COMMERCIAL LAW

Table of Contents
Insurance p. 2
Pre-Need p. 2
Transportation Law p. 2
Business Organizations p. 2
Securities p. 2
Banking p. 2
Intellectual Property p. 2
Special Laws p. 2

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 INSURANCE AQUINO
8. Compulsory Insurance Coverage for Agency-Hired Workers
Reference: Aquino, T. B. (2018). Essentials of Insurance Law

•
E. Variable Contracts
∘
• Definition:
◆ s
◇ s
F. Insurable Interest
∎ s
□ s
1. In Life/Health
( 1)
( 2)
2. In Property
( 3)

3. Double Insurance and Over Insurance

A. Concept of Insurance
4. Multiple or Several Interests on Same Property
• Definition:
• Test:

G. Perfection of the Contract of Insurance

B. Elements of an Insurance Contract

1. Offer and Acceptance/Consensuality

C. Characteristics and Nature of Insurance Contracts

a. Delay in Acceptance

b. Delivery of Policy
D. Classes

1. Marine
2. Premium Payment

2. Fire
3. Non-Default Options in Life Insurance

3. Casualty
4. Reinstatement of a Lapsed Policy of Life Insurance

4. Suretyship
5. Refund of Premiums
• Definition:
5. Life

6. Microinsurance
H. Rescission of Insurance Contracts

7. Compulsory Motor Vehicle Liability Insurance

1. Concealment

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 2. Misrepresentation/Omissions

3. Breach of Warranties

I. Claims Settlement and Subrogation

1. Notice and Proof of Loss

2. Guidelines on Claims Settlement

a. Unfair Claims Settlement; Sanctions

b. Prescription of Action

c. Subrogation

J. Business of Insurance; Requirements

• Scope:

K. Insurance Commissioner and Its Powers

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 PRE-NEED AQUINO

A. Definition

1. Pre-Need Plans

2. Pre-Need Company

B. Registration of Pre-Need Plans

C. Licensing of Sales Counselor and General Agent

D. Default and Termination

E. Claims Settlement

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 TRANSPORTATION LAW AQUINO

E. Liability for Baggage of Passengers

COMMON CARRIERS
1. Checked-In Baggage
A. Diligence Required of Common Carriers
2. Baggage in Possession of Passengers
B. Liabilities of Common Carriers

C. Classification of Transport Network Vehicle Services and Transport Network

Companies
SAFETY OF PASSENGERS

A. Void Stipulations
VIGILANCE OVER GOODS

B. Duration of Liability
A. Exempting Causes
1. Waiting for Carrier or Boarding of Carrier
1. Requirement of Absence of Negligence
2. Arrival at Destination
2. Absence of Delay

3. Due Diligence to Prevent or Lessen the Loss C. Liability for Acts of Others

1. Employees
B. Contributory Negligence
2. Other Passengers and Strangers
C. Duration of Liability

1. Delivery of Goods to Common Carrier D. Liability for Delay in Commencement of Voyage

2. Actual or Constructive Delivery E. Liability for Defects in Equipment and Facilities

3. Temporary Unloading or Storage F. Extent of Liability for Damages

D. Stipulation for Limitation of Liability

BILL OF LADING

1. Void Stipulations
A. Three-Fold Character
2. Limitation of Liability to Fixed Amount
B. Delivery of Goods
3. Limitation of Liability in Absence of Declaration of Greater Value

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 1. Period for Delivery 1. Application

2. Delivery without Surrender of Bill of Lading 2. Notice of Loss or Damage

3. Refusal of Consignee to Take Delivery 3. Period of Prescription

4. Limitation of Liability
C. Period for Filing Claims

D. Period for Filing Actions

PUBLIC SERVICE ACT
E. Effects of Stipulations

A. Definition of Public Utility

MARITIME COMMERCE B. Necessity for Certificate of Public Convenience

A. Charter Parties 1. Requisites

1. Bareboat/Demise Charter a. Citizenship

2. Time Charter b. Promotion of Public Interests

3. Voyage/Trip Charter c. Financial Capability

B. Liability of Shipowners and Shipping Agents 2. Prior Operator Rule

1. Liability for Acts of Captain a. Meaning

2. Exceptions to Limited Liability b. Exceptions

c. Ruinous Competition
C. Accidents and Damages in Maritime Commerce

1. General Average C. Fixing of Rate

2. Collisions and Allisions 1. Rate of Return

2. Exclusion of Income Tax as Expense

D. Carriage of Goods by Sea Act

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D. Unlawful Arrangements

1. Boundary System

2. Kabit System

E. Approval of Sale, Encumbrance or Lease of Party

THE WARSAW CONVENTION

A. Applicability

B. Limitation of Liability

1. Liability to Passengers

2. Liability for Checked Baggage

3. Liability for Hand-Carried Baggage

C. Willful Misconduct

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 BUSINESS ORGANIZATIONS b. Recovery of Damages

2. Doctrine of Piercing the Corporate Veil

PARTNERSHIPS VILLANUEVA
a. Grounds for Application of Doctrine
A. General Provisions
b. Test in Determining Applicability
B. Rights and Obligations of Partnership and Partners

1. Rights and Obligations of the Partnership

E. Capital Structure
2. Obligations of Partners among Themselves
1. Number and Qualifications of Incorporators
3. Obligations of Partnership/Partners to Third Persons
2. Subscription Requirements

C. Dissolution and Winding Up 3. Corporate Term

D. Limited Partnership 4. Classification of Shares

a. Preferred Shares Versus Common Shares

CORPORATIONS AQUINO VILLANUEVA
b. Scope of Voting Rights Subject to Classification
A. Definition of Corporation
c. Founder’s Shares
B. Classes of Corporations
d. Redeemable Shares
C. Nationality of Corporations
e. Treasury Shares
1. Control Test

2. Grandfather Rule
F. Incorporation and Organization

1. Promoter
D. Corporate Juridical Personality

a. Liability of Promoter
1. Doctrine of Separate Juridical Personality

b. Liability of Corporation for Promoter’s Contracts

a. Liability for Tort and Crimes

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 2. Subscription Contract 4. Power to Increase or Decrease Capital Stock or Incur, Create, Increase Bonded
Indebtedness
3. Pre-Incorporation Subscription Agreements
5. Power to Deny Pre-Emptive Rights
4. Consideration for Stocks
6. Power to Sell or Dispose Corporate Assets
5. Articles of Incorporation
7. Power to Acquire Own Shares
a. Contents
8. Power to Invest Corporate Funds in Another Corporation or Business
b. Non-Amendable Items
9. Power to Declare Dividends

6. Corporate Name; Limitations on Use of Corporate Name 10. Power to Enter into Management Contract

7. Registration, Incorporation and Commencement of Corporate Existence 11. Limitations

8. Election of Directors or Trustees a. Ultra Vires Acts

9. Adoption of By-Laws i. Applicability of Ultra Vires Doctrine

a. Contents of By-Laws ii. Consequences of Ultra Vires Acts

b. Binding Effects
12. Doctrine of Individuality of Subscription
c. Amendments
13. Doctrine of Equality of Shares

10. Effects of Non-Use of Corporate Charter 14. Trust Fund Doctrine

a. How Exercised

i. By the Shareholders

G. Corporate Powers ii. By the Board of Directors

1. General Powers; Theory of General Capacity iii. By the Officers

2. Specific Powers; Theory of Specific Capacity

3. Power to Extend or Shorten Corporate Term H. Stockholders and Members

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 1. Fundamental Rights of a Stockholder 4. Remedial Rights

2. Participation in Management a. Individual Suit

a. Proxy b. Representative Suit

b. Voting Trust c. Derivative Suit

c. Cases When Stockholders’ Action Is Required

5. Obligations of a Stockholder
i. By a Majority Vote
6. Meetings
ii. By a Two-Thirds Vote
a. Regular or Special
iii. By Cumulative Voting
b. Notice of Meetings
d. Manner of Voting
c. Place and Time of Meetings

3. Propriety Rights d. Quorum

a. Right to Dividends e. Minutes and Agenda of Meetings

b. Appraisal Right

i. When Available I. Board of Directors and Trustees

ii. Manner of Exercise of Right 1. Repository of Corporate Powers

2. Tenure, Qualifications and Disqualifications of Directors

3. Requirement of Independent Directors

c. Right to Inspect 4. Elections

d. Preemptive Right a. Cumulative Voting

e. Right to Vote b. Quorum

f. Right to Dividends
5. Removal

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 6. Filling of Vacancies
b. Who presides
7. Compensation
c. Quorum
8. Disloyalty
d. Rule on Abstention
9. Business Judgment Rule

10. Solidary Liabilities for Damages J. Capital Affairs

11. Personal Liabilities 1. Certificate of Stock

12. Responsibility for Crimes a. Nature of the Certificate

13. Special Fact Doctrine b. Uncertified Shares

14. Inside Information c. Negotiability; Requirements for Valid Transfer of Stocks

15. Contracts d. Issuance

a. By Self-Dealing Directors with the Corporation i. Full Payment

b. Between Corporations with Interlocking Directors ii. Payment Pro-Rata

16. Executive and Other Special Committees e. Stock and Transfer Book

a. Creation i. Contents

b. Limitations on Its Powers ii. Who May Make Valid Entries

iii. Stock Transfer Agent

17. Meetings

a. Regular or Special f. Lost or Destroyed Certificates

i. When and Where g. Situs of the Shares of Stock

ii. Notice
2. Watered Stocks
iii. Attendance in Meetings
a. Definition

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 b. Liability of Directors for Watered Stocks a. Records to Be Kept at Principal Office

c. Trust Fund Doctrine for Liability for Watered Stocks b. Right to Inspect Corporate Records

c. Effect of Refusal to Inspect Corporate Records

3. Payment of Balance of Subscription

a. Call by Board of Directors

K. Dissolution and Liquidation
b. Notice Requirement
1. Modes of Dissolution

4. Sale of Delinquent Shares a. Voluntary Dissolution

a. Effect of Delinquency i. Where No Creditors Are Affected

b. Call by Resolution of the Board of Directors ii. Where Creditors Are Affected

c. Notice of Sale iii. By Shortening of Corporate Term

d. Auction Sale iv. Withdrawal of Dissolution

5. Alienation of Shares b. Involuntary Dissolution

a. Allowable Restriction on the Sale of Shares

2. Methods of Liquidation
b. Sale of Partially Paid Shares
a. By the Corporation Itself
c. Sale of a Portion of Shares Not Fully Paid
b. Conveyance to a Trustee within a Three-Year Period
d. Sale of All of Shares Not Fully Paid
c. By Management Committee or Rehabilitation Receiver
e. Sale of Fully Paid Shares
d. Liquidation after Three Years
f. Requisites of a Valid Transfer

g. Involuntary Dealings
L. Other Corporations

6. Corporate Books and Records 1. Close Corporations

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 c. Articles of Incorporation and By-Laws
a. Characteristics of a Close Corporation
d. Corporate Name
b. Validity of Restrictions on Transfer of Shares
e. Corporate Structure and Officers
c. Issuance or Transfer of Stock in Breach of Qualifying Conditions
f. Nominee
d. When Board Meeting Is Unnecessary or Improperly Held
g. Minutes and Records
e. Preemptive Right
h. Liability
f. Amendment of Articles of Incorporation
i. Conversion of Corporation to One Person Corporation and Vice-Versa
g. Deadlocks

6. Foreign Corporations
2. Non-Stock Corporations
a. Bases of Authority over Foreign Corporations
a. Definition
i. Consent
b. Purposes
ii. Doctrine of “Doing Business”
c. Treatment of Profits

d. Plan and Distribution of Assets upon Dissolution b. Necessity of a License to Do Business

i. Requisites for Issuance of a License

3. Educational Corporations
ii. Resident Agent
4. Religious Corporations
iii. Amendment of License
a. Corporation Sole; Nationality

b. Religious Societies c. Personality to Sue

d. Suability of Foreign Corporations

5. One Person Corporations
e. Instances When Unlicensed Foreign Corporations May Be Allowed to Sue
a. Excepted Corporations (Isolated Transactions)

b. Capital Stock Requirement f. Grounds for Revocation of License

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 d. Who Are Liable

M. Merger and Consolidation

3. Authority of the Securities and Exchange Commission
1. Definition and Concept

2. Distinguish: Constituent and Consolidated Corporation

3. Plan of Merger or Consolidation

4. Articles of Merger or Consolidation

5. Procedure

6. Effectivity

7. Limitations

8. Effects

N. Investigation, Offenses, and Penalties

1. Authority of Commissioner

a. Investigation and Prosecution of Offenses

b. Administration of Oath and Issuance of Subpoena

c. Cease and Desist Power

d. Contempt

2. Sanctions for Violations

a. Administrative Sanctions

b. Prohibited Acts

c. Penalties

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 SECURITIES AQUINO
2. Rules on Proxy Solicitation

A. State Policy
3. Disclosure Rule

B. Definition of Securities

C. Kinds of Securities

1. Exempt Securities

2. Exempt Transactions

3. Non- Exempt Transactions

D. Powers and Functions of the Securities and Exchange Commission

E. Procedure for Registration of Securities

F. Prohibitions on Fraud, Manipulation, and Insider Trading

1. Manipulation of Security Prices

2. Short Sales

3. Option Trading

4. Fraudulent Transactions

5. Insider Trading

G. Protection of Shareholder Interests

1. Tender Offer Rule

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 BANKING AQUINO SUNDIANG, JR.
I. Rules on Bank Deposits and Investments by Directors, Officers, Stockholders and
Their Related Interests

NEW CENTRAL BANK ACT J. Supervision and Regulation of Bank Operations

A. State Policies 1. Loans and Other Credit Accommodations

B. Creation of the Bangko Sentral ng Pilipinas 2. Selective Regulation

C. Responsibility and Primary Objective a. Margin Requirements against Letters of Credit

D. Corporate Powers b. Required Security against Bank Loans

E. Operations of the Bangko Sentral ng Pilipinas c. Portfolio Ceilings

d. Minimum Capital Ratios

1. Authority to Obtain Data and Information

2. Supervision and Examination

K. Rate of Exchange
3. Bank Deposits and Investments

4. Prohibitions LAW ON SECRECY OF BANK DEPOSITS

5. Examination and Fees

A. Purpose

B. Prohibited Acts
F. Monetary Board; Powers and Functions
C. Deposits Covered
G. How the Bangko Sentral ng Pilipinas Handles Banks in Distress
D. Exceptions
1. Conservatorship
E. Garnishment of Deposits, Including Foreign Deposits
2. Closure
F. Penalties for Violation
3. Receivership

4. Liquidation
GENERAL BANKING ACT

H. Administrative Sanctions on Supervised Entities A. Definition and Classification of Banks

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 B. Powers and Functions of the Philippine Deposit Insurance Corporation;
B. Distinction of Banks from Quasi-Banks and Trust Entities Prohibitions

C. Bank Powers and Liabilities C. Concept of Insured Deposits

1. Corporate Powers D. Liability to Depositors

2. Banking and Incidental Powers 1. Deposit Liabilities Required to Be Insured with Philippine Deposit Insurance
Corporation

2. Commencement of Liability
D. Diligence Required of Banks in View of Fiduciary Nature of Banking

3. Deposit Accounts Not Entitled to Payment

E. Nature of Bank Funds and Bank Deposits

4. Extent of Liability
F. Grant of Loans and Security Requirements

5. Determination of Insured Deposits

1. Ratio of Net Worth to Total Risk Assets

6. Calculation of Liability
2. Single Borrower’s Limit

a. Per Depositor, Per Capacity Rule

3. Restrictions on Bank Exposure to Directors, Officers, Stockholders, and Their
Related Interests
b. Joint Accounts
4. Prohibited Acts of Borrowers
c. Mode of Payment
5. Floating Interest Rates and Escalation Clauses
d. Effect of Payment of Insured Deposits

G. Penalties for Violations e. Payment of Insured Deposits as Preferred Credit

1. Fine, Imprisonment f. Failure to Settle Claim of Insured Depositor

2. Suspension or Removal of Director or Officer g. Failure of Depositor to Claim Insured Deposits

3. Dissolution of Bank i. Examination of Banks and Deposit Accounts

ii. Prohibition against Splitting of Deposits

iii. Prohibition against Issuances of Temporary Restraining Orders

PHILIPPINE DEPOSIT INSURANCE CORPORATION ACT

A. Basic Policy

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E. Concept of Bank Resolution

F. Role of the Philippine Deposit Insurance Corporation in Relation to Banks in

Distress

1. Closure and Takeover

2. Conservatorship

3. Receivership

4. Liquidation

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 INTELLECTUAL PROPERTY FUNA
8. Patent Infringement

A. Intellectual Property Rights in General

a. Tests in Patent Infringement

1. Intellectual Property Rights

i. Literal Infringement

2. Differences between Copyright, Trademarks, and Patents

ii. Doctrine of Equivalents

3. Technology Transfer Arrangement

b. Civil and Criminal Action

c. Prescriptive Period
B. Patents

d. Defenses in Action for Infringement

1. Patentable Invention

2. Non-Patentable Invention
9. Licensing

3. Ownership of a Patent
a. Voluntary

a. Right to a Patent
b. Compulsory

b. First-to-File Rule

10. Assignment and Transmission of Rights

c. Invention Created Pursuant to a Commission

d. Right of Priority

C. Trademarks

4. Grounds for Cancellation of a Patent

1. Definitions of Marks, Collective Marks, and Trade Names

5. Remedy of the True and Actual Inventor

2. Acquisition of Ownership of Mark

6. Rights Conferred by a Patent

3. Acquisition of Ownership of Trade Name

7. Limitations of Patent Rights

4. Non-Registrable Marks

a. Prior User
5. Prior Use of Mark as a Requirement

b. Use by the Government

6. Tests to Determine Confusing Similarity between Marks

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 a. Dominancy Test
2. Copyrightable Works
b. Holistic Test
a. Original Works
c. Idem Sonans
b. Derivative Works

7. Well-Known Marks
3. Non-Copyrightable Works
8. Rights Conferred by Registration
4. Rights of Copyright Owner
9. Use by Third Parties of Names, etc. Similar to Registered Mark
5. Rules on Ownership of Copyright
10. Infringement and Remedies
6. Limitations on Copyright
a. Trademark Infringement
a. Fair Use
b. Damages

c. Requirement of Notice 7. Copyright Infringement

d. Penalties a. Remedies

b. Criminal Penalties
11. Unfair Competition

12. Registration of Marks under the Madrid Protocol

a. Coverage

b. Rights Conferred

c. Requirements for Registration

d. Term of Protection

D. Copyright

1. Basic Principles

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 SPECIAL LAWS SUNDIANG, JR. c. Right to Alienate Mortgage Credit

d. Right to Alienate Colalteral

SECURED TRANSACTIONS
2. Essential Requisites
A. Personal Property Security Act

1. Definitions and Scope C. Guaranty

2. Asset-Specific Rules 1. Nature and Extent of Guaranty

a. Future Property a. Obligation Secured by Guaranty

b. Rights to Proceeds and Commingled Funds b. Parties to a Guaranty

c. Tangible Assets Commingled in a Mass c. Excussion

d. Accounts Receivables d. Right to Protection

e. Right to Indemnification
3. Perfection of Security Interests
f. Right to Subrogation
4. Registration
g. Right of Co-Guarantors
5. Priority of Security Interests

6. Tangible Assets; Intangible Assets 2. Effects of Guaranty

7. Enforcement of Security Interests 3. Extinguishment of Guaranty

8. Prior Interests and the Transitional Period 4. Legal and Judicial Bonds

B. Real Estate Mortgage Law D. Surety

1. Definition and Characteristics 1. Concept

a. Obligations Secured by Real Estate Mortgage 2. Form of Surety

b. Object of Real Estate Mortgage 3. Obligations Secured

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 4. Surety Distinguished from Standby Letter of Credit
F. Safe Harbor Provision
5. Surety Distinguished from Guaranty
G. Application for Freeze Orders
6. Surety Distinguished from Joint and Solidary Obligations
1. Who May Apply

E. Letters of Credit 2. Effectivity

1. Definition and Purpose 3. Duties of Covered Institutions

2. Kinds of Letters of Credit

H. Authority to Inquire into Bank Deposits
3. Rule of Strict Compliance
1. Forfeiture Provisions
4. Independence Principle
2. Mutual Assistance among States

TRUTH IN LENDING ACT

FOREIGN INVESTMENTS ACT
A. Purpose
A. Policy of the Law
B. Obligation of Creditors to Person to Whom Credit Is Extended
B. Definition of Terms
C. Covered and Excluded Transactions
1. Foreign Investment
D. Consequences of Non-Compliance with Obligation
2. “Doing Business” in the Philippines

ANTI-MONEY LAUNDERING ACT 3. Export Enterprise

4. Domestic Market Enterprise

A. Policy of the Law

B. Covered Institutions and Their Obligations

C. Registration of Investments of Non-Philippine Nationals

C. Covered and Suspicious Transactions

D. Foreign Investments in Export Enterprises

D. Money Laundering; How Committed; Unlawful Activities or Predicate Crimes

E. Foreign Investments in Domestic Market Enterprises

E. Anti-Money Laundering Council; Functions

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F. Foreign Investment Negative List a. Types

b. Conversion of Rehabilitation to Liquidation Proceedings

INSOLVENCY LAWS
c. Liquidation Order

A. Concurrence and Preference of Credits

d. Rights of Secured Creditors

1. Meaning of Concurrence and Preference

e. Liquidator

2. Exempt Properties
f. Determination of Claims

3. Classification of Credits
g. Liquidation of Plan

4. Order of Preference of Credits

B. Financial Rehabilitation and Insolvency Act of 2010

DATA PRIVACY ACT OF 2012
1. Definition of Insolvency
A. Definitions and Scope
2. Suspension of Payments
B. Extraterritorial Application
3. Rehabilitation
C. Processing of Personal Information
a. Types
1. General Principles
b. Commencement Order
2. Sensitive and Privileged Information
c. Stay or Suspension Order
3. Subcontracting
d. Rehabilitation Receiver
4. Privileged Communication
e. Management Committee

f. Rehabilitation Plan D. Rights of the Data Subject; Exceptions/Non-Applicability

g. Cram Down Effect E. Duties and Responsibilities of Personal Information Controller

4. Liquidation PHILIPPINE COMPETITION ACT

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A. Definitions and Scope of Application ∎ s
□ s
B. Powers and Functions of the Philippine Competition Commission ( 1)
( 2)
C. Prohibited Acts ( 3)

1. Anti-Competitive Agreements

a. Per Se Violations

b. Not Per Se Violations

2. Abuse of Dominant Position

3. Prohibited Mergers and Acquisitions

4. Exceptions

D. Covered Transactions

1. Thresholds for Compulsory Notification

2. Notifying Entity

3. Exceptions

E. Determining the Relevant Market

F. Determining Control or Dominance of Market

G. Determining Existence of Anti-Competitive Conduct

H. Forbearance by the Philippine Competition Commission

•
∘
◆ s
◇ s

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