Commercial Law Finals Study Guide - DVOREF

I IN AN INSURANCE CLAIM FOR PROPERTY DAMAGE AMOUNTING TO PHP 2M, AFTER TYPHOON YOLANDA AGAINST PETITIONER INSURANCE CO., INC. BEFORE THE INSURNACE COMM., THE LAWYER FOR THE COMPANY SOUGHT DISMISSAL OF THE CASE FOR LACK OF MERIT, IS THE MOVE TENABLE? WHY?  ANS. Yes, the lawyer for the company is correct. Pursuant to Sec. 416 of ICP, the Insurance Commission's jurisdictional amount is limited to 100,000 or less and only if subject is incapable of pecuniary estimation, otherwise, jurisdiction is vested with first level courts. IN A SALE OF LAND L AND ON INSTALMENT PLAN, THE CONTRACT PROVIDES THAT IN CASE OF THE DEATH OF THE VENDOR BEFORE THE COMPLETION OF ALL INSTALMENT PAYMENTS, THE VENDEE'S REPRESENTATIVE OR HIS HEIRS COULD EITHER COMPLETE ITS PAYMENT AND RECEIVE THE TITLE TO THE LAND FROM THE VENDOR OR RESCIND THE CONTRACT AND RECOVER ITS PRIOR PAYMENTS MADE. IS THIS AN INSURANCE CONTRACT? WHY?  ANS. No, this is not an insurance contract co ntract because no indemnification for the death of the vendee is being made and no insurance company within the contemplation of the law is involved. II WHAT ARE THE EXEMPT SECURITIES UNDER THE LAW?  ANS. The following are securities exempt from the requirement of registration: 1. any security issued or guaranteed by the Govt. of the PHL or its political subdivisions; 2. any security issued or guaranteed by the govt. in any country with which the PHL maintains diplomatic relations, or by any state, province or political subdivision thereof on the basis of reciprocity; 3. certificates issued by a receiver or by a trustee in bankruptcy duly approved by the proper adjudicatory body; 4. any security or its derivatives the sale or o r transfer of which, by law, is under the supervision and regulation of the Office of Insurance Comm., HLURB, BIR; 5. any security issued by a bank except its own shares of stock.

 A OBTAINS A FIRE INSURANCE POLICY OF HIS HOUSE LOCATED IN PALO, LEYTE AND AS A GENEROUS GESTURE NAMED HIS CLOSE NEIGHBOR M,  AS HIS BENEFICIARY. IF A's HOUSE IS DESTROYED BY FIRE, CAN M SUCCESSFULLY CLAIM AGAINST THE POLICY?  ANS. No, M cannot claim against a gainst the policy because he has no insurable interest in the house owned by A. In fire insurance, the claimant must have an insurable interest in the property at the time of the loss of the subject property.

III WHEN CAN THER BE COMPULSORY LICENSING BY THE IPO?  ANS. Compulsory licensing is applicable under the following cases: 1. national emergency or other circumstances of extreme urgency;

2. where public interest, in particular, national security, nutrition, health or the development of other vital sectors of the national economy as determined by the appropriate agency of the government; 3. where judicial or administrative body has determined that the manner of exploitation by the owner of the patent or his licensee is anti-competitive; 4. in case of public non-commercial use of the patent by the patentee, without satisfactory reason; 5. if the patented invention is not being worked in the PHL on a commercial scale, although capable of being worked, without satisfactory reason: Provided, that the importation of the patented article shall constitute working or using the patent; and 6. where demand for patented drugs and medicines is not being met to an adequate extent and on reasonable terms, as determined by the Secretary of Health.

WHAT IS THE FIT AND PROPER RULE?  ANS. It is the power of the Monetary Board to pass rules providing for the qualifications and disqualifications of individuals elected or a ppointed bank directors or officers and to disqualify those found unfit after due notice (Sec. 16, GBL).

IV X TOOK VERMAR BUS, ON HIS TRIP TO ORMOC CITY FROM TACLOBAN  AND PLACED HIS HAND CARRIED CARRIED BAG IN THE BAGGAGE COMPARTMENT COMPARTMENT COMMON TO ALL PASSENGERS. WHEN X GOT OFF, HE COULD NOT FIND HIS BAG. COULD VELMAR BUS BE LIABLE FOR THE LOSS OF HIS BAG? WHY?  ANS. Yes, Velmar Bus can be held liable for the loss of X's bag since as a common carrier, it is responsible for the loss, destruction or deterioration of the goods it is transporting unless the cause is any of the following: 1. flood, storm, earthquake, lightning or other natural disaster or calamity; 2. acts of public enemy in war, whether international or civil; 3. act or omission of the shipper or owner of the goods; 4. character of the goods or defects of the goods; 5. order or act of competent authority; 6. exercise of extraordinary diligence. (Arts. 1735 and 1755, NCC)

DISTINGUISH CORPORATE REHABILITATION FROM THE INSOLVENCY LAW?  ANS. Corporate Corporate rehabilitation is intended to ensure that that the interests of juridical juridical and natural persons are collectively and realistically resolved and seeks to improve the viability of the corporation. Insolvency law is a method to protect only the interests of a debtor unable to honor his obligations.  V B WAS INDEBTED TO A FOR PHP 10,000. TO SECURE HIS PAYMENT B DELIVERED AND INDORSED A WAREHOUSE RECEIPT ISSUED TO HIM BY D. WHEN A, NOW TRIED TO WITHDRAW SAID GOODS FROM THE WAREHOUSEMAN, SAID GOODS DO NOT EXIST AT ALL. WOULD B BE LIABLE FOR HIS INDORSEMENT OF THIS WAREHOUSE RECEIPT TO D? WHY? IF IT WAS A NEGOTIABLE PROMISSORY NOTE WOULD YOUR  ANSWER BE THE SAME?

 ANS. B would woul d be liable liable since a warehouse receipt rece ipt is a negotiable instrument where it is stated that the goods received will be delivered to the bearer or to the order any person person named therein (Sec. 5, WRL). Since the receipt is for the order of B, B's indorsement and delivery is needed to transfer ownership to A, which is attendant in this case. B then is liable for is indorsement. If it were a negotiable promissory note, B would still be liable on his indorsement.

DISTINGUISH INFRINGEMENT FROM UNFAIR COMPETITION  ANS. 1. in infringment of trademark, there is unauthorized use of a trademark, while in unfair competition under the IPC involves passing off one's goods as those of another and giving one's goods the appearance of that of another; 2. it is not necessary to establish fraudulent intent in a case for infringement of trademark while it is necessary to establish fraudulent intent in unfair competition case; 3. registration of the trademark is necessary for the filing of an action for infringement of trademark while prior registration of a trademark is not necessary in unfair competition; 4. unfair competition is broader as it includes cases that are covered not only by the IPC but also by Art. 27 of NCC.

 VI IN A LETTER OF CREDIT IN BANKING TRANSACTIONS, WHAT ARE THE LIABILITIES OF CONFIRMING BANK AND NOTIFYING BANK IF ANY? HOW MANY TRANSACTIONS ARE NORMALLY INVOLVED IN MODERN TYPES OF LETTER OF CREDIT? DISCUSS BRIEFLY SAID TRANSACTIONS.  ANS. The confirming bank must make sure that the terms and conditions of the Letter of Credit are strictly complied with and will be directly liable to pay the sellerbeneficiary. The notifying bank has no liability since it merely conveys to the seller the existence of the credit. The issuing bank, unless otherwise indicated, is solidarily liable with the buyerapplicant.

 A PROMISSORY NOTE READS AS FOLLOWS: "I PROMISE TO PAY A THE THE  AMOUNT OF P2M, THREE YEARS YEARS AFTER HIS MARRIAGE TO M." M." IS THIS A NEGOTIABLE INSTRUMENT? WHY?  ANS. No, this is not a negotiable instrument because the requirement under Sec. 1 (b) of the NIL is not fulfilled, viz: "Must contain an unconditional promise or order to pay a sum certain in money." In the case at bar, the marriage of A to M is a contingent event that may or may not happen.

 VII WHAT IS A FAIR USE DOCTRINE? WHEN CAN THIS BE NOT APPLICABLE?

 ANS. Fair use is a judicial doctrine that refers to a use of copyrighted material that does not infringe or violate the exclusive rights of the copyright holder. Test to determine Fair use are: 1. purpose and character of the use, whether commercial or nonprofit educational purposes; 2. nature of copyright work; 3. amount and substantiality of the portion used in relation to the copyright work as a whole; 4. effect of the use upon the potential market for, or value of, the copyright work. It is usually considered fair use of an authored work to take small quotations or excerpts and to include them in another work, as when quotations are taken from a book and inserted into a book review. WHAT ARE AVERAGES IN MARITME COMMERCE? WHAT ARE ITS CLASSIFICATIONS? WHO ARE LIABLE IF IT HAPPENS?  ANS. Averages refers to damages, losses and expenses sustained in marine transportation. 1. General Average Loss = damages and expenses deliberately caused by the master of the ship or upon his authority, in order to save the vessel, vessel, its cargo or both at the same time from a real or known risk. It must be borne equally by all of the interests concerned in the venture. 2. Particular Average Loss = includes all damages and expenses caused to the vessel or to her cargo which have not inured to the common benefit and profit of all persons interested in the vessel or cargo. The loss of the entity whose cargo was sacrificed will be equally borne by all those who benefited from the former's loss.

 VIII WHAT GOVERNMENTAL AGENCIES TOOK OVER THE FUNCTIONS OF THE PUBLIC SERVICE COMMISSION? WHAT ARE THE INTELLECTUAL CREATIONS PROVIDED UNDER THE IPC.  ANS. 1. author with regard his literary, dramatic, historical, legal, philosophical, scientific or other work; 2. composer as to his musical composition; 3. painter, sculptor or other artist with regard his product; 4. scientist or technologist with regard his invention.

IX UNDER WHAT CONDITION MAY STOCK CORPORATIONS BE EMPOWERED TO ACQUIRE ITS OWN STOCK. DISCRUSS BRIEFLY ITS PROCEDURE. WHEN CAN APPRAISAL RIGHT BE EXERCISED BY A STOCKHOLDER? DISCUSS BRIEFLY THE PROCEDURE.

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WHAT IS TRUST FUND DOCTRINE. WHO HAS THE RIGHT TO THIS FUND? COULD IT BE SET ASIDE BY VIRTUE OF A CORPORATE RESOLUTION? IN WHAT INSTANCES IS TENDER OFFER REQUIRED BY LAW?