Uy Commercial Law Mock Bar. WITH COMMENTS.docx

I. As the general counsel of the bank, I will not order the disclosure of the bank deposits of Dragan Tankov. The law provides that secrecy of bank deposits may be disregarded when the depositor is a terrorist or is involved in financing terrorist activities. Here, Dragan Tankov is only a suspected terrorist and no case has yet been filed against him. Hence, his bank deposits should not be disclosed and the NBI Agents should not be allowed to look into the said deposits. II. a. Mr. Dineros is liable for insider trading. The Corporation Code provides that an insider is one who is in possession of a material non-public information due to his position in the company or has received the said information from those privy to it inside the company. In this case, Mr. Dineros is the corporate secretary of the company. His position made him privy to the material non-public information as shown by his immediate purchase of shares when vast amounts of god were found in the exploration site. Hence, Mr. Dineros has made use of the material non-public information and thus should be charged with insider trading

Commented [R1]: It’s better to write item numbers at the center of the page. Commented [R2]: If you will notice, there are Peso and Dollar deposits, you must provide an answer for each. They are governed by different rules. Commented [R3]: It’s better if you will be particular in the first paragraph based on the facts of the problem, e.g. I would advise the TRIPOLITAN Bank to allow… For others, i.e. motion, argument, indicate the motion or the argument to guide the examiner in recalling the question and facts. Commented [R4]: Be particular with your legal basis, ie., Securities Regulation Code, New Civil Code on Sales, Rules of Court on Evidence. If you are not sure whether the legal basis is in the code or jurisprudence, you may say “Law on Securities”, Law on Sales, Law on Evidence, Law on Contracts, etc. Commented [R5]: As much as possible, use the exact keywords/ legal terms provided under the law. Commented [R6]: This implies that this is the only exception to the secrecy of bank deposits. You can add “among others” to convey that there are other grounds. Commented [R7]: Since you mentioned insider trading in the first paragraph, you must also discuss insider trading in the second paragraph, not just the insider.

Commented [R8]: I encourage to use “here”, “based on the problem”, “In the given facts” instead of “in this case”. The latter may refer to a particular case decided by the SC especially if you cited a jurisprudence in the second paragraph. Commented [R9]: You can simplify this by saying “…the corporate secretary of Philex Mining Corporation which made him privy…”

Commented [R10]: There’s sub-question (b). As much as possible, try to answer each question.

III. The SEC does not have jurisdiction over the petition. PD 902-A has transferred the jurisdiction of the SEC to hear and decide intracorporate disputes and fraud cases to the Regional Trial Courts. In the case at bar, the petition against the validation of the proxies were based on the grounds of fraud and irregularities. Therefore, the case is outside the jurisdiction of the SEC.

Commented [R11]: It’s better to spell out SEC. Avoid abbreviations except in third paragraph when the problem provides the abbreviation, e.g., RTC Makati. Commented [R12]: It’s better to indicate the petition filed. In first paragraph, indicate facts and/or answer to the issue which can guide the examiner in checking your answer without him looking at the questionnaire. First paragraph must give the examiner an overview of the answer and the pertinent facts. Commented [R13]: It is better to indicate also the title of this law. Commented [R14]: You can use “not within” instead of “outside”.

IV. A) The Corporation may not return Alex’s investment.

Commented [R15]: Please refer to Comment No. 12

Under the Corporation Code, incorporated shares may not be removed outright since the corporation would not be prejudiced from its removal especially if the corporation has just been incorporated. Alex’s 10 Million peso investment is part of the paid-up capital of the corporation. The Corporation will be prejudiced upon its withdrawal and it would also run counter to the Trust Fund Doctrine.

B) Yes, Scriptoria may be allowed to redeem the property.

Commented [R16]: Observe interlocking key concepts. The keywords in the second paragraph must be used in the third paragraph when applying the law to the facts. Legal term/principle must be mentioned in the second paragraph if you will use it in the third. Commented [R17]: Don’t forget to write your conclusion.

In extrajudicial foreclosures of land involving the corporation, the period of redemption is six months from registration of the sale.

Commented [R18]: The answer is incomplete. Always cite your legal basis and apply the same to the facts even for sub-questions.

V. ABC should be allowed to oppose the application of S. The Intellectual Property Code provides that a universally well known mark of a foreign company will be protected here in our jurisdiction even if the said mark has never been used or registered here in our country. Here, the mark of ABC is a generally accepted well known mark. Hence, ABC may oppose the application of S.

Commented [R19]: It’s better to say “I would allow the opposition…” the question requires that you decide on the opposition

Commented [R20]: Use specific facts according to the problem. e.g. “…trademark GOODWILL for goods in class 25 is generally accepted as a universally known or popular mark in the world market….”

VI. a) Argus can demand from Romulus that another check be issued to him or that Romulus pay him P500,000. The check having been stolen from Argus has not yet been encashed by him and thus Romulus is still obliged to give P500,000.

b.)

Yes, Romulus can demand that BPI should recredit his account.

Commented [R21]: Try to discuss your answer by citing the legal provision and applying the same to the facts.

The business of banks is impressed with public interest and thus they should exercise the highest diligence in the conduct of their business. Here BPI did not send back the check after clearing. Hence it is also negligient.

C.

BPI can recover the P500,000 from RCBC.

RCBC made a general indorsement at the back of the check, the effect of which, it guarantees all prior indorsements in the instrument. Hence, RCBC can be made liable for the P500,000 that BPI recredited to Romulus.

VII. a.) The counterclaim against Lopez Inc. is not proper. Lopez, Inc. and Sky Inc. are two different companies. This is also evidenced by the mere 33% share of Lopez Inc. in Sky.

Commented [R22]: You may indicate the counterclaim filed to guide the examiner recall the facts and the question.

Commented [R23]: Don’t forget to cite your legal basis.

Hence, Velarde’s counterclaim is without merit since the two companies are separate and distinct. b. No, my answer will not be the same if Lopez Inc. owns 99% of the shares of Sky Vision Inc. since there is a presumption that the two companies are the same.

Commented [R24]: There is no presumption under the law. Always explain fully your answer.

VIII. The Comelec resolution is not valid. Under the law, it is the Central Bank which shall have the power to regulate matters pertaining to the conduct of banks and other monetary matters. Here, the Comelec has encroached upon the power of the Central Bank. Hence, the issued resolution is not valid. IX. a. The insurer’s refusal to pay the proceeds of the policy is not justified.

The Incontestability Clause in our insurance Code provides that any claim of fraud of misrepresentation by the insurer may no longer be entertained if it is outside the 2 year period starting from the effectivity of the contract as mandated by the Incontestability Clause. Here, 2 years had already elapsed when Brenda killed herself. Therefore, the refusal of the insurer to pay is not justified. b. Yes, the incontestability clause would still apply even if the policy was attached and there is a stipulation that the policy and the application constitute the contract between the parties. The insurer should still pay the proceeds since Brenda died outside the prescribed 2 year period.

X. Yes, Will can enforce the note against Simon. Under the Shelter Rule in the Negotiable Instruments Law, a party, although not a holder in due course, may still enjoy the privilege of being one if he got hold of the instrument from a holder in due course. Here, Will received the note from Dave who is a holder in due course. Hence, Will can enforce the note against Simon.

XI. a) The franchise agreements and the corresponding management contracts are not securities. The nature of the said agreements cannot be said to be securities since it is akin to that of opening a business or shop and letting another person manage the business. b. The officers of Acme Corporation are not criminally liable. It was not shown that Acme used fraud or any ill motive. They may however be liable for the said breach of contract.

XII. Yes, Mr. X is liable. The No Vessel No Liability Rule should not be given application in the case at bar since it was shown that the Queen Donna was not equipped properly in order for it to navigate safely. The negligience of Mr. X should negate his defense and that he should be made liable for the collision.

XIII. The argument of Giri that he cannot be jointly and severally liable with AGI is incorrect. The Corporation Code provides for exceptions to the rule that a corporate officer will not be held liable solidarily with the corporation in the light of the Doctrine of Separate Juridical Personality. An example is when the officer was negligient in directing the affairs of the corporation. Here, Giri materially revised the plans and deviated from it without informing the Spouses Steiner. Therefore, Giri should be made personally liable with the corporation.

XIV. a) Acme Corporation will lose its registration over the mark. The Intellectual Property Code provides that the non-use of the mark within 5 years from its registration will result to its cancellation. b) Acme Corporation can retain protection over the mark by filing another registration of the mark together with an explanation of non-use.

XV. a) The stipulation that limits the required diligence of the bus company is invalid.

The Law on Transportation provides that common carriers should exercise extraordinary diligence in the carriage of passengers and they should carry them safely to their destination. b) The passenger is bound by the value stated in the ticket. He should not be allowed to claim more than the value stated therein since he did not indicate the actual value of the baggae and he did not pay the corresponding charge thereon. XVI. The motion to dismiss should be granted. Fortius Holdings should still make a tender offer to Gawsengsit even if it is a foreign corporation since the law does not prohibit such and that Gawsengsit could file the necessary action in order to protect its interests in Bumblebee Corp. The SEC may also grant the prayed for affirmative relief since it is an implied power given to it in relation to its power to investigate and impose fines for the violation of the tender offer rule. XVII. a) Caloy can enforce the note against Mario to the original amount of P30,000. Under the Negotiable Instruments Law, a holder is deemed to be a holder in due course if there is no evidence to the contrary. Hence, Bugoy who issued the note to Caloy is considered a Holder in Due Course. Applying the Shelter Rule, although Caloy had knowledge of the alteration, he can still enforce it to its original tenor.

b) Yes, Caloy can enforce the note against Bugoy. Bugoy need not be given a Notice of Dishonor since Mario had already refused to pay the instrument that Bugoy had indorsed. The contention that Caloy is not a holder in due course should also not hold water since Bugoy had endorsed the instrument to Caloy making him liable thereon.

XVIII. No, the bank cannot file a case for estafa against Mr. Ko. Under the Doctrine of Separate Juridical Personality, the officers may not be held liable solidarily with the corporation absent any showing that merit the imposition of such liability. Here, Mr. Koh only signed in his capacity as President and he was not making himself personally liable. Hence, a case of estafa may not be filed against him.

XIX. Malakas may recover against ABC Insurance based on the Fire Policy. Under the Insurance Code, the payment of premium is required for the effectivity of the contract unless there is a stipulation or agreement to the contrary. In this case, there was an agreed 60 day credit term to renew the policy. When the fire took place, it was still within the agreed 60 day credit term. Notwithstanding the fact that ABC Insurance called up Malakas to inform him that the company was cancelling the insurance, because Malakas Department Store did not reply to the said cancellation as required by the law. Hence, the insurance policy was still in effect and Malakas may still claim from it.