3-COMxCRM Commercial and Criminal Laws PRE-WEEK NOTES

‌ ‌ ‌ ‌ Commercial‌‌Law‌& ‌ ‌‌ Criminal‌‌Law‌ ‌ COM‌x‌CRM‌ ‌Pre-Week‌‌Notes‌ ‌ ‌‌ ‌ Compiled‌‌by‌‌RGL‌‌|‌‌USC‌ ‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ TABLE‌‌OF‌‌CONTENTS‌ ‌ ‌ COMMERCIAL‌‌LAW‌ ‌ Insurance‌‌Law‌ Surety‌ ‌116‌ ‌ Letters‌‌of‌‌Credit‌ ‌117‌ ‌ 2‌ ‌ Special‌‌Laws‌ Fire‌ ‌ Casualty‌ ‌ Compulsory‌‌Motor‌‌Vehicle‌‌Liability‌ ‌ ‌ Suretyship‌ ‌ Pre-Need‌‌Law‌ 18‌ ‌ Truth‌‌in‌‌Lending‌‌Act‌ ‌119‌ ‌ Transportation‌‌Law‌ ‌20‌ ‌ Anti-Money‌‌Laundering‌‌Act‌ ‌120‌ ‌ Bancassurance‌ ‌ Partnership‌ ‌32‌ ‌ Foreign‌‌Investments‌‌Act‌ ‌124‌ ‌ Compulsory‌‌insurance‌‌coverage‌‌for‌‌agency-hired‌‌workers‌ ‌ Corporation‌‌Law‌ ‌42‌ ‌ Insolvency‌‌Laws‌ ‌125‌ ‌ Variable‌‌Contracts‌ ‌ ‌126‌ ‌ Insurable‌‌Interest‌ ‌ Securities‌‌Regulation‌‌Code‌ Banking‌‌Laws‌ 73‌ ‌ ‌ The‌‌New‌‌Central‌‌Bank‌‌Act‌ 81‌ ‌ Law‌‌on‌‌Secrecy‌‌of‌‌Bank‌‌Deposits‌ ‌84‌ ‌ General‌‌Banking‌‌Act‌ ‌85‌ ‌ Philippine‌‌Deposit‌‌Insurance‌‌Corporation‌‌Act‌ ‌89‌ ‌ Intellectual‌‌Property‌‌Law‌ Financial‌‌Rehabilitation‌‌and‌‌Insolvency‌‌Act‌ ‌94‌ ‌ Data‌‌Privacy‌‌Act‌ ‌1‌35‌ ‌ Philippine‌‌Competition‌‌Act‌ ‌138‌ ‌ Microinsurance‌ ‌ Perfection‌ ‌ Offer‌‌and‌‌acceptance/consensuality‌ ‌ Premium‌‌payment‌ ‌ CRIMINAL‌‌LAW‌ ‌ Non-default‌‌options‌‌in‌‌life‌‌insurance‌ ‌ Principles‌‌of‌‌Criminal‌‌Law‌ 146‌ ‌ Reinstatement‌‌of‌‌a‌‌lapsed‌‌policy‌‌of‌‌life‌‌insurance‌ ‌ Crimes‌‌under‌‌the‌‌Revised‌‌Penal‌‌Code‌ 187‌ ‌ Refund‌‌of‌‌premiums‌ ‌ Special‌‌Penal‌‌Laws‌ 224‌ ‌ Rescission‌ ‌ Incontestability‌‌Clause‌ ‌ ‌ Law‌‌on‌‌Patents‌ 95‌ ‌ Law‌‌on‌‌Trademark‌ ‌99‌ ‌ Law‌‌on‌‌Copyright‌ ‌106‌ ‌ Secured‌‌Transactions‌ Personal‌‌Property‌‌Securities‌‌Act‌ Real‌‌Estate‌‌Mortgage‌‌Law‌ Guaranty‌ ‌ ‌111‌ ‌ ‌113‌ ‌ Insurance‌‌Law‌ ‌ Devices‌‌to‌‌Ascertain‌‌and‌‌Control‌‌Risks‌ ‌ RA‌‌No‌‌10607‌‌|‌‌The‌‌Insurance‌‌Code‌ ‌ Business‌‌of‌‌Insurance‌ ‌ Concept‌‌of‌‌Insurance‌ ‌ Elements‌‌of‌‌an‌‌Insurance‌‌Contract‌ ‌ Characteristics‌‌and‌‌Nature‌‌of‌‌Insurance‌‌Contracts‌ ‌ Classes‌‌of‌‌Insurance‌ ‌ ‌114‌ ‌ Claims‌‌Settlement‌‌and‌‌Subrogation‌ ‌ Insurance‌‌Commission‌‌and‌‌its‌‌Powers‌ ‌ Concept‌‌of‌‌Insurance‌‌ ‌ 1. Life‌ ‌ Definition.‌ ‌—‌ ‌A‌ ‌contract‌ ‌of‌ ‌insurance‌ ‌is‌ ‌an‌ ‌agreement‌‌ whereby‌‌ ‌ Marine‌ ‌ a. one‌‌undertakes‌‌for‌‌a‌c‌ onsideration‌‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 2‌o ‌ f‌‌‌249‌ ‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ 2. 3. b. to‌i‌ ndemnify‌‌another‌‌ ‌ c. against‌l‌ oss,‌‌damage‌‌or‌‌liability‌‌ ‌ d. arising‌‌from‌‌an‌u ‌ nknown‌‌or‌‌contingent‌‌event‌.‌ ‌ For‌ ‌regulatory‌ ‌purposes,‌ ‌a‌ ‌contract‌ ‌of‌ ‌suretyship‌ ‌shall‌ ‌be‌‌ deemed‌ ‌to‌ ‌be‌ ‌an‌‌insurance‌‌contract‌‌ONLY‌‌‌if‌‌made‌‌by‌‌a‌‌surety‌‌ who‌‌is‌‌doing‌‌an‌‌insurance‌‌business.‌ ‌ Insurance‌‌‌is‌‌a‌‌contract‌‌whereby‌ ‌ a. 4. 8. One‌ ‌party‌ ‌called‌ ‌the‌ ‌insurer‌ ‌undertakes‌ ‌for‌ ‌a‌‌ consideration‌ ‌ b. To‌ ‌pay‌ ‌another‌ ‌party‌ ‌called‌ ‌the‌ ‌insured‌,‌ ‌or‌ ‌his‌‌ beneficiary‌,‌ ‌ c. Upon‌‌the‌‌happening‌‌of‌‌the‌p ‌ eril‌i‌ nsured‌‌against,‌ ‌ d. Whereby‌ ‌the‌ ‌insured‌ ‌or‌ ‌his‌ ‌beneficiary‌ ‌suffers‌ ‌loss‌ ‌or‌‌ damage‌o ‌ r‌‌is‌‌exposed‌‌to‌l‌ iability‌.‌ ‌ The‌‌‌TEST‌‌‌to‌‌determine‌‌whether‌‌a‌‌contract‌‌is‌‌one‌‌of‌‌insurance‌‌ 9. 6. 7. Applying‌ ‌the‌ ‌"‌principal‌ ‌object‌ ‌and‌ ‌purpose‌ ‌test‌,"‌ ‌a‌‌ corporation,‌ ‌such‌ ‌as‌ ‌an‌ ‌HMO‌,‌ ‌whether‌ ‌or‌ ‌not‌ ‌organized‌ ‌for‌‌ profit,‌‌whose‌‌main‌‌object‌‌is‌‌to‌‌provide‌‌the‌‌members‌‌of‌‌a‌‌group‌‌ with‌‌health‌‌services,‌‌is‌‌‌NOT‌‌‌engaged‌‌in‌‌the‌‌insurance‌‌business.‌‌ (‌Philippine‌‌Health‌‌Care‌‌Providers‌‌v.‌‌CIR‌)‌ ‌ Profit‌ ‌not‌ ‌material‌ ‌—‌ ‌Absence‌ ‌of‌ ‌PROFIT‌ ‌does‌ ‌NOT‌‌negate‌‌ the‌‌existence‌‌of‌‌an‌‌insurance‌‌contract.‌ ‌ 3. A‌ ‌third‌‌person‌‌is‌‌the‌‌‌beneficiary‌‌‌whose‌‌favor‌‌the‌‌insurance‌‌ was‌‌taken‌‌by‌‌the‌‌insured‌‌and‌‌who‌‌will‌‌receive‌‌the‌‌proceeds‌‌of‌‌ the‌‌insurance.‌ ‌ GR‌:‌ Designation‌‌of‌‌beneficiary‌‌is‌‌REVOCABLE.‌ ‌ EXC‌:‌ Unless,‌‌expressly‌d ‌ esignated‌‌as‌‌IRREVOCABLE.‌ ‌ Thus,‌ ‌an‌ ‌irrevocable‌ ‌beneficiary‌ ‌has‌ ‌VESTED‌ ‌rights‌ ‌over‌ ‌the‌‌ policy.‌ ‌ 4. If‌‌a‌‌beneficiary‌‌is‌‌disqualified‌:‌ ‌ Principle‌‌of‌‌Indemnity‌ ‌ a. Forfeited‌‌share‌‌shall‌‌pass‌‌on‌‌to‌o ‌ ther‌‌beneficiaries;‌ ‌ The‌ ‌real‌ ‌purpose‌ ‌is‌ ‌to‌ ‌place‌ ‌the‌ ‌insured‌ ‌in‌ ‌the‌ ‌same‌ ‌situation‌ ‌in‌‌ which‌‌he‌‌was‌‌before‌‌the‌‌loss.‌ ‌ b. If‌‌there‌‌are‌‌no‌‌other‌‌beneficiaries,‌‌or‌‌that‌‌they‌‌are‌‌also‌‌ DQed,‌‌look‌‌at‌‌the‌‌policy‌‌contract;‌ ‌ GR‌:‌ The‌ ‌insured‌ ‌should‌ ‌not‌ ‌collect‌ ‌more‌‌than‌‌the‌‌actual‌‌cash‌‌ value‌‌of‌‌the‌‌loss.‌ ‌ c. If‌ ‌the‌ ‌contract‌ ‌is‌ ‌silent,‌ ‌proceeds‌ ‌go‌ ‌to‌ ‌the‌‌‌estate‌‌‌of‌‌ the‌‌insured.‌ ‌ EXC‌:‌ Accepted‌‌exceptions‌‌are:‌ ‌ 5. Grounds‌‌for‌‌DQ‌ ‌ 1) Life‌‌insurance‌;‌ ‌ is‌‌whenever‌‌the‌‌assumption‌‌of‌‌risk‌‌and‌‌the‌‌indemnification‌‌ of‌‌loss‌‌is‌‌the‌p ‌ rincipal‌‌object‌‌and‌‌purpose‌‌o ‌ f‌‌the‌‌contract.‌ ‌ 5. Mutual‌ ‌Insurance‌ ‌Companies‌ ‌like‌ ‌P&I‌ ‌Clubs‌ ‌are‌‌ considered‌ ‌insurers‌.‌ ‌A‌ ‌protection‌ ‌and‌ ‌indemnity‌ ‌club‌,‌ ‌is‌‌ an‌ ‌association‌ ‌composed‌ ‌of‌ ‌shipowners‌ ‌generally‌‌formed‌‌for‌‌ the‌ ‌specific‌ ‌purpose‌ ‌of‌ ‌providing‌ ‌insurance‌ ‌cover‌ ‌against‌‌ third-party‌ ‌liabilities‌ ‌of‌ ‌its‌ ‌members.‌ ‌(‌Steamship‌ ‌Mutual‌‌ Underwriting‌ ‌Association‌ ‌(Bermuda)‌ ‌Ltd.‌ ‌v.‌ ‌Sulpicio‌ ‌Lines‌‌ 2017‌‌Leonen,‌‌J)‌ ‌ ‌ a. Those‌ ‌made‌ ‌between‌ ‌persons‌ ‌who‌ ‌were‌ ‌guilty‌ ‌of‌‌ adultery‌ ‌or‌ ‌concubinage‌ ‌at‌ ‌the‌ ‌time‌ ‌of‌ ‌donation;‌‌ Conviction,‌‌not‌‌necessary.‌ ‌ b. Those‌‌made‌‌between‌‌persons‌‌found‌‌guilty‌‌of‌‌the‌‌same‌‌ criminal‌‌offense,‌‌in‌‌consideration‌‌thereof;‌ c. Those‌ ‌made‌ ‌to‌ ‌a‌ ‌public‌ ‌officer‌ ‌or‌ ‌his‌ ‌wife,‌‌ descendants‌‌and‌‌ascendants,‌‌by‌‌reason‌‌of‌‌his‌‌office.‌ ‌ 2) Valued‌‌policies‌.‌ ‌ Parties‌ ‌ 1. The‌‌insurer‌i‌ s‌‌the‌‌party‌‌who‌‌promises‌‌to‌‌pay‌‌in‌‌case‌‌of‌‌loss.‌‌ ‌ 2. The‌‌insured‌i‌ s‌‌either‌ ‌ However‌,‌‌it‌‌does‌‌not‌‌follow‌‌that‌‌the‌‌contract‌‌that‌‌is‌‌entered‌‌into‌‌ is‌ ‌not‌ ‌insurance;‌ ‌the‌ ‌nature‌ ‌of‌ ‌the‌ ‌contract‌ ‌will‌ ‌be‌‌ examined‌ ‌on‌ ‌a‌ ‌case-to-case‌ ‌basis‌.‌ ‌Thus,‌ ‌a‌ ‌health‌ ‌care‌‌ agreement‌ ‌may‌ ‌be‌ ‌construed‌ ‌as‌ ‌a‌ ‌non-life‌ ‌insurance‌ ‌if‌ ‌it‌ ‌is‌‌ primarily‌‌a‌‌contract‌‌of‌‌indemnity.‌‌(‌Fortune‌‌Medicare‌‌v.‌‌Amorin‌‌ 2014‌)‌ ‌ Mutual‌ ‌Insurance‌ ‌Companies.‌‌‌A‌‌mutual‌‌insurance‌‌company‌‌ is‌‌a‌‌cooperative‌‌enterprise‌‌where‌‌the‌‌‌members‌‌are‌‌both‌‌the‌‌ insurer‌‌and‌‌insured‌.‌‌ ‌ Additionally,‌ ‌they‌ ‌provide‌ ‌three‌ ‌types‌ ‌of‌ ‌coverage,‌ ‌namely,‌‌ protection‌‌and‌‌indemnity,‌‌war‌‌risks,‌‌and‌‌defense‌‌costs‌.‌ ‌ a. The‌ ‌owner‌ ‌of‌ ‌the‌ ‌policy‌ ‌whose‌ ‌life‌ ‌or‌ ‌property‌ ‌is‌‌ insured;‌ ‌ Here,‌ ‌the‌ ‌insured‌ ‌and‌ ‌the‌ ‌owner‌ ‌of‌ ‌the‌ ‌policy‌‌is‌‌one‌‌ and‌‌the‌‌same.‌ ‌ b. One‌ ‌who‌ ‌took‌ ‌out‌ ‌the‌ ‌insurance‌ ‌over‌ ‌the‌ ‌life‌ ‌of‌‌ persons‌‌in‌‌whom‌‌he‌‌has‌‌insurable‌‌interest.‌ ‌ Here,‌ ‌the‌ ‌owner‌ ‌of‌ ‌the‌ ‌policy‌‌is‌‌called‌‌the‌‌‌assured‌,‌‌ while‌‌the‌‌person‌‌whose‌‌life‌‌is‌‌insured‌‌is‌‌the‌i‌ nsured.‌ ‌ If‌‌the‌‌owner‌‌dies‌,‌‌the‌‌policy‌‌automatically‌‌vests‌‌in‌‌the‌‌ insured,‌u ‌ nless‌o ‌ therwise‌‌provided‌‌for‌‌in‌‌the‌‌policy.‌ ‌ Policy‌ ‌ A‌‌policy‌‌of‌‌insurance‌‌must‌‌specify:‌ ‌ a) The‌‌parties‌b ‌ etween‌‌whom‌‌the‌‌contract‌‌is‌‌made;‌ ‌ b) The‌ ‌amount‌ ‌to‌ ‌be‌ ‌insured‌ ‌except‌ ‌in‌ ‌the‌ ‌cases‌ ‌of‌ ‌open‌ ‌or‌‌ running‌‌policies;‌ ‌ May‌ ‌stipulate‌ ‌an‌ ‌Automatic‌ ‌Increase‌ ‌Clause‌,‌ ‌wherein‌ ‌the‌‌ coverage‌ ‌is‌ ‌automatically‌ ‌increased‌ ‌to‌ ‌a‌ ‌higher‌ ‌amount‌‌if‌‌the‌‌ insured‌‌reaches‌‌a‌‌certain‌‌age.‌ ‌ c) The‌‌‌premium‌,‌‌or‌‌if‌‌the‌‌insurance‌‌is‌‌of‌‌a‌‌character‌‌where‌‌the‌‌ exact‌ ‌premium‌ ‌is‌ ‌only‌ ‌determinable‌ ‌upon‌ ‌the‌ ‌termination‌ ‌of‌‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 3‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ the‌‌contract,‌‌a‌‌statement‌‌of‌‌the‌‌basis‌‌and‌‌rates‌‌upon‌‌which‌‌the‌‌ final‌‌premium‌‌is‌‌to‌‌be‌‌determined;‌ ‌ b) Conviction‌ ‌of‌ ‌a‌ ‌crime‌ ‌arising‌ ‌out‌ ‌of‌ ‌acts‌ ‌increasing‌ ‌the‌‌ hazard‌‌insured‌‌against;‌ ‌ d) The‌‌property‌o ‌ r‌‌life‌‌insured;‌ ‌ c) Discovery‌‌of‌f‌ raud‌o ‌ r‌‌material‌m ‌ isrepresentation‌;‌ ‌ e) The‌ ‌interest‌ ‌of‌ ‌the‌ ‌insured‌ ‌in‌ ‌property‌ ‌insured,‌ ‌if‌‌he‌‌is‌‌not‌‌ d) Discovery‌ ‌of‌ ‌willful‌ ‌or‌ ‌reckless‌ ‌acts‌ ‌or‌ ‌omissions‌‌ increasing‌‌the‌‌hazard‌‌insured‌‌against;‌ ‌ the‌‌absolute‌‌owner‌‌thereof;‌ ‌ f) The‌‌risks‌i‌ nsured‌‌against;‌ ‌ All‌‌risk‌‌policy‌‌‌—‌‌all‌‌risks‌‌of‌‌accidental‌‌nature‌‌are‌‌covered.‌ ‌ f) g) The‌‌period‌d ‌ uring‌‌which‌‌the‌‌insurance‌‌is‌‌to‌‌continue.‌ ‌ Reasonable‌ ‌Expectation‌ ‌Doctrine‌ ‌dictates‌ ‌that‌ ‌the‌ ‌language‌ ‌of‌ ‌the‌‌ policy‌ ‌is‌ ‌interpreted‌ ‌to‌ ‌give‌ ‌effect‌‌to‌‌the‌‌reasonable‌‌expectation‌‌of‌‌the‌‌ insured‌.‌ ‌ §62‌.‌ ‌A‌ ‌running‌ ‌policy‌ ‌is‌ ‌one‌ ‌which‌ ‌contemplates‌‌ successive‌ ‌insurances,‌ ‌and‌ ‌which‌ ‌provides‌ ‌that‌ ‌the‌ ‌object‌ ‌of‌‌ the‌ ‌policy‌ ‌may‌ ‌be‌ ‌from‌‌time‌‌to‌‌time‌‌defined,‌‌especially‌‌as‌‌to‌‌ the‌ ‌subjects‌ ‌of‌ ‌insurance,‌ ‌by‌ ‌additional‌ ‌statements‌ ‌or‌‌ indorsements.‌ ‌ Requisites‌‌for‌C ‌ ancellation‌ ‌ 1) Prior‌‌notice‌t‌ o‌‌insured;‌ ‌ 2) Based‌‌on‌‌the‌‌‌occurrence‌‌AFTER‌‌‌effective‌‌date‌‌of‌‌the‌‌policy‌‌of‌‌ one‌‌or‌‌more‌‌of‌‌these‌g ‌ rounds‌:‌ ‌ a) Nonpayment‌o ‌ f‌‌premium;‌ ‌ Discovery‌ ‌of‌ ‌other‌ ‌insurance‌ ‌coverage‌ ‌that‌ ‌makes‌ ‌the‌‌ total‌ ‌insurance‌ ‌in‌ ‌excess‌ ‌of‌ ‌the‌ ‌value‌ ‌of‌ ‌the‌ ‌property‌‌ insured;‌‌or‌ ‌ g) A‌ ‌determination‌ ‌by‌ ‌the‌ ‌Commissioner‌ ‌that‌ ‌the‌‌ continuation‌ ‌of‌ ‌the‌ ‌policy‌ ‌would‌ ‌violate‌ ‌or‌ ‌would‌ ‌place‌‌ the‌‌insurer‌‌in‌‌violation‌‌of‌‌the‌‌IC.‌ ‌ Kinds‌‌of‌‌Property‌‌Insurance‌‌Policy‌ ‌ §61‌.‌ ‌A‌ ‌valued‌ ‌policy‌ ‌is‌‌one‌‌which‌‌expresses‌‌on‌‌its‌‌face‌‌an‌‌ agreement‌ ‌that‌ ‌the‌ ‌thing‌ ‌insured‌ ‌shall‌ ‌be‌ ‌valued‌‌at‌‌a‌‌specific‌‌ sum.‌ ‌ Risk‌ ‌ 1. 3) Notice‌‌must‌‌be‌‌in‌‌writing,‌‌mailed‌‌or‌‌delivered‌‌to‌‌insured‌‌or‌‌his‌‌ authorized‌‌broker;‌ ‌ 4) Notice‌‌must‌‌state‌‌the‌‌grounds‌‌relied‌‌upon‌‌and‌‌upon‌‌request‌‌of‌‌ insured,‌‌to‌‌furnish‌‌facts‌‌on‌‌which‌‌the‌‌cancellation‌‌is‌‌based.‌ ‌ Any‌c‌ ontingent‌o ‌ r‌‌unknown‌e‌ vent,‌‌whether‌‌past‌‌or‌‌future,‌‌ ‌ Uncertainty‌i‌ s‌‌a‌‌feature‌‌in‌‌insurance‌‌contracts.‌ ‌ e) Physical‌‌changes‌‌in‌‌the‌‌property‌‌insured‌‌which‌‌result‌‌in‌‌ the‌‌property‌‌becoming‌‌uninsurable;‌ ‌ Named‌‌peril‌‌policy‌‌‌—‌‌the‌‌risks‌‌insured‌‌against‌‌are‌‌specified;‌ ‌ §60‌.‌ ‌An‌ ‌open‌ ‌policy‌ ‌is‌ ‌one‌ ‌in‌‌which‌‌the‌‌value‌‌of‌‌the‌‌thing‌‌ insured‌ ‌is‌ ‌not‌ ‌agreed‌ ‌upon,‌ ‌and‌ ‌the‌ ‌amount‌ ‌of‌ ‌the‌ ‌insurance‌‌ merely‌ ‌represents‌ ‌the‌ ‌insurer's‌ ‌maximum‌ ‌liability.‌‌The‌‌value‌‌ of‌ ‌such‌ ‌thing‌ ‌insured‌ ‌shall‌ ‌be‌ ‌ascertained‌ ‌at‌ ‌the‌ ‌time‌ ‌of‌ ‌the‌‌ loss.‌ ‌ e) In‌ ‌consideration‌ ‌of‌ ‌the‌ ‌insurer’s‌ ‌promise,‌ ‌the‌ ‌insured‌ ‌pays‌ ‌a‌‌ premium‌.‌ ‌ Past‌ ‌events‌ ‌that‌ ‌may‌ ‌be‌ ‌insured‌ ‌is‌ ‌peculiar‌ ‌to‌ ‌marine‌‌ insurance.‌ ‌ 2. Which‌‌‌may‌‌damnify‌‌a‌‌person‌‌having‌‌an‌‌insurable‌‌interest,‌‌or‌‌ create‌‌a‌‌liability‌‌‌against‌‌him.‌ ‌ Further,‌‌the‌‌risk‌‌must‌‌be‌I‌ NSURABLE‌,‌‌wherein:‌ ‌ 1. There‌ ‌must‌ ‌be‌ ‌a‌ ‌large‌ ‌number‌ ‌of‌ ‌homogenous‌ ‌exposure‌‌ units;‌ ‌ 2. The‌‌loss‌‌must‌‌be‌‌accidental‌a‌ nd‌‌unintentional‌;‌ ‌ 3. The‌‌loss‌‌must‌‌be‌‌determinable‌a‌ nd‌‌measurable‌;‌ ‌ 4. The‌‌loss‌‌should‌‌NOT‌b ‌ e‌‌catastrophic‌;‌ ‌ Nevertheless,‌‌trivial‌‌losses‌‌are‌‌NOT‌‌insurable.‌‌‌De‌‌minimis‌‌non‌‌ curat‌‌lex.‌ ‌ Transfer‌‌of‌‌Policy‌ ‌ 1) Life‌ ‌insurance‌ ‌—‌ ‌may‌ ‌be‌ ‌transferred‌ ‌WITHOUT‌ ‌consent‌ ‌of‌‌ insurer;‌ ‌ 2) Property‌ ‌insurance‌ ‌—‌ ‌needs‌ ‌consent‌ ‌of‌ ‌insurer;‌ ‌otherwise,‌‌ the‌‌policy‌‌is‌‌suspended‌,‌‌but‌‌not‌‌avoided.‌ ‌ Elements‌‌of‌‌an‌‌Insurance‌‌Contract‌ ‌ a) The‌‌insured‌‌has‌‌an‌i‌ nsurable‌‌interest‌;‌ ‌ b) The‌‌insured‌‌is‌‌subject‌‌to‌‌a‌‌risk‌‌of‌‌loss‌‌by‌‌the‌‌happening‌‌of‌‌the‌‌ designated‌‌peril;‌ ‌ 5. The‌‌chance‌o ‌ f‌‌loss‌‌must‌‌be‌‌calculable‌;‌‌and‌ ‌ 6. The‌‌premium‌m ‌ ust‌‌be‌‌economically‌f‌ easible‌.‌ ‌ Assumption‌‌of‌‌Risk‌‌—‌‌The‌‌insurer‌‌promises‌‌to‌‌pay‌‌the‌‌insured‌‌if‌‌the‌‌ risk‌‌insured‌‌against‌‌occurs.‌ ‌ Characteristics‌‌and‌‌Nature‌‌of‌‌Insurance‌‌Contracts‌ ‌ Insurance‌‌contracts‌‌are:‌ ‌ 1) Contract‌‌of‌‌Adhesion‌;‌ ‌ c) The‌‌insurer‌a ‌ ssumes‌‌the‌‌risk‌;‌ ‌ 2) Risk-Distributing‌‌Device‌;‌ ‌ d) Such‌ ‌assumption‌ ‌of‌ ‌risk‌ ‌is‌ ‌part‌ ‌of‌ ‌a‌ ‌general‌ ‌scheme‌ ‌to‌‌ distribute‌ ‌actual‌ ‌losses‌ ‌among‌ ‌a‌ ‌large‌ ‌group‌ ‌of‌ ‌persons‌‌ bearing‌‌a‌‌similar‌‌risk;‌‌and‌ ‌ 3) Aleatory‌ ‌—‌ ‌the‌ ‌obligation‌ ‌of‌ ‌the‌ ‌insurer‌ ‌to‌ ‌pay‌‌arises‌‌only‌‌ upon‌ ‌the‌ ‌happening‌ ‌of‌ ‌an‌ ‌event,‌ ‌which‌ ‌is‌ ‌uncertain,‌ ‌or‌ ‌is‌ ‌to‌‌ occur‌‌at‌‌an‌‌indeterminate‌‌time.‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 4‌o ‌ f‌‌‌249‌ ‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ 4) Unilateral‌ ‌—‌ ‌upon‌ ‌payment‌ ‌of‌ ‌the‌ ‌premium,‌ ‌there‌ ‌is‌ ‌only‌‌ one‌ ‌party‌ ‌who‌ ‌has‌ ‌the‌ ‌obligation,‌ ‌the‌ ‌insurer’s‌ ‌obligation‌ ‌to‌‌ pay‌‌the‌‌proceeds‌‌of‌‌insurance‌‌in‌‌case‌‌of‌‌loss.‌ ‌ 5) Personal‌‌‌—‌‌‌Each‌‌party‌‌enters‌‌into‌‌the‌‌contract‌‌in‌‌view‌‌of‌‌the‌‌ character,‌‌credit,‌‌and‌‌conduct‌‌of‌‌the‌‌other.‌ ‌ 6) Consensual‌— ‌ ‌‌perfected‌‌by‌‌mere‌‌consent.‌ ‌ 7) Uberrimae‌ ‌Fidae‌ ‌—‌‌‌one‌‌of‌‌perfect‌‌good‌‌faith.‌‌Parties‌‌must‌‌ avoid‌‌material‌‌concealment‌‌or‌‌misrepresentations.‌ ‌ 8) Executory‌ ‌and‌ ‌Conditional‌ ‌—‌ ‌executory‌ ‌to‌ ‌the‌ ‌insurer‌‌ and‌ ‌subject‌ ‌to‌‌conditions,‌‌principal‌‌of‌‌which‌‌is‌‌the‌‌happening‌‌ of‌‌the‌‌event‌‌insured‌‌against.‌ ‌ Classes‌‌of‌‌Insurance‌ ‌ 2) Term‌ ‌—‌ ‌Insurer‌ ‌pays‌ ‌proceeds‌ ‌if‌ ‌insured‌ ‌dies‌ ‌within‌ ‌a‌‌ specified‌‌period;‌‌insured‌‌gets‌‌nothing‌‌if‌‌he‌‌survives‌‌the‌‌period.‌ ‌ 3) Endowment‌ ‌Policy‌ ‌—‌ ‌proceeds‌ ‌shall‌ ‌be‌ ‌payable‌ ‌to‌ ‌the‌‌ assured‌ ‌if‌ ‌he‌ ‌lives‌ ‌to‌‌a‌‌certain‌‌date;‌‌to‌‌the‌‌‌beneficiary‌‌‌if‌‌the‌‌ assured‌‌dies‌‌before‌‌said‌‌date.‌ ‌ 4) Industrial‌ ‌Life‌ ‌—‌ ‌premiums‌ ‌are‌ ‌payable‌ ‌either‌ ‌monthly‌ ‌or‌‌ oftener.‌ ‌ 5) Variable‌ ‌Life‌ ‌or‌ ‌Variable‌ ‌Unit-Linked‌ ‌(VUL)‌ ‌Insurance‌‌ Contractor‌‌Policy‌‌‌—‌‌see‌‌§238(a)‌‌‌on‌‌Variable‌‌Contract.‌ ‌ Suicide‌‌Clause‌ ‌ movable‌ ‌property,‌ ‌may‌ ‌be‌ ‌exposed‌ ‌during‌ ‌a‌ ‌certain‌ ‌voyage‌ ‌or‌ ‌a‌‌ fixed‌‌period‌‌of‌‌time.‌ ‌ Different‌‌Types‌ ‌ 1) Ocean‌ ‌Marine‌ ‌—‌ ‌connected‌ ‌with‌ ‌navigation;‌ ‌they‌ ‌are‌‌ insurance‌ ‌ a) Over‌‌the‌‌vessel;‌ ‌ b) Against‌‌liability‌ ‌ i) ii) The‌ ‌insurer‌ ‌is‌ ‌liable‌ ‌in‌ ‌case‌ ‌of‌ ‌suicide‌ ‌when‌ ‌it‌ ‌is‌ ‌committed‌‌ AFTER‌‌‌the‌‌policy‌‌has‌‌been‌‌in‌‌force‌‌for‌‌‌2‌‌years‌‌from‌‌date‌‌of‌‌issue‌‌ or‌‌last‌‌reinstatement.‌ ‌ Every‌ ‌contract‌ ‌or‌ ‌undertaking‌ ‌for‌ ‌the‌ ‌payment‌ ‌of‌ ‌annuities‌‌ 1) When‌‌a‌‌shorter‌‌period‌‌is‌‌provided‌‌for;‌ ‌ including‌ ‌contracts‌ ‌for‌ ‌the‌ ‌payment‌ ‌of‌ ‌lump‌ ‌sums‌ ‌under‌ ‌a‌‌ 2) When‌‌the‌‌suicide‌‌was‌‌committed‌‌in‌‌a‌s‌ tate‌‌of‌‌insanity.‌ ‌ retirement‌‌program‌‌where‌‌a‌‌‌life‌‌insurance‌‌company‌‌manages‌‌ or‌ ‌acts‌ ‌as‌ ‌a‌ ‌trustee‌ ‌for‌ ‌such‌ ‌retirement‌ ‌program‌ ‌shall‌ ‌be‌‌ Accidental‌‌Death‌‌Benefit‌‌Clause‌ ‌ considered‌‌a‌‌life‌‌insurance‌‌contract.‌ ‌ Gives‌‌beneficiaries‌‌additional‌‌benefits‌‌if‌‌the‌‌death‌‌of‌‌the‌‌insured‌‌is‌‌ GR‌:‌ Not‌ ‌a‌ ‌contract‌ ‌of‌ ‌indemnity.‌ ‌The‌‌measure‌‌of‌‌indemnity‌‌is‌‌the‌‌ through‌‌accidental‌‌means.‌ ‌ sum‌‌fixed‌i‌ n‌‌the‌‌policy.‌‌It‌‌is‌‌therefore‌‌a‌v ‌ alued‌p ‌ olicy.‌ ‌ Applicability‌‌of‌‌Incontestability‌‌Clause‌ EXC‌:‌ Unless‌‌the‌‌interest‌‌of‌‌a‌‌person‌‌insured‌‌is‌‌‌susceptible‌‌of‌‌exact‌‌ If‌‌the‌‌insured‌‌dies‌‌within‌‌the‌‌two-year‌‌contestability‌‌period‌,‌‌the‌‌ pecuniary‌‌measurement‌,‌‌‌i.e.‌‌a‌‌creditor‌‌insures‌‌the‌‌life‌‌of‌‌his‌‌ insurer‌ ‌is‌ ‌bound‌ ‌to‌ ‌make‌ ‌good‌ ‌its‌ ‌obligation‌ ‌under‌ ‌the‌ ‌policy,‌‌ debtor‌‌based‌‌on‌‌the‌‌value‌‌of‌‌indebtedness.‌ ‌ regardless‌ ‌of‌ ‌the‌ ‌presence‌ ‌or‌ ‌lack‌ ‌of‌ ‌concealment‌ ‌or‌‌ Kinds‌‌of‌‌Life‌‌Insurance‌ ‌ 1) Whole‌ ‌Life‌ ‌—‌ ‌offers‌‌permanent‌‌protection.‌‌Further‌‌classified‌‌ as‌‌to‌‌mode‌‌of‌‌payment‌‌of‌‌premium:‌ ‌ a) Single‌‌Premium;‌ ‌ b) Continuous‌‌Premium‌‌or‌‌Ordinary‌‌Life;‌ ‌ c) Limited‌‌Payment‌‌Period.‌ ‌ misrepresentation.‌ ‌ After‌ ‌the‌‌two-year‌‌period‌‌lapses,‌‌OR‌‌when‌‌the‌‌insured‌‌dies‌‌within‌‌ the‌ ‌period,‌ ‌the‌ ‌insurer‌ ‌must‌ ‌make‌ ‌good‌ ‌on‌ ‌the‌ ‌policy‌,‌ ‌even‌‌ though‌ ‌the‌ ‌policy‌ ‌was‌ ‌obtained‌ ‌by‌ ‌fraud,‌ ‌concealment,‌ ‌or‌ misrepresentation.‌‌(S‌ un‌‌Life‌‌of‌‌Canada‌‌v.‌‌Sibya‌‌2 ‌ 016‌)‌ ‌ Marine‌ ‌ Marine‌‌Protection‌‌and‌‌Indemnity‌‌Insurance‌;‌ ‌ iii) Excess‌ ‌Protection‌ ‌and‌ ‌Indemnity‌ ‌Insurance‌ ‌—‌‌ covers‌‌damage‌‌or‌‌liability‌‌in‌‌excess‌‌of‌‌the‌‌value‌‌of‌‌the‌‌ ship.‌ ‌It‌ ‌is‌ ‌an‌ ‌exception‌ ‌to‌ ‌the‌‌limited‌‌liability‌‌rule‌‌in‌‌ maritime‌ ‌law.‌ ‌Includes‌ ‌cases‌ ‌when‌ ‌shipowner‌ ‌was‌‌ negligent.‌ ‌ iv) Water‌‌Pollution‌‌Liability‌.‌ ‌ The‌‌insurer‌‌is‌‌still‌‌liable‌‌even‌‌before‌‌the‌‌two‌‌year‌‌period‌‌in‌‌any‌‌of‌‌ the‌‌following‌‌cases:‌ ‌ Life‌ ‌ Running‌ ‌Down‌ ‌Clause‌ ‌—‌ ‌insures‌ ‌liability‌ ‌against‌‌ collision;‌ ‌ c) Over‌‌the‌‌cargo‌ ‌ i) ii) Trip‌‌or‌‌Single‌‌Risk‌‌Cargo‌‌Policy‌;‌ ‌ Open‌‌Cargo‌‌Policy‌.‌ ‌ d) Over‌ ‌freightage‌ ‌and‌ ‌income‌ ‌—‌‌cover‌‌loss‌‌of‌‌freightage‌‌ for‌‌failure‌‌to‌‌complete‌‌voyage‌‌or‌‌delivery‌‌of‌‌goods.‌ ‌ e) Compulsory‌ ‌Passenger‌ ‌and‌ ‌Cargo‌‌Liability‌‌Insurance‌‌ —‌ ‌mandated‌ ‌by‌ ‌RA‌ ‌9295.‌ ‌P200K‌ ‌for‌ ‌each‌ ‌passenger‌‌ imposed‌ ‌on‌ ‌shipowners.‌ ‌P50K‌ ‌each‌ ‌for‌ ‌survivors‌ ‌of‌ ‌a‌‌ maritime‌‌accident.‌ ‌ 2) Inland‌ ‌Marine‌ ‌—‌ ‌do‌ ‌not‌ ‌relate‌ ‌to‌ ‌navigation.‌ ‌Includes‌‌ insurance‌‌over‌‌cargoes,‌‌infrastructure‌‌and‌‌floaters.‌ ‌ 3) Aviation‌— ‌ ‌‌over‌‌aircrafts.‌ ‌ Risks‌‌Insured‌‌Against‌ ‌ Includes‌ ‌policies‌ ‌that‌ ‌cover‌ ‌risks‌ ‌connected‌ ‌with‌ ‌navigation,‌ ‌to‌‌ which‌‌a‌‌ship,‌‌cargo,‌‌freightage,‌‌profits,‌‌or‌‌other‌‌insurable‌‌interest‌‌in‌‌ 1) All‌‌Risk‌‌Policy‌‌‌—‌‌against‌‌ALL‌‌conceivable‌‌causes‌e‌ xcept‌ ‌ a) As‌‌otherwise‌‌excepted,‌‌such‌‌as‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 5‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ i) ii) Free‌‌capture‌‌and‌‌seizure‌‌(FC&S)‌‌clause;‌ ‌ b) through‌ ‌the‌ ‌latent‌ ‌defects‌ ‌of‌ ‌the‌ ‌machinery‌ ‌and‌‌ equipment,‌‌‌hull‌‌or‌‌its‌‌appurtenances‌‌and‌‌ ‌ Strikes,‌‌riots‌‌and‌‌civil‌‌commotion‌‌(SR&CC)‌‌clause‌;‌‌ or‌ ‌ a) Perils‌ ‌of‌ ‌the‌ ‌sea‌ ‌or‌ ‌navigation‌ ‌—‌ ‌include‌ ‌only‌ ‌such‌‌ losses‌ ‌as‌ ‌are‌ ‌of‌ ‌extraordinary‌ ‌nature‌ ‌or‌ ‌arise‌ ‌from‌ ‌some‌‌ overwhelming‌ ‌power‌ ‌which‌‌cannot‌‌be‌‌guarded‌‌against‌‌by‌‌ the‌‌ordinary‌‌exertion‌‌of‌‌human‌‌skill‌‌or‌‌prudence.‌ ‌ b) Perils‌‌of‌‌the‌‌ship‌‌—‌‌a‌‌loss‌‌which‌‌in‌‌the‌‌ordinary‌‌course‌‌ of‌‌events,‌‌results:‌ i) ii) iii) From‌‌the‌‌ordinary,‌‌natural,‌‌and‌‌inevitable‌‌action‌‌of‌‌the‌‌ sea;‌ ‌ From‌‌ordinary‌‌wear‌‌and‌‌tear‌‌of‌‌the‌‌ship;‌‌and‌ ‌ From‌ ‌the‌ ‌negligent‌ ‌failure‌ ‌of‌ ‌the‌ ‌ship’s‌ ‌owner‌ ‌to‌‌ provide‌ ‌the‌ ‌vessel‌ ‌with‌ ‌the‌ ‌proper‌ ‌equipment‌ ‌to‌‌ convey‌‌the‌‌cargo.‌ ‌ c) Fire‌‌and‌‌Related‌‌Perils‌;‌ ‌ d) Jettison‌ ‌—‌ ‌goods‌ ‌are‌ ‌thrown‌ ‌overboard‌ ‌to‌ ‌save‌ ‌other‌‌ cargoes‌‌and/or‌‌the‌‌ship;‌ ‌ i) If‌ ‌there‌ ‌is‌ ‌a‌ ‌charter‌ ‌party‌ ‌—‌ ‌when‌ ‌the‌ ‌ship‌‌has‌‌ broken‌‌ground‌‌on‌‌the‌‌chartered‌‌voyage;‌ ‌ ii) 4) Sue‌ ‌and‌‌Labor‌‌(S&L)‌‌Clause‌‌‌—‌‌requires‌‌the‌‌insured‌‌and‌‌his‌ representative‌‌to‌‌take‌‌all‌‌reasonable‌‌steps‌‌that‌‌are‌‌necessary‌‌to‌‌ limit‌‌or‌‌reduce‌‌an‌‌imminent‌‌loss.‌ ‌ In‌ ‌carriage‌ ‌of‌ ‌goods‌ ‌—‌ ‌when‌ ‌the‌ ‌goods‌ ‌are‌‌ actually‌ ‌on‌ ‌board‌ ‌or‌ ‌there‌ ‌is‌ ‌some‌ ‌contract‌ ‌for‌‌ putting‌ ‌them‌ ‌on‌ ‌board,‌ ‌and‌ ‌both‌ ‌ship‌ ‌and‌‌goods‌‌ are‌‌ready‌‌for‌‌the‌‌specified‌‌voyage.‌ ‌ 5) Protection‌ ‌and‌ ‌Indemnity‌ ‌(P&I)‌ ‌Clause‌ ‌—‌ ‌insures‌ ‌the‌ shipowner‌ ‌from‌ ‌liability‌ ‌for‌ ‌damages‌ ‌caused‌ ‌by‌ ‌the‌ ‌ship‌ ‌to‌‌ wharves,‌‌piers‌‌and‌‌other‌‌harbor‌‌installations;‌ ‌ b) One‌‌who‌‌‌has‌‌an‌‌interest‌‌in‌‌the‌‌thing‌‌from‌‌which‌‌profits‌‌ are‌ ‌expected‌ ‌to‌ ‌proceed‌ ‌has‌ ‌an‌ ‌insurable‌ ‌interest‌ ‌in‌ ‌the‌‌ profits‌.‌‌(§107)‌ ‌ 3) Delay‌ ‌Clause‌ ‌—‌ ‌exempts‌ ‌insurer‌ ‌from‌ ‌liability‌ ‌if‌ ‌there‌ ‌was‌‌ delay‌‌in‌‌the‌‌voyage;‌ ‌ 6) Institute‌‌War‌‌Clause‌‌(IWC)‌‌‌—‌‌covers‌‌risks‌‌covered‌‌by‌‌FC&S‌‌ +‌‌capture,‌‌seizure,‌‌arrest,‌‌restraint‌‌or‌‌detainment,‌‌including‌‌by‌‌ civil‌‌authorities.‌ ‌ 7) Memorandum‌ ‌Clause‌ ‌—‌ ‌provides‌ ‌for‌ ‌the‌ ‌list‌ ‌of‌ ‌goods‌ ‌for‌‌ which‌‌the‌‌insurer‌‌will‌‌be‌‌liable‌‌unless‌‌damage‌‌exceeds‌‌a‌‌stated‌‌ percentage‌‌of‌‌total‌‌value.‌ ‌ Who‌‌has‌I‌ nsurable‌‌Interest‌ ‌ 1) Over‌‌the‌s‌ hip‌ ‌ a) Shipowner‌-‌ ‌‌up‌‌to‌‌the‌‌full‌‌value‌‌of‌‌the‌‌ship;‌ ‌ If‌ ‌ship‌ ‌also‌ ‌insured‌ ‌by‌ ‌charterer,‌ ‌the‌ ‌shipowner‌ ‌can‌‌ only‌ ‌recover‌ ‌the‌ ‌portion‌ ‌that‌ ‌he‌‌cannot‌‌recover‌‌from‌‌ the‌‌charterer.‌ ‌ Assailing‌‌Thieves‌— ‌ ‌‌theft‌‌of‌‌cargo‌‌committed‌‌by‌‌force;‌ ‌ g) All‌‌Other‌‌like‌‌Perils‌‌‌—‌‌to‌‌be‌‌interpreted‌‌as‌‌covering‌‌risks‌‌ which‌ ‌are‌ ‌of‌ ‌like‌ ‌kind‌ ‌with‌ ‌particular‌ ‌risks‌ ‌which‌ ‌are‌‌ enumerated‌ ‌in‌ ‌the‌ ‌preceding‌ ‌part‌ ‌of‌ ‌the‌ ‌same‌ ‌clause,‌‌ following‌e‌ jusdem‌‌generis‌.‌ ‌ b) Charterer‌ ‌-‌ ‌to‌‌the‌‌extent‌‌that‌‌he‌‌is‌‌liable‌‌to‌‌be‌‌damnified‌‌ by‌‌its‌‌loss;‌ ‌ Clauses‌‌that‌M ‌ odify‌‌Coverage‌ ‌ 1) Inchmaree‌ ‌Clause‌ ‌—‌ ‌included‌ ‌in‌‌a‌‌hull‌‌policy‌‌to‌‌cover‌‌loss‌‌ or‌‌damage‌‌ ‌ a) Shipowner‌ ‌and‌‌charterer‌‌‌-‌‌over‌‌the‌‌expected‌‌freightage,‌‌ which‌‌arises:‌ ‌ 2) Running‌‌Down‌‌Clause‌— ‌ ‌‌insures‌‌liability‌‌against‌c‌ ollision‌;‌ ‌ e) Barratry‌‌‌—‌‌act‌‌committed‌‌by‌‌the‌‌master‌‌or‌‌crew‌‌for‌‌some‌‌ unlawful‌‌or‌‌fraudulent‌‌purpose‌‌contrary‌‌to‌‌their‌‌duty;‌ ‌ f) 3) Over‌f‌ reightage‌‌and‌‌income‌ ‌ c) faults‌‌or‌‌errors‌‌in‌‌the‌‌navigation‌‌or‌‌management‌‌of‌‌the‌‌ vessel.‌‌ ‌ b) One‌‌due‌‌to‌‌fraud‌‌or‌‌intentional‌‌misconduct‌‌of‌‌insured.‌ ‌ 2) Named‌‌Perils‌‌Policy‌ ‌ b) In‌‌Respondentia‌.‌ ‌ GR‌:‌ In‌‌ordinary‌‌insurance,‌‌belief‌‌or‌‌expectation‌‌of‌‌third‌‌persons‌‌are‌‌ NOT‌‌material‌‌and‌‌need‌‌not‌‌be‌‌disclosed.‌ ‌ EXC‌:‌ In‌ ‌marine‌ ‌insurance,‌ ‌where‌ ‌information‌ ‌of‌ ‌the‌ ‌belief‌ ‌or‌‌ expectation‌‌of‌‌a‌‌third‌‌person,‌‌‌in‌‌reference‌‌to‌‌a‌‌material‌‌fact‌,‌‌is‌‌ material‌.‌ ‌ GR‌:‌ Insurer‌‌may‌‌rescind‌‌contract‌‌even‌‌if‌‌the‌‌risk‌‌concealed‌‌is‌‌NOT‌‌ the‌‌cause‌‌of‌‌the‌‌loss.‌ ‌ EXC‌:‌ In‌ ‌marine‌ ‌insurance,‌ ‌insurer‌ ‌is‌ ‌exonerated‌ ‌ONLY‌ ‌if‌ ‌the‌‌risk‌‌ concealed‌‌is‌‌the‌‌cause‌‌of‌‌the‌‌loss‌‌and‌‌relates‌‌to‌‌the:‌ ‌ 1) national‌‌character‌‌of‌‌the‌‌insured;‌ ‌ 2) liability‌‌of‌‌the‌‌thing‌‌insured‌‌to‌‌capture‌‌and‌‌detention;‌ ‌ 3) liability‌‌to‌‌seizure‌‌from‌‌breach‌‌of‌‌foreign‌‌laws‌‌of‌‌trade;‌ ‌ c) Lender‌‌on‌‌Bottomry‌‌‌-‌‌up‌‌to‌‌the‌‌extent‌‌of‌‌the‌‌loan;‌ ‌ 4) want‌‌of‌‌necessary‌‌documents;‌‌OR‌ ‌ d) Mortgagee‌.‌ ‌ 5) use‌‌of‌‌false‌‌and‌‌simulated‌‌papers.‌ ‌ Representation‌ ‌ 2) Over‌c‌ argo‌ ‌ a) through‌‌the‌‌bursting‌‌of‌‌the‌‌boiler,‌‌breaking‌‌of‌‌shafts‌‌or‌‌ ‌ Concealment‌ ‌ a) Both‌‌the‌‌shipowner‌‌and‌‌shipper.‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 6‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ 1. 2. 3. If‌ ‌intentionally‌ ‌false‌ ‌in‌ ‌any‌ ‌material‌ ‌respect,‌‌or‌‌‌in‌‌respect‌‌of‌‌ any‌‌fact‌‌on‌‌which‌‌the‌‌character‌‌and‌‌nature‌‌of‌‌the‌‌risk‌‌depends,‌‌ the‌‌insurer‌‌may‌‌rescind‌‌the‌‌entire‌‌contract.‌ ‌ b) Departure‌ ‌from‌ ‌the‌ ‌most‌ ‌natural,‌ ‌direct‌ ‌and‌‌ advantageous‌‌route‌i‌ f‌‌not‌‌fixed‌‌by‌‌mercantile‌‌usage;‌ ‌ Expectations‌ ‌of‌ ‌insured‌ ‌are‌‌not‌‌material‌‌‌unless‌‌it‌‌will‌‌amount‌‌ to‌‌promissory‌‌representation.‌ ‌ d) Commencement‌‌of‌‌an‌‌‌entirely‌‌different‌‌‌voyage.‌ ‌ c) Unreasonable‌‌delay‌‌‌in‌‌pursuing‌‌the‌‌voyage;‌‌or‌ ‌ A‌‌deviation‌‌is‌P ‌ ROPER‌:‌ ‌ The‌ ‌contract‌ ‌will‌ ‌be‌ ‌avoided‌ ‌only‌ ‌if‌ ‌there‌ ‌is‌ ‌fraud‌ ‌in‌‌ representing‌‌an‌‌expectation‌‌that‌‌turns‌‌out‌‌to‌‌be‌‌false‌‌(§114).‌ ‌ a) When‌ ‌caused‌ ‌by‌ ‌circumstances‌ ‌over‌ ‌which‌ ‌neither‌ ‌the‌‌ master‌‌nor‌‌the‌‌owner‌‌of‌‌the‌‌ship‌‌has‌‌any‌‌control;‌ ‌ Implied‌‌Warranties‌ ‌ b) When‌‌necessary‌‌‌to‌‌comply‌‌with‌‌a‌‌warranty‌,‌‌or‌‌to‌‌‌avoid‌‌ a‌‌peril‌,‌‌whether‌‌or‌‌not‌‌the‌‌peril‌‌is‌‌insured‌‌against;‌ ‌ 1) Seaworthiness‌ ‌—‌ ‌a‌ ‌ship‌ ‌is‌ ‌seaworthy‌ ‌if‌ ‌it‌ ‌is‌ ‌able‌ ‌to‌‌ withstand‌‌the‌‌rigors‌‌of‌‌the‌‌voyage‌‌and‌‌it‌‌has‌‌been‌‌ ‌ c) When‌‌made‌‌in‌‌good‌‌faith‌,‌‌and‌‌upon‌‌reasonable‌‌grounds‌‌of‌‌ belief‌‌in‌‌its‌‌necessity‌‌to‌‌avoid‌‌a‌‌peril‌;‌‌or‌ ‌ a) properly‌‌laden,‌‌ ‌ b) provided‌‌with‌‌competent‌‌crew‌‌and‌‌ ‌ d) When‌ ‌made‌ ‌in‌ ‌good‌ ‌faith‌,‌ ‌for‌ ‌the‌ ‌purpose‌ ‌of‌ ‌saving‌‌ human‌‌life‌‌‌or‌‌relieving‌‌another‌‌vessel‌‌in‌‌distress‌.‌ ‌ c) equipped‌ ‌with‌ ‌the‌ ‌appropriate‌ ‌appurtenances‌ ‌and‌‌ equipment.‌ ‌ Every‌‌other‌‌deviation,‌I‌ MPROPER‌.‌ ‌ GR‌:‌ It‌‌is‌‌only‌‌at‌‌the‌‌commencement‌‌of‌‌the‌‌voyage‌‌that‌‌the‌‌ 4) Legality‌o ‌ f‌‌voyage.‌ ‌ ship‌ ‌be‌ ‌seaworthy.‌ ‌There‌ ‌is‌ ‌no‌ ‌breach‌ ‌of‌‌warranty‌‌if‌‌ the‌‌ship‌‌becomes‌‌unseaworthy‌‌afterwards.‌ ‌ Loss‌ ‌ EXC‌:‌ If‌ ‌there‌ ‌is‌ ‌unreasonable‌ ‌delay‌ ‌in‌ ‌repairing‌ ‌the‌‌ defect‌‌when‌‌the‌‌ship‌‌becomes‌‌unseaworthy‌‌during‌‌the‌‌ voyage.‌‌The‌‌insurer‌‌is‌‌exonerated.‌‌(§120)‌ ‌ a) Actual‌— ‌ ‌‌caused‌‌by:‌ ‌ Total‌‌destruction‌‌‌of‌‌the‌‌thing‌‌insured;‌ ‌ ii) 2) That‌‌the‌‌ship‌‌has‌‌the‌‌‌documents‌‌of‌‌neutrality‌‌or‌‌nationality‌‌ —‌‌ ‌ The‌ ‌irretrievable‌ ‌loss‌ ‌of‌ ‌the‌‌thing‌‌by‌‌sinking,‌‌or‌‌by‌‌ being‌‌broken‌‌up;‌ ‌ iii) a) Vessel‌ ‌has‌ ‌the‌ ‌requisite‌ ‌documents‌ ‌of‌ ‌nationality‌ ‌or‌‌ neutrality;‌‌and‌ ‌ Any‌ ‌damage‌ ‌to‌‌the‌‌thing‌‌which‌‌‌renders‌‌it‌‌valueless‌‌ to‌‌the‌‌owner‌f‌ or‌‌the‌‌purpose‌‌‌for‌‌which‌‌he‌‌held‌‌it;‌‌or‌ ‌ iv) Any‌ ‌other‌ ‌event‌ ‌which‌ ‌effectively‌ ‌deprives‌ ‌the‌‌ owner‌‌of‌‌the‌‌possession‌,‌‌at‌‌the‌‌port‌‌of‌‌destination,‌‌of‌‌ the‌‌thing‌‌insured.‌ ‌ 3) Against‌‌improper‌d ‌ eviation‌— ‌ ‌‌Instances‌‌of‌‌deviation:‌ ‌ a) Departure‌ ‌from‌ ‌the‌ ‌course‌ ‌of‌ ‌sailing‌ ‌fixed‌ ‌by‌‌mercantile‌‌ usage;‌ ‌ b) Constructive,‌‌commercial,‌‌or‌‌conventional‌‌‌—‌‌gives‌‌to‌‌a‌‌ person‌‌insured‌‌a‌‌right‌‌to‌‌abandon‌,‌‌under‌‌§141.‌ ‌ i) more‌‌than‌‌ ‌¾;‌‌ ‌ iii) Expense‌ ‌of‌ ‌transshipment‌ ‌exceeds‌ ‌¾‌‌of‌‌the‌‌value‌‌of‌‌ cargo.‌ ‌ GR‌:‌ Fact‌ ‌of‌ ‌actual‌ ‌loss‌ ‌must‌ ‌be‌‌established‌‌by‌‌sufficient‌‌ evidence.‌ ‌ EXC‌:‌ There‌‌is‌‌‌presumed‌‌actual‌‌total‌‌loss‌‌if‌‌the‌‌following‌‌ requisites‌‌concur:‌ ‌ a) Continued‌ ‌absence‌ ‌of‌ ‌the‌ ‌ship‌ ‌for‌ ‌a‌ ‌considerable‌‌ length‌‌of‌‌time;‌‌and‌ ‌ b) The‌‌vessel‌‌has‌‌not‌‌been‌‌heard‌‌of.‌‌(§134)‌ ‌ 2) PARTIAL‌— ‌ ‌‌not‌‌total.‌ ‌ Reshipment‌ ‌ 1) If‌ ‌the‌ ‌goods‌ ‌are‌ ‌reshipped,‌ ‌the‌ ‌insurance‌ ‌over‌ ‌the‌ ‌goods‌‌ continue‌‌when‌‌they‌‌are‌‌thus‌‌reshipped;‌ ‌ As‌‌to‌‌cargo‌‌owners‌,‌‌it‌‌is‌‌their‌‌responsibility‌‌to‌‌make‌‌sure‌‌the‌‌ carrier‌‌they‌‌choose‌‌to‌‌ship‌‌their‌‌goods‌‌is‌‌seaworthy.‌ ‌ b) Vessel‌ ‌will‌ ‌not‌ ‌carry‌‌documents‌‌that‌‌will‌‌cast‌‌reasonable‌‌ suspicion‌ ‌on‌ ‌its‌ ‌nationality‌ ‌or‌‌neutrality‌‌‌if‌‌nationality‌‌or‌‌ neutrality‌‌is‌‌expressly‌‌warranted.‌(‌ §122)‌ ‌ Damage‌‌reducing‌‌the‌‌value‌‌of‌‌the‌‌vessel‌‌and‌‌cargo‌‌by‌‌ Whenever‌‌the‌‌ship‌‌is‌‌prevented‌‌from‌‌completing‌‌its‌‌voyage‌‌because‌‌of‌‌a‌‌ peril‌‌insured‌‌against,‌‌the‌‌rules‌‌are‌‌as‌‌follows:‌ ‌ 1) TOTAL‌ ‌ i) ii) Actual‌‌loss‌‌of‌‌more‌‌than‌‌ ‌¾‌‌of‌‌its‌‌value;‌ ‌ 2) The‌ ‌insurer‌ ‌may‌ ‌require‌‌the‌‌additional‌‌premium‌‌if‌‌the‌‌hazard‌‌ is‌‌increased‌‌by‌‌this‌‌extension‌‌of‌‌liability;‌ ‌ 3) The‌ ‌marine‌ ‌insurer‌ ‌is‌ ‌bound‌ ‌to‌ ‌pay‌ ‌for‌ ‌damages,‌ ‌expenses,‌‌ extra‌ ‌freightage,‌ ‌etc.‌ ‌incurred‌ ‌in‌‌saving‌‌cargo‌‌reshipped,‌‌up‌‌to‌‌ the‌‌amount‌‌insured;‌‌and‌ ‌ 4) The‌ ‌marine‌ ‌insurer‌ ‌shall‌ ‌NOT‌ ‌be‌ ‌liable‌ ‌for‌ ‌any‌ ‌amount‌ ‌in‌‌ excess‌‌of‌‌the‌‌insured‌‌value‌‌or,‌‌if‌‌there‌‌be‌‌none,‌‌of‌‌the‌‌insurable‌‌ value.‌ ‌ Abandonment‌ ‌ The‌ ‌act‌ ‌of‌ ‌the‌ ‌insured‌‌by‌‌which,‌‌after‌‌a‌‌constructive‌‌total‌‌loss,‌‌he‌‌ declares‌ ‌the‌ ‌relinquishment‌ ‌to‌ ‌the‌ ‌insurer‌ ‌of‌ ‌his‌ ‌interest‌ ‌in‌‌the‌‌ thing‌‌insured.‌ ‌ Abandonment‌‌in‌ ‌ Maritime‌‌Law‌ ‌ Marine‌‌Insurance‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 7‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ Need‌‌for‌‌ constructive‌‌loss‌ ‌ Made‌‌in‌‌favor‌‌of‌ ‌ ✘‌ ‌ Persons‌‌whom‌‌the‌‌ carrier‌‌is‌‌liable‌ ‌ ✔‌ ‌ of‌ ‌ALL‌ ‌the‌ ‌persons‌ ‌interested.‌ ‌If‌ ‌not‌ ‌general,‌ ‌then‌ ‌it‌ ‌is‌‌ particular.‌ ‌ Insured‌ ‌ The‌ ‌owner‌ ‌of‌ ‌the‌ ‌goods‌ ‌which‌ ‌gave‌ ‌rise‌ ‌to‌ ‌the‌ ‌expense‌ ‌or‌‌ suffered‌‌the‌‌damage‌‌shall‌‌bear‌‌the‌‌simple‌‌averages.‌ ‌ 1) There‌ ‌must‌ ‌be‌ ‌an‌ ‌actual‌ ‌relinquishment‌ ‌by‌ ‌the‌ ‌person‌‌ insured‌‌of‌‌his‌‌interest‌‌in‌‌the‌‌thing‌‌insured;‌ ‌ 3) Be‌‌neither‌‌partial‌‌nor‌‌conditional‌;‌ ‌ a) There‌‌must‌‌be‌‌a‌c‌ ommon‌‌danger‌;‌ ‌ 4) Made‌ ‌within‌ ‌a‌ ‌reasonable‌ ‌time‌ ‌after‌ ‌receipt‌ ‌of‌ ‌reliable‌‌ information‌‌of‌‌the‌‌loss;‌ ‌ 6) Made‌ ‌by‌ ‌giving‌ ‌notice‌ ‌thereof‌ ‌to‌ ‌the‌ ‌insurer‌ ‌orally‌ ‌or‌ ‌in‌‌ writing;‌‌AND‌ ‌ Co-insurance‌ ‌ Amount = 1) There‌‌must‌‌be‌‌PARTIAL‌‌loss;‌‌and‌ ‌ GR‌:‌ x V alue of Damage ‌ 1) Simple‌ ‌or‌ ‌Particular‌ ‌—‌ ‌may‌ ‌be‌ ‌covered‌ ‌by‌ ‌the‌ ‌insurance‌‌ policy.‌‌They‌‌are‌‌all‌‌expenses‌‌and‌‌damages‌‌caused‌‌to‌‌the‌‌vessel‌‌ or‌‌to‌‌her‌‌cargo‌‌which‌‌have‌‌NOT‌‌inured‌‌to‌‌the‌‌benefit‌‌and‌‌profit‌‌ Hostile‌‌fire‌‌is‌‌one‌‌that‌‌is‌‌uncontrolled,‌‌or‌‌initially‌‌friendly‌‌but‌‌ passed‌‌outside‌‌the‌‌limits‌‌assigned‌‌to‌‌it.‌ ‌ 2. Friendly‌‌fire‌‌‌is‌‌one‌‌contained‌‌in‌‌its‌‌proper‌‌receptacle.‌ ‌ 3) It‌‌is‌‌without‌‌consent‌‌‌of‌‌the‌‌insurer;‌ ‌ 4) Within‌‌the‌‌control‌o ‌ f‌‌the‌‌insured;‌‌AND‌ ‌ The‌ ‌formula‌ ‌for‌ ‌the‌ ‌determination‌ ‌of‌ ‌the‌ ‌general‌ ‌average‌‌ contribution‌‌of‌‌the‌‌insurer‌i‌ s:‌ ‌ There‌ ‌is‌ ‌ALWAYS‌ ‌co-insurance‌‌in‌‌marine‌‌insurance.‌‌The‌‌requisites‌‌for‌‌ its‌‌application‌‌are‌‌as‌‌follows:‌ ‌ All‌‌extraordinary‌‌or‌‌accidental‌‌expenses‌‌which‌‌may‌‌be‌‌incurred‌‌during‌‌ the‌‌voyage‌‌in‌‌order‌‌to‌‌preserve‌‌the‌‌vessel‌‌and/or‌‌cargo‌‌and‌‌any‌‌damage‌‌ or‌‌deterioration‌‌which‌‌the‌‌vessel‌‌may‌‌suffer.‌ ‌ 1. 2) The‌‌use‌‌or‌‌condition‌‌is‌‌limited‌i‌ n‌‌the‌‌policy;‌ ‌ d) The‌‌expenses‌‌and‌‌damages‌‌should‌‌have‌‌been‌‌incurred‌‌ or‌ ‌inflicted‌ ‌after‌ ‌taking‌ ‌proper‌ ‌legal‌ ‌steps‌ ‌and‌‌ authority‌.‌ ‌ 7) The‌‌notice‌‌of‌‌abandonment‌‌must‌‌be‌‌‌explicit‌‌‌and‌‌must‌‌specify‌‌ the‌‌particular‌‌cause.‌ ‌ Averages‌ ‌ Insurer‌‌is‌‌liable‌‌only‌‌if‌‌there‌‌is‌‌hostile‌‌fire‌‌and‌‌NOT‌‌‌friendly‌‌ fire‌.‌ ‌ Alteration‌ ‌ b) For‌ ‌the‌ ‌common‌ ‌safety,‌ ‌part‌ ‌of‌ ‌the‌ ‌vessel‌ ‌or‌ ‌of‌ ‌the‌‌ Will‌ ‌prevent‌ ‌recovery‌ ‌on‌ ‌the‌ ‌policy‌ ‌if‌ ‌the‌ ‌following‌ ‌requisites‌ ‌are‌‌ cargo‌‌or‌‌both‌‌is‌s‌ acrificed‌‌deliberately‌;‌ ‌ present:‌ ‌ c) From‌ ‌the‌ ‌expenses‌ ‌or‌ ‌damages‌ ‌caused‌ ‌follows‌ ‌the‌‌ 1) The‌‌alteration‌‌is‌‌on‌‌the‌‌‌use‌‌or‌‌condition‌o ‌ f‌‌the‌‌thing‌‌insured;‌ ‌ successful‌‌saving‌‌‌of‌‌the‌‌vessel‌‌and‌‌cargo;‌‌and‌ ‌ 5) Must‌‌be‌‌factual‌;‌ ‌ Amount of Insurance V alue of P roperty NB:‌‌ 2) General‌ ‌or‌ ‌Gross‌ ‌—‌ ‌all‌ ‌damages‌ ‌and‌ ‌expenses‌ ‌which‌ ‌are‌‌ DELIBERATELY‌ ‌caused‌ ‌in‌ ‌order‌ ‌to‌ ‌save‌ ‌the‌ ‌vessel‌ ‌and/or‌ ‌its‌‌ cargo‌ ‌at‌ ‌the‌ ‌same‌ ‌time,‌ ‌from‌ ‌real‌ ‌and‌ ‌known‌ ‌risk.‌ ‌The‌‌ requisites‌‌are:‌ ‌ 2) There‌‌must‌‌be‌c‌ onstructive‌‌total‌‌loss‌;‌ ‌ S hare of Insurer = Shall‌‌include‌‌insurance‌‌against‌‌loss‌‌by‌‌‌fire‌,‌‌‌lightning‌,‌‌‌windstorm‌,‌‌ tornado‌ ‌or‌ ‌earthquake‌ ‌and‌ ‌other‌ ‌allied‌‌risks‌,‌‌‌when‌‌such‌‌risks‌‌ are‌ ‌covered‌ ‌by‌ ‌extension‌ ‌to‌ ‌fire‌ ‌insurance‌ ‌policies‌ ‌or‌ ‌under‌‌ separate‌‌policies.‌ ‌ Free‌ ‌from‌ ‌Particular‌ ‌Average‌‌(FPA)‌‌Clause‌‌—‌‌free‌‌from‌‌PA‌‌ only,‌‌and‌‌not‌‌GA.‌ ‌ Abandonment‌‌shall‌‌be‌‌effective‌‌if‌‌the‌‌following‌r‌ equisites‌a‌ re‌‌present:‌ ‌ 2) There‌ ‌is‌ ‌UNDER‌ ‌insurance,‌ ‌or‌ ‌that‌ ‌the‌ ‌insurance‌ ‌coverage‌ ‌is‌‌ LESS‌‌than‌‌the‌‌value‌‌of‌‌the‌‌property‌‌insured.‌ ‌ Fire‌ ‌ EXC‌:‌ Amount of Insurance V alue of P roperty Insured x GA Share of Insured The‌ ‌insured‌ ‌may‌‌either‌‌hold‌‌the‌‌insurer‌‌directly‌‌liable‌‌for‌‌the‌‌ whole‌ ‌of‌ ‌the‌ ‌insured‌ ‌value‌ ‌of‌ ‌the‌ ‌property‌ ‌sacrificed‌ ‌for‌ ‌the‌‌ general‌ ‌benefit,‌ ‌subrogating‌ ‌him‌ ‌to‌ ‌his‌ ‌own‌ ‌right‌ ‌of‌‌ contribution‌ ‌from‌ ‌the‌ ‌other‌ ‌interested‌ ‌parties‌ ‌as‌ ‌soon‌ ‌as‌ ‌the‌‌ vessel‌‌arrives‌‌at‌‌her‌‌destination.‌ ‌ The‌‌insured‌‌cannot‌‌claim‌‌in‌‌the‌‌following‌‌instances:‌ ‌ 1) There‌ ‌is‌ ‌already‌ ‌separation‌ ‌of‌ ‌interest‌ ‌liable‌ ‌to‌ ‌the‌‌ contribution;‌ ‌ 2) The‌‌insured‌‌neglects‌‌to‌‌claim‌‌contribution‌‌although‌‌he‌‌has‌‌the‌‌ opportunity‌‌to‌‌enforce‌‌the‌‌same;‌‌and‌ ‌ 3) Insured‌‌waives‌‌his‌‌right‌‌to‌‌claim‌‌contribution.‌ ‌ 5) It‌‌increases‌t‌ he‌‌risk.‌ ‌ ‌ Option‌‌to‌‌Rebuild‌‌Clause‌‌—‌‌insurer‌‌may‌‌cause‌‌the‌‌repair,‌‌rebuilding,‌‌ or‌ ‌replacement‌ ‌of‌ ‌the‌ ‌buildings‌ ‌or‌ ‌structures‌ ‌wholly‌ ‌or‌ ‌partially‌‌ destroyed‌‌or‌‌damaged.‌ ‌ Prohibitions‌ ‌ §175.‌ ‌No‌ ‌policy‌ ‌of‌ ‌fire‌ ‌insurance‌ ‌shall‌ ‌be‌ ‌pledged,‌‌ hypothecated,‌ ‌or‌ ‌transferred‌ ‌to‌ ‌any‌ ‌person,‌ ‌firm‌ ‌or‌ ‌company‌‌ who‌ ‌acts‌ ‌as‌ ‌agent‌ ‌for‌ ‌or‌ ‌otherwise‌ ‌represents‌ ‌the‌ ‌issuing‌‌ company,‌ ‌and‌ ‌any‌ ‌such‌ ‌pledge,‌ ‌hypothecation,‌ ‌or‌ ‌transfer‌‌ hereafter‌‌made‌‌shall‌‌be‌‌void‌‌and‌‌of‌‌no‌‌effect‌‌insofar‌‌as‌‌it‌‌may‌‌ affect‌‌other‌‌creditors‌‌of‌‌the‌‌insured.‌ ‌ Casualty‌ ‌ Insurance‌ ‌covering‌ ‌loss‌ ‌or‌ ‌liability‌ ‌arising‌ ‌from‌ ‌accident‌ ‌or‌ ‌mishap,‌‌ excluding‌ ‌those‌ ‌covered‌ ‌in‌‌fire‌‌or‌‌marine‌‌insurance.‌‌It‌‌includes,‌‌but‌‌is‌‌ not‌‌limited‌‌to,‌‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 8‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ 1. 2. Employer's‌‌liability‌‌‌insurance‌‌—‌‌usual‌e‌ xclusions‌:‌ ‌ Theft‌ ‌Clause‌ ‌—‌ ‌makes‌ ‌theft‌ ‌a‌ ‌risk‌ ‌insured‌ ‌against.‌ ‌Theft‌ ‌Is‌ ‌NOT‌‌ covered‌‌by‌‌the‌M ‌ alicious‌‌Damage‌‌Clause‌.‌ ‌ a. When‌‌there‌‌is‌‌serious‌‌or‌‌willful‌‌misconduct‌‌on‌‌the‌‌part‌‌of‌‌ insured;‌ ‌ Compulsory‌‌Motor‌‌Vehicle‌‌Liability‌ ‌ b. When‌‌the‌‌employee‌‌was‌‌hired‌‌in‌‌violation‌‌of‌‌law;‌ ‌ c. When‌ ‌insured‌ ‌failed‌ ‌to‌ ‌comply‌ ‌with‌ ‌health‌ ‌and‌ ‌safety‌‌ regulations;‌‌and‌ ‌ d. When‌ ‌the‌ ‌employer‌ ‌discharges,‌ ‌corces,‌ ‌or‌ ‌discriminates‌‌ against‌‌an‌‌employee.‌ ‌ Motor‌ ‌vehicle‌ ‌liability‌ ‌insurance‌ ‌—‌ ‌third‌ ‌party‌ ‌victim‌ ‌may‌‌ proceed‌‌directly‌‌against‌‌the‌‌insurer‌‌for‌‌indemnity.‌ ‌ If‌ ‌direct‌ ‌liability‌ ‌to‌ ‌third‌ ‌party‌ ‌is‌ ‌provided‌ ‌for,‌ ‌a‌ ‌no‌ ‌action‌‌ clause‌‌‌is‌‌NOT‌‌allowed‌.‌ ‌ A‌‌‌no‌‌action‌‌clause‌‌disallows‌‌suit‌‌against‌‌insurer‌‌unless‌‌final‌‌ judgment‌‌is‌‌obtained‌‌by‌‌a‌‌third‌‌party‌‌against‌‌the‌‌insured.‌ ‌ 3. Plate‌‌glass‌‌‌insurance,‌ ‌ 4. Burglary‌‌and‌‌theft‌i‌ nsurance,‌‌ ‌ aka‌‌Compulsory‌‌Third‌‌Party‌‌Liability‌‌(CTPL)‌ ‌ It‌ ‌shall‌ ‌be‌ ‌unlawful‌‌for‌‌any‌‌land‌‌transportation‌‌operator‌‌or‌‌owner‌‌of‌‌a‌‌ motor‌‌vehicle‌‌to‌‌operate‌‌the‌‌same‌‌in‌‌the‌‌public‌‌highways‌‌unless‌‌there‌‌is‌‌ in‌‌force‌‌ ‌ 1. a‌‌policy‌‌of‌‌insurance‌o ‌ r‌‌ ‌ 2. guaranty‌‌ ‌ a. in‌‌cash‌‌bond‌‌‌or‌‌ ‌ b. surety‌‌bond‌‌ ‌ to‌ ‌indemnify‌ ‌the‌ ‌death,‌ ‌bodily‌ ‌injury,‌ ‌and/or‌ ‌damage‌ ‌to‌‌property‌‌of‌‌a‌‌ third-party‌‌or‌‌passenger.‌ ‌ Coverage,‌‌Extent‌‌and‌‌Limit‌‌of‌‌Liability‌ ‌ Suretyship‌ ‌ Insurance‌ ‌ Three‌‌parties:‌‌Principal,‌‌Obligee,‌‌ Two‌‌parties:‌‌Insurer‌‌and‌‌Insured‌ ‌ Surety‌ ‌ Surety,‌‌in‌‌theory,‌‌expects‌‌no‌‌loss‌‌ Loss‌‌is‌‌expected‌‌to‌‌occur‌ ‌ to‌‌occur‌ ‌ Surety‌‌has‌r‌ ight‌‌of‌‌ reimbursement‌‌‌against‌‌ defaulting‌‌principal‌ ‌ Insurer‌‌has‌‌NO‌‌such‌‌right‌‌from‌‌ the‌‌insured‌ ‌ Surety‌‌guarantees‌‌the‌‌qualities‌‌of‌‌ Covers‌‌losses‌‌beyond‌‌the‌‌control‌‌ the‌ ‌principal‌ ‌as‌ ‌to‌ ‌Character,‌‌ of‌‌insured‌ ‌ Capacity,‌‌and‌‌Capital‌‌(3C’s)‌ ‌ Kinds‌‌of‌‌Bonds‌ ‌ 1) Coverage‌‌—‌‌P100K‌‌(+‌‌P100K‌‌if‌‌vehicle‌‌is‌‌for‌‌public‌‌utility);‌ ‌ 1) Fidelity‌ ‌Bond‌ ‌—‌‌answers‌‌for‌‌the‌‌loss‌‌of‌‌an‌‌employer‌‌who‌‌is‌‌ the‌‌obligee,‌‌for‌‌the‌‌dishonesty‌‌of‌‌the‌‌employee;‌ ‌ 2) Death‌‌Indemnity‌‌—‌‌P70K‌‌+‌‌P30K‌‌funeral‌‌expenses;‌ ‌ 2) Surety‌‌Bond.‌ ‌ Excluded‌‌‌are‌‌those‌‌in‌‌the‌‌insured’s‌‌service‌‌and‌‌employment‌ ‌ 5. Suretyship‌ ‌ 3) Limit‌‌—‌‌P100K‌‌or‌‌P200K‌‌per‌‌person/injury.‌ ‌ Personal‌ ‌accident‌ ‌and‌ ‌health‌ ‌insurance‌ ‌as‌ ‌written‌ ‌by‌‌ No‌ ‌Fault‌ ‌Indemnity‌ ‌Clause‌ ‌—‌ ‌Proof‌ ‌of‌ ‌fault‌ ‌or‌ ‌negligence‌ ‌is‌ ‌NOT‌‌ non-life‌‌insurance‌‌companies‌‌—‌‌normally‌‌includes‌ ‌ necessary‌‌for‌‌payment‌‌of‌‌any‌‌claim‌‌if‌‌the‌‌following‌‌are‌‌established:‌ ‌ a. Income‌‌coverage;‌ ‌ 1) A‌‌claim‌‌may‌‌be‌‌made‌‌against‌‌ONE‌‌motor‌‌vehicle‌‌only;‌ ‌ b. Coverage‌‌for‌‌loss‌‌of‌‌life,‌‌sight‌‌or‌‌limb;‌‌or‌ ‌ 2) Total‌‌indemnity‌‌shall‌‌not‌‌exceed‌P ‌ 15K‌;‌ ‌ c. Medical‌‌expenses‌‌coverage.‌ ‌ 3) Proofs‌‌of‌‌loss‌‌submitted‌‌under‌‌oath.‌ ‌ Fidelity‌ ‌Guaranty‌ ‌Insurance‌ ‌—‌ ‌a‌ ‌contract‌ ‌whereby‌ ‌one,‌ ‌for‌ ‌a‌‌ consideration,‌‌agrees‌‌to‌‌indemnify‌‌the‌‌assured‌‌against‌‌loss‌‌arising‌‌from‌‌ the‌‌want‌‌of‌‌integrity,‌‌fidelity,‌‌or‌‌honesty‌‌of‌‌employees‌‌or‌‌other‌‌persons‌‌ holding‌‌positions‌‌of‌‌trusts.‌ ‌ Continuing‌‌Surety‌‌—‌‌In‌‌the‌‌case‌‌of‌‌a‌‌continuing‌‌bond,‌‌the‌‌obligor‌‌shall‌‌ pay‌‌the‌‌subsequent‌‌annual‌‌premium‌‌as‌‌it‌‌falls‌‌due‌‌until‌‌the‌‌contract‌‌of‌‌ suretyship‌‌is‌‌cancelled.‌ ‌ 6. Other‌‌substantially‌‌similar‌‌kinds‌‌of‌‌insurance.‌ ‌ Transfer‌‌of‌‌ownership‌‌‌DOES‌‌NOT‌‌suspend‌‌the‌‌policy.‌‌(§395)‌ ‌ Microinsurance‌ ‌ 7. Criminal‌ ‌negligence‌ ‌is‌ ‌insurable,‌ ‌so‌ ‌long‌ ‌as‌ ‌it‌ ‌is‌ ‌not‌ ‌gross‌‌ amounting‌‌to‌‌willful‌‌misconduct.‌ ‌ Claims‌‌Settlement‌ ‌ A‌‌financial‌‌product‌‌or‌‌service‌‌that‌‌meets‌‌the‌‌risk‌‌protection‌‌needs‌‌of‌‌the‌‌ poor‌‌where:‌ ‌ Authorized‌‌Driver‌‌Clause‌‌—‌‌‌Insurer‌‌will‌‌be‌‌liable‌‌only‌‌if‌‌the‌‌driver‌‌is‌‌ an‌‌“authorized‌‌driver”‌‌at‌‌the‌‌time‌‌of‌‌accident.‌ ‌ 1. Duly‌‌licensed,‌‌need‌‌not‌‌prove‌‌if‌‌insured‌‌is‌‌the‌‌driver;‌‌and‌ ‌ 2. Authorized‌‌by‌‌the‌‌owner‌‌of‌‌vehicle‌‌to‌‌drive.‌ ‌ 1) File‌‌within‌‌‌6‌‌months‌‌from‌‌date‌‌of‌‌accident,‌‌‌otherwise,‌‌deemed‌‌ waived;‌ ‌ 2) File‌ ‌in‌ ‌court‌ ‌or‌ ‌with‌ ‌the‌ ‌Commissioner‌ ‌within‌ ‌1‌ ‌year‌ ‌from‌ denial‌‌of‌‌claim,‌‌‌otherwise,‌‌claimant’s‌‌right‌‌of‌‌action‌‌shall‌‌have‌‌ prescribed.‌ ‌ a) The‌ ‌amount‌ ‌of‌ ‌contributions,‌ ‌premiums,‌ ‌fees‌ ‌or‌ ‌charges,‌‌ computed‌ ‌on‌ ‌a‌ ‌daily‌ ‌basis,‌ ‌does‌ ‌not‌ ‌exceed‌ ‌seven‌ ‌and‌‌a‌‌half‌‌ percent‌‌(‌7.5%‌)‌‌of‌‌the‌‌‌current‌‌daily‌‌minimum‌‌wage‌‌rate‌‌for‌‌ nonagricultural‌‌workers‌‌in‌‌Metro‌‌Manila;‌‌and‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 9‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ b) The‌ ‌maximum‌ ‌sum‌ ‌of‌ ‌guaranteed‌ ‌benefits‌ ‌is‌ ‌not‌‌more‌‌than‌‌ 1000x‌ ‌of‌ ‌the‌ ‌current‌ ‌daily‌ ‌minimum‌ ‌wage‌ ‌rate‌ ‌for‌‌ nonagricultural‌‌workers‌‌in‌‌Metro‌‌Manila.‌‌(§187)‌ ‌ f) Bancassurance‌ ‌ The‌ ‌presentation‌ ‌and‌ ‌sale‌ ‌to‌ ‌bank‌ ‌customers‌ ‌by‌ ‌an‌ ‌insurance‌‌ company‌‌of‌‌its‌‌insurance‌‌products‌‌within‌‌the‌‌premises‌‌of‌‌the‌‌head‌‌ office‌‌of‌‌such‌‌bank‌‌duly‌‌licensed‌‌by‌‌the‌‌BSP‌‌or‌‌any‌‌of‌‌its‌‌branches‌‌ under‌ ‌such‌ ‌rules‌ ‌and‌ ‌regulations‌ ‌which‌ ‌the‌ ‌Commission‌ ‌and‌ ‌the‌‌ BSP‌‌may‌‌promulgate.‌ ‌ A‌ ‌bank‌ ‌is‌ ‌not‌ ‌required‌ ‌to‌ ‌have‌ ‌equity‌‌ownership‌‌of‌‌the‌‌insurance‌‌ company.‌‌(§375)‌ ‌ Compulsory‌‌insurance‌‌coverage‌‌for‌‌agency-hired‌‌workers‌ ‌ Each‌ ‌migrant‌ ‌worker‌ ‌deployed‌ ‌by‌ ‌a‌ ‌recruitment‌ ‌or‌ ‌manning‌‌ agency‌‌shall‌‌be‌‌covered‌‌by‌‌a‌‌compulsory‌‌insurance‌‌policy‌‌which‌‌shall‌‌ be‌‌secured‌A ‌ T‌‌NO‌‌COST‌t‌ o‌‌said‌‌worker.‌‌ ‌ Such‌ ‌insurance‌‌policy‌‌shall‌‌be‌‌effective‌‌for‌‌the‌‌duration‌‌of‌‌the‌‌migrant‌‌ worker's‌‌employment‌‌contract‌‌and‌‌shall‌‌cover,‌‌at‌‌the‌‌minimum:‌ ‌ a) Accidental‌ ‌death‌,‌ ‌with‌ ‌at‌ ‌least‌ ‌US$15K‌ ‌survivor's‌ ‌benefit‌‌ payable‌‌to‌‌the‌‌migrant‌‌worker's‌‌beneficiaries;‌ ‌ b) Natural‌‌death‌,‌‌with‌‌at‌‌least‌‌US$10K‌‌survivor's‌‌benefit‌‌payable‌‌ to‌‌the‌‌migrant‌‌worker's‌‌beneficiaries;‌ ‌ c) Permanent‌ ‌total‌ ‌disablement‌,‌ ‌with‌ ‌at‌ ‌least‌ ‌US$7.5K‌‌ disability‌‌benefit‌‌payable‌‌to‌‌the‌‌migrant‌‌worker;‌ ‌ Money‌‌claims‌‌‌arising‌‌from‌‌employer's‌‌liability‌‌which‌‌may‌‌be‌‌ awarded‌‌or‌‌given‌‌to‌‌the‌‌worker‌‌in‌‌a‌‌judgement‌‌or‌‌settlement‌‌of‌‌ his‌‌or‌‌her‌‌case‌‌in‌‌the‌‌NLRC.‌‌The‌‌insurance‌‌coverage‌‌for‌‌money‌‌ claims‌‌shall‌‌be‌‌equivalent‌‌to‌‌at‌‌least‌‌three‌‌(3)‌‌months‌‌for‌‌every‌‌ year‌‌of‌‌the‌‌migrant‌‌worker's‌‌employment‌‌contract;‌ ‌ (‌Section‌‌37–A‌‌of‌R ‌ A‌‌No.‌‌8042,‌‌as‌‌amended‌‌by‌‌RA‌‌No.‌‌10022‌)‌ ‌ If‌‌the‌‌contract‌‌is‌‌really‌‌a‌‌‌wager‌,‌‌then‌‌it‌‌is‌‌‌VOID‌‌‌for‌‌being‌‌against‌‌public‌‌ policy.‌ ‌ In‌‌Life‌‌Insurance‌ ‌ Every‌‌person‌‌has‌‌an‌‌insurable‌‌interest‌‌in‌‌the‌‌life‌‌and‌‌health:‌ ‌ a) Of‌‌himself‌,‌‌of‌‌his‌‌spouse‌‌and‌‌of‌‌his‌‌children‌;‌ ‌ b) Of‌ ‌any‌ ‌person‌ ‌on‌ ‌whom‌ ‌he‌ ‌depends‌ ‌wholly‌ ‌or‌ ‌in‌ ‌part‌ ‌for‌‌ education‌‌or‌‌support,‌‌or‌‌in‌‌whom‌‌he‌‌has‌‌a‌p ‌ ecuniary‌‌interest‌;‌ ‌ Variable‌‌Contracts‌‌ ‌ Any‌ ‌policy‌‌or‌‌contract‌‌on‌‌either‌‌a‌‌group‌‌or‌‌on‌‌an‌‌individual‌‌basis‌‌ issued‌‌by‌‌an‌‌insurance‌‌company‌‌‌providing‌‌for‌‌benefits‌‌or‌‌other‌‌ contractual‌ ‌payments‌ ‌or‌ ‌values‌ ‌thereunder‌ ‌to‌ ‌vary‌ ‌so‌ ‌as‌ ‌to‌‌ reflect‌ ‌investment‌ ‌results‌ ‌of‌ ‌any‌ ‌segregated‌ ‌portfolio‌ ‌of‌‌ investments‌‌or‌‌of‌‌a‌‌designated‌‌separate‌‌account‌‌in‌‌which‌‌amounts‌‌ received‌ ‌in‌‌connection‌‌with‌‌such‌‌contracts‌‌shall‌‌have‌‌been‌‌placed‌‌ and‌‌accounted‌‌for‌‌separately‌‌and‌‌apart‌‌from‌‌other‌‌investments‌‌and‌‌ accounts.‌‌ ‌ This‌‌contract‌‌may‌‌also‌‌provide‌‌benefits‌‌or‌‌values‌‌incidental‌‌thereto‌‌ payable‌‌in‌‌fixed‌‌or‌‌variable‌‌amounts,‌‌or‌‌both.‌ ‌ IOW:‌‌ ‌Insurance‌‌+‌‌Investment‌‌=‌‌Variable‌‌Contract‌ ‌ Insurable‌‌Interest‌‌ ‌ ⭐Such‌‌an‌‌interest,‌‌arising‌‌from‌‌the‌‌relation‌‌of‌‌the‌‌party‌‌obtaining‌‌ the‌‌insurance,‌‌either‌‌as‌‌creditor‌‌of‌‌or‌‌surety‌‌for‌‌the‌‌assured,‌‌or‌‌from‌‌ ties‌ ‌of‌ ‌blood‌ ‌or‌ ‌marriage‌ ‌to‌ ‌him,‌ ‌as‌ ‌will‌ ‌justify‌ ‌a‌ ‌reasonable‌‌ expectation‌‌of‌‌advantage‌‌or‌‌benefit‌‌from‌‌the‌‌continuance‌‌of‌‌his‌‌life‌.‌ ‌ d) Repatriation‌‌cost‌‌‌of‌‌the‌‌worker‌‌when‌‌his/her‌‌employment‌‌is‌‌ ‌ urposes‌:‌ ‌ terminated‌ ‌without‌‌any‌‌valid‌‌cause,‌‌including‌‌the‌‌transport‌‌of‌‌ Its‌‌presence‌‌has‌‌the‌‌following‌p his‌ ‌or‌‌her‌‌personal‌‌belongings.‌‌In‌‌case‌‌of‌‌death,‌‌the‌‌insurance‌‌ 1) To‌ ‌reduce‌ ‌moral‌ ‌hazard‌ ‌—‌ ‌dishonesty‌ ‌or‌‌character‌‌defects‌‌in‌‌ provider‌‌shall‌‌arrange‌‌and‌‌pay‌‌for‌‌the‌‌repatriation‌‌or‌‌return‌‌of‌‌ the‌‌individual‌‌that‌‌increases‌‌the‌‌chance‌‌of‌‌loss;‌‌and‌ ‌ the‌‌worker's‌‌remains;‌ ‌ 2) Helps‌‌in‌‌measuring‌‌the‌‌loss‌‌of‌‌the‌‌insured.‌ ‌ e) Subsistence‌ ‌allowance‌ ‌benefit‌,‌ ‌with‌ ‌at‌ ‌least‌‌US$100.00‌‌per‌‌ month‌‌for‌‌a‌‌maximum‌‌of‌‌six‌‌(6)‌‌months‌‌for‌‌a‌‌migrant‌‌worker‌‌ Effect‌‌of‌‌lack‌‌of‌‌insurable‌‌interest.‌‌—‌‌If‌‌the‌‌insured‌‌has‌‌no‌‌insurable‌‌ who‌ ‌is‌ ‌involved‌ ‌in‌ ‌a‌ ‌case‌ ‌or‌ ‌litigation‌ ‌for‌ ‌the‌ ‌protection‌ ‌of‌‌ interest‌ ‌over‌ ‌the‌ ‌life‌ ‌or‌ ‌property‌ ‌he‌ ‌insures,‌ ‌the‌ ‌insurance‌‌contract‌‌is‌‌ UNENFORCEABLE‌.‌ ‌ his/her‌‌rights‌‌in‌‌the‌‌receiving‌‌country;‌ ‌ c) Of‌ ‌any‌ ‌person‌ ‌under‌ ‌a‌ ‌legal‌ ‌obligation‌ ‌to‌ ‌him‌ ‌for‌ ‌the‌‌ payment‌‌of‌‌money,‌‌or‌‌respecting‌‌property‌‌or‌‌services,‌‌of‌‌which‌‌ death‌‌or‌‌illness‌‌might‌‌delay‌‌or‌‌prevent‌‌the‌‌performance;‌ ‌ A‌ ‌creditor‌ ‌has‌‌an‌‌insurable‌‌interest‌‌over‌‌the‌‌life‌‌of‌‌his‌‌debtor,‌‌ but‌‌not‌‌the‌‌other‌‌way‌‌around.‌ ‌ d) Of‌ ‌any‌ ‌person‌ ‌upon‌‌whose‌‌life‌‌any‌‌‌estate‌‌or‌‌interest‌‌vested‌‌ in‌‌him‌‌depends.‌‌(‌Sec‌‌10‌‌IC‌)‌ ‌ For‌‌(b)‌‌-‌‌(d),‌‌the‌‌‌basis‌‌‌of‌‌insurable‌‌interest‌‌is‌‌‌NOT‌‌blood‌‌relationship‌ but‌‌PECUNIARY‌‌INTEREST‌.‌ ‌ In‌‌Property‌‌Insurance‌ ‌ §18‌.‌ ‌No‌ ‌contract‌ ‌or‌ ‌policy‌ ‌of‌ ‌insurance‌ ‌on‌‌property‌‌shall‌‌be‌‌ enforceable‌ ‌except‌ ‌for‌ ‌the‌ ‌benefit‌ ‌of‌ ‌some‌ ‌person‌ ‌having‌‌ an‌‌insurable‌‌interest‌‌in‌‌the‌‌property‌‌insured‌.‌ ‌ §13‌.‌ ‌Every‌ ‌interest‌ ‌in‌ ‌property,‌ ‌whether‌ ‌real‌ ‌or‌ ‌personal,‌ ‌or‌‌ any‌ ‌relation‌ ‌thereto,‌ ‌or‌ ‌liability‌ ‌in‌ ‌respect‌ ‌thereof,‌ ‌of‌ ‌such‌‌ nature‌ ‌that‌ ‌a‌ ‌contemplated‌ ‌peril‌ ‌might‌ ‌directly‌ ‌damnify‌ ‌the‌‌ insured,‌‌is‌‌an‌‌insurable‌‌interest.‌ ‌ §14‌.‌‌An‌‌insurable‌‌interest‌‌in‌‌property‌‌may‌‌consist‌‌in:‌ ‌ a) An‌‌existing‌i‌ nterest;‌ ‌ b) An‌‌inchoate‌i‌ nterest‌f‌ ounded‌‌on‌‌an‌‌existing‌‌interest;‌‌or‌ ‌ c) An‌ ‌expectancy‌,‌ ‌coupled‌ ‌with‌ ‌an‌‌existing‌‌interest‌‌in‌‌ that‌‌out‌‌of‌‌which‌‌the‌‌expectancy‌‌arises.‌ ‌ §16‌.‌ ‌A‌ ‌mere‌ ‌contingent‌ ‌or‌ ‌expectant‌‌interest‌‌in‌‌any‌‌thing,‌‌ not‌‌founded‌‌on‌‌an‌‌actual‌‌right‌‌to‌‌the‌‌thing,‌‌nor‌‌upon‌‌any‌‌valid‌‌ contract‌‌for‌‌it,‌‌is‌N ‌ OT‌i‌ nsurable.‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 10‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ §17‌.‌ ‌The‌ ‌measure‌ ‌of‌ ‌an‌‌insurable‌‌interest‌‌in‌‌property‌‌is‌‌the‌‌ extent‌ ‌to‌ ‌which‌ ‌the‌ ‌insured‌ ‌might‌ ‌be‌ ‌damnified‌ ‌by‌ ‌loss‌ ‌or‌‌ injury‌‌thereof.‌ ‌ The‌‌TEST‌i‌ s‌‌whether‌‌one‌‌will‌ ‌ 1. 2. Derive‌ ‌pecuniary‌ ‌benefit‌ ‌or‌ ‌advantage‌ ‌from‌ ‌its‌ ‌preservation;‌‌ OR‌ ‌ Suffer‌ ‌pecuniary‌ ‌loss‌ ‌or‌ d ‌ amage‌ ‌from‌ ‌its‌ ‌destruction,‌‌ termination,‌ ‌injury‌ ‌by‌ ‌the‌ ‌happening‌ ‌of‌ ‌the‌ ‌event‌ ‌insured‌‌ against.‌ ‌ Kinds‌‌of‌‌Insurable‌‌Interest‌ ‌ c) Expected‌‌commission‌‌of‌‌agents;‌ ‌ d) Owner‌‌of‌‌a‌‌ship‌‌in‌‌expected‌‌freightage.‌ ‌ Extent‌ ‌ b) Lessee;‌ ‌ Property‌ ‌ Limited‌‌up‌‌to‌‌value‌ ‌ Need‌‌for‌‌ legal‌‌basis‌ ‌ d) Usufructuary;‌ ‌ f) Possessor‌h ‌ olding‌‌the‌‌property‌‌without‌‌consideration‌‌ with‌‌the‌‌consent‌‌of‌‌owner;‌ ‌ g) An‌‌unpaid‌‌seller‌,‌‌even‌‌if‌‌ownership‌‌had‌‌already‌‌been‌‌ transferred‌‌upon‌‌delivery;‌ ‌ h) Vendee‌,‌‌even‌‌while‌‌the‌‌goods‌‌are‌‌still‌‌in‌‌transit.‌ ‌ 2) Inchoate‌,‌‌founded‌‌on‌‌an‌‌existing‌‌interest‌‌‌—‌‌ ‌ a) A‌‌shareholder‌o ‌ ver‌‌the‌‌properties‌‌of‌‌the‌‌corporation;‌ ‌ Beneficiary’s‌‌ interest‌ ‌ Assignee’s‌‌ interest‌ ‌ GR‌:‌ b) Purchaser‌o ‌ f‌‌a‌‌property‌‌in‌‌a‌‌judicial‌‌sale‌‌subject‌‌to‌‌ redemption.‌ ‌ An‌‌heir‌‌has‌‌NO‌i‌ nsurable‌‌interest‌‌over‌‌properties‌‌that‌‌he‌‌will‌‌ inherit.‌ ‌ 3) Expectancy‌,‌ ‌coupled‌ ‌with‌ ‌one‌ ‌existing‌ ‌out‌ ‌of‌ ‌which‌ ‌the‌‌ expectancy‌‌arises‌‌‌—‌‌ ‌ a) Interest‌ ‌over‌ ‌the‌ ‌profits‌ ‌that‌ ‌are‌ ‌to‌ ‌be‌ ‌earned‌ ‌by‌ ‌a‌‌ business;‌ ‌ Unlimited,‌e‌ xcept‌‌‌if‌‌secured‌‌ by‌‌creditor‌ ‌ Need‌‌not‌‌have‌‌legal‌‌basis‌‌ Expectation‌‌of‌‌benefit‌‌ or‌‌be‌‌based‌‌on‌‌legally‌‌ must‌‌have‌‌legal‌‌basis‌ ‌ enforceable‌‌obligation‌ ‌ c) Depositary;‌ ‌ e) Borrower‌‌in‌c‌ ommodatum;‌ ‌ Life‌ ‌ Perfection‌‌of‌‌contract‌‌ Time‌‌when‌‌ AND‌‌at‌‌the‌‌time‌‌of‌‌ Perfection‌‌of‌‌insurance‌‌ it‌‌must‌‌exist‌ ‌ loss;‌N ‌ eed‌‌not‌‌exist‌‌in‌‌ contract‌ ‌ between‌ ‌ 1) Existing‌‌—‌‌ ‌ a) Owner;‌ ‌ 4) Change‌‌of‌‌interest‌‌through‌‌succession;‌ ‌ Insurable‌‌Interest‌‌in‌‌Property‌‌vs.‌‌Life‌‌Insurance‌ As‌‌to‌ ‌ EXC‌:‌ Beneficiary‌‌MUST‌‌ HAVE‌‌insurable‌‌ interest;‌o ‌ therwise‌,‌‌ considered‌‌a‌‌ wagering‌‌contract‌ ‌ MUST‌‌HAVE‌ ‌ 3) If‌‌there‌‌is‌‌a‌‌change‌‌in‌‌interest‌‌in‌‌one‌‌or‌‌more‌‌of‌‌several‌‌things‌‌ that‌‌are‌‌separately‌‌insured;‌ ‌ If‌‌insured‌‌took‌‌out‌‌the‌‌ policy‌‌on‌‌his‌‌own‌‌life‌‌and‌‌ designated‌‌another‌‌—‌N ‌ OT‌‌ necessary‌ ‌ 5) Transfer‌ ‌of‌ ‌interest‌ ‌from‌ ‌one‌ ‌partner‌ ‌to‌ ‌another‌ ‌partner‌ ‌of‌‌ interest‌‌over‌‌a‌‌property‌‌jointly‌‌insured;‌‌and‌ ‌ 6) Transfer‌‌of‌‌interest‌‌from‌‌one‌‌joint‌‌or‌‌co-owner‌‌to‌‌another‌‌of‌‌the‌‌ jointly‌‌or‌‌co-owned‌‌property‌‌insured.‌ ‌ 7) When‌ ‌a‌ ‌policy‌ ‌is‌ ‌so‌ ‌framed‌‌that‌‌it‌‌will‌‌inure‌‌to‌‌the‌‌benefit‌‌of‌‌ whomsoever,‌ ‌during‌ ‌the‌ ‌continuance‌ ‌of‌‌the‌‌risk,‌‌may‌‌become‌‌ the‌‌owner‌‌of‌‌the‌‌interest‌‌insured.‌‌(S‌ ec‌‌57‌‌IC‌)‌ ‌ NB:‌‌ The‌ ‌policy‌‌is‌‌‌AVOIDED‌,‌‌and‌‌not‌‌merely‌‌suspended,‌‌if‌‌there‌‌is‌‌ an‌‌express‌‌prohibition‌‌to‌‌alienate‌‌but‌‌the‌‌insured‌‌breached‌‌the‌‌ prohibition.‌ ‌ Double‌‌Insurance‌ ‌ A‌‌‌double‌‌insurance‌‌exists‌‌where‌‌the‌‌same‌‌person‌‌is‌‌insured‌‌by‌‌several‌‌ insurers‌‌separately‌‌in‌‌respect‌‌to‌‌the‌‌same‌‌subject‌‌and‌‌interest.‌‌Thus:‌ ‌ 1) The‌‌‌same‌‌person‌‌‌is‌‌insured;‌ ‌ If‌‌one‌‌took‌‌out‌‌an‌‌insurance‌‌ on‌ ‌the‌ ‌life‌ ‌of‌ ‌another‌ ‌—‌‌ MUST‌‌HAVE‌ ‌ 2) There‌ ‌are‌ ‌two‌ ‌or‌ ‌more‌ ‌insurers‌ ‌that‌ ‌insured‌ ‌the‌ ‌person‌‌ separately;‌ ‌ NOT‌n ‌ ecessary‌ ‌ 4) Involving‌‌the‌s‌ ame‌‌interest‌;‌‌and‌ ‌ 3) Over‌‌the‌s‌ ame‌‌subject‌;‌ ‌ 5) The‌‌same‌‌peril‌‌‌is‌‌insured‌‌against.‌ ‌ A‌ ‌change‌ ‌of‌ ‌interest‌ ‌in‌ ‌any‌ ‌part‌ ‌of‌ ‌a‌ ‌thing‌ ‌insured‌‌ GR‌:‌ ‌NOT‌‌PROHIBITED;‌ ‌ unaccompanied‌ ‌by‌ ‌a‌ ‌corresponding‌ ‌change‌ ‌of‌ ‌interest‌ ‌in‌ ‌the‌‌ insurance,‌ ‌SUSPENDS‌ ‌the‌ ‌insurance‌ ‌to‌ ‌an‌ ‌equivalent‌ ‌extent,‌‌ EXC‌:‌ ‌Other‌‌Insurance‌‌Clause.‌ ‌ until‌ ‌the‌ ‌interest‌ ‌in‌‌the‌‌thing‌‌and‌‌the‌‌interest‌‌in‌‌the‌‌insurance‌‌ Overinsurance‌ ‌ are‌‌vested‌‌in‌‌the‌‌same‌‌person.‌ ‌ Will‌‌NOT‌‌suspend‌‌‌in‌‌the‌‌following‌‌cases:‌ ‌ 1) In‌‌life,‌‌health,‌‌and‌‌accident‌‌insurance;‌ ‌ 2) If‌ ‌there‌ ‌is‌ ‌a‌ ‌change‌ ‌in‌ ‌interest‌ ‌in‌ ‌the‌ ‌thing‌ ‌insured‌ ‌after‌ ‌the‌‌ occurrence‌‌of‌‌the‌‌loss;‌ ‌ If‌‌the‌‌insured‌‌takes‌‌out‌‌an‌‌insurance‌‌over‌‌the‌‌property‌‌insured‌‌in‌‌an‌‌ amount‌‌which‌‌is‌i‌ n‌‌excess‌‌of‌‌the‌‌value‌‌of‌‌the‌‌insurable‌‌interest‌.‌ ‌ Collateral‌‌Source‌‌Rule‌ ‌ Here,‌‌the‌‌defendant‌‌is‌‌prevented‌‌from‌‌benefiting‌‌from‌‌the‌‌plaintiff’s‌‌ receipt‌‌of‌‌money‌‌from‌‌other‌‌sources.‌ ‌ b) Future‌‌crops‌‌of‌‌farmers;‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 11‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ Under‌‌this‌‌rule,‌‌if‌‌an‌‌injured‌‌person‌‌receives‌‌compensation‌‌for‌‌his‌‌ Provided‌‌by‌‌law‌‌in‌m ‌ arine‌‌ insurance‌ ‌ injuries‌ ‌from‌ ‌a‌ ‌source‌ ‌wholly‌ ‌independent‌ ‌of‌ ‌the‌ ‌tortfeasor,‌ ‌the‌‌ payment‌ ‌should‌ ‌NOT‌ ‌be‌ ‌deducted‌ ‌from‌ ‌the‌ ‌damages‌ ‌which‌ ‌he‌‌ Kinds‌‌of‌‌Reinsurance‌ ‌ would‌‌otherwise‌‌collect‌‌from‌‌the‌‌tortfeasor.‌ ‌ Not‌‌mandated‌‌by‌‌law‌‌in‌‌marine‌‌ insurance‌ ‌ AQUINO‌:‌‌Applies‌‌in‌‌Life‌‌Insurance,‌‌but‌‌NOT‌‌in‌‌Property‌‌Insurance.‌ ‌ 1) Facultative‌— ‌ ‌‌optional,‌‌case-by-case‌‌method.‌ ‌ Reinsurance‌ ‌ 2) Automatic‌ ‌Treaty‌ ‌—‌‌involves‌‌a‌‌prior‌‌agreement‌‌between‌‌the‌‌ insurer‌ ‌and‌ ‌reinsurer‌ ‌that‌ ‌the‌ ‌latter‌ ‌is‌ ‌compelled‌ ‌to‌ ‌accept‌‌ what‌‌is‌‌being‌‌ceded‌‌by‌‌the‌‌insurer.‌ ‌ An‌ ‌insurer‌ ‌procures‌ ‌a‌ ‌third‌ ‌person‌ ‌to‌ ‌insure‌ ‌him‌ ‌against‌ ‌loss‌ ‌or‌‌ liability‌‌by‌‌reason‌‌of‌‌such‌‌original‌‌insurance.‌ ‌ A‌ ‌reinsurance‌ ‌is‌ ‌presumed‌ ‌to‌ ‌be‌ ‌a‌ ‌contract‌ ‌of‌ ‌indemnity‌‌against‌‌ liability,‌‌and‌‌not‌‌merely‌‌against‌‌damage.‌ ‌ The‌‌original‌‌insured‌‌has‌N ‌ O‌‌‌interest‌‌in‌‌a‌‌contract‌‌of‌‌reinsurance.‌ ‌ Double‌‌Insurance‌ ‌ Reinsurance‌ ‌ Insurer‌‌remains‌‌in‌‌such‌‌capacity‌‌ Insurer‌‌becomes‌‌the‌‌insured‌ ‌ only‌ ‌ Only‌‌one‌‌insured‌ ‌ Two‌‌separate‌‌insured‌ ‌ Subject‌‌matter‌‌is‌‌the‌‌property‌‌ insured‌ ‌ Subject‌‌matter‌‌is‌‌the‌‌liability‌‌of‌‌ insured‌ ‌ Same‌‌interest‌‌is‌‌insured‌ ‌ Involves‌‌separate‌‌interests‌ ‌ Same‌‌peril‌‌is‌‌insured‌‌against‌‌in‌‌ separate‌‌policies‌ ‌ Different‌‌perils‌‌are‌‌insured‌‌ against‌‌in‌‌separate‌‌policies‌ ‌ Bordereau‌.‌‌Policy‌‌form‌‌that‌‌shows‌‌loss‌‌history‌‌and‌‌premium‌‌history‌‌ with‌ ‌respect‌ ‌to‌ ‌specific‌ ‌risks.‌ ‌The‌ ‌information‌ ‌herein‌ ‌is‌ ‌used‌ ‌by‌ ‌the‌‌ reinsurer‌‌to‌‌establish‌‌the‌‌reinsurance‌‌premium.‌ ‌ One‌‌contract‌ ‌ Reinsurance‌ ‌ Two‌‌separate‌‌contracts‌‌are‌‌ involved‌ ‌ Obligation‌‌on‌‌the‌‌part‌‌of‌‌insured‌‌ Liability‌‌is‌‌fixed‌‌in‌‌a‌‌separate‌‌ is‌‌fixed‌‌by‌‌law‌‌or‌‌in‌‌a‌‌stipulated‌‌ contract‌‌between‌‌different‌‌ clause‌ ‌ parties‌ ‌ Insured‌w ‌ ill‌‌share‌‌‌in‌‌the‌‌loss‌ ‌ Cognition‌ ‌Theory‌ ‌—‌ ‌An‌ ‌insurance‌ ‌contract‌ ‌is‌ ‌perfected‌ ‌the‌ ‌moment‌‌ the‌‌offeror‌‌learns‌‌of‌‌the‌‌acceptance‌‌of‌‌his‌‌offer‌‌by‌‌the‌‌other‌‌party.‌ ‌ 1. The‌ ‌contract,‌ ‌to‌ ‌be‌‌binding‌‌from‌‌the‌‌date‌‌of‌‌application,‌‌must‌‌ have‌ ‌been‌ ‌a‌ ‌completed‌ ‌contract.‌ ‌There‌ ‌can‌ ‌be‌ ‌no‌ ‌contract‌ ‌of‌‌ insurance‌ ‌unless‌ ‌the‌ ‌minds‌ ‌of‌ ‌the‌ ‌parties‌ ‌have‌ ‌met‌ ‌in‌‌ agreement.‌ ‌(‌Steamship‌ ‌Mutual‌ ‌Underwriting‌ ‌Association‌‌ (Bermuda)‌‌Ltd.‌‌v.‌‌Sulpicio‌‌Lines‌‌‌2017‌‌Leonen,‌‌J)‌ ‌ ‌ 2. An‌‌insurance‌‌contract‌‌can‌‌be‌‌entered‌‌into‌‌through‌‌an‌‌agent.‌‌For‌‌ example,‌ ‌a‌ ‌bank‌‌is‌‌an‌‌agent‌‌of‌‌the‌‌insurer‌‌if‌‌it‌‌offers‌‌a‌‌special‌‌ type‌ ‌of‌ ‌savings‌ ‌and‌ ‌insurance‌ ‌account‌ ‌whereby‌‌the‌‌depositor‌‌ has‌ ‌automatic‌ ‌insurance‌‌coverage‌‌for‌‌disability‌‌or‌‌death.‌‌(‌BPI‌‌ v.‌‌Laingo‌‌‌2016‌)‌‌ ‌ 3. However‌,‌‌there‌‌are‌‌cases‌‌when‌‌the‌‌insurer‌‌assumed‌‌the‌‌risk‌‌of‌‌ loss‌ ‌without‌ ‌approving‌ ‌the‌ ‌application.‌ ‌This‌ ‌includes‌ ‌cases‌‌ when‌ ‌the‌ ‌buyer‌ ‌of‌ ‌a‌ ‌memorial‌ ‌lot‌ ‌is‌ ‌deemed‌ ‌insured‌ ‌the‌‌ moment‌ ‌it‌ ‌enters‌ ‌into‌ ‌a‌ ‌contract‌ ‌with‌ ‌the‌ ‌seller.‌ ‌(‌Eternal‌‌ Gardens‌‌Memorial‌‌Park‌‌v.‌‌Phil.‌‌American‌‌Life‌‌Insurance‌‌Corp.‌)‌ ‌ Multiple‌‌or‌‌several‌‌interests‌‌on‌‌same‌‌property‌ ‌ Loss‌‌payable‌‌clause‌‌—‌‌the‌‌mortgagee‌‌is‌‌only‌‌a‌‌beneficiary‌‌under‌‌ the‌‌contract,‌‌and‌‌recognized‌‌as‌‌such‌‌by‌‌the‌‌insurer‌‌but‌‌NOT‌‌made‌‌a‌‌ party‌ ‌to‌ ‌the‌ ‌contract‌ ‌itself.‌ ‌Thus,‌ ‌any‌ ‌act‌ ‌of‌‌the‌‌mortgagor‌‌affects‌‌ the‌‌mortgagee‌‌(S‌ ec‌‌8‌‌IC‌).‌‌This‌‌is‌‌distinguished‌‌from‌‌a‌ ‌ Union‌ ‌mortgage‌ ‌clause‌ ‌—‌ ‌where‌ ‌there‌ ‌is‌ ‌a‌ ‌transfer‌ ‌of‌ ‌an‌‌ insurance‌ ‌from‌ ‌mortgagor‌‌to‌‌mortgagee‌‌with‌‌assent‌‌of‌‌the‌‌insurer.‌‌ The‌‌act‌‌of‌‌the‌‌former‌‌CANNOT‌‌affect‌‌the‌‌latter.‌‌(S‌ ec‌‌9‌‌IC‌)‌ ‌ Insurable‌‌Interest‌‌of‌‌Mortgagee‌ ‌ 1. A‌ ‌mortgagee‌ ‌may,‌ ‌independently‌ ‌of‌ ‌the‌ ‌mortgagor,‌ ‌insure‌ ‌the‌ mortgaged‌‌property‌‌in‌‌his‌‌own‌‌name‌‌and‌‌for‌‌his‌‌own‌‌interest;‌ ‌ 2. In‌ ‌case‌ ‌of‌ ‌loss,‌ ‌mortgagee‌ ‌is‌ ‌entitled‌ ‌to‌ ‌the‌ ‌insurance‌‌ proceeds;‌ ‌ ‌ Co-Insurance‌ ‌ Offer‌‌and‌‌acceptance;‌‌consensuality‌ ‌ Delay‌ ‌in‌ ‌acceptance.‌ ‌—‌ ‌Mere‌ ‌delay‌ ‌in‌ ‌acceptance‌ ‌of‌ ‌the‌ ‌insurance‌‌ application‌ ‌will‌ ‌not‌ ‌result‌ ‌in‌ ‌a‌ ‌binding‌ ‌contract.‌ ‌However,‌ ‌in‌ ‌proper‌‌ cases,‌‌the‌‌insurer‌‌may‌‌be‌‌liable‌‌for‌T ‌ ORT‌.‌ ‌ Delivery‌ ‌of‌ ‌policy.‌ ‌—‌ ‌not‌‌necessary‌‌for‌‌perfection‌‌since‌‌an‌‌insurance‌‌ contract‌‌is‌‌consensual.‌ ‌ Premium‌‌payment‌ ‌ 3. However,‌ ‌he‌ ‌is‌ ‌not‌ ‌allowed‌ ‌to‌ ‌retain‌ ‌his‌ ‌claim‌ ‌against‌ ‌the‌‌ mortgagor;‌ ‌ 4. The‌‌claim‌‌is‌‌passed‌‌by‌‌‌subrogation‌‌‌to‌‌the‌‌insurer‌‌to‌‌the‌‌extent‌‌ GR‌:‌ of‌‌the‌‌money‌‌paid.‌ ‌ An‌ ‌insurer‌ ‌is‌ ‌entitled‌‌to‌‌payment‌‌of‌‌the‌‌premium‌‌‌as‌‌soon‌‌as‌‌the‌‌thing‌‌ insured‌‌is‌‌exposed‌‌to‌‌the‌‌peril‌‌‌insured‌‌against.‌ ‌ Perfection‌‌ ‌ Insured‌‌will‌‌NOT‌‌shoulder‌‌part‌‌ of‌‌the‌‌loss‌ ‌ EXC‌:‌ ‌ ash‌‌and‌‌carry‌‌principle.‌‌‌No‌‌policy‌‌or‌‌contract‌‌of‌‌insurance‌‌ C issued‌ ‌by‌ ‌an‌ ‌insurance‌ ‌company‌ ‌is‌ ‌valid‌ ‌and‌ ‌binding‌ ‌unless‌‌ and‌‌until‌‌the‌‌premium‌‌thereof‌‌has‌‌been‌‌paid,‌‌‌notwithstanding‌‌ any‌‌agreement‌‌to‌‌the‌‌contrary.‌ ‌ in‌‌the‌‌case‌‌of‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 12‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ 1) A‌ ‌life‌ ‌or‌ ‌an‌ ‌industrial‌ ‌life‌ ‌policy‌ ‌whenever‌ ‌the‌‌‌grace‌‌period‌‌ provision‌‌applies;‌ ‌ 4) Reinstatement‌ ‌Clause‌ ‌—‌ ‌at‌ ‌any‌ ‌time‌ ‌within‌ ‌3‌ ‌years‌ ‌from‌‌ date‌‌of‌‌default‌‌subject‌‌to‌‌conditions:‌ ‌ Applies‌‌only‌‌when‌‌the‌‌policy‌‌had‌‌already‌‌been‌‌in‌‌force.‌ ‌ 2) Whenever‌ ‌under‌ ‌the‌ ‌broker‌ ‌and‌ ‌agency‌ ‌agreements‌‌with‌‌‌duly‌‌ licensed‌ ‌intermediaries‌,‌ ‌a‌ ‌ninety‌ ‌(90)-day‌ ‌credit‌‌extension‌‌ is‌‌given,‌‌which‌‌is‌‌non-extendible;‌ ‌ 3) When‌ ‌there‌ ‌is‌ ‌an‌ ‌acknowledgment‌ ‌in‌ ‌the‌ ‌policy‌ ‌or‌ ‌receipt‌‌ that‌‌the‌‌premium‌‌has‌‌been‌‌paid;‌ ‌ a) Insured‌‌must‌‌prove‌‌insurability;‌‌and‌ ‌ b) Pay‌‌overdue‌‌premium.‌ ‌ Non-default‌‌options‌‌in‌‌life‌‌insurance‌ ‌ 1) To‌ ‌prevent‌ ‌the‌ ‌lapse‌ ‌of‌ ‌life‌‌insurance‌‌policy,‌‌the‌‌insured‌‌may‌‌ avail‌‌of:‌ ‌ 4) When‌‌there‌‌is‌‌an‌‌agreement‌‌that‌‌the‌‌premium‌‌shall‌‌be‌‌payable‌‌ on‌‌installment‌;‌‌(‌Makati‌‌Tuscany‌‌Condo‌‌Corp‌‌v.‌‌CA‌)‌‌and‌ ‌ a) Grace‌‌period;‌ ‌ 5) When‌‌the‌‌equitable‌‌doctrine‌‌of‌e ‌ stoppel‌a‌ pplies.‌ ‌ b) Automatic‌ ‌policy‌ ‌loan‌ ‌from‌ ‌the‌ ‌policy’s‌ ‌cash‌‌ surrender‌‌value;‌ ‌ Effect‌‌of‌‌Non-payment‌ ‌ 1. 2. c) Application‌‌of‌‌dividend;‌‌and‌ ‌ The‌ ‌obligation‌ ‌of‌ ‌the‌ ‌insurer‌ ‌will‌ ‌NOT‌ ‌become‌ ‌valid‌ ‌and‌‌ binding‌‌if‌‌the‌f‌ irst‌‌‌premium‌‌has‌‌not‌‌been‌‌paid.‌ ‌ If‌ ‌the‌ ‌subsequent‌ ‌premiums‌ ‌have‌ ‌not‌‌been‌‌paid,‌‌the‌‌policies‌‌ issued‌ ‌will‌‌be‌‌deemed‌‌to‌‌have‌‌been‌‌‌lapsed‌.‌‌Thus,‌‌the‌‌insurer‌‌ has‌‌NO‌‌liability‌‌to‌‌indemnify.‌ ‌ 3. It‌ ‌does‌ ‌NOT‌ ‌give‌ ‌the‌ ‌insurer‌ ‌the‌ ‌right‌ ‌to‌ ‌sue‌ ‌or‌ ‌demand‌‌ payment‌‌from‌‌the‌‌insured.‌ ‌ 4. Will‌‌not‌‌create‌‌the‌v‌ inculum‌‌juris‌‌‌between‌‌the‌‌parties.‌ ‌ Devices‌‌to‌‌Prevent‌‌Lapse‌‌of‌‌Life‌‌Insurance‌‌Policy‌ ‌ 1) Grace‌‌Period‌;‌ ‌ 2) Automatic‌‌Policy‌‌Loan‌‌—‌‌‌Cash‌‌surrender‌‌value‌‌is‌‌the‌‌amount‌‌ of‌ ‌money‌ ‌the‌ ‌company‌‌agrees‌‌to‌‌pay‌‌to‌‌the‌‌policyholder‌‌if‌‌he‌‌ surrenders‌‌it‌‌and‌‌releases‌‌his‌‌claims‌‌upon‌‌it.‌ ‌ d) Reinstatement‌‌clause.‌ ‌ Reinstatement‌‌of‌‌a‌‌lapsed‌‌policy‌‌of‌‌life‌‌insurance‌ ‌ Refund‌‌of‌‌premiums‌ ‌ Return‌‌of‌‌Premium‌ ‌ 1) When‌‌the‌‌thing‌‌was‌n ‌ ot‌‌exposed‌‌to‌‌the‌‌peril‌‌‌insured‌‌against;‌ ‌ 2) Time‌ ‌policy.‌ ‌When‌ ‌the‌ ‌policy‌ ‌is‌ ‌surrendered‌ ‌before‌ ‌the‌‌ expiration‌‌of‌‌the‌‌stipulated‌‌time.‌‌Refund‌‌is‌p ‌ ro‌‌rata‌;‌ ‌ 3) When‌‌the‌‌contract‌‌is‌‌voidable‌‌and‌‌subsequently‌‌annulled;‌ ‌ 4) The‌ ‌insurance‌ ‌contract‌ ‌is‌ ‌voidable‌ ‌due‌ ‌to‌ ‌the‌ ‌fraud‌ ‌or‌‌ misrepresentation‌‌of‌‌insurer‌ ‌or‌‌of‌‌his‌‌agent.‌ ‌ 5) When‌‌the‌‌contract‌‌is‌‌annulled‌‌on‌‌account‌‌of‌‌ ‌ a) fraud‌‌or‌‌misrepresentation‌‌of‌‌the‌‌insurer‌‌or‌‌his‌‌agent,‌‌or‌ ‌ b) facts,‌‌or‌‌the‌‌existence‌‌of‌‌which‌‌the‌‌insured‌‌was‌‌ignorant‌‌of‌‌ without‌‌his‌‌fault.‌ ‌ 6) When‌‌by‌‌any‌‌default‌‌of‌‌the‌‌insured‌‌other‌‌than‌‌actual‌‌fraud,‌‌the‌‌ insurer‌‌never‌‌incurred‌‌liability‌‌under‌‌the‌‌policy;‌‌and‌ ‌ 7) When‌‌there‌‌is‌o ‌ verinsurance‌.‌ ‌ The‌ ‌stipulation‌ ‌in‌ ‌a‌ ‌life‌ ‌insurance‌ ‌policy‌ ‌giving‌ ‌the‌ ‌insured‌ ‌the‌‌ 8) When‌ ‌rescission‌ ‌is‌ ‌granted‌ ‌due‌ ‌to‌ ‌the‌ ‌insurer’s‌ ‌breach‌ ‌of‌‌ privilege‌‌to‌‌reinstate‌‌it‌‌upon‌‌written‌‌application‌‌‌does‌‌not‌‌give‌‌the‌‌ contract.‌ ‌ insured‌‌absolute‌‌right‌‌to‌‌such‌‌reinstatement‌‌by‌‌the‌‌mere‌‌filing‌‌of‌‌ an‌ ‌application.‌ ‌The‌ ‌insurer‌ ‌has‌ ‌the‌ ‌right‌ ‌to‌ ‌deny‌ ‌the‌‌ When‌‌NOT‌‌recoverable‌ ‌ reinstatement‌ ‌if‌ ‌it‌ ‌is‌ ‌not‌ ‌satisfied‌ ‌as‌ ‌to‌ ‌the‌ ‌insurability‌ ‌of‌ ‌the‌‌ 1) The‌‌risk‌‌has‌‌already‌‌attached,‌‌is‌‌entire‌‌and‌‌indivisible;‌ ‌ insured‌ ‌and‌ ‌if‌‌the‌‌latter‌‌does‌‌not‌‌pay‌‌all‌‌overdue‌‌premium‌‌and‌‌all‌‌ 2) In‌‌life‌i‌ nsurance;‌ ‌ other‌‌indebtedness‌‌to‌‌the‌‌insurer.‌‌‌After‌‌the‌‌death‌‌of‌‌the‌‌insured‌‌ the‌ ‌insurance‌ ‌Company‌ ‌cannot‌‌be‌‌compelled‌‌to‌‌entertain‌‌an‌‌ 3) The‌ ‌contract‌ ‌is‌ ‌rescindable‌ ‌or‌ ‌rendered‌ ‌void‌ ‌ab‌ ‌initio‌ ‌due‌‌to‌‌ application‌ ‌for‌ ‌reinstatement‌ ‌of‌ ‌the‌ ‌policy‌ ‌because‌ ‌the‌‌ the‌‌fraud‌‌of‌i‌ nsured‌.‌ ‌ conditions‌‌precedent‌‌to‌‌reinstatement‌‌can‌‌no‌‌longer‌‌be‌‌determined‌‌ and‌‌satisfied.‌‌(‌Lalican‌‌v.‌‌The‌‌Insular‌‌Life‌‌Assurance‌)‌ ‌ Philam‌‌Insurance‌‌v.‌‌Parc‌‌Chateau‌‌Condominium‌‌‌2019‌ ‌ If‌‌at‌‌the‌‌end‌‌of‌‌the‌‌grace‌‌period‌‌the‌‌premium‌‌has‌‌not‌‌been‌‌paid,‌‌ a‌‌policy‌‌loan‌‌will‌‌automatically‌‌be‌‌made‌‌from‌‌the‌‌policy’s‌‌cash‌‌ value‌ ‌to‌ ‌pay‌ ‌the‌ ‌premium.‌ ‌This‌ ‌is‌ ‌to‌ ‌prevent‌ ‌unintentional‌‌ lapse‌‌of‌‌the‌‌policy.‌ ‌ The‌ ‌policyholder‌ ‌shall‌ ‌be‌ ‌entitled‌ ‌to‌ ‌have‌‌the‌‌policy‌‌reinstated‌‌at‌‌any‌‌ time‌ ‌within‌ ‌three‌ ‌(3)‌ ‌years‌ ‌from‌ ‌the‌ ‌date‌ ‌of‌ ‌default‌ ‌of‌ ‌premium‌‌ payment‌ ‌unless‌ ‌the‌ ‌cash‌ ‌surrender‌ ‌value‌ ‌has‌ ‌been‌ ‌duly‌ ‌paid,‌ ‌or‌ ‌the‌‌ extension‌‌period‌‌has‌‌expired.‌‌There‌‌must‌‌be:‌ ‌ 3) Application‌ ‌of‌ ‌Dividend‌ ‌—‌ ‌in‌ ‌case‌ ‌of‌ ‌participating‌‌ insurance‌ ‌policy,‌‌the‌‌insured‌‌is‌‌entitled‌‌to‌‌dividends‌‌that‌‌may‌‌ be‌ ‌available.‌ ‌The‌ ‌dividend‌ ‌shall‌ ‌be‌ ‌applied‌ ‌to‌ ‌the‌ ‌premiums‌‌ that‌‌are‌‌due‌‌or‌‌payable.‌ ‌ a) upon‌ ‌production‌ ‌of‌ ‌evidence‌ ‌of‌ ‌insurability‌ ‌satisfactory‌ ‌to‌‌ the‌‌company‌‌and‌‌ ‌ b) payment‌ ‌of‌ ‌all‌ ‌overdue‌ ‌premiums‌ ‌and‌ ‌any‌ ‌indebtedness‌ ‌to‌‌ the‌‌company‌‌upon‌‌said‌‌policy(‌Sec‌‌233[j]‌‌IC‌)‌ ‌ WON‌‌Philam‌‌has‌‌NO‌‌right‌‌to‌‌recover‌‌the‌‌unpaid‌‌premium‌‌based‌‌on‌‌ void‌‌and‌‌ineffective‌‌insurance‌‌policies.‌ ‌ YES‌.‌ ‌The‌ ‌Jumbo‌ ‌Risk‌‌Provision‌‌clearly‌‌indicates‌‌that‌‌failure‌‌to‌‌pay‌‌ in‌ ‌full‌ ‌any‌ ‌of‌ ‌the‌ ‌scheduled‌ ‌installments‌ ‌on‌ ‌or‌ ‌before‌ ‌the‌‌due‌‌date‌‌ shall‌‌render‌‌the‌‌insurance‌‌policy‌‌void‌‌and‌‌ineffective‌‌as‌‌of‌‌4‌‌p.m.‌‌of‌‌ such‌ ‌date.‌ ‌Parc‌ ‌Association's‌ ‌failure‌ ‌to‌ ‌pay‌ ‌on‌ ‌the‌ ‌first‌ ‌due‌ ‌date,‌‌ resulted‌‌in‌‌a‌‌void‌‌and‌‌ineffective‌‌policy‌‌as‌‌of‌‌4‌‌p.m.‌‌of‌‌November‌‌30,‌‌ 2003.‌ ‌Hence,‌ ‌there‌ ‌is‌ ‌no‌ ‌credit‌ ‌extension‌ ‌to‌ ‌consider‌ ‌as‌‌the‌‌Jumbo‌‌ Risk‌‌Provision‌‌itself‌‌expressly‌‌cuts‌‌off‌‌the‌‌inception‌‌of‌‌the‌‌insurance‌‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 13‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ policy‌‌in‌‌case‌‌of‌‌default.‌ ‌ ‌ Rescission‌‌ ‌ 1) When‌ ‌representation‌ ‌is‌ ‌false‌ ‌on‌ ‌material‌ ‌point‌ ‌whether‌‌ affirmative‌‌or‌‌promissory;‌ ‌ 2) Violation‌ ‌of‌ ‌material‌ ‌warranty‌ ‌on‌ ‌the‌ ‌part‌ ‌of‌ ‌either‌‌party‌‌or‌‌ other‌‌material‌‌provisions‌‌of‌‌the‌‌policy;‌ ‌ 3) Intentional‌‌or‌‌unintentional‌c‌ oncealment‌;‌ ‌ 4) Violation‌‌of‌‌a‌‌special‌‌provision‌‌of‌‌the‌‌policy‌‌where‌‌the‌‌policy‌‌ declares‌‌that‌‌violation‌‌thereof‌‌shall‌‌avoid‌‌the‌‌policy;‌ ‌ 5) Intentional‌‌or‌‌fraudulent‌‌omission,‌‌on‌‌the‌‌part‌‌of‌‌one‌‌insured,‌‌ to‌ ‌communicate‌ ‌information‌ ‌of‌ ‌matters‌ ‌proving‌ ‌or‌‌tending‌‌to‌‌ prove‌‌the‌‌falsity‌‌of‌‌a‌‌warranty;‌‌and‌ ‌ 6) With‌‌respect‌‌to‌‌‌fire‌i‌ nsurance,‌‌ ‌ a) alteration‌ ‌in‌ ‌the‌ ‌use‌ ‌or‌ ‌condition‌ ‌of‌‌a‌‌thing‌‌insured‌‌from‌‌ that‌‌to‌‌which‌‌it‌‌is‌‌limited‌‌by‌‌the‌‌policy‌‌ ‌ b) made‌‌without‌‌the‌‌consent‌‌of‌‌the‌‌insurer,‌‌ ‌ c) by‌‌means‌‌within‌‌the‌‌control‌‌of‌‌the‌‌insured,‌‌and‌ d) increasing‌‌the‌‌risks.‌ ‌ Incontestability‌‌Clause‌ ‌ The‌ ‌insurer‌ ‌CANNOT‌ ‌prove‌ ‌that‌ ‌the‌ ‌policy‌ ‌is‌ ‌void‌ ‌ab‌ ‌initio‌ ‌or‌ ‌is‌‌ rescindable‌ ‌by‌ ‌reason‌ ‌of‌ ‌the‌ ‌fraudulent‌ ‌concealment‌ ‌or‌‌ misrepresentation‌‌of‌‌the‌‌insured‌‌or‌‌his‌‌agent:‌ After‌‌a‌‌policy‌‌of‌‌‌life‌‌insurance‌ ‌made‌‌payable‌‌on‌‌the‌‌death‌‌of‌‌the‌‌ insured‌ ‌shall‌ ‌have‌ ‌been‌ ‌in‌ ‌force‌ ‌during‌ ‌the‌ ‌lifetime‌ ‌of‌ ‌the‌‌ insured‌‌for‌‌a‌‌period‌‌of‌‌two‌‌(2)‌‌years‌‌from‌‌the‌‌date‌‌of‌‌its‌‌issue‌‌or‌‌ of‌‌its‌‌last‌‌reinstatement,‌‌ ‌ 2) The‌ ‌policy‌ ‌is‌ ‌in‌ ‌force‌ ‌for‌ ‌2‌ ‌years‌ ‌from‌ ‌issue‌ ‌or‌ ‌last‌‌ reinstatement.‌ ‌(‌Manila‌ ‌Bankers‌ ‌Life‌ ‌Insurance‌ ‌Corp.‌ ‌v.‌ ‌Aban‌‌ 2013)‌ ‌ What‌ ‌if‌ ‌the‌‌insured‌‌dies‌‌during‌‌the‌‌two-year‌‌period?‌‌‌The‌‌death‌‌of‌‌ the‌ ‌insured‌ ‌within‌ ‌the‌ ‌two-year‌ ‌period‌ ‌will‌ ‌render‌ ‌the‌ ‌right‌ ‌of‌ ‌the‌‌ insurer‌‌to‌‌rescind‌‌nugatory.‌‌(S‌ un‌‌Life‌‌v.‌‌Sibya‌‌‌2016)‌ ‌ NB:‌ ‌This‌ ‌rule‌ ‌is‌ ‌quite‌ ‌controversial‌ ‌as‌‌the‌‌prevailing‌‌rule‌‌had‌‌been‌‌to‌‌ allow‌ ‌the‌ ‌lapse‌ ‌of‌ ‌the‌ ‌2-year‌ ‌period‌ ‌first‌ ‌before‌ ‌the‌ ‌incontestability‌‌ clause‌‌can‌‌be‌‌invoked.‌ ‌ The‌‌clause‌‌CANNOT‌‌be‌‌invoked‌‌‌in‌‌the‌‌following‌‌cases:‌ ‌ 1) Non-payment‌‌of‌‌premium;‌ ‌ 4) Estoppel.‌ ‌ Devices‌‌to‌‌Ascertain‌‌and‌‌Control‌‌Risks‌ ‌ 1) Concealment;‌ ‌ 2) Representation;‌ ‌ 3) Warranties;‌ ‌ 4) Conditions;‌ ‌ 5) Exception,‌‌Exclusion,‌‌or‌‌Exemption.‌ ‌ Concealment‌ ‌ 2) Violation‌‌of‌‌the‌‌conditions‌‌of‌‌the‌‌policy‌‌relating‌‌to‌‌military‌‌or‌‌ naval‌‌service‌‌in‌‌times‌‌of‌‌war;‌ ‌ §26‌.‌ ‌A‌ ‌neglect‌ ‌to‌ ‌communicate‌ ‌that‌ ‌which‌ ‌a‌ ‌party‌ ‌knows‌‌ and‌‌ought‌‌to‌‌communicate,‌‌xxx.‌ ‌ 3) Property‌‌insurance;‌ ‌ §27‌.‌ ‌xxx‌ ‌whether‌ ‌intentional‌ ‌or‌ ‌unintentional‌ entitles‌ ‌the‌ injured‌‌party‌‌to‌‌rescind‌‌a‌‌contract‌‌of‌‌insurance.‌ ‌ 4) Absence‌‌of‌‌insurable‌‌interest;‌ ‌ 5) When‌‌VICIOUS‌‌fraud‌‌was‌‌employed‌‌in‌‌obtaining‌‌the‌‌policy,‌‌i.e.‌‌ fraudulent‌‌impersonation,‌‌scheme‌‌to‌‌murder‌‌insured;‌ ‌ 6) The‌‌cause‌‌of‌‌the‌‌loss‌‌is‌‌an‌‌excepted‌‌risk;‌ ‌ 7) The‌‌beneficiary‌‌feloniously‌‌kills‌‌the‌‌insured;‌ ‌ 8) Beneficiary‌ ‌failed‌ ‌to‌ ‌comply‌ ‌with‌ ‌conditions‌ ‌subsequent,‌ ‌i.e.‌‌ failure‌‌to‌‌submit‌‌notice‌‌of‌‌loss;‌‌and‌ ‌ 9) The‌‌claim‌‌is‌‌barred‌‌by‌‌extinctive‌‌prescription.‌ ‌ Other‌‌Defenses‌‌of‌‌Insured‌‌Against‌‌Revocation‌ ‌ 1) Guaranteed‌ ‌Insurability‌ ‌Clause‌ ‌—‌ ‌statements‌ ‌that‌ ‌tend‌ ‌to‌‌ show‌ ‌that‌ ‌the‌ ‌insured‌ ‌is‌ ‌uninsurable‌ ‌cannot‌ ‌be‌ ‌used‌ ‌against‌‌ him‌‌in‌‌the‌‌following‌‌cases:‌ ‌ a) If‌ ‌the‌ ‌insurance‌‌has‌‌been‌‌in‌‌force‌‌prior‌‌to‌‌the‌‌contest‌‌ for‌‌a‌‌period‌‌of‌‌2‌‌years‌‌during‌‌the‌‌person’s‌‌lifetime;‌‌or‌ ‌ The‌ ‌incontestability‌ ‌clause‌ ‌applies‌ ‌if‌ ‌the‌ ‌following‌ ‌requisites‌ ‌are‌‌ present:‌‌ ‌ 1) The‌‌policy‌‌must‌‌be‌‌a‌‌Life‌‌Insurance‌‌policy;‌‌ ‌ 3) Waiver;‌ ‌ b) If‌‌the‌‌statement‌‌is‌‌not‌‌in‌‌writing‌‌and/or‌‌not‌‌signed‌‌by‌‌ the‌‌insured.‌ ‌ 2) Failure‌‌to‌‌invoke‌‌before‌‌commencement‌‌of‌‌action;‌ ‌ ‌Thus,‌‌good‌‌faith‌‌is‌‌NOT‌‌a‌‌defense.‌ ‌ §28‌.‌ ‌Each‌‌party‌‌to‌‌a‌‌contract‌‌of‌‌insurance‌‌must‌‌communicate‌‌ to‌‌the‌‌other,‌i‌ n‌‌good‌‌faith‌,‌‌all‌‌facts‌‌ ‌ 1. within‌‌his‌‌knowledge‌‌ ‌ 2. which‌‌are‌m ‌ aterial‌t‌ o‌‌the‌‌contract‌‌and‌‌ ‌ 3. as‌‌to‌‌which‌‌he‌‌makes‌‌no‌‌warranty,‌‌and‌‌ ‌ 4. which‌‌the‌‌other‌‌has‌‌not‌‌the‌‌means‌‌of‌‌ascertaining.‌ ‌ The‌ ‌test‌‌of‌‌materiality‌ ‌is‌‌the‌‌effect‌‌which‌‌the‌‌knowledge‌‌of‌‌the‌‌fact‌‌ in‌ ‌question‌ ‌would‌ ‌have‌ ‌on‌ ‌the‌ ‌making‌ ‌of‌ ‌the‌ ‌contract.‌‌The‌‌fact‌‌‌need‌‌ not‌ ‌increase‌ ‌the‌ ‌risk‌ ‌or‌ ‌contribute‌ ‌to‌ ‌any‌ ‌loss‌ ‌or‌ ‌damage.‌ ‌It‌ ‌is‌‌ sufficient‌ ‌if‌ ‌the‌ ‌knowledge‌ ‌of‌ ‌it‌ ‌would‌ ‌influence‌ ‌the‌ ‌parties‌ ‌in‌‌ making‌‌the‌‌contract‌.‌ ‌ The‌‌matter‌‌concealed‌‌NEED‌‌NOT‌‌be‌‌the‌‌cause‌‌of‌‌the‌‌loss.‌ ‌ Requisites‌‌to‌‌rescind‌‌on‌‌ground‌‌of‌‌concealment‌ ‌ 1) The‌‌party‌‌involved‌‌must‌‌know,‌‌or‌‌‌ought‌‌to‌‌know‌,‌‌the‌‌fact‌‌ concealed;‌ ‌ 2) The‌‌fact‌‌concealed‌‌must‌‌be‌m ‌ aterial‌;‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 14‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ 3) No‌ ‌warranty‌ ‌is‌ ‌extended‌ ‌by‌ ‌the‌ ‌party‌ ‌regarding‌ ‌the‌ ‌fact‌‌ concealed;‌‌and‌ ‌ 4) The‌‌other‌‌party‌‌does‌n ‌ ot‌‌have‌t‌ he‌‌means‌‌of‌a ‌ scertaining‌.‌ ‌ Representation‌ ‌ Warranty‌ ‌ 1. An‌‌affirmation‌‌of‌‌fact‌‌or‌‌a‌‌promise‌‌that‌‌forms‌‌part‌‌of‌‌the‌‌terms‌‌ and‌‌conditions‌‌of‌‌the‌‌policy.‌ ‌ 2. It‌ ‌is‌ ‌a‌ ‌statement‌ ‌or‌ ‌promise‌ ‌set‌ ‌forth‌ ‌in‌ ‌the‌ ‌policy,‌ ‌or‌ ‌by‌‌ reference‌ ‌incorporated‌ ‌therein,‌ ‌the‌ ‌untruth‌‌or‌‌non-fulfillment,‌‌ renders‌‌the‌‌policy‌‌voidable‌‌by‌‌the‌‌insurer.‌ ‌ Statements‌ ‌made‌ ‌to‌ ‌give‌ ‌information‌ ‌to‌ ‌the‌ ‌insurer‌ ‌to‌ ‌induce‌ ‌him‌‌to‌‌ enter‌‌into‌‌the‌‌insurance‌‌contract.‌‌ ‌ 1. It‌‌is‌‌a‌‌collateral‌‌communication‌‌ ‌ 2. Made‌ ‌at‌ ‌the‌ ‌time‌ ‌of,‌ ‌or‌ ‌before,‌ ‌issuance‌ ‌of‌‌the‌‌policy,‌‌oral‌‌or‌‌ written.‌‌ ‌ EXC‌:‌‌ 3. It‌‌is‌‌either‌‌expressed‌o ‌ r‌‌implied‌.‌ ‌ 4. A‌‌statement‌‌of‌‌a‌‌matter‌‌relating‌‌to‌‌the‌‌person‌‌or‌‌thing‌‌insured,‌‌ or‌‌to‌‌the‌‌risk,‌‌as‌‌fact,‌‌is‌‌an‌e ‌ xpress‌w ‌ arranty.‌ ‌ I‌ t‌‌may‌‌also‌‌be‌‌one‌‌that‌‌induces‌‌the‌‌party‌‌to‌‌modify‌‌the‌‌ contract.‌ ‌ Concealment‌ ‌ Representation‌ ‌ Involves‌‌an‌o ‌ mission‌‌‌—‌‌ non-disclosure‌ ‌ Involves‌‌a‌‌positive‌a ‌ ssertion‌‌or‌‌ affirmation‌ ‌ Cannot‌‌refer‌‌to‌‌future‌‌acts‌ ‌ Can‌‌pertain‌‌to‌‌the‌‌future,‌‌if‌‌ promissory‌ ‌ Same‌‌‌test‌‌of‌‌materiality‌‌‌for‌‌both‌ ‌ Ground‌‌for‌‌rescission‌ ‌ The‌ ‌Insurance‌ ‌Code‌ ‌dispenses‌ ‌with‌ ‌proof‌ ‌of‌ ‌fraudulent‌ ‌intent‌ ‌in‌‌ cases‌ ‌of‌ ‌rescission‌ ‌due‌ ‌to‌ ‌concealment‌,‌ ‌but‌ ‌not‌ ‌so‌ ‌in‌ ‌cases‌ ‌of‌‌ rescission‌‌due‌‌to‌‌false‌‌‌representations‌.‌‌(‌The‌‌Insular‌‌Life‌‌v.‌‌Heirs‌‌ of‌‌Alvarez‌‌‌2018‌‌Leonen,‌‌J)‌ ‌ ‌ IOW:‌‌ Fraudulent‌ ‌intent‌ ‌is‌ ‌required‌ ‌to‌ ‌rescind‌ ‌an‌ ‌insurance‌‌ contract‌‌due‌‌to‌‌false‌‌representations;‌‌but‌‌NOT‌‌if‌‌the‌‌ground‌‌ is‌‌concealment.‌ ‌ When‌‌Rescission‌‌UNAVAILABLE‌ ‌ 1) When‌‌there‌‌is‌w ‌ aiver‌;‌ ‌ 2) When‌ ‌an‌ ‌action‌ ‌has‌ ‌already‌ ‌been‌ ‌commenced‌ ‌on‌ ‌the‌‌ contract;‌‌and‌ ‌ There‌‌must‌‌be‌‌strict‌‌compliance‌ ‌ Must‌‌be‌‌substantially‌‌true‌ ‌ a. It‌‌must‌‌be‌‌contained‌‌in‌‌the‌‌policy;‌‌or‌ ‌ b. Expressed‌‌in‌‌another‌‌instrument‌‌‌provided‌‌that‌‌such‌‌is‌‌ signed‌‌by‌‌the‌‌insured‌‌and‌‌referred‌‌to‌‌in‌‌the‌‌policy.‌ ‌ 5. It‌‌may‌‌relate‌‌to‌‌the‌‌‌past‌,‌‌the‌‌‌present‌,‌‌the‌‌‌future‌,‌‌or‌‌to‌‌any‌‌or‌‌ all‌‌of‌‌these.‌ ‌ 6. Promissory‌ ‌warranty‌ ‌is‌ ‌a‌ ‌statement‌ ‌which‌ ‌imparts‌ ‌that‌ ‌it‌ ‌is‌‌ intended‌‌to‌‌do‌‌or‌‌not‌‌to‌‌do‌‌a‌‌thing‌‌which‌‌materially‌‌affects‌‌the‌‌ risk.‌ ‌ GR‌:‌ Rescission‌ ‌is‌ ‌available‌ ‌only‌ ‌if‌ ‌the‌ ‌breach‌ ‌is‌ ‌on‌ ‌a‌ ‌material‌‌ warranty.‌ EXC‌:‌ Even‌‌if‌‌the‌‌provision‌‌is‌‌‌immaterial‌,‌‌a‌‌policy‌‌may‌‌declare‌‌that‌‌a‌‌ violation‌ ‌of‌ ‌such‌ ‌avoids‌ ‌the‌ ‌policy,‌ ‌thereby‌ ‌converting‌ ‌the‌‌ provision‌‌into‌‌a‌‌material‌‌one.‌ ‌ §76‌.‌‌A‌‌‌breach‌‌of‌‌warranty‌‌‌without‌‌fraud‌‌‌merely‌‌exonerates‌‌ an‌‌insurer‌‌from‌‌the‌‌time‌‌that‌‌it‌‌occurs,‌‌or‌‌where‌‌it‌‌is‌‌broken‌‌in‌‌ its‌‌inception,‌‌prevents‌‌the‌‌policy‌‌from‌‌attaching‌‌to‌‌the‌‌risk.‌ ‌ Warranty‌ ‌ Representation‌ ‌ Part‌‌of‌‌the‌‌contract‌ ‌ Not‌‌part‌‌of‌‌the‌‌contract‌‌but‌‌a‌‌ collateral‌‌inducement‌ ‌ Written‌‌on‌‌a‌‌policy‌‌or‌‌its‌‌rider‌ ‌ May‌‌be‌‌oral‌‌or‌‌written‌ ‌ Presumed‌‌to‌‌be‌‌material‌ ‌ Must‌‌be‌‌established‌‌to‌‌be‌‌ material‌ ‌ 3) When‌‌the‌‌incontestability‌‌clause‌a‌ pplies.‌ ‌ Conditions‌ ‌ Are‌‌in‌‌the‌‌nature‌‌of‌‌collateral‌‌terms.‌‌They‌‌include:‌ ‌ 1) Promises‌ ‌or‌ ‌obligations‌ ‌regarding‌ ‌claims‌ ‌procedure‌ ‌that‌‌ are‌‌not‌‌fundamental‌‌to‌‌the‌‌validity‌‌of‌‌the‌‌contract;‌‌and‌ ‌ 2) Conditions‌‌conferring‌‌more‌‌rights‌‌to‌‌the‌‌insurer‌‌enlarging‌‌ or‌‌repeating‌‌the‌‌minimum‌‌rights‌‌provided‌‌by‌‌law.‌ ‌ May‌ ‌be‌ ‌either‌ ‌condition‌ ‌precedent‌ ‌like‌ ‌payment‌ ‌of‌ ‌premium‌ ‌or‌‌ condition‌‌subsequent‌l‌ ike‌‌giving‌‌notice‌‌of‌‌loss.‌ ‌ An‌ ‌example‌ ‌is‌ ‌an‌ ‌“‌Other‌ ‌Insurance‌ ‌Clause‌”‌ ‌wherein‌ ‌it‌ ‌may‌ ‌be‌‌ expressly‌‌provided‌‌as‌‌a‌‌condition‌‌that‌‌the‌‌insured‌‌must‌‌give‌‌notice‌‌ of‌‌the‌‌existence‌‌of‌‌another‌‌insurance‌‌coverage‌‌of‌‌the‌‌same‌‌property.‌‌ Otherwise,‌‌the‌‌policy‌‌is‌‌‌null‌‌and‌‌void‌.‌ ‌ Exception,‌‌Exclusion,‌‌or‌‌Exemption‌ ‌ These‌‌should‌‌be‌‌expressed‌‌in‌‌the‌‌policy‌‌in‌‌clear‌‌and‌‌unmistakable‌‌ language.‌ ‌ Claims‌‌Settlement‌‌and‌‌Subrogation‌ ‌ Claims‌ ‌Settlement.‌ ‌The‌ ‌liability‌ ‌of‌ ‌the‌ ‌insurer‌ ‌attaches‌ ‌the‌‌ moment‌‌the‌‌risk‌‌insured‌‌against‌‌causes‌‌loss‌‌to‌‌the‌‌insured.‌ ‌ Loss‌‌and‌‌Notice‌‌of‌‌Loss‌ ‌ Loss‌ ‌in‌ ‌insurance‌ ‌means‌ ‌the‌ ‌injury‌ ‌or‌ ‌damage‌ ‌sustained‌ ‌by‌ ‌the‌‌ insured‌ ‌in‌ ‌consequence‌ ‌of‌ ‌the‌ ‌happening‌ ‌of‌ ‌one‌ ‌or‌ ‌more‌ ‌of‌ ‌the‌‌ accidents‌‌or‌‌misfortune‌‌against‌‌which‌‌the‌‌insurer,‌‌in‌‌consideration‌‌ of‌‌the‌‌premium,‌‌has‌‌undertaken‌‌to‌‌indemnify‌‌the‌‌insured.‌ ‌ Proximate‌ ‌Cause‌ ‌is‌ ‌that‌ ‌cause‌ ‌which,‌ ‌in‌ ‌natural‌ ‌and‌‌continuous‌‌ sequence,‌ ‌unbroken‌ ‌by‌ ‌any‌ ‌efficient‌ ‌intervening‌ ‌cause,‌ ‌produces‌‌ the‌‌injury,‌‌and‌‌without‌‌which‌‌the‌‌result‌‌would‌‌not‌‌have‌‌occurred.‌ ‌ Remote‌‌Cause‌‌is‌‌that‌‌cause‌‌which‌‌some‌‌independent‌‌force‌‌merely‌‌ took‌‌advantage‌‌of‌‌to‌‌accomplish‌‌something‌‌which‌‌is‌‌not‌‌the‌‌natural‌‌ effect‌‌thereof.‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 15‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ Efficient‌‌Cause‌.‌‌In‌‌Insurance‌‌Law,‌‌the‌‌proximate‌‌cause‌‌of‌‌the‌‌loss,‌‌ not‌‌necessarily‌‌in‌‌time,‌‌but‌i‌ n‌‌efficiency‌.‌ ‌ Immediate‌ ‌Cause‌ ‌suggests‌ ‌proximity‌ ‌in‌ ‌time‌ ‌of‌ ‌the‌ ‌loss.‌ ‌This‌‌ contemplates‌‌at‌‌least‌‌two‌‌causes‌‌are‌‌involved.‌ ‌ Rules‌ ‌ unnecessary‌ ‌delay.‌ ‌(‌Industrial‌ ‌Personnel‌ ‌and‌ ‌Management‌ ‌Services,‌‌ Inc.‌‌v.‌‌Country‌‌Bankers‌‌Insurance‌‌‌2018‌)‌ ‌ annuity‌,‌‌in‌‌which‌‌case‌‌the‌‌installments,‌‌or‌‌annuities‌‌shall‌‌be‌‌paid‌‌ as‌‌they‌‌become‌‌due.‌ ‌ Integrated‌‌Micro‌‌Electronics‌‌v.‌‌Standard‌‌Insurance‌‌Co.,‌‌Inc.‌‌‌2020‌ ‌ If‌‌the‌‌cause‌‌of‌‌maturity‌‌is‌‌‌death‌‌‌of‌‌the‌‌insured,‌‌the‌‌proceeds‌‌shall‌‌ be‌‌paid‌‌‌within‌‌sixty‌‌(60)‌‌days‌‌after‌‌presentation‌‌of‌‌the‌‌claim‌‌and‌‌ filing‌‌of‌‌the‌‌proof‌‌of‌‌death‌‌of‌‌the‌‌insured.‌ ‌ WON‌‌Integrated‌‌Micro's‌‌cause‌‌of‌‌action‌‌has‌‌already‌‌prescribed.‌ ‌ YES‌.‌ ‌It‌ ‌is‌ ‌explicit‌ ‌that‌ ‌if‌ ‌a‌ ‌claim‌ ‌is‌‌made‌‌and‌‌rejected,‌‌an‌‌action‌‌or‌‌ 1) Liable‌ ‌if‌ ‌the‌ ‌peril‌ ‌insured‌ ‌against‌ ‌is‌ ‌the‌ ‌proximate‌‌‌cause‌‌of‌‌ the‌‌loss;‌‌ ‌ Regardless‌‌of‌‌whether‌‌accompanied‌‌by‌‌a‌‌remote‌‌or‌‌immediate‌‌ cause,‌‌and‌‌whether‌‌such‌‌causes‌‌are‌‌excepted‌‌perils.‌ ‌ 2) Not‌‌liable‌‌‌if‌‌the‌‌peril‌‌insured‌‌against‌‌is‌‌the‌r‌ emote‌c‌ ause;‌ ‌ 3) Liable‌ ‌if‌ ‌the‌ ‌thing‌ ‌insured‌ ‌is‌ ‌damaged‌ ‌because‌ ‌it‌ ‌was‌ ‌being‌‌ rescued‌‌from‌‌the‌‌peril‌‌‌insured‌‌against;‌ ‌ suit‌‌should‌‌be‌‌commenced‌‌within‌‌a‌‌period‌‌of‌‌‌12‌‌months.‌‌Based‌‌on‌‌ the‌ ‌plain‌ ‌and‌ ‌ordinary‌ ‌context‌ ‌of‌ ‌the‌ ‌agreement,‌ ‌the‌ ‌parties‌‌ contemplated‌ ‌that‌ ‌the‌ ‌cause‌ ‌of‌ ‌action‌ ‌for‌ ‌loss‌ ‌or‌ ‌damages‌ ‌arising‌‌ from‌ ‌the‌ ‌insurance‌ ‌contract‌‌shall‌‌accrue‌‌from‌‌rejection‌‌of‌‌the‌‌claim‌‌ at‌‌the‌‌first‌‌instance.‌ ‌ In‌ ‌Sun‌ ‌Insurance‌ ‌Office,‌ ‌Ltd.‌ ‌v.‌ ‌CA,‌ ‌et‌ ‌al.‌,‌ ‌the‌ ‌Court‌ ‌clarified‌‌that‌‌ once‌ ‌there‌ ‌is‌ ‌a‌ ‌refusal‌ ‌conveyed‌ ‌by‌ ‌the‌ ‌insurer‌ ‌to‌ ‌the‌ ‌claimant,‌‌ expressly‌ ‌or‌ ‌impliedly,‌ ‌the‌ ‌12-month‌ ‌prescriptive‌ ‌period‌ ‌should‌‌ commence‌‌to‌‌run,‌‌without‌‌awaiting‌‌any‌‌reconsideration.‌ ‌ 4) Liable‌ ‌for‌ ‌damages‌ ‌caused‌ ‌by‌ ‌a‌ ‌peril‌ ‌not‌ ‌insured‌ ‌against‌ ‌to‌‌ which‌‌the‌‌thing‌‌was‌‌exposed‌‌while‌‌the‌‌same‌‌was‌‌being‌‌rescued‌‌ Guidelines‌‌on‌‌claims‌‌settlement‌ ‌ from‌‌a‌‌peril‌‌insured‌‌against;‌ ‌ 5) Liable‌ ‌if‌ ‌the‌ ‌peril‌ ‌insured‌ ‌against‌‌is‌‌the‌‌‌immediate‌‌‌cause‌‌of‌‌ Unfair‌‌Claims‌‌Settlement‌‌Practices‌ ‌ the‌‌loss‌‌if‌‌the‌‌proximate‌‌cause‌‌is‌‌not‌‌an‌‌excepted‌‌peril‌;‌ ‌ 6) Not‌‌liable‌‌if‌‌the‌‌peril‌‌insured‌‌against‌‌is‌‌the‌‌‌immediate‌‌‌cause‌‌ but‌‌the‌‌proximate‌‌cause‌‌is‌‌an‌‌excepted‌‌cause‌;‌ ‌ 7) Not‌‌liable‌‌‌for‌‌losses‌‌caused‌‌by‌‌intentional‌‌acts‌‌of‌‌insured;‌ ‌ 8) Liable‌‌if‌‌the‌‌loss‌‌was‌‌caused‌‌through‌‌ordinary‌‌negligence.‌ ‌ If‌‌negligence‌‌is‌‌‌gross‌,‌‌amounting‌‌to‌‌misconduct‌‌or‌‌a‌‌wrongful‌‌ act,‌‌it‌‌may‌‌exonerate‌‌the‌‌insurer‌‌from‌‌liability.‌ ‌ Delay‌‌of‌‌Notice‌‌of‌‌Loss‌‌to‌‌Insurer;‌‌When‌‌Excused‌ ‌ 1) When‌‌delay‌‌is‌‌attributable‌‌to‌‌the‌‌insurer;‌ ‌ 2) When‌‌there‌‌was‌‌no‌‌prompt‌‌objection;‌‌and‌ ‌ 3) There‌‌was‌‌an‌‌objection‌‌but‌‌not‌‌specifically‌‌on‌‌the‌‌ground‌‌that‌‌ there‌‌was‌‌delay‌‌of‌‌notice‌‌or‌‌proof‌‌of‌‌loss.‌ ‌ Under‌ ‌Section‌‌92‌‌of‌‌the‌‌Insurance‌‌Code‌‌all‌‌defects‌‌in‌‌the‌‌proof‌‌of‌‌loss,‌‌ which‌ ‌the‌ ‌insured‌ ‌might‌ ‌remedy,‌ ‌are‌‌‌waived‌‌‌as‌‌grounds‌‌for‌‌objection‌‌ when‌ ‌the‌ ‌insurer‌ ‌omits‌ ‌to‌ ‌specify‌ ‌to‌ ‌him‌ ‌such‌ ‌defects‌ ‌without‌‌ 1) Knowingly‌ ‌misrepresenting‌ ‌to‌ ‌claimants‌ ‌pertinent‌ ‌facts‌ ‌or‌‌ policy‌‌provisions‌‌relating‌‌to‌‌coverage‌‌at‌‌issue;‌ ‌ 2) Failing‌ ‌to‌ ‌acknowledge‌ ‌with‌ ‌reasonable‌ ‌promptness‌‌ pertinent‌‌communications‌‌with‌‌respect‌‌to‌‌claims‌‌arising‌‌under‌‌ its‌‌policies;‌ ‌ 3) Failing‌ ‌to‌ ‌adopt‌ ‌and‌ ‌implement‌ ‌reasonable‌ ‌standards‌ ‌for‌ ‌the‌‌ prompt‌‌investigation‌‌‌of‌‌claims‌‌arising‌‌under‌‌its‌‌policies;‌ ‌ 4) Not‌ ‌attempting‌ ‌in‌ ‌good‌ ‌faith‌ ‌to‌ ‌effectuate‌ ‌prompt,‌ ‌fair‌ ‌and‌‌ equitable‌‌settlement‌‌of‌‌claims‌‌submitted‌‌in‌‌which‌‌liability‌‌has‌‌ become‌‌reasonably‌‌clear;‌‌or‌ ‌ 5) Compelling‌ ‌policyholders‌ ‌to‌ ‌institute‌ ‌suits‌ ‌to‌ ‌recover‌‌ amounts‌ ‌due‌ ‌under‌ ‌its‌ ‌policies‌‌by‌‌offering‌‌without‌‌justifiable‌‌ reason‌ ‌substantially‌ ‌less‌ ‌than‌ ‌the‌ ‌amounts‌ ‌ultimately‌‌ recovered‌‌in‌‌suits‌‌brought‌‌by‌‌them.‌ ‌ Refusal‌ ‌or‌ ‌failure‌ ‌to‌‌pay‌‌the‌‌claim‌‌within‌‌the‌‌time‌‌prescribed‌‌will‌‌ entitle‌ ‌the‌ ‌beneficiary‌ ‌to‌ ‌collect‌ ‌interest‌ ‌on‌ ‌the‌ ‌proceeds‌ ‌of‌ ‌the‌‌ policy‌‌for‌‌the‌‌duration‌‌of‌‌the‌‌delay‌‌at‌‌the‌‌rate‌‌of‌1 ‌ 2%‌.‌ ‌ In‌‌Non-life‌‌Insurance‌ ‌ Proceeds‌ ‌shall‌ ‌be‌ ‌paid‌ ‌within‌ ‌30‌ ‌days‌ ‌after‌ ‌proof‌ ‌of‌ ‌loss‌ ‌is‌‌ received‌ ‌and‌‌‌ascertainment‌‌‌of‌‌the‌‌loss‌‌or‌‌damage‌‌is‌‌made‌‌either‌‌ by‌‌agreement‌b ‌ etween‌‌the‌‌parties‌‌or‌b ‌ y‌‌arbitration‌.‌ ‌ If‌‌ascertainment‌‌is‌‌not‌‌had‌‌or‌‌made‌‌within‌‌60‌‌days‌‌‌after‌‌receipt‌‌of‌‌ proof‌‌of‌‌loss,‌‌then‌‌the‌‌loss‌‌or‌‌damage‌‌shall‌‌be‌‌paid‌‌within‌‌‌90‌‌days‌‌ after‌‌receipt‌‌of‌‌proof‌‌of‌‌loss.‌ ‌ Unreasonable‌‌Denial‌‌or‌‌Withholding‌‌of‌‌Claim‌ ‌ In‌ ‌case‌ ‌of‌ ‌any‌ ‌litigation‌ ‌for‌ ‌the‌ ‌enforcement‌ ‌of‌ ‌any‌ ‌policy‌ ‌or‌‌ contract‌ ‌of‌ ‌insurance,‌ ‌it‌ ‌shall‌ ‌be‌‌the‌‌duty‌‌of‌‌the‌‌Commissioner‌‌or‌‌ the‌‌Court,‌‌to‌‌make‌‌a‌‌finding‌‌as‌‌to‌‌whether‌‌the‌‌payment‌‌of‌‌the‌‌claim‌‌ of‌‌the‌‌insured‌‌has‌‌been‌‌unreasonably‌‌denied‌‌or‌‌withheld.‌ ‌ In‌‌the‌‌affirmative‌‌case,‌‌the‌‌insurance‌‌company‌‌shall‌‌be‌‌adjudged‌‌to‌‌ pay‌d ‌ amages‌‌which‌‌shall‌‌consist‌‌of‌‌ ‌ 1. attorney's‌‌fees‌‌and‌‌ ‌ 2. other‌‌expenses‌‌incurred‌‌by‌‌the‌‌insured‌‌person‌‌by‌‌reason‌‌of‌‌ such‌‌unreasonable‌‌denial‌‌or‌‌withholding‌‌of‌‌payment‌‌ ‌ 3. plus‌‌interest‌‌of‌1 ‌ 2%.‌ ‌ Failure‌ ‌to‌ ‌pay‌ ‌any‌ ‌such‌ ‌claim‌ ‌within‌ ‌the‌ ‌time‌ ‌prescribed‌ ‌in‌ ‌said‌‌ sections‌‌shall‌‌be‌‌considered‌‌‌prima‌‌facie‌‌evidence‌‌‌of‌‌unreasonable‌‌ delay‌‌in‌‌payment.‌ ‌ Prescriptive‌‌Period‌ ‌ In‌‌Life‌‌Insurance‌ ‌ Proceeds‌‌shall‌‌be‌‌paid‌‌‌immediately‌‌upon‌‌maturity‌‌of‌‌the‌‌policy,‌ unless‌ ‌such‌ ‌proceeds‌ ‌are‌ ‌made‌ ‌payable‌ ‌in‌‌‌installments‌‌‌or‌‌as‌‌an‌‌ GR‌:‌ ‌TEN‌‌(10)‌‌YEARS‌f‌ rom‌‌rejection‌‌of‌‌claim‌‌by‌‌the‌‌insurer.‌ ‌ EXC‌:‌ If‌‌otherwise‌‌stipulated‌‌in‌‌the‌‌contract.‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 16‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ E2E‌:‌ ‌ONE‌‌(1)‌‌YEAR‌‌‌for‌‌Compulsory‌‌Third‌‌Party‌‌Liability.‌ ‌ Subrogation‌ ‌ An‌ ‌equitable‌ ‌doctrine‌ ‌and‌ ‌arises‌ ‌ipso‌ ‌facto‌.‌ ‌The‌ ‌following‌‌ requisites‌m ‌ ust‌‌concur‌‌for‌‌subrogation‌‌to‌‌take‌‌place:‌ ‌ 1) The‌‌insurance‌‌involved‌‌is‌p ‌ roperty‌i‌ nsurance;‌ ‌ Capitalization‌ ‌ 1. No‌‌new‌‌domestic‌‌life‌‌or‌‌non-life‌‌insurance‌‌company‌‌shall,‌‌in‌‌a‌‌ stock‌‌corporation,‌‌engage‌‌in‌‌business‌‌in‌‌the‌‌Philippines‌‌unless‌‌ possessed‌‌of‌‌a‌‌paid-up‌‌capital‌‌‌equal‌‌to‌‌at‌‌least‌P ‌ hp‌‌1B‌.‌ ‌ 2. A‌ ‌domestic‌ ‌insurance‌ ‌company‌ ‌already‌‌doing‌‌business‌‌in‌‌the‌‌ Philippines‌‌shall‌‌have‌‌a‌n ‌ et‌‌worth‌‌ ‌ 2) There‌‌is‌‌a‌‌loss‌‌arising‌‌from‌‌the‌‌risk‌‌insured‌‌against;‌ ‌ a. 3) The‌‌insured‌‌received‌‌indemnity‌‌from‌‌the‌‌insurer;‌ ‌ 4) The‌‌indemnity‌‌is‌‌covered‌‌by‌‌the‌‌face‌‌value‌‌of‌‌the‌‌policy.‌ ‌ by‌‌December‌‌31,‌‌2019,‌‌an‌‌additional‌‌Php‌‌350M‌‌in‌‌net‌‌ worth;‌‌and‌‌ ‌ d) Membership‌‌certificate‌‌issued‌‌by‌‌members‌‌of‌‌mutual‌‌ benefit‌‌associations.‌ ‌ 2) Primary‌ ‌and‌ ‌Exclusive‌ ‌Jurisdiction‌ ‌—‌ ‌claim‌ ‌for‌ ‌benefits‌‌ involving‌ ‌pre-need‌ ‌plans‌ ‌where‌ ‌the‌ ‌amount‌ ‌of‌ ‌benefit‌ ‌does‌‌ not‌‌exceed‌P ‌ 100K‌.‌ ‌ 3) NO‌ ‌jurisdiction‌ ‌to‌ ‌decide‌ ‌legality‌ ‌of‌ ‌a‌ ‌contract‌ ‌of‌ ‌agency‌‌ between‌‌insurer‌‌and‌‌its‌‌agent.‌ ‌ 4) Jurisdiction‌ ‌over‌ ‌administrative‌ ‌cases‌ ‌against‌ ‌insurance‌ companies‌‌such‌‌as‌‌cases‌‌for‌u ‌ nfair‌‌claims‌‌settlement‌.‌ ‌ b. by‌‌December‌‌31,‌‌2022,‌‌an‌‌additional‌‌Php‌‌400M‌‌in‌‌net‌‌ Revocation‌‌of‌‌Certificate‌‌of‌‌Authority‌ ‌ worth.‌ ‌ 1) insurance‌‌company‌‌is‌‌in‌‌an‌u ‌ nsound‌‌condition‌,‌ If‌ ‌the‌ ‌assured‌ ‌by‌ ‌his‌ ‌own‌ ‌acts‌ ‌releases‌ ‌the‌ ‌wrongdoer‌ ‌from‌‌ Dividend‌‌Policy‌ ‌ 2) it‌ ‌has‌ ‌failed‌ ‌to‌ ‌comply‌ ‌with‌ ‌the‌ ‌provisions‌ ‌of‌ ‌law‌ ‌or‌‌ liability;‌ ‌ No‌ ‌domestic‌ ‌insurance‌ ‌corporation‌ ‌shall‌ ‌declare‌ ‌or‌ ‌distribute‌ ‌any‌‌ regulations‌‌obligatory‌‌upon‌‌it,‌‌ ‌ The‌ ‌insurer‌ ‌pays‌ ‌the‌ ‌assured‌ ‌the‌ ‌value‌ ‌of‌ ‌the‌ ‌lost‌ g‌ oods‌‌ dividend‌ ‌on‌ ‌its‌ ‌outstanding‌ ‌stocks‌ ‌unless‌ ‌it‌ ‌has‌ ‌met‌ ‌the‌ ‌minimum‌‌ 3) its‌ ‌condition‌ ‌or‌ ‌method‌ ‌of‌ ‌business‌ ‌is‌ ‌such‌ ‌as‌ ‌to‌ ‌render‌ ‌its‌‌ without‌ ‌notifying‌ ‌the‌‌carrier‌‌who‌‌has‌‌in‌‌good‌‌faith‌‌settled‌‌the‌‌ paid-up‌‌capital‌‌and‌‌net‌‌worth‌‌requirements‌‌under‌‌Section‌‌194‌‌and:‌ ‌ proceedings‌‌hazardous‌t‌ o‌‌the‌‌public‌‌or‌‌to‌‌its‌‌policyholders,‌ ‌ claims‌‌of‌‌the‌‌assured;‌ ‌ a) The‌‌entire‌‌paid-up‌‌capital‌‌stock,‌ ‌ 4) its‌ ‌net‌ ‌worth‌ ‌requirement‌,‌ ‌in‌ ‌the‌ ‌case‌ ‌of‌ ‌a‌‌domestic‌‌stock‌‌ The‌ ‌insurer‌ ‌pays‌ ‌the‌ ‌assured‌ ‌for‌ ‌a‌ ‌loss‌ ‌which‌ ‌is‌ ‌not‌ ‌a‌ ‌risk‌‌ b) The‌‌solvency‌‌requirements‌‌defined‌‌by‌‌Section‌‌200;‌ ‌ company,‌‌or‌‌ ‌ covered‌‌by‌‌the‌‌policy;‌ ‌ its‌ ‌available‌ ‌cash‌ ‌assets‌,‌ ‌in‌ ‌the‌ ‌case‌ ‌of‌ ‌a‌ ‌domestic‌ ‌mutual‌‌ c) The‌‌legal‌‌reserve‌‌fund‌‌required‌b ‌ y‌‌Secs‌‌217‌‌and‌‌219;‌‌and‌ ‌ The‌‌insurer‌‌paid‌‌in‌‌excess‌‌of‌‌the‌‌amount‌‌of‌‌the‌‌loss;‌‌and‌ ‌ company,‌‌or‌‌ ‌ d) A‌‌sum‌‌sufficient‌‌to‌‌pay‌‌all‌‌net‌‌losses‌‌reported,‌‌or‌‌in‌‌the‌‌course‌‌ Life‌‌insurance‌‌is‌‌involved.‌ ‌ its‌‌security‌‌deposits‌,‌‌in‌‌the‌‌case‌‌of‌‌a‌‌foreign‌‌company,‌‌ ‌ of‌ ‌settlement,‌ ‌and‌ ‌all‌ ‌liabilities‌ ‌for‌ ‌expenses‌ ‌and‌ ‌taxes.‌ ‌(‌Sec‌‌ When‌‌there‌‌is‌N ‌ O‌s‌ ubrogation‌ ‌ 1) 2) 3) 4) 5) 201‌‌IC‌)‌ ‌ Business‌‌of‌‌Insurance‌‌ ‌ There‌ ‌are‌ ‌three‌ ‌(3)‌ ‌basic‌ ‌requirements‌ ‌for‌ ‌the‌ ‌formation‌‌of‌‌insurance‌‌ corporations:‌ ‌ 1) It‌ ‌must‌ ‌possess‌ ‌the‌ ‌capital‌ ‌and‌ ‌assets‌ ‌required‌ ‌of‌ ‌an‌‌ insurance‌ ‌corporation‌ ‌doing‌ ‌the‌ ‌same‌‌kind‌‌of‌‌business‌‌in‌‌the‌‌ Philippines‌‌and‌‌invested‌‌in‌‌the‌‌same‌‌manner;‌ ‌ is‌‌impaired‌‌or‌‌deficient,‌‌or‌‌ ‌ Insurance‌‌Commission‌‌and‌‌its‌‌Powers‌‌ ‌ Headed‌ ‌by‌ ‌the‌ ‌Insurance‌ ‌Commissioner‌ ‌who‌ ‌is‌ ‌appointed‌ ‌by‌ ‌the‌‌ President‌‌for‌‌a‌‌term‌‌of‌6 ‌ ‌‌years‌‌‌without‌‌reappointment.‌ ‌ Adjudicatory‌‌or‌‌Quasi-Judicial‌‌Powers‌ ‌ 1) Concurrent‌ ‌Jurisdiction‌ ‌—‌ ‌cases‌ ‌where‌ ‌any‌ ‌single‌ ‌claim‌‌ 2) The‌ ‌Insurance‌ ‌Commissioner‌ ‌had‌ ‌granted‌ ‌a‌certificate‌‌‌to‌‌the‌‌ effect‌‌that‌‌the‌‌insurer‌‌has‌‌complied‌‌with‌‌the‌‌provisions‌‌of‌‌the‌‌ IC;‌‌and‌ ‌ 3) It‌ ‌must‌ ‌have‌ ‌obtained‌ ‌a‌ ‌certificate‌ ‌of‌ ‌authority‌ ‌to‌ ‌transact‌‌ business‌‌from‌‌the‌‌Insurance‌‌Commissioner.‌‌(‌Secs‌‌192‌‌and‌‌193,‌‌ IC‌)‌ ‌ does‌‌not‌‌exceed‌P ‌ 5M‌‌‌involving‌‌liability‌‌arising‌‌from‌ ‌ a) Insurance‌‌contract;‌ ‌ b) Contract‌‌of‌‌suretyship;‌ ‌ c) Reinsurance‌‌contract;‌‌and‌ ‌ 5) the‌‌margin‌‌of‌‌solvency‌‌‌required‌‌of‌‌such‌‌company‌‌is‌‌deficient.‌ ‌ Before‌ ‌restoring‌ ‌such‌ ‌authority,‌ ‌the‌ ‌Commissioner‌ ‌shall‌ ‌require‌ ‌the‌‌ company‌ ‌concerned‌ ‌to‌ ‌submit‌ ‌to‌ ‌him‌ ‌a‌ ‌business‌ ‌plan‌ ‌showing‌ ‌the‌‌ company's‌ ‌estimated‌ ‌receipts‌ ‌and‌ ‌disbursements,‌‌as‌‌well‌‌as‌‌the‌‌basis‌‌ therefor,‌‌for‌‌the‌‌‌next‌‌succeeding‌‌three‌‌(3)‌‌years‌.‌ ‌ Insolvency‌ ‌ 1) Liquidation‌ ‌—‌ ‌insolvent‌ ‌or‌ ‌cannot‌ ‌resume‌ ‌business;‌‌(§256)‌‌ or‌ ‌ 2) Appointment‌ ‌of‌ ‌Conservator‌ ‌—‌ ‌company‌ ‌is‌ ‌in‌ ‌a‌ ‌state‌ ‌of‌‌ continuing‌ ‌inability‌ ‌or‌ ‌unwillingness‌ ‌to‌ ‌maintain‌ ‌a‌‌condition‌‌ of‌‌solvency‌‌or‌‌liquidity‌‌deemed‌‌adequate‌‌to‌‌protect‌‌the‌‌interest‌‌ of‌‌policyholders‌‌and‌‌creditors.‌‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 17‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ "‌Pre-need‌ ‌company‌"‌ ‌refers‌ ‌to‌ ‌any‌ ‌corporation‌ ‌registered‌‌ 3. ‌ with‌ ‌the‌ ‌Commission‌ ‌and‌ ‌authorized/licensed‌ ‌to‌‌sell‌‌or‌‌offer‌‌ to‌ ‌sell‌ ‌pre-need‌ ‌plans.‌ ‌It‌ ‌also‌ ‌refers‌ ‌to‌ ‌schools,‌ ‌memorial‌‌ chapels,‌ ‌banks,‌ ‌nonbank‌ ‌financial‌ ‌institutions‌‌and‌‌other‌‌ entities‌ ‌which‌ ‌have‌ ‌also‌ ‌been‌ ‌authorized/licensed‌ ‌to‌ ‌sell‌ ‌or‌‌ offer‌ ‌to‌ ‌sell‌ ‌pre-need‌‌plans‌‌insofar‌‌as‌‌their‌‌pre-need‌‌activities‌‌ or‌‌business‌‌are‌‌concerned.‌ ‌ References:‌‌Aquino,‌‌2018‌‌and‌‌Sundiang‌‌&‌‌Aquino,‌‌2019‌ ‌ Pre-Need‌‌Law‌ ‌ RA‌‌No‌‌9829‌‌|‌‌Pre-Need‌‌Code‌‌of‌‌the‌‌Philippines‌ Implementing‌‌Rules‌‌and‌‌Regulations‌ It‌‌is‌‌‌REQUIRED‌‌‌that‌‌the‌‌word‌‌“‌Plan‌”‌‌or‌‌“‌Plans‌”‌‌is‌‌included‌‌in‌‌ the‌‌corporate‌‌name‌‌of‌‌the‌‌company.‌ ‌ Definition‌ ‌ Default‌‌and‌‌Termination‌ ‌ Claims‌‌Settlement‌ ‌ Trust‌‌Fund‌ ‌ Definition‌‌ ‌ 1. "‌Pre-need‌‌plans‌"‌‌are‌‌contracts,‌‌agreements,‌‌deeds‌‌or‌‌plans‌‌ ‌ Pre-determined‌‌period‌ ‌ Uncertain‌‌time‌ ‌ Denial‌‌of‌‌Registration‌ ‌ Contingent‌‌on‌‌future‌‌liability‌ ‌ Fixed‌‌amount‌ ‌ The‌ ‌commission‌ ‌shall‌ ‌deny‌ ‌the‌ ‌registration‌ ‌of‌ ‌pre-need‌ ‌plan/s‌ ‌of‌ ‌a‌‌ pre-need‌ ‌company‌ ‌if‌ ‌on‌ ‌the‌ ‌basis‌ ‌of‌ ‌its‌ ‌latest‌ ‌audited‌ ‌financial‌‌ statements,‌‌trust‌‌fund‌‌annual‌‌statements‌‌and‌‌reserves‌‌valuation‌‌report,‌‌ it‌‌has‌‌ ‌ Registration‌‌of‌‌Pre-need‌‌Plans‌ ‌ Kinds‌ ‌ 1. solvency‌‌or‌‌trust‌‌fund‌‌deficiencies‌,‌‌or‌‌ ‌ The‌‌Plans‌‌that‌‌may‌‌be‌‌issued‌‌by‌‌pre-need‌‌companies‌‌include‌ ‌ 2. paid-up‌‌capital‌‌impairment‌.‌ ‌ 1) Life‌‌Plans;‌ ‌ Mandatory‌‌Cancellation‌‌of‌‌Registration‌ ‌ The‌ ‌commission‌‌shall‌‌cancel‌‌the‌‌registration‌‌of‌‌any‌‌pre-need‌‌plan‌‌and‌‌ the‌‌permit‌‌to‌‌sell‌‌such‌‌pre-need‌‌plan‌‌if,‌‌after‌‌due‌‌notice‌‌and‌‌hearing,‌‌it‌‌ shall‌‌appear‌‌that‌‌the‌‌issuer:‌ ‌ 2) Pension‌‌Plans;‌ ‌ b. which‌ ‌provide‌ ‌for‌ ‌the‌ ‌performance‌ ‌of‌ ‌future‌‌ service/s,‌ ‌payment‌ ‌of‌ ‌monetary‌ ‌considerations‌ ‌or‌‌ delivery‌‌of‌‌other‌‌benefits‌‌ ‌ 3) Educational‌‌Plans;‌ ‌ d. in‌ ‌exchange‌ ‌for‌ ‌cash‌ ‌or‌ ‌installment‌ ‌amounts‌ ‌with‌‌or‌‌ without‌‌interest‌‌or‌‌insurance‌‌coverage‌‌and‌‌ ‌ e. 2. ‌ for‌‌the‌‌benefit‌‌of‌‌the‌p ‌ lanholders‌‌ ‌ at‌ ‌the‌ ‌time‌ ‌of‌ ‌actual‌‌need‌‌‌or‌‌agreed‌‌maturity‌‌date,‌‌as‌‌ specified‌‌therein,‌‌ ‌ includes‌ ‌life‌,‌ ‌pension‌,‌ ‌education‌,‌ ‌internment‌ ‌and‌‌ other‌‌plans,‌‌instruments‌‌contracts‌‌or‌‌deeds‌‌as‌‌may‌‌in‌‌ the‌‌future‌‌be‌‌determined‌‌by‌‌the‌‌Commission.‌ ‌ "‌Planholder‌"‌‌refers‌‌to‌‌‌any‌‌natural‌‌or‌‌juridical‌‌person‌‌who‌‌ purchases‌‌pre-need‌‌plans‌‌from‌‌a‌‌pre-need‌‌company.‌‌ ‌ 6) Contingent‌‌benefit‌‌plans‌‌—‌‌a‌‌plan‌‌the‌‌timing‌‌of‌‌the‌‌provision‌‌ of‌‌the‌‌benefits‌‌of‌‌which‌‌is‌‌conditional‌‌on‌‌the‌‌occurrence‌‌of‌‌the‌‌ contingency.‌‌ ‌ Insurance‌ ‌ a. c. 5) Scheduled‌‌benefit‌‌plans‌‌‌—‌‌plans‌‌the‌‌date‌‌of‌‌availment‌‌of‌‌the‌‌ benefits‌‌of‌‌which‌‌is‌‌set‌‌at‌‌the‌‌inception‌‌or‌‌purchase‌‌of‌‌the‌‌plan.‌ ‌ Pre-Need‌ ‌ Registration‌‌of‌‌Pre-need‌‌Plans‌ ‌ Licensing‌‌of‌‌Sales‌‌Counselor‌‌and‌‌General‌‌Agent‌ ‌ 4) Cancelled‌ ‌plan‌ ‌—‌ ‌a‌ ‌plan‌ ‌that‌ ‌can‌ ‌no‌‌longer‌‌be‌‌reinstated‌‌by‌‌ reason‌‌of‌‌delinquency‌‌in‌‌the‌‌payment‌‌of‌‌installments‌‌for‌‌more‌‌ than‌ ‌two‌ ‌(2)‌ ‌years‌ ‌or‌ ‌a‌ ‌longer‌ ‌period‌ ‌as‌ ‌provided‌ ‌in‌ ‌the‌‌ contract,‌‌counted‌‌from‌‌the‌‌expiry‌‌of‌‌the‌‌grace‌‌period‌‌provided‌‌ for‌‌in‌‌the‌‌plan‌‌or‌‌contract.‌ ‌ 4) Memorial‌‌or‌‌Interment‌‌Plans,‌‌etc.‌ ‌ Other‌‌plans‌‌expressly‌‌defined‌‌in‌‌the‌‌Pre-Need‌‌Code‌‌include:‌ ‌ 1. Is‌‌insolvent‌;‌ ‌ 2. Has‌ ‌violated‌ ‌any‌ ‌of‌ ‌the‌ ‌provisions‌ ‌of‌ ‌the‌ ‌code,‌ ‌or‌ ‌the‌ ‌rules‌‌ promulgated‌‌pursuant‌‌thereto,‌‌or‌‌any‌‌order‌‌of‌‌the‌‌commission‌‌ of‌‌which‌‌the‌‌issuer‌‌has‌‌notice;‌ ‌ 1) Fixed‌‌value‌‌plans‌‌—‌‌pre-need‌‌plans‌‌whose‌‌benefits‌‌and‌‌costs‌‌ are‌‌fixed‌‌and‌‌predetermined‌‌at‌‌the‌‌inception‌‌or‌‌purchase‌‌of‌‌the‌‌ plan.‌ ‌ 2) In-force‌‌plan‌‌—‌‌a‌‌plan‌‌for‌‌which‌‌the‌‌pre-need‌‌company‌‌has‌‌an‌‌ outstanding‌ ‌obligation‌ ‌for‌ ‌the‌ ‌delivery‌‌of‌‌benefits‌‌or‌‌services‌‌ or‌‌payment‌‌of‌‌termination‌‌value.‌ ‌ 3) Lapsed‌ ‌plan‌ ‌—‌ ‌a‌ ‌plan‌ ‌that‌ ‌is‌ ‌delinquent‌ ‌in‌ ‌payment‌ ‌of‌‌ installments‌ ‌provided‌ ‌for‌ ‌in‌ ‌the‌ ‌contract,‌ ‌the‌ ‌delinquency‌ ‌of‌‌ which‌‌extends‌‌beyond‌‌the‌‌grace‌‌period‌‌provided‌‌for‌‌in‌‌the‌‌plan‌‌ or‌‌contract.‌ ‌ a. Refusal‌ ‌of‌ ‌the‌ ‌issuer‌ ‌to‌ ‌permit‌ ‌an‌ ‌examination‌ ‌to‌ ‌be‌‌ made‌‌by‌‌the‌‌commission.‌ ‌ 3. Has‌ ‌been‌ ‌or‌ ‌is‌ ‌engaged‌ ‌or‌ ‌is‌ ‌about‌ ‌to‌ ‌engage‌ ‌in‌ ‌fraudulent‌‌ transactions‌;‌ ‌ 4. Is‌ ‌in‌ ‌any‌ ‌other‌ ‌way‌ ‌dishonest‌ ‌or‌ ‌has‌ ‌made‌ ‌any‌ ‌fraudulent‌‌ representation‌ ‌in‌ ‌any‌‌circular‌‌or‌‌other‌‌literature‌‌that‌‌has‌‌been‌‌ distributed‌‌concerning‌‌the‌‌issuer‌‌or‌‌its‌‌pre-need‌‌plans;‌‌and‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 18‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ 5. Does‌‌not‌‌conduct‌‌its‌‌business‌‌in‌‌accordance‌‌with‌‌law.‌ ‌ Voluntary‌‌Cancellation‌‌of‌‌Registration‌‌or‌‌Suspension‌‌of‌‌Permit‌‌to‌‌ Sell.‌‌—‌‌A‌‌registration‌‌of‌‌a‌‌pre-need‌‌plan‌‌may‌‌be‌‌cancelled‌‌or‌‌a‌‌permit‌‌to‌‌ sell‌ ‌may‌ ‌be‌ ‌suspended‌ ‌or‌ ‌cancelled‌ ‌by‌‌the‌‌commission‌‌upon‌‌petition‌‌ for‌ ‌its‌ ‌suspension‌ ‌and/or‌ ‌cancellation,‌ ‌as‌ ‌the‌ ‌case‌ ‌may‌ ‌be,‌ ‌by‌ ‌the‌‌ issuer‌.‌ ‌ 1. Sales‌‌counselors‌‌‌—‌‌natural‌‌persons‌‌who‌‌are‌‌engaged‌‌in‌‌the‌‌ sale‌ ‌of,‌ ‌or‌ ‌offer‌ ‌to‌‌sell,‌‌or‌‌counsel‌‌of‌‌prospective‌‌planholders‌‌ for‌‌the‌‌purpose‌‌of‌‌selling,‌‌whether‌‌or‌‌not‌‌on‌‌commission‌‌basis,‌‌ pre-need‌‌plans‌‌upon‌‌the‌‌authority‌‌of‌‌the‌‌pre-need‌‌company.‌ ‌ 2. General‌‌agent‌‌‌—‌‌a‌‌corporation‌‌or‌‌entity‌‌engaged‌‌in‌‌the‌‌sales‌‌ a) Pre-need‌ ‌plans‌ ‌shall‌ ‌be‌ ‌advertised‌ ‌and‌ ‌sold‌‌in‌‌an‌‌appropriate‌‌ non-misleading‌‌manner.‌ ‌ of,‌ ‌or‌ ‌offering‌ ‌to‌ ‌sell,‌ ‌or‌‌advising‌‌prospective‌‌planholders‌‌for‌‌ the‌‌purpose‌‌of‌‌selling‌‌pre-need‌‌plans‌‌in‌‌behalf‌‌of‌‌the‌‌pre-need‌‌ company‌‌and/or‌‌performing‌‌other‌‌acts‌‌and‌‌things‌‌in‌‌its‌‌behalf‌‌ in‌‌the‌‌conduct‌‌of‌‌its‌‌business‌‌as‌‌specified‌‌in‌‌the‌‌general‌‌agency‌‌ agreement‌‌executed‌‌by‌‌and‌‌between‌‌them.‌ ‌ b) It‌ ‌shall‌ ‌be‌ ‌unlawful‌ ‌for‌ ‌any‌ ‌pre-need‌ ‌company‌ ‌to‌ ‌advertise‌‌ itself‌ ‌or‌ ‌its‌ ‌pre-need‌ ‌plans‌ ‌unless‌ ‌the‌ ‌IC‌ ‌has‌ ‌approved‌ ‌such‌‌ advertising‌‌material.‌ ‌ The‌ ‌general‌ ‌agent‌ ‌shall‌ ‌cease‌ ‌solicitation‌ ‌and‌ ‌selling‌ ‌of‌‌ pre-need‌ ‌plans‌ ‌when‌ ‌no‌ ‌natural‌ ‌person‌ ‌holds‌ ‌a‌ ‌valid‌ ‌license‌‌ representing‌‌the‌‌general‌‌agent‌.‌ ‌ Pre-Need‌‌Advertising‌‌Rules‌ ‌ c) Any‌ ‌person‌ ‌who‌ ‌sells‌ ‌or‌ ‌offers‌ ‌to‌ ‌sell‌ ‌any‌ ‌pre-need‌ ‌plan‌ ‌or‌‌ Default‌‌and‌‌Termination‌‌ ‌ contract‌ ‌by‌ ‌any‌ ‌means‌ ‌or‌ ‌instruments‌ ‌of‌ ‌communication‌ ‌in‌‌ violation‌ ‌of‌ ‌this‌ ‌section‌ ‌shall‌ ‌be‌ ‌liable‌ ‌to‌ ‌the‌ ‌person‌‌ Default;‌‌Reinstatement‌‌Period‌ ‌ purchasing‌‌such‌‌pre-need‌‌contract‌‌who‌‌may‌‌sue‌‌to‌‌recover‌‌the‌‌ a) Planholders‌ ‌are‌ ‌issued‌ ‌a‌ ‌grace‌‌period‌‌of‌‌at‌‌least‌‌sixty‌‌(60)‌‌ consideration‌ ‌paid‌ ‌for‌ ‌such‌ ‌pre-need‌ ‌contract‌ ‌with‌ ‌interest‌‌ days‌ ‌within‌ ‌which‌ ‌to‌‌pay‌‌accrued‌‌installments,‌‌counted‌‌from‌‌ thereon.‌‌ ‌ the‌‌due‌‌date‌‌of‌‌the‌‌first‌‌unpaid‌‌installment.‌ ‌ Disclosures‌‌to‌‌Prospective‌‌Planholders‌ ‌ a) No‌ ‌registered‌ ‌pre-need‌ ‌plan‌ ‌shall‌ ‌be‌ ‌sold‌ ‌to‌ ‌prospective‌‌ planholders‌‌unless‌‌an‌‌information‌‌brochure,‌‌which‌‌has‌‌been‌‌ filed‌‌with‌‌the‌‌IC,‌‌has‌‌been‌‌provided‌‌to‌‌the‌‌purchaser.‌ ‌ b) Nonpayment‌‌‌of‌‌a‌‌plan‌‌within‌‌the‌‌grace‌‌period‌‌shall‌‌render‌‌the‌‌ plan‌‌a‌‌lapsed‌‌plan‌.‌‌ ‌ The‌‌planholder‌‌shall‌‌be‌‌allowed‌‌a‌‌period‌‌of‌‌not‌‌less‌‌than‌‌two‌‌ (2)‌ ‌years‌ ‌from‌ ‌the‌ ‌lapse‌ ‌of‌ ‌the‌ ‌grace‌ ‌period‌ ‌or‌ ‌a‌ ‌longer‌‌ period‌‌as‌‌provided‌‌in‌‌the‌‌contract‌‌within‌‌which‌‌to‌r ‌ einstate‌.‌‌ ‌ b) The‌‌‌information‌‌brochure‌‌‌shall‌‌contain‌‌ ‌ i) an‌‌explanation‌‌of‌‌the‌‌principal‌‌features‌‌of‌‌the‌‌pre-need‌‌ plan,‌‌ ‌ ii) a‌‌statement‌‌that‌‌the‌‌planholder‌‌may‌‌avail‌‌of‌‌a‌‌‌default‌‌ or‌ ‌reinstatement‌ ‌period‌ ‌within‌ ‌which‌ ‌to‌ ‌reinstate‌‌ his‌‌lapsed‌‌plan,‌‌and‌‌ ‌ iii) the‌ ‌conditions‌ ‌of‌ ‌the‌‌same‌‌and‌‌the‌‌rates‌‌of‌‌return‌‌for‌‌ scheduled‌ ‌benefit‌ ‌plans‌ ‌and‌ ‌illustrative‌ ‌yields‌ ‌for‌‌ contingent‌‌benefit‌‌plans.‌ ‌ Licensing‌‌of‌‌Sales‌‌Counselor‌‌and‌‌General‌‌Agent‌ ‌ Failure‌ ‌to‌ ‌give‌ ‌either‌ ‌of‌ ‌the‌ ‌required‌ ‌notices‌ ‌shall‌‌ preclude‌ ‌the‌ ‌pre-need‌ ‌company‌ ‌from‌ ‌treating‌ ‌the‌ ‌plans‌‌ as‌‌cancelled‌.‌ ‌ Termination‌‌of‌‌Pre-Need‌‌Plans‌ ‌ a) A‌‌‌planholder‌‌‌may‌‌terminate‌‌his‌‌pre-need‌‌plan‌‌at‌‌any‌‌time‌‌by‌‌ giving‌‌written‌‌notice‌‌to‌‌the‌‌issuer.‌ ‌ b) A‌ ‌pre-need‌ ‌plan‌ ‌shall‌ ‌contain‌ ‌a‌ ‌schedule‌ ‌of‌ ‌termination‌‌ values‌‌‌to‌‌which‌‌the‌‌planholder‌‌is‌‌entitled‌‌to‌‌upon‌‌termination.‌‌ ‌ The‌ ‌termination‌ ‌value‌ ‌of‌ ‌the‌ ‌pre-need‌ ‌plan‌ ‌shall‌ ‌be‌‌ pre-determined‌ ‌by‌ ‌the‌ ‌actuary‌ ‌of‌ ‌the‌ ‌pre-need‌ ‌company‌‌ upon‌ ‌application‌ ‌for‌‌registration‌‌and‌‌shall‌‌be‌‌disclosed‌‌in‌‌the‌‌ contract.‌ ‌ c) Any‌‌offer‌‌by‌‌the‌‌‌pre-need‌‌company‌‌‌to‌‌terminate‌‌the‌‌pre-need‌‌ plan‌ ‌for‌ ‌consideration‌ ‌exceeding‌ ‌the‌ ‌termination‌ ‌value‌‌ provided‌ ‌in‌ ‌the‌ ‌plan‌ ‌contract‌ ‌shall‌ ‌not‌ ‌require‌ ‌the‌ ‌prior‌‌ approval‌‌‌of‌‌the‌‌IC,‌‌provided‌‌that‌ ‌ i) the‌ ‌consideration‌ ‌shall‌ ‌be‌ ‌below‌ ‌the‌ ‌pre-need‌‌ reserves‌‌‌for‌‌the‌‌specific‌‌plan,‌ ‌ ii) the‌‌offer‌‌is‌a ‌ ccepted‌b ‌ y‌‌the‌‌pre-need‌‌planholders,‌‌and‌‌ ‌ iii) the‌‌offer‌‌shall‌‌not‌‌prejudice‌‌the‌‌claim‌‌of‌‌planholders‌‌ who‌‌do‌‌not‌‌avail‌‌of‌‌such‌‌offer.‌ ‌ Claims‌‌Settlement‌ ‌ No‌ ‌cancellation‌ ‌of‌ ‌plans‌ ‌shall‌ ‌be‌ ‌made‌ ‌by‌ ‌the‌ ‌issuer‌ ‌during‌‌ Payment‌‌of‌‌Plan‌‌Proceeds‌ ‌ such‌‌period‌‌when‌‌reinstatement‌‌may‌‌be‌‌effected.‌ ‌ a) In‌ ‌the‌ ‌case‌ ‌of‌ ‌scheduled‌ ‌benefit‌ ‌plans‌,‌ ‌the‌ ‌proceeds‌ ‌of‌ ‌the‌‌ c) Within‌ ‌thirty‌ ‌(30)‌ ‌days‌ ‌from‌ ‌the‌ ‌expiration‌ ‌of‌ ‌the‌ ‌grace‌‌ plan‌ ‌shall‌ ‌be‌ ‌paid‌ ‌immediately‌ ‌upon‌ ‌maturity‌ ‌of‌ ‌the‌‌ period‌ ‌and‌ ‌thirty‌ ‌(30)‌ ‌days‌ ‌prior‌ ‌to‌ ‌the‌ ‌expiration‌ ‌of‌ ‌the‌‌ contract,‌ ‌unless‌ ‌such‌ ‌proceeds‌ ‌are‌ ‌made‌ ‌payable‌ ‌in‌‌ reinstatement‌‌period‌,‌‌which‌‌is‌‌two‌‌(2)‌‌years‌‌from‌‌the‌‌lapse‌‌ installments‌‌‌or‌‌as‌‌an‌‌‌annuity‌,‌‌in‌‌which‌‌case‌‌the‌‌installments‌‌ of‌ ‌the‌ ‌grace‌ ‌period,‌ ‌the‌ ‌pre-need‌ ‌company‌ ‌shall‌ ‌give‌ ‌written‌‌ or‌‌annuities‌‌shall‌‌be‌‌paid‌‌as‌‌they‌‌become‌‌due.‌‌ ‌ notice‌ ‌to‌ ‌the‌ ‌planholder‌‌that‌‌his‌‌plan‌‌will‌‌be‌‌‌cancelled‌‌‌if‌‌not‌‌ Refusal‌ ‌or‌ ‌failure‌ ‌to‌ ‌pay‌ ‌the‌ ‌claim‌ ‌within‌ ‌fifteen‌ ‌(15)‌ ‌days‌‌ reinstated‌ ‌within‌ ‌two‌ ‌(2)‌ ‌years‌ ‌from‌ ‌the‌ ‌lapse‌ ‌of‌ ‌the‌ ‌grace‌‌ from‌‌maturity‌‌or‌‌due‌‌date‌‌will‌‌entitle‌‌the‌‌beneficiary‌‌to‌‌collect‌‌ period‌‌or‌‌a‌‌longer‌‌period‌‌as‌‌provided‌‌in‌‌the‌‌contract.‌‌ ‌ interest‌ ‌on‌ ‌the‌ ‌proceeds‌ ‌of‌ ‌the‌ ‌plan‌ ‌for‌ ‌the‌ ‌duration‌ ‌of‌ ‌the‌‌ delay‌‌at‌‌the‌‌rate‌‌‌twice‌‌the‌‌legal‌‌interest‌‌unless‌‌such‌‌failure‌‌or‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 19‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ refusal‌ ‌to‌ ‌pay‌ ‌is‌ ‌based‌ ‌on‌ ‌the‌ ‌ground‌ ‌that‌ ‌the‌ ‌claim‌ ‌is‌‌ fraudulent‌.‌ ‌ b) In‌ ‌the‌ ‌case‌ ‌of‌‌‌contingent‌‌benefit‌‌plans‌,‌‌the‌‌benefits‌‌shall‌‌be‌‌ paid‌ ‌by‌ ‌the‌ ‌pre-need‌ ‌company‌ ‌thirty‌ ‌(30)‌ ‌days‌ ‌upon‌‌ submission‌‌of‌‌all‌‌necessary‌‌documents.‌ ‌ Recovery‌‌of‌‌Investment‌ ‌ The‌‌planholder‌‌may‌‌institute‌‌the‌‌necessary‌‌legal‌‌action‌‌in‌‌court‌‌to‌‌ recover‌ ‌his‌ ‌investment‌ ‌in‌ ‌the‌ ‌pre-need‌ ‌company,‌ ‌in‌ ‌case‌ ‌of‌ ‌its‌‌ insolvency‌‌or‌‌bankruptcy‌.‌‌ ‌ However‌,‌‌in‌‌case‌‌the‌‌insolvency‌‌or‌‌bankruptcy‌‌is‌‌a‌‌‌mere‌‌cover-up‌‌ for‌‌fraud‌‌or‌‌illegality‌,‌‌the‌‌planholder‌‌may‌‌institute‌‌the‌‌legal‌‌action‌‌ directly‌ ‌against‌ ‌the‌ ‌officers‌ ‌and/or‌ ‌controlling‌ ‌owners‌‌of‌‌the‌‌ said‌‌pre-need‌‌company.‌ ‌ deficiencies,‌ ‌such‌ ‌obligations‌ ‌should‌‌be‌‌paid‌‌for‌‌by‌‌its‌‌assets‌,‌‌‌not‌‌ a) To‌ ‌ensure‌ ‌the‌‌delivery‌‌of‌‌the‌‌guaranteed‌‌benefits‌‌and‌‌services‌‌ by‌‌the‌‌trust‌‌fund‌.‌‌(‌SEC‌‌v.‌‌CAP‌‌‌2018‌)‌ ‌ provided‌ ‌under‌ ‌a‌ ‌pre-need‌ ‌plan‌ ‌contract,‌ ‌a‌ ‌trust‌ ‌fund‌ ‌per‌‌ ‌ pre-need‌‌plan‌‌category‌‌‌shall‌‌be‌‌established.‌ ‌ Reference:‌‌Aquino,‌‌2018‌ b) Assets‌‌in‌‌the‌‌trust‌‌fund‌‌shall‌‌‌at‌‌all‌‌times‌‌remain‌‌for‌‌the‌‌sole‌‌ benefit‌ ‌of‌ ‌the‌ ‌planholders‌.‌ ‌The‌ ‌provision‌‌of‌‌any‌‌law‌‌to‌‌the‌‌ Transportation‌‌Law‌ ‌ contrary‌‌notwithstanding,‌‌‌in‌‌case‌‌of‌‌‌insolvency‌of‌‌the‌‌pre-need‌‌ company,‌ ‌the‌ ‌general‌‌creditors‌‌shall‌‌not‌‌be‌‌entitled‌‌to‌‌the‌‌ 1. New‌‌Civil‌‌Code‌‌Provisions‌‌on‌‌Common‌‌Carriers‌ ‌ trust‌‌fund‌.‌ ‌ 2. Act‌‌No‌‌2616‌‌|‌‌The‌‌Salvage‌‌Law‌ ‌ c) No‌ ‌withdrawal‌ ‌shall‌ ‌be‌ ‌made‌ ‌from‌ ‌the‌ ‌trust‌ ‌fund‌ ‌unless‌‌ 3. CA‌‌No‌‌65‌‌|‌‌Carriage‌‌of‌‌Goods‌‌by‌‌Sea‌‌Act‌ ‌ approved‌‌by‌‌the‌‌IC‌e‌ xcept‌f‌ or‌‌the‌‌payment‌‌of‌‌ ‌ 4. CA‌‌No‌‌146‌‌|‌‌Public‌‌Service‌‌Act‌ ‌ ‌ i) ii) iii) Consequences‌‌of‌‌Delay‌‌or‌‌Default‌ ‌ If‌ ‌found‌ ‌to‌ ‌have‌ ‌unreasonably‌ ‌denied‌ ‌or‌ ‌withheld‌ ‌the‌ ‌claim,‌ ‌the‌‌ pre-need‌ ‌company‌ ‌shall‌ ‌be‌ ‌liable‌ ‌to‌ ‌pay‌ ‌damages‌,‌ ‌consisting‌ ‌of‌‌ actual‌ ‌damages,‌ ‌attorney's‌ ‌fees‌ ‌and‌ ‌legal‌ ‌interest‌,‌ ‌to‌ ‌be‌‌ computed‌‌from‌‌the‌‌date‌‌the‌‌claim‌‌is‌‌made‌‌until‌‌it‌‌is‌‌fully‌‌satisfied.‌ ‌ Unfair‌‌Claims‌‌Settlement‌‌Practices‌ ‌ Any‌‌of‌‌the‌‌following‌‌acts‌‌by‌‌a‌‌pre-need‌‌company,‌‌if‌‌committed‌‌without‌‌ just‌‌cause,‌‌shall‌‌constitute‌u ‌ nfair‌‌claims‌‌settlement‌‌practices‌:‌ ‌ 1. 2. iv) Trust‌‌Fund‌ ‌ the‌‌termination‌‌values‌‌payable‌‌to‌‌the‌‌planholders,‌‌ ‌ the‌ ‌insurance‌ ‌premium‌ ‌payments‌ ‌for‌ ‌insurance-‌‌ funded‌‌benefits‌‌of‌‌memorial‌‌life‌‌plans‌‌and‌‌ ‌ other‌ ‌costs‌ ‌necessary‌ ‌to‌ ‌ensure‌ ‌the‌ ‌delivery‌ ‌of‌‌ benefits‌‌or‌‌services‌‌to‌‌planholders,‌ ‌ d) The‌‌benefits‌‌received‌‌by‌‌the‌‌planholders‌‌shall‌‌be‌‌exempt‌‌from‌‌ all‌ ‌taxes‌ ‌and‌ ‌the‌ ‌trust‌ ‌fund‌ ‌shall‌ ‌NOT‌ ‌be‌ ‌held‌ ‌liable‌ ‌for‌‌ attachment,‌‌garnishment,‌‌levy‌‌or‌‌seizure‌‌by‌‌or‌‌under‌‌any‌‌legal‌‌ or‌‌equitable‌‌processes‌e‌ xcept‌‌ ‌ i) Knowingly‌ ‌misrepresenting‌ ‌to‌ ‌claimants‌ ‌pertinent‌ ‌facts‌ ‌or‌‌ plan‌‌provisions‌‌relating‌‌to‌‌coverages‌‌at‌‌issue;‌‌xxxx‌‌or‌ ‌ Compelling‌ ‌planholders‌ ‌to‌ ‌institute‌ ‌suits‌ ‌or‌ ‌recover‌‌ amounts‌ ‌due‌ ‌under‌ ‌its‌ ‌plan‌ ‌by‌ ‌offering,‌ ‌without‌ ‌justifiable‌‌ reason,‌ ‌substantially‌ ‌less‌ ‌than‌ ‌the‌ ‌amounts‌ ‌ultimately‌‌ recovered‌‌in‌‌suits‌‌brought‌‌by‌‌them.‌ ‌ the‌‌cost‌‌of‌‌benefits‌‌or‌‌services,‌‌ ‌ ii) 5. Code‌‌of‌‌Commerce‌‌for‌‌Maritime‌‌Law‌ ‌ 6. Warsaw‌‌Convention‌ ‌ 7. RA‌‌No‌‌10668‌ ‌ Common‌‌Carriers‌ ‌ Vigilance‌‌Over‌‌Goods‌ ‌ Safety‌‌of‌‌Passengers‌ ‌ Bill‌‌of‌‌Lading‌ ‌ Maritime‌‌Commerce‌ ‌ Charter‌‌Parties‌ ‌ to‌‌pay‌‌for‌‌the‌‌debt‌‌of‌‌the‌‌planholder‌‌to‌‌the‌‌benefit‌‌plan‌‌ or‌‌ ‌ Liability‌‌of‌‌Shipowners‌‌and‌‌Shipping‌‌Agents‌ ‌ that‌ ‌arising‌ ‌from‌ ‌criminal‌ ‌liability‌ ‌imposed‌ ‌in‌ ‌a‌‌ criminal‌‌action.‌ ‌ e) The‌ ‌trust‌ ‌fund‌ ‌shall‌ ‌at‌ ‌all‌ ‌times‌ ‌be‌ ‌sufficient‌ ‌to‌ ‌cover‌ ‌the‌ required‌‌pre-need‌‌reserve.‌ ‌ The‌ ‌trust‌ ‌fund‌ ‌is‌ ‌to‌ ‌be‌ ‌treated‌ ‌as‌ ‌separate‌ ‌and‌ ‌distinct‌ ‌from‌ ‌the‌‌ paid-up‌‌capital‌‌of‌‌the‌‌company‌,‌‌and‌‌is‌‌established‌‌with‌‌a‌‌trustee‌‌under‌‌ a‌‌trust‌‌agreement‌‌approved‌‌by‌‌the‌‌IC‌‌to‌‌pay‌‌the‌‌benefits‌‌as‌‌provided‌‌in‌‌ the‌‌pre-need‌‌plans.‌‌ ‌ A‌ ‌fund‌ ‌set‌ ‌up‌ ‌from‌ ‌the‌ ‌planholders'‌ ‌payments‌ ‌to‌ ‌pay‌ ‌for‌ ‌the‌ ‌cost‌ ‌of‌‌ benefits‌ ‌and‌ ‌services,‌ ‌termination‌ ‌values‌ ‌payable‌ ‌to‌ ‌planholders‌ ‌and‌‌ Even‌ ‌assuming‌ ‌that‌ ‌the‌ ‌obligations‌ ‌were‌ ‌incurred‌ ‌by‌ ‌the‌ ‌company‌ ‌in‌‌ other‌ ‌costs‌ ‌necessary‌ ‌to‌ ‌ensure‌ ‌the‌‌delivery‌‌of‌‌benefits‌‌or‌‌services‌‌to‌‌ order‌ t‌ o‌ ‌infuse‌ ‌sufficient‌ ‌money‌ ‌in‌ ‌the‌ ‌trust‌ ‌fund‌ ‌to‌ ‌correct‌ ‌its‌‌ planholders‌‌as‌‌provided‌‌for‌‌in‌‌the‌‌contracts.‌ ‌ Accidents‌‌and‌‌Damages‌ ‌ Carriage‌‌of‌‌Goods‌‌by‌‌Sea‌‌Act‌ ‌ Public‌‌Service‌‌Act‌ ‌ The‌‌Warsaw‌‌Convention‌ ‌ Common‌‌Carriers‌ ‌ Common‌‌carriers‌‌‌are‌‌ ‌ 1. persons,‌‌corporations,‌‌firms‌‌or‌‌associations‌‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 20‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ 2. engaged‌‌in‌‌the‌‌business‌‌of‌‌carrying‌‌or‌‌transporting‌‌passengers‌‌ or‌‌goods‌‌or‌‌both,‌‌ ‌ 3. by‌‌land,‌‌water,‌‌or‌‌air,‌‌ ‌ 4. for‌‌compensation,‌‌ ‌ 5. offering‌‌their‌‌services‌‌to‌‌the‌‌public.‌ ‌ A‌‌‌common‌‌carrier‌‌is‌‌one‌‌that‌‌‌holds‌‌itself‌‌out‌‌as‌‌ready‌‌to‌‌engage‌‌in‌‌the‌‌ transportation‌ ‌of‌ ‌goods‌ ‌for‌ ‌hire‌ ‌as‌ ‌a‌‌‌public‌‌‌employment‌‌and‌‌not‌‌as‌‌a‌‌ casual‌‌occupation.‌ ‌ The‌‌‌TRUE‌‌TEST‌‌for‌‌a‌‌common‌‌carrier‌‌is‌‌NOT‌‌the‌‌quantity‌‌or‌‌extent‌‌of‌‌ business‌ ‌actually‌ ‌transacted,‌ ‌or‌ ‌the‌ ‌number‌ ‌and‌ ‌character‌ ‌of‌ ‌the‌‌ conveyances‌ ‌used‌ ‌in‌ ‌the‌ ‌activity,‌ ‌but‌ ‌whether‌ ‌the‌ ‌undertaking‌ ‌is‌ ‌a‌‌ part‌‌of‌‌the‌‌activity‌‌engaged‌‌in‌‌by‌‌the‌‌carrier‌‌that‌‌he‌‌has‌‌held‌‌out‌‌ to‌‌the‌‌general‌‌public‌‌as‌‌his‌‌business‌‌or‌‌occupation‌.‌ ‌ Thus,‌ ‌the‌ ‌CHARACTERISTICS‌ ‌of‌ ‌a‌ ‌common‌ ‌carrier‌ ‌are‌ ‌determined‌‌ following‌‌these‌‌principles:‌ ‌ NB:‌‌ Under‌‌‌Sec‌‌7‌‌of‌‌RA‌‌10668‌,‌‌foreign‌‌vessels‌‌engaging‌‌in‌‌carriage‌‌ conducted‌ ‌in‌ ‌accordance‌ ‌with‌ ‌the‌ ‌said‌ ‌law‌ ‌shall‌ ‌not‌ ‌be‌‌ considered‌ ‌common‌ ‌carriers‌ ‌and‌ ‌are‌ ‌not‌ ‌offering‌ ‌a‌ ‌public‌‌ service.‌ ‌ As‌‌to‌ ‌ Common‌‌Carrier‌ ‌ Undertaking‌ ‌ At‌‌least‌‌occasional‌ ‌ Single‌‌transaction‌ ‌ Part‌‌of‌‌general‌‌business‌‌ NOT‌‌part‌‌of‌‌general‌‌ or‌‌occupation;‌‌may‌‌also‌‌ business‌‌or‌‌occupation‌ ‌ be‌‌ANCILLARY‌ ‌ Fee‌ ‌ Gratuitous‌‌or‌‌for‌‌a‌‌fee‌ ‌ Gratuitous‌‌or‌‌for‌‌a‌‌fee‌ ‌ Extraordinary‌ ‌ That‌‌of‌‌a‌‌good‌‌father‌‌of‌‌ the‌‌family‌ ‌ Presumption‌‌ of‌‌negligence‌ ‌ ✔‌ ‌ 1) Art‌ ‌1732‌ ‌makes‌ ‌no‌ ‌distinction‌ ‌between‌ ‌one‌ ‌whose‌ ‌principal‌‌ business‌ ‌activity‌ ‌is‌ ‌the‌ ‌carrying‌ ‌of‌‌persons‌‌or‌‌goods‌‌or‌‌both,‌‌ and‌‌one‌‌who‌‌does‌‌such‌‌carrying‌‌only‌‌as‌‌an‌‌‌ancillary‌‌activity,‌‌ or‌‌“sideline”.‌ ‌ Governing‌‌ law‌ ‌ 2) Art‌ ‌1732‌ ‌makes‌ ‌no‌ ‌distinction‌ ‌as‌ ‌to‌ ‌the‌ ‌regularity‌ ‌of‌ ‌the‌‌ offer‌‌of‌‌such‌‌service.‌ ‌ Exemption‌ CANNOT‌‌stipulate‌ ‌ from‌‌Liability‌ ‌ Provisions‌‌on‌‌Common‌‌ Carriage‌‌of‌‌the‌‌NCC‌‌+‌‌ Public‌‌Services‌‌Act‌‌+‌‌ Special‌‌Transpo‌‌Laws‌ ‌ Provisions‌‌on‌‌ordinary‌ contracts‌‌of‌‌the‌‌NCC‌ ‌ MAY‌‌stipulate‌ ‌ 4) No‌‌need‌‌to‌‌secure‌‌a‌‌Certificate‌‌of‌‌Public‌‌Convenience.‌ ‌ b) Pipeline‌ ‌operators‌ ‌are‌ ‌common‌ ‌carriers‌ transportation‌‌need‌‌not‌‌be‌‌by‌‌motor‌‌vehicle.‌ ‌ Thus,‌‌a‌‌pipeline‌‌operator‌‌‌is‌‌considered‌‌a‌‌common‌‌carrier.‌ ‌ 7) No‌‌need‌‌to‌‌have‌‌a‌‌fixed‌‌and‌‌publicly‌‌known‌‌route,‌‌nor‌‌maintain‌‌ terminals‌‌and‌‌issue‌‌tickets.‌ ‌ i) ii) has‌‌no‌‌regular‌‌and‌‌fixed‌‌routes‌‌and‌‌schedules‌‌ ‌ but‌‌accepts‌‌cargo‌‌wherever‌‌and‌‌whenever‌‌the‌‌shipper‌‌ desires,‌ ‌ iii) Is‌‌hired‌‌on‌‌a‌‌contractual‌‌basis,‌ ‌ iv) Or‌ ‌chartered‌ ‌by‌ ‌any‌ ‌one‌ ‌or‌ ‌few‌ ‌shippers‌ ‌under‌‌ mutually‌‌agreed‌‌terms‌ v) And‌‌usually‌‌carries‌‌bulk‌‌or‌‌break‌‌bulk‌‌cargoes.‌ ‌ Those‌ ‌engaged‌ ‌in‌ ‌tramp‌ ‌services‌ ‌may‌ ‌also‌ ‌be‌ ‌considered‌‌ common‌‌carriers‌‌depending‌‌on‌‌the‌‌circumstances.‌ ‌ Diligence‌‌Required‌ ‌ Common‌ ‌carriers,‌ ‌from‌‌the‌‌nature‌‌of‌‌their‌‌business‌‌and‌‌for‌‌reasons‌‌of‌‌ public‌‌policy,‌‌are‌‌bound‌‌to‌‌observe‌‌‌extraordinary‌‌diligence‌‌ ‌ a) Travel‌ ‌agent.‌ ‌Not‌ ‌an‌ ‌entity‌ ‌engaged‌ ‌in‌ ‌the‌ ‌business‌ ‌of‌‌ transporting‌ ‌either‌ ‌passengers‌ ‌or‌ ‌goods‌ ‌and‌ ‌is‌ ‌therefore,‌‌ neither‌‌a‌‌private‌‌nor‌‌a‌‌common‌‌carrier.‌‌(C ‌ risostomo‌‌v.‌‌CA‌)‌ ‌ 6) Transportation‌‌need‌‌not‌‌be‌‌by‌‌motor‌‌vehicle.‌ ‌ Stevedoring‌ ‌is‌ ‌the‌ ‌carriage‌ ‌of‌ ‌goods‌ ‌within‌ ‌the‌ ‌holds‌ ‌of‌ ‌the‌‌ vessel‌ ‌or‌ ‌from‌‌the‌‌ship’s‌‌tackle‌‌to‌‌the‌‌cargo‌‌hold.‌‌Also‌‌NOT‌‌a‌‌ common‌‌carrier.‌ ‌ g) Tramp‌‌service.‌‌—‌t‌ he‌‌operation‌‌of‌‌a‌‌contract‌‌carrier‌‌which‌‌ ‌ ✘‌ ‌ 3) Art‌ ‌1732‌ ‌does‌ ‌not‌ ‌distinguish‌ ‌between‌ ‌a‌ ‌carrier‌ ‌offering‌ ‌its‌‌ services‌‌to‌‌the‌‌“general‌‌public”,‌‌and‌‌one‌‌to‌‌a‌‌narrow‌‌segment‌‌of‌‌ the‌‌general‌‌population.‌ ‌ 5) Transportation‌‌may‌‌be‌‌by‌‌land,‌‌water‌‌or‌‌air.‌ ‌ f) Private‌‌Carrier‌ ‌ Part‌‌of‌‌ business‌ ‌ Diligence‌‌ required‌ ‌ e) Arrastre‌‌undertakes‌‌to‌‌transport‌‌goods‌‌from‌‌the‌‌ship's‌‌side‌‌to‌‌ the‌‌warehouse‌‌of‌‌the‌‌consignee.‌‌Such‌‌is‌‌NOT‌‌a‌‌common‌‌carrier‌‌ but‌‌the‌‌diligence‌‌required‌‌is‌‌still‌‌extraordinary.‌ ‌ ‌because‌‌ c) Customs‌ ‌brokers‌ ‌have‌ ‌been‌ ‌regarded‌ ‌as‌ ‌COMMON‌ ‌carriers‌‌ because‌ ‌transportation‌ ‌of‌ ‌goods‌ ‌is‌ ‌an‌ ‌integral‌ ‌part‌ ‌of‌ ‌their‌ business.‌ ‌ d) Towage‌ ‌is‌ ‌the‌ ‌bringing‌ ‌of‌ ‌one‌ ‌vessel‌ ‌from‌ ‌a‌ ‌port‌‌to‌‌another.‌‌ Here,‌‌there‌‌is‌‌NO‌‌transportation‌‌to‌‌speak‌‌of.‌ ‌ 1. in‌‌the‌‌vigilance‌‌over‌‌the‌‌goods‌‌‌and‌‌ ‌ 2. for‌‌the‌s‌ afety‌‌of‌‌the‌‌passengers‌‌ ‌ transported‌‌by‌‌them,‌‌according‌‌to‌‌all‌‌the‌‌circumstances‌‌of‌‌each‌‌case.‌ ‌ Liabilities‌ ‌ GR‌:‌‌ Common‌ ‌carriers‌ ‌cannot‌ ‌lawfully‌ ‌decline‌ ‌to‌ ‌accept‌ ‌a‌‌ particular‌‌class‌‌of‌‌goods.‌ ‌ EXC‌:‌‌ ‌ 1) Goods‌ ‌are‌ ‌dangerous‌ ‌objects,‌ ‌or‌ ‌substances‌ ‌including‌‌ explosives;‌ ‌ 8) Need‌‌not‌‌be‌‌engaged‌‌in‌‌the‌‌business‌‌of‌‌public‌‌transportation.‌ ‌ 2) Goods‌‌are‌‌unfit‌‌for‌‌transportation;‌ 9) Need‌‌not‌‌own‌‌the‌‌vehicle‌‌or‌‌vessel‌‌that‌‌he‌‌or‌‌she‌‌operates.‌ ‌ 3) Acceptance‌‌would‌‌result‌‌in‌‌overloading;‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 21‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ 4) Contrabands‌‌or‌‌illegal‌‌goods;‌ ‌ 5) Goods‌‌are‌‌injurious‌‌to‌‌health;‌ ‌ Classification‌‌of‌‌TNVS‌‌and‌‌TNCs‌ ‌ 1. Transportation‌‌Network‌‌Vehicle‌‌Services‌ ‌ 6) Goods‌ ‌will‌ ‌be‌ ‌exposed‌ ‌to‌‌untoward‌‌danger‌‌like‌‌flood,‌‌capture‌‌ by‌‌enemies,‌‌and‌‌the‌‌like;‌ ‌ The‌‌accountability‌‌of‌‌the‌‌TNVS,‌‌as‌‌a‌‌‌common‌‌carrier‌,‌‌attaches‌‌ from‌ ‌the‌ ‌time‌ ‌the‌ ‌TNVS‌ ‌is‌‌online‌‌and‌‌offers‌‌its‌‌service‌‌to‌‌the‌‌ riding‌‌public.‌ ‌ 7) Goods‌‌like‌‌livestock‌‌will‌‌be‌‌exposed‌‌to‌‌diseases;‌ ‌ 8) Strike;‌‌AND‌ ‌ 2. Transportation‌‌Network‌‌Companies‌ ‌ A‌‌‌TNC‌‌‌is‌‌an‌‌organization‌‌whether‌‌a‌‌corporation,‌‌partnership,‌‌or‌‌ sole‌ ‌proprietor,‌ ‌that‌ ‌provides‌ ‌pre-arranged‌ ‌transportation‌‌ services‌ ‌for‌ ‌compensation‌ ‌using‌ ‌an‌ ‌internet-based‌‌ technology‌ ‌application‌ ‌or‌ ‌digital‌ ‌platform‌ ‌technology‌ ‌to‌‌ connect‌‌passengers‌‌with‌‌drivers‌‌using‌‌their‌‌personal‌‌vehicles.‌‌ A‌‌TNC‌‌is‌‌thus‌‌treated‌‌as‌‌a‌‌transport‌‌provider.‌ ‌ 9) Failure‌‌to‌‌tender‌‌goods‌‌on‌‌time.‌ ‌ 2100‌‌Customs‌‌Brokers,‌‌Inc.‌‌v.‌‌Philam‌‌Insurance‌‌Company‌‌‌2020‌ ‌ WON‌ ‌a‌ ‌Marine‌ ‌Cargo‌ ‌Certificate‌‌may‌‌include‌‌goods‌‌transported‌‌by‌‌ air.‌ ‌ YES‌.‌ ‌Simply‌ ‌because‌ ‌the‌‌word‌‌"marine"‌‌was‌‌used‌‌in‌‌Marine‌‌Cargo‌‌ The‌ ‌TNC‌ ‌shall‌ ‌exercise‌ ‌due‌ ‌diligence‌ ‌of‌ ‌a‌ ‌good‌‌father‌‌of‌‌a‌‌ family‌ ‌in‌ ‌accrediting‌ ‌and‌ ‌supervising‌ ‌its‌ ‌drivers.‌ ‌The‌ ‌TNC‌‌ shall‌ ‌be‌ ‌held‌ ‌liable‌ ‌for‌ ‌acts‌ ‌or‌ ‌omissions‌ ‌committed‌ ‌by‌ ‌its‌‌ TNVS‌ ‌while‌ ‌online,‌ ‌except‌ ‌if‌ ‌the‌ ‌same‌ ‌is‌ ‌beyond‌ ‌the‌ ‌TNC’s‌‌ control.‌ ‌ Certificate‌ ‌does‌ ‌not‌ ‌mean‌ ‌that‌ ‌TSPIC‌ ‌availed‌ ‌the‌ ‌wrong‌ ‌insurance‌‌ policy‌‌for‌‌its‌‌cargo‌‌transported‌‌through‌‌airplane.‌ ‌ Section‌ ‌101(a)(2)‌ ‌of‌ ‌RA‌ ‌10607‌ ‌provides‌ ‌that‌ ‌the‌ ‌scope‌ ‌of‌ ‌marine‌‌ insurance‌‌includes‌‌inland‌‌marine‌‌insurance‌‌and‌‌covers‌‌over‌‌the‌‌land‌‌ transportation‌‌perils‌‌of‌‌property‌‌shipped‌‌by‌‌airplanes.‌ ‌ WON‌‌the‌‌insurance‌‌policy‌‌must‌‌be‌‌presented‌‌to‌‌establish‌‌the‌‌liability‌‌ of‌‌the‌‌common‌‌carrier‌‌to‌‌Philam.‌ ‌ YES‌.‌‌The‌‌original‌‌copy‌‌of‌‌the‌‌insurance‌‌policy‌‌is‌‌the‌‌best‌‌proof‌‌of‌‌its‌‌ contents.‌‌The‌‌contract‌‌of‌‌insurance‌‌must‌‌be‌‌presented‌‌in‌‌evidence‌‌to‌‌ indicate‌‌the‌‌extent‌‌of‌‌its‌‌coverage.‌‌ ‌ WON‌ ‌2100‌ ‌CBI‌ ‌was‌ ‌negligent‌ ‌in‌ ‌handling‌ ‌the‌ ‌shipment‌ ‌of‌ ‌TSPIC,‌‌ thus‌‌making‌‌it‌‌liable‌‌for‌‌damages.‌ ‌ NO‌.‌‌2100‌‌CBI‌‌was‌‌not‌‌negligent‌‌in‌‌handling‌‌the‌‌shipment‌‌of‌‌TSPIC.‌ ‌ There‌‌is‌‌no‌‌need‌‌to‌‌rely‌‌on‌‌the‌‌presumption‌‌of‌‌the‌‌law‌‌that‌‌a‌‌common‌‌ carrier‌‌is‌‌presumed‌‌to‌‌have‌‌been‌‌at‌‌fault‌‌or‌‌have‌‌acted‌‌negligently‌‌in‌‌ case‌‌of‌‌damaged‌‌goods.‌‌This‌‌is‌‌because‌‌‌the‌‌delay‌‌in‌‌the‌‌release‌‌of‌‌ the‌ ‌goods‌ ‌was‌ ‌through‌ ‌no‌ ‌fault‌ ‌of‌ ‌2100‌ ‌CBI.‌ ‌The‌ ‌damage‌ ‌was‌‌ caused‌‌by‌‌the‌‌late‌‌payment‌‌of‌‌the‌‌funds‌‌needed‌‌for‌‌the‌‌release‌‌of‌‌the‌‌ goods‌ ‌from‌ ‌the‌ ‌custody‌ ‌of‌ ‌BOC‌ ‌which‌ ‌was‌ ‌originally‌ ‌TSPIC's‌‌ responsibility.‌‌ ‌ The‌ ‌business‌ ‌of‌ ‌holding‌ ‌one's‌ ‌self‌ ‌out‌ ‌as‌ ‌a‌ ‌transportation‌ ‌service‌‌ provider,‌ ‌whether‌ ‌done‌ ‌through‌ ‌online‌‌platforms‌‌or‌‌not,‌‌appears‌‌to‌‌be‌‌ one‌ ‌which‌ ‌is‌ ‌imbued‌ ‌with‌ ‌public‌ ‌interest‌ ‌and‌ ‌thus,‌ ‌deserves‌‌ appropriate‌ ‌regulations.‌ ‌With‌ ‌the‌ ‌safety‌ ‌of‌ ‌the‌ ‌public‌‌further‌‌in‌‌mind,‌‌ and‌ ‌given‌ ‌that,‌‌at‌‌any‌‌rate,‌‌the‌‌above-said‌‌administrative‌‌issuances‌‌are‌‌ presumed‌ ‌to‌ ‌be‌ ‌valid‌ ‌until‌ ‌and‌ ‌unless‌ ‌they‌ ‌are‌ ‌set‌ ‌aside.‌ ‌(‌LTFRB‌ ‌v.‌‌ Valenzuela‌‌and‌‌DBDOYC‌‌2 ‌ 019‌)‌ ‌ Vigilance‌‌Over‌‌Goods‌ ‌ The‌‌consignee‌‌‌is‌‌the‌‌person‌‌to‌‌whom‌‌the‌‌goods‌‌are‌‌to‌‌be‌‌delivered.‌‌ ‌ 1. He‌‌may‌‌be‌‌the‌s‌ hipper‌‌himself.‌‌ ‌ 2. He‌ ‌may‌ ‌also‌ ‌be‌ ‌a‌ ‌third‌ ‌person‌ ‌who‌ ‌is‌ ‌not‌ ‌a‌ ‌party‌ ‌to‌ ‌the‌‌ contract‌‌of‌‌carriage.‌ ‌ Exempting‌‌Causes‌ ‌ Common‌ ‌carriers‌ ‌are‌ ‌responsible‌ ‌for‌ ‌the‌ ‌loss,‌ ‌destruction,‌ ‌or‌‌ deterioration‌ ‌of‌ ‌the‌ ‌goods,‌ ‌unless‌ ‌the‌ ‌same‌ ‌is‌ ‌due‌ ‌to‌ ‌any‌ ‌of‌ ‌the‌‌ following‌‌causes‌‌only:‌ ‌ 1) Flood,‌ ‌storm,‌ ‌earthquake,‌ ‌lightning,‌ ‌or‌ ‌other‌ ‌natural‌‌ disaster‌‌‌or‌‌calamity;‌ ‌ 2) Act‌ ‌of‌ ‌the‌ ‌public‌ ‌enemy‌ ‌in‌ ‌war‌,‌‌whether‌‌international‌‌or‌‌ civil;‌ ‌ 3) Act‌‌or‌‌omission‌‌of‌‌the‌s‌ hipper‌‌or‌‌owner‌‌of‌‌the‌‌goods;‌ ‌ 4) The‌‌character‌‌of‌‌the‌‌goods‌‌or‌‌‌defects‌‌‌in‌‌the‌‌packing‌‌or‌‌in‌‌ the‌‌containers;‌ ‌ 5) Order‌‌or‌‌act‌‌of‌c‌ ompetent‌‌public‌‌authority‌.‌ ‌ Absence‌ ‌of‌ ‌delay‌.‌ ‌If‌ ‌the‌ ‌common‌ ‌carrier‌ ‌negligently‌ ‌incurs‌ ‌in‌‌ delay‌‌in‌‌transporting‌‌the‌‌goods,‌‌a‌‌‌natural‌‌disaster‌‌shall‌‌not‌‌free‌‌ such‌‌carrier‌‌from‌‌responsibility.‌‌(A ‌ rt‌‌1740‌)‌ ‌ Due‌ ‌diligence‌ ‌to‌ ‌prevent‌ ‌or‌ ‌lessen‌ ‌the‌ ‌loss‌.‌ ‌In‌ ‌order‌ ‌that‌ ‌the‌‌ common‌ ‌carrier‌ ‌may‌ ‌be‌ ‌exempted‌ ‌from‌ ‌responsibility,‌ ‌the‌‌ natural‌ ‌disaster‌ ‌must‌ ‌have‌ ‌been‌ ‌the‌ ‌proximate‌ ‌and‌ ‌only‌‌ cause‌‌‌of‌‌the‌‌loss.‌‌ ‌ Under‌ ‌Art‌ ‌1745‌ ‌(6)‌,‌ ‌a‌ ‌common‌ ‌carrier‌‌is‌‌held‌‌responsible‌‌—‌‌and‌‌ will‌‌not‌‌be‌‌allowed‌‌to‌‌divest‌‌or‌‌to‌‌diminish‌‌such‌‌responsibility‌‌—‌‌ even‌ ‌for‌ ‌acts‌ ‌of‌ ‌strangers‌ ‌like‌ ‌thieves‌ ‌or‌ ‌robbers,‌ ‌except‌ ‌where‌‌ such‌ ‌thieves‌ ‌or‌ ‌robbers‌ ‌in‌ ‌fact‌ ‌acted‌ ‌"‌with‌ ‌grave‌‌or‌‌irresistible‌‌ threat,‌‌violence‌‌or‌‌force.‌"‌ ‌ The‌ ‌loss‌ ‌here‌ ‌was‌ ‌not‌ ‌attended‌ ‌by‌ ‌grave‌ ‌or‌ ‌irresistible‌ ‌threat,‌‌ violence,‌ ‌or‌ ‌force.‌ ‌Instead,‌ ‌it‌ ‌was‌ ‌brought‌ ‌about‌ ‌by‌ ‌petitioner's‌‌ failure‌ ‌to‌ ‌exercise‌ ‌extraordinary‌ ‌diligence‌ ‌when‌ ‌she‌ ‌neglected‌‌ vetting‌‌her‌‌driver‌‌or‌‌providing‌‌security‌‌for‌‌the‌‌cargo‌‌and‌‌failing‌‌to‌‌ take‌ ‌out‌ ‌insurance‌ ‌on‌ ‌the‌ ‌shipment's‌‌value.‌‌(‌Tan‌‌v.‌‌Great‌‌Harvest‌‌ Enterprises‌‌‌2019‌‌Leonen,‌‌J)‌ ‌ ‌ Contributory‌‌Negligence‌ ‌ Contributory‌ ‌negligence‌ ‌is‌ ‌conduct‌ ‌on‌ ‌the‌ ‌part‌ ‌of‌ ‌the‌ ‌plaintiff‌‌ which‌‌falls‌‌below‌‌the‌‌standard‌‌to‌‌which‌‌he‌‌should‌‌conform‌‌for‌‌his‌‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 22‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ own‌‌protection‌‌and‌‌which‌‌is‌‌legally‌‌contributing‌‌cause,‌‌cooperating‌‌ with‌‌the‌‌negligence‌‌of‌‌the‌‌defendant‌‌in‌‌bringing‌‌about‌‌the‌‌plaintiff's‌‌ harm.‌ ‌ Contributory‌ ‌negligence‌ ‌on‌ ‌the‌ ‌part‌ ‌of‌ ‌the‌ ‌shipper‌ ‌is‌ ‌NOT‌ ‌a‌‌ defense‌ ‌that‌ ‌will‌ ‌excuse‌ ‌the‌ ‌carrier‌ ‌from‌ ‌liability.‌ ‌It‌ ‌will‌ ‌only‌‌ MITIGATE‌s‌ uch‌‌liability.‌ ‌ For‌‌a‌‌common‌‌carrier‌‌to‌‌be‌‌absolved‌‌from‌‌liability‌‌in‌‌case‌‌of‌‌‌force‌‌ majeure‌,‌ ‌it‌ ‌is‌ ‌not‌ ‌enough‌ ‌that‌ ‌the‌ ‌accident‌ ‌was‌ ‌caused‌ ‌by‌ ‌a‌‌ fortuitous‌ ‌event.‌ ‌The‌ ‌common‌ ‌carrier‌ ‌must‌ ‌still‌ ‌prove‌ ‌that‌ ‌it‌ ‌did‌‌ not‌‌contribute‌‌to‌‌the‌‌occurrence‌‌of‌‌the‌‌incident‌‌due‌‌to‌‌its‌‌own‌‌or‌‌its‌‌ employees'‌‌negligence.‌‌(S‌ ulpicio‌‌Lines‌‌v.‌‌Sesante‌‌‌2016‌)‌ ‌ Duration‌‌of‌‌Liability‌ ‌ The‌‌extraordinary‌‌responsibility‌‌of‌‌the‌‌common‌‌carrier‌‌lasts‌‌ ‌ 3) That‌‌the‌‌common‌‌carrier‌‌‌need‌‌not‌‌observe‌‌any‌‌diligence‌‌in‌‌ the‌‌custody‌‌of‌‌the‌‌goods;‌ ‌ 4) That‌ ‌the‌ ‌common‌ ‌carrier‌‌shall‌‌not‌‌be‌‌responsible‌‌for‌‌the‌‌acts‌‌ or‌‌omission‌‌of‌‌his‌‌or‌‌its‌‌employees;‌ ‌ 3. The‌ ‌act‌ ‌of‌ ‌a‌ ‌thief‌ ‌or‌ ‌robber,‌ ‌who‌ ‌has‌ ‌entered‌‌the‌‌hotel‌‌is‌‌not‌‌ deemed‌ ‌force‌ ‌majeure‌,‌ ‌unless‌ ‌it‌ ‌is‌ ‌done‌ ‌with‌ ‌the‌ ‌use‌ ‌of‌‌ arms‌‌‌or‌‌through‌‌an‌i‌ rresistible‌‌force‌.‌ ‌ 4. The‌‌hotel-keeper‌‌is‌N ‌ OT‌‌liable‌‌‌for‌‌compensation‌‌if‌‌the‌‌loss‌‌ ‌ 5) That‌ ‌the‌ ‌common‌ ‌carrier's‌ ‌liability‌ ‌for‌ ‌acts‌ ‌committed‌ ‌by‌‌ thieves,‌‌or‌‌of‌‌robbers‌‌who‌‌do‌‌not‌‌act‌‌with‌‌grave‌‌or‌‌irresistible‌‌ threat,‌‌violence‌‌or‌‌force,‌‌is‌‌dispensed‌‌with‌‌or‌‌diminished;‌ ‌ 6) That‌ ‌the‌ ‌common‌ ‌carrier‌ ‌is‌ ‌not‌ ‌responsible‌ ‌for‌ ‌the‌ ‌loss,‌‌ destruction,‌ ‌or‌ ‌deterioration‌ ‌of‌ ‌goods‌ ‌on‌ ‌account‌ ‌of‌ ‌the‌‌ defective‌ ‌condition‌ ‌of‌ ‌the‌ ‌car,‌ ‌vehicle,‌ ‌ship,‌ ‌airplane‌ ‌or‌‌other‌‌ equipment‌‌used‌‌in‌‌the‌‌contract‌‌of‌‌carriage.‌ ‌ a) from‌ ‌the‌ ‌time‌ ‌the‌ ‌goods‌ ‌are‌ ‌unconditionally‌ ‌placed‌ ‌in‌ ‌the‌‌ Fixed‌‌amount‌ ‌ possession‌‌of,‌‌and‌r‌ eceived‌‌by‌‌the‌‌carrier‌f‌ or‌‌transportation‌‌ ‌ A‌ ‌stipulation‌ ‌that‌ ‌the‌ ‌common‌ ‌carrier's‌ ‌liability‌ ‌is‌ ‌limited‌ ‌to‌ ‌the‌‌ b) until‌‌‌the‌‌same‌‌are‌‌‌delivered‌,‌‌‌actually‌‌‌or‌‌‌constructively‌,‌‌by‌‌the‌‌ value‌ ‌of‌ ‌the‌ ‌goods‌ ‌appearing‌ ‌in‌ ‌the‌ ‌bill‌ ‌of‌ ‌lading‌,‌ ‌unless‌ ‌the‌‌ carrier‌ ‌to‌ ‌the‌ ‌consignee,‌ ‌or‌ ‌to‌‌the‌‌person‌‌who‌‌‌has‌‌a‌‌right‌‌to‌‌ shipper‌‌or‌‌owner‌‌declares‌‌a‌‌greater‌‌value,‌‌is‌b ‌ inding‌.‌ ‌ receive‌‌‌them.‌‌(Art‌‌1736)‌ ‌ A‌ ‌contract‌ ‌fixing‌ ‌the‌ ‌sum‌ ‌that‌ ‌may‌ ‌be‌ ‌recovered‌ ‌by‌ ‌the‌‌owner‌‌or‌‌ Stipulation‌‌for‌‌Limitation‌‌of‌‌Liability‌ ‌ shipper‌ ‌for‌ ‌the‌ ‌loss,‌ ‌destruction,‌ ‌or‌ ‌deterioration‌ ‌of‌ ‌the‌ ‌goods‌ ‌is‌‌ VALID‌,‌‌if‌‌it‌‌ ‌ A‌ ‌stipulation‌ ‌between‌ ‌the‌ ‌common‌ ‌carrier‌ ‌and‌ ‌the‌ ‌shipper‌ ‌or‌ ‌owner‌‌ limiting‌ ‌the‌ ‌liability‌ ‌of‌ ‌the‌ ‌former‌ ‌for‌ ‌the‌ ‌loss,‌ ‌destruction,‌ ‌or‌‌ deterioration‌ ‌of‌‌the‌‌goods‌‌to‌‌a‌‌degree‌‌less‌‌than‌‌extraordinary‌‌diligence‌‌ shall‌‌be‌‌VALID‌,‌‌provided‌‌it‌‌be:‌ ‌ 1) In‌‌writing,‌‌signed‌‌by‌‌the‌‌shipper‌‌or‌‌owner;‌ ‌ employees‌‌of‌‌the‌‌keepers‌‌of‌‌hotels‌‌or‌‌inns‌‌as‌‌well‌‌as‌‌strangers‌;‌‌ but‌‌not‌‌that‌‌which‌‌may‌‌proceed‌‌from‌‌any‌‌force‌‌majeure‌.‌‌ ‌ 2) That‌ ‌the‌ ‌common‌ ‌carrier‌ ‌will‌ ‌not‌ ‌be‌ ‌liable‌ ‌for‌ ‌any‌ ‌loss,‌‌ destruction,‌‌or‌‌deterioration‌‌of‌‌the‌‌goods;‌ ‌ 1. is‌‌reasonable‌‌and‌‌just‌‌under‌‌the‌‌circumstances,‌‌and‌‌ ‌ 2. has‌‌been‌‌fairly‌‌and‌‌freely‌‌agreed‌‌upon.‌ ‌ Liability‌‌for‌‌Baggage‌‌of‌‌Passengers‌ ‌ 2) Supported‌ ‌by‌ ‌a‌ ‌valuable‌ ‌consideration‌ ‌OTHER‌ ‌than‌ ‌the‌‌ The‌ ‌provisions‌‌of‌‌Articles‌‌1733‌‌to‌‌1753‌‌shall‌‌apply‌‌to‌‌the‌‌passenger's‌‌ baggage‌ ‌which‌ ‌is‌ ‌not‌ ‌in‌ ‌his‌ ‌personal‌ ‌custody‌ ‌or‌ ‌in‌ ‌that‌ ‌of‌ ‌his‌‌ service‌‌rendered‌‌by‌‌the‌‌common‌‌carrier;‌‌and‌ employee.‌ ‌As‌ ‌to‌ ‌other‌ ‌baggage,‌ ‌the‌ ‌rules‌ ‌on‌ ‌deposit‌ ‌concerning‌ ‌the‌‌ 3) Reasonable,‌‌just‌‌and‌‌not‌‌contrary‌‌to‌‌public‌‌policy.‌ ‌ responsibility‌‌of‌‌hotel-keepers‌‌shall‌‌be‌‌applicable.‌ ‌ VOID‌‌‌Stipulations‌ ‌ 1. The‌‌keepers‌‌of‌‌hotels‌‌or‌‌inns‌‌shall‌‌be‌‌responsible‌‌for‌‌them‌‌as‌‌ depositaries,‌ ‌provided‌ ‌that‌ ‌notice‌ ‌was‌ ‌given‌ ‌to‌ ‌them‌ ‌and‌‌ Any‌ ‌of‌ ‌the‌ ‌following‌ ‌or‌ ‌similar‌ ‌stipulations‌ ‌shall‌ ‌be‌ ‌considered‌‌ that‌ ‌the‌ ‌guests‌ ‌take‌ ‌the‌ ‌precautions‌ ‌relative‌ ‌to‌ ‌the‌ ‌care‌ ‌and‌‌ unreasonable,‌‌unjust‌‌and‌‌contrary‌‌to‌‌public‌‌policy‌:‌ ‌ vigilance‌‌of‌‌their‌‌effects.‌ ‌ 1) That‌ ‌the‌ ‌goods‌ ‌are‌ ‌transported‌ ‌at‌ ‌the‌ ‌risk‌ ‌of‌ ‌the‌ ‌owner‌ ‌or‌‌ 2. The‌ ‌responsibility‌ ‌shall‌ ‌include‌ ‌the‌ ‌loss‌ ‌of,‌ ‌or‌ ‌injury‌ ‌to‌ ‌the‌‌ shipper;‌ ‌ personal‌ ‌property‌ ‌of‌ ‌the‌ ‌guests‌ ‌caused‌ ‌by‌ ‌the‌ ‌servants‌ ‌or‌‌ 5. a. is‌ ‌due‌ ‌to‌ ‌the‌‌acts‌‌of‌‌the‌‌guest,‌‌his‌‌family,‌‌servants‌‌or‌‌ visitors,‌‌or‌‌ ‌ b. arises‌‌from‌‌the‌‌character‌‌of‌‌the‌‌things‌‌brought‌‌into‌‌the‌‌ hotel.‌ ‌ The‌‌hotel-keeper‌‌cannot‌‌free‌‌himself‌‌from‌‌responsibility‌‌by‌‌ posting‌‌notices‌‌to‌‌the‌‌effect‌‌that‌‌he‌‌is‌‌not‌‌liable‌‌for‌‌the‌‌articles‌‌ brought‌‌by‌‌the‌‌guest.‌‌ ‌ Checked-in‌ ‌Baggage.‌ ‌The‌ ‌rules‌ ‌applicable‌ ‌to‌ ‌goods‌ ‌that‌ ‌are‌ ‌being‌‌ shipped‌‌are‌‌applicable‌‌to‌‌baggage‌‌delivered‌‌to‌‌the‌‌custody‌‌of‌‌the‌‌carrier‌‌ as‌‌an‌‌incident‌‌of‌‌a‌‌contract‌‌of‌‌carriage‌‌of‌‌passenger.‌ ‌ Hand‌ ‌Carried‌ ‌Luggage.‌ ‌The‌ ‌rules‌ ‌on‌ ‌necessary‌ ‌deposit‌ ‌applies.‌‌ Thus,‌‌the‌‌passenger‌‌is‌‌duty‌‌bound‌‌to:‌ ‌ 1) Give‌ ‌notice‌ ‌to‌ ‌the‌ ‌common‌ ‌carrier‌ ‌or‌ ‌its‌ ‌employees,‌ ‌of‌ ‌the‌‌ effects‌‌brought‌‌by‌‌the‌‌passenger;‌‌AND‌ ‌ 2) To‌ ‌take‌ ‌the‌ ‌precautions‌ ‌which‌ ‌the‌ ‌common‌ ‌carrier‌ ‌or‌ ‌their‌‌ substitutes‌ ‌advised‌ ‌relative‌ ‌to‌ ‌the‌ ‌care‌ ‌and‌ ‌vigilance‌ ‌of‌ ‌their‌‌ effects.‌ ‌ The‌‌law‌‌requires‌‌the‌‌common‌‌carrier‌‌to‌‌observe‌‌the‌‌‌same‌‌diligence‌‌as‌‌ the‌ ‌hotel‌ ‌keepers‌ ‌in‌ ‌case‌ ‌the‌ ‌baggage‌ ‌remains‌ ‌with‌ ‌the‌ ‌passenger;‌‌ otherwise‌,‌ ‌extraordinary‌‌diligence‌‌must‌‌be‌‌exercised.‌‌(‌Sulpicio‌‌Lines‌‌v.‌‌ Sesante‌‌‌2016)‌ ‌ However‌,‌ ‌common‌ ‌carriers‌ ‌are‌ ‌still‌ ‌duty-bound‌ ‌to‌ ‌observe‌‌ extraordinary‌‌diligence‌‌e‌ ven‌‌for‌‌hand‌‌carried‌‌luggage‌.‌ ‌ Safety‌‌of‌‌Passengers‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 23‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ into‌ ‌the‌ ‌rear‌ ‌of‌ ‌the‌ ‌Isuzu‌ ‌truck.‌ ‌He‌ ‌had‌ ‌the‌ ‌last‌ ‌clear‌ ‌chance‌ ‌of‌‌ Under‌ ‌Article‌ ‌1758‌ ‌of‌ ‌the‌ ‌NCC‌,‌ ‌when‌ ‌a‌ ‌passenger‌ ‌is‌ ‌carried‌‌ Vicarious‌‌Liability‌ ‌ avoiding‌‌the‌‌accident.‌‌(R ‌ aynera‌‌v.‌‌Hiceta‌)‌ ‌ gratuitously‌,‌ ‌a‌ ‌stipulation‌‌limiting‌‌the‌‌common‌‌carrier’s‌‌liability‌‌ Generally,‌‌when‌‌an‌‌injury‌‌is‌‌caused‌‌by‌‌the‌‌negligence‌‌of‌‌a‌‌servant‌‌or‌‌ is‌‌VALID.‌ ‌ When‌ ‌there‌ ‌is‌‌contributory‌‌negligence.‌‌The‌‌proximate‌‌cause‌‌of‌‌ employee,‌ ‌there‌ ‌instantly‌ ‌arises‌ ‌a‌ ‌presumption‌ ‌of‌ ‌law‌ ‌that‌ ‌there‌‌ the‌ ‌death‌ ‌of‌ ‌the‌‌victim‌‌is‌‌the‌‌negligence‌‌of‌‌petitioner's‌‌bus‌‌driver,‌‌ was‌ ‌negligence‌‌on‌‌the‌‌part‌‌of‌‌the‌‌master‌‌or‌‌employer‌‌either‌‌in‌‌the‌‌ Void‌‌Stipulations‌ ‌ with‌ ‌the‌ ‌contributory‌ ‌negligence‌ ‌of‌ ‌the‌ ‌driver‌ ‌and‌ ‌owner‌ ‌of‌ ‌the‌‌ selection‌‌of‌‌the‌‌servant‌‌or‌‌employee‌‌or‌‌in‌‌the‌‌supervision‌‌over‌‌him‌‌ jeepney.‌‌(T ‌ ravel‌‌&‌‌Tours‌‌Advisers‌‌v.‌‌Cruz,‌‌Sr.,‌‌et‌‌al‌‌2 ‌ 016‌)‌ ‌ 1. A‌‌stipulation‌‌limiting‌‌the‌‌liability‌‌of‌‌the‌‌carrier‌‌for‌‌the‌‌injuries‌‌ after‌‌the‌‌selection,‌‌or‌‌both.‌‌(M ‌ endoza‌‌v.‌‌Sps‌‌Gomez‌‌2 ‌ 014‌)‌ ‌ to‌‌paying‌‌passengers‌‌is‌V ‌ OID‌.‌ ‌ The‌‌operator‌‌of‌‌a‌‌school‌‌bus‌‌service‌‌is‌‌a‌‌common‌‌carrier‌‌in‌‌the‌‌ The‌‌‌registered‌‌owner‌‌is‌‌deemed‌‌the‌‌employer‌‌of‌‌the‌‌driver‌‌and‌‌is‌‌ eyes‌‌of‌‌the‌‌law.‌‌(S‌ ps‌‌Perena‌‌v.‌‌Sps‌‌Zarate‌‌2 ‌ 012‌)‌ ‌ 2. The‌ ‌common‌ ‌carrier's‌ ‌responsibility‌ ‌pertaining‌ ‌to‌ ‌acts‌ ‌of‌ ‌its‌‌ thus‌‌vicariously‌‌liable‌‌under‌‌Article‌‌2176‌‌in‌‌relation‌‌with‌‌2180‌‌of‌‌ employees‌‌as‌‌well‌‌as‌‌to‌‌the‌‌safety‌‌of‌‌its‌‌passengers‌‌in‌‌general‌‌ the‌‌Civil‌‌Code.‌‌(F ‌ ilcar‌‌Transport‌‌Services‌‌v.‌‌Espinas‌‌2 ‌ 012‌)‌ ‌ Liability‌‌for‌‌ ‌ cannot‌ ‌be‌ ‌eliminated‌ ‌or‌‌limited‌‌by‌‌stipulation,‌‌by‌‌the‌‌posting‌‌ By‌‌Other‌‌Passengers‌‌and‌‌Strangers‌ ‌ 1) Delay‌‌in‌‌commencement‌‌of‌‌voyage‌ ‌ of‌‌notices,‌‌by‌‌statements‌‌on‌‌the‌‌tickets‌‌or‌‌otherwise.‌ ‌ Duration‌‌of‌‌Liability‌ ‌ Such‌ ‌duty‌ ‌of‌‌a‌‌common‌‌carrier‌‌to‌‌provide‌‌safety‌‌to‌‌its‌‌passengers‌‌ so‌‌obligates‌‌it‌‌not‌‌only‌‌during‌‌the‌‌course‌‌of‌‌the‌‌trip‌‌but‌‌‌for‌‌so‌‌long‌‌ as‌ ‌the‌ ‌passengers‌ ‌are‌ ‌within‌ ‌its‌ ‌premises‌ ‌and‌ ‌where‌ ‌they‌‌ ought‌‌to‌‌be‌‌in‌‌pursuance‌‌to‌‌the‌‌contract‌‌of‌‌carriage.‌‌The‌‌statutory‌‌ provisions‌‌render‌‌a‌‌common‌‌carrier‌‌liable‌‌for‌‌death‌‌of‌‌or‌‌injury‌‌to‌‌ passengers‌‌ ‌ A‌ ‌common‌ ‌carrier‌ ‌is‌ ‌responsible‌ ‌for‌ ‌injuries‌ ‌suffered‌ ‌by‌ ‌a‌‌ passenger‌ ‌on‌ ‌account‌ ‌of‌ ‌the‌ ‌wilful‌ ‌acts‌ ‌or‌ ‌negligence‌ ‌of‌ ‌other‌‌ passengers‌ ‌or‌ ‌of‌ ‌strangers,‌ ‌if‌ ‌the‌ ‌common‌ ‌carrier's‌ ‌employees‌‌ through‌ ‌the‌ ‌exercise‌ ‌of‌ ‌the‌ ‌diligence‌ ‌of‌ ‌a‌ ‌good‌ ‌father‌ ‌of‌ ‌a‌ ‌family‌‌ could‌‌have‌‌prevented‌‌or‌‌stopped‌‌the‌‌act‌‌or‌‌omission‌.‌ ‌ In‌ ‌Pilapil‌ ‌v.‌ ‌CA‌,‌ ‌the‌ ‌Court‌‌clarified‌‌that‌‌where‌‌the‌‌injury‌‌sustained‌‌ by‌‌the‌‌passenger‌‌was‌‌in‌‌no‌‌way‌‌due‌‌ ‌ 1) to‌‌any‌‌defect‌‌in‌‌the‌‌means‌‌of‌‌transport‌‌or‌‌in‌‌the‌‌method‌‌of‌‌ transporting,‌‌or‌‌ ‌ a) through‌‌the‌‌negligence‌‌or‌‌wilful‌‌acts‌‌of‌‌its‌‌employees‌‌or‌‌ ‌ b) on‌‌account‌‌of‌‌wilful‌‌acts‌‌or‌‌negligence‌‌of‌‌other‌‌passengers‌‌ or‌‌of‌‌strangers‌‌if‌‌the‌‌common‌‌carrier’s‌‌employees‌‌through‌‌ the‌ ‌exercise‌ ‌of‌ ‌due‌ ‌diligence‌ ‌could‌ ‌have‌ ‌prevented‌ ‌or‌‌ stopped‌‌the‌‌act‌‌or‌‌omission.‌(‌ LRTA‌‌v.‌‌Navidad)‌ ‌ Liability‌‌for‌‌Acts‌‌of‌‌Others‌ ‌ By‌‌Employees‌ ‌ 2) to‌ ‌the‌ ‌negligent‌ ‌or‌ ‌willful‌ ‌acts‌ ‌of‌ ‌the‌ ‌common‌ ‌carrier's‌‌ employees‌‌with‌‌respect‌‌to‌‌the‌‌foregoing‌‌—‌ ‌ such‌ ‌as‌ ‌when‌ ‌the‌ ‌injury‌ ‌arises‌ ‌wholly‌ ‌from‌ ‌causes‌ ‌created‌ ‌by‌‌ strangers‌ ‌which‌ ‌the‌ ‌carrier‌ ‌had‌ ‌no‌ ‌control‌ ‌of‌ ‌or‌ ‌prior‌‌ knowledge‌ ‌to‌ ‌prevent‌ ‌—‌ ‌there‌ ‌would‌ ‌be‌ ‌no‌ ‌issue‌‌regarding‌‌the‌‌ common‌‌carrier's‌‌negligence‌‌in‌‌its‌‌duty‌‌to‌‌provide‌‌safe‌‌and‌‌suitable‌‌ care,‌ ‌as‌ ‌well‌ ‌as‌ ‌competent‌ ‌employees‌ ‌in‌ ‌relation‌ ‌to‌ ‌its‌ ‌transport‌‌ business;‌ ‌as‌ ‌such,‌ ‌the‌ ‌presumption‌ ‌of‌ ‌fault/negligence‌ ‌foisted‌‌ under‌ ‌Article‌ ‌1756‌ ‌of‌ ‌the‌ ‌Civil‌ ‌Code‌ ‌should‌ ‌not‌ ‌apply‌.‌ ‌(‌G.V.‌‌ Florida‌‌v.‌‌Heirs‌‌of‌‌Battung‌‌2 ‌ 015‌)‌ ‌ Common‌ ‌carriers‌ ‌are‌ ‌liable‌ ‌for‌ ‌the‌ ‌death‌ ‌of‌ ‌or‌ ‌injuries‌ ‌to‌‌ passengers‌ ‌through‌ ‌the‌ ‌negligence‌ ‌or‌ ‌wilful‌ ‌acts‌ ‌of‌ ‌the‌ ‌former's‌‌ employees,‌ ‌although‌‌‌such‌‌employees‌‌‌may‌‌have‌‌acted‌‌beyond‌‌‌the‌‌ scope‌‌of‌‌their‌‌authority‌‌or‌‌in‌‌violation‌‌of‌‌the‌‌orders‌‌of‌‌the‌‌common‌‌ Contributory‌‌Negligence‌ ‌ carriers.‌ ‌ This‌ ‌liability‌ ‌of‌ ‌the‌ ‌common‌ ‌carriers‌ ‌does‌ ‌not‌ ‌cease‌ ‌upon‌ ‌proof‌‌ that‌ ‌they‌ ‌exercised‌ ‌all‌ ‌the‌‌diligence‌‌of‌‌a‌‌good‌‌father‌‌of‌‌a‌‌family‌‌in‌‌ the‌ ‌selection‌ ‌and‌ ‌supervision‌ ‌of‌‌their‌‌employees.‌‌(‌Travel‌‌&‌‌Tours‌‌ Advisers‌‌v.‌‌Cruz,‌‌Sr.,‌‌et‌‌al‌‌2 ‌ 016‌)‌ ‌ When‌‌there‌‌is‌‌no‌‌contributory‌‌negligence.‌‌‌The‌‌responsibility‌‌to‌‌ avoid‌‌the‌‌collision‌‌with‌‌the‌‌front‌‌vehicle‌‌lies‌‌with‌‌the‌‌driver‌‌of‌‌the‌‌ rear‌ ‌vehicle.‌ ‌Consequently,‌ ‌no‌ ‌other‌ ‌person‌ ‌was‌ ‌to‌ ‌blame‌ ‌but‌‌the‌‌ victim‌ ‌himself‌ ‌since‌ ‌he‌ ‌was‌ ‌the‌‌one‌‌who‌‌bumped‌‌his‌‌motorcycle‌‌ ‌If‌‌the‌‌delay‌‌is‌‌legally‌‌inexcusable,‌‌the‌‌following‌‌result:‌ ‌ a) The‌ ‌carrier‌ ‌is‌ ‌still‌ ‌liable‌ ‌even‌ ‌if‌ ‌natural‌ ‌disaster‌‌ caused‌‌the‌‌damage;‌‌(‌Art‌‌1740‌)‌ ‌ b) The‌ ‌stipulation‌ ‌limiting‌ ‌the‌ ‌liability‌ ‌of‌ ‌the‌ ‌carrier‌ ‌is‌‌ inoperative;‌‌(A ‌ rt‌‌1747‌)‌ ‌ c) Carrier‌‌is‌‌liable‌‌for‌‌damages‌‌due‌‌to‌‌the‌‌delay;‌‌AND‌ ‌ d) Consignee‌ ‌may‌ ‌exercise‌ ‌his‌‌right‌‌to‌‌ABANDON‌‌under‌‌ Art‌‌371‌‌of‌‌the‌‌Code‌‌of‌‌Commerce.‌ ‌ 2) Defects‌‌in‌‌equipment‌‌and‌‌facilities‌ ‌ The‌ ‌common‌ ‌carrier‌ ‌is‌ ‌NOT‌ ‌responsible‌ ‌for‌ ‌the‌ ‌loss,‌‌ destruction,‌ ‌or‌ ‌deterioration‌ ‌of‌ ‌goods‌ ‌on‌ ‌account‌ ‌of‌ ‌the‌‌ defective‌ ‌condition‌ ‌of‌ ‌the‌ ‌car,‌ ‌vehicle,‌ ‌ship,‌ ‌airplane‌ ‌or‌‌other‌‌ equipment‌‌used‌‌in‌‌the‌‌contract‌‌of‌‌carriage.‌ ‌ Extent‌‌of‌‌liability‌‌for‌‌damages‌ ‌ 1) Actual‌‌and‌‌Consequential‌‌Damages‌ ‌ The‌ ‌passenger‌ ‌or‌ ‌his‌ ‌heirs‌ ‌can‌ ‌recover‌ ‌not‌ ‌only‌ ‌actual‌‌ damages,‌‌but‌‌also‌‌consequential‌‌or‌‌compensatory‌‌damages:‌ ‌ a) Loss‌‌of‌‌earning‌‌capacity‌‌‌—‌‌2/3‌‌x‌‌(80‌‌–‌‌age‌‌at‌‌time‌‌of‌‌ death)‌‌x‌‌Net‌‌Earnings;‌ ‌ b) Straight‌‌death‌‌indemnity‌‌of‌‌P50K‌‌under‌‌Art‌‌2206;‌ ‌ c) Moral‌‌damages‌‌+‌‌Attorney’s‌‌fees.‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 24‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ 2) Moral‌‌Damages‌ ‌ Three-fold‌‌character‌ ‌ Recoverable‌ ‌if‌ ‌the‌ ‌cases‌ ‌under‌ ‌Art‌ ‌2219‌ ‌of‌ ‌the‌ ‌NCC‌ ‌are‌ ‌the‌‌ A‌‌bill‌‌of‌‌lading,‌‌aside‌‌from‌‌being‌‌a‌‌ ‌ proximate‌ ‌result‌ ‌of‌ ‌the‌ ‌breach‌ ‌of‌ ‌contract‌ ‌of‌ ‌carriage.‌‌ 1) contract‌a‌ nd‌‌ ‌ Recoverable‌‌only‌‌when‌ ‌ 2) a‌‌receipt‌,‌‌ ‌ a) Death‌o ‌ f‌‌passenger‌‌results;‌‌or‌ ‌ 3) is‌‌also‌‌a‌‌symbol‌o ‌ f‌‌the‌‌goods‌‌covered‌‌by‌‌it.‌‌ ‌ b) The‌‌carrier‌‌was‌‌guilty‌‌of‌‌fraud‌‌and‌‌bad‌‌faith‌‌even‌‌if‌‌ death‌‌does‌‌not‌‌result.‌ ‌ A‌‌‌clean‌‌bill‌‌of‌‌lading‌‌constitutes‌‌‌prima‌‌facie‌‌evidence‌‌of‌‌the‌‌receipt‌‌by‌‌ the‌‌carrier‌‌of‌‌the‌‌goods‌‌as‌‌therein‌‌described.‌‌It‌‌is‌‌ ‌ Without‌ ‌the‌ ‌award‌ ‌of‌ ‌moral‌ ‌damages,‌ ‌award‌ ‌of‌ ‌exemplary‌‌ damages‌‌and‌‌attorney’s‌‌fees‌‌is‌‌improper.‌ ‌ 1) a‌‌written‌a ‌ cknowledgement‌,‌‌ ‌ 3) Exemplary‌‌Damages‌ ‌ May‌ ‌be‌ ‌awarded‌ ‌only‌ ‌if‌ ‌the‌ ‌defendant‌ ‌had‌ ‌acted‌‌in‌‌a‌‌wanton,‌‌ fraudulent,‌‌reckless,‌‌oppressive‌‌or‌‌malevolent‌‌manner.‌ ‌ 4) Attorney’s‌‌Fees‌‌and‌‌Interest.‌ ‌ ‌ Bill‌‌of‌‌Lading‌ ‌ 2) signed‌ ‌by‌ ‌the‌ ‌master‌ ‌of‌‌a‌‌vessel‌‌or‌‌other‌‌authorized‌‌agent‌‌of‌ the‌‌carrier,‌‌ ‌ 3) that‌‌he‌‌has‌‌received‌t‌ he‌‌described‌‌goods‌‌from‌‌the‌‌shipper,‌‌ ‌ 4) to‌‌be‌t‌ ransported‌o ‌ n‌‌the‌‌expressed‌‌terms,‌‌ ‌ 5) to‌‌the‌‌described‌‌place‌‌of‌d ‌ estination‌,‌‌and‌‌ ‌ 6) to‌‌be‌‌delivered‌‌there‌‌to‌‌the‌‌designated‌c‌ onsignee‌o ‌ r‌‌parties.‌ ‌ A‌‌‌bill‌‌of‌‌lading‌‌‌is‌‌a‌‌written‌‌acknowledgement‌‌of‌‌receipt‌‌of‌‌goods‌‌ Bill‌‌of‌‌Lading‌‌as‌‌a‌‌Contract‌ ‌ and‌ ‌agreement‌ ‌to‌ ‌transport‌ ‌them‌ ‌to‌ ‌a‌ ‌specific‌ ‌place‌ ‌to‌ ‌a‌ ‌person‌‌ The‌ ‌nature‌ ‌of‌ ‌a‌ ‌bill‌ ‌of‌ ‌lading‌ ‌as‌ ‌receipt‌ ‌and‌ ‌document‌ ‌of‌ ‌title‌‌ named‌‌or‌‌to‌‌his‌‌order.‌‌It‌‌is‌‌‌not‌‌indispensable‌‌for‌‌the‌‌perfection‌‌of‌‌ applies‌ ‌only‌ ‌to‌ ‌carriage‌ ‌of‌ ‌goods.‌ ‌Its‌ ‌nature‌ ‌as‌ ‌a‌ ‌contract‌ ‌also‌‌ the‌‌contract‌‌of‌‌carriage‌‌although‌‌its‌‌issuance‌‌‌can‌‌be‌‌demanded‌‌as‌‌a‌‌ applies‌‌to‌‌tickets‌‌issued‌‌to‌‌passengers.‌ ‌ matter‌ ‌of‌ ‌right‌ by‌ ‌the‌ ‌shipper.‌ ‌A‌ ‌consignee‌,‌ ‌although‌ ‌not‌ ‌a‌‌ signatory‌ ‌to‌ ‌the‌ ‌contract‌ ‌of‌ ‌carriage‌ ‌between‌ ‌the‌ ‌shipper‌ ‌and‌ ‌the‌‌ A‌ ‌bill‌ ‌of‌ ‌lading‌ ‌is‌ ‌covered‌ ‌by‌ ‌the‌ ‌parol‌ ‌evidence‌ ‌rule‌.‌ ‌The‌‌ carrier,‌‌becomes‌‌a‌‌party‌‌to‌‌the‌‌contract‌‌by‌‌reason‌‌of‌‌either‌‌ ‌ mistake‌‌contemplated‌‌as‌‌an‌‌‌exception‌‌‌to‌‌the‌‌parol‌‌evidence‌‌rule‌‌is‌‌ one‌‌which‌‌is‌‌a‌‌‌mistake‌‌of‌‌fact‌‌‌mutual‌‌‌to‌‌the‌‌parties.‌‌‌(Magellan‌‌ a) The‌‌relationship‌‌of‌‌‌agency‌‌‌between‌‌the‌‌consignee‌‌and‌‌the‌‌ Manufacturing‌‌v.‌‌CA)‌ ‌ shipper/consignor;‌ ‌ b) The‌ ‌unequivocal‌ ‌acceptance‌ ‌of‌ ‌the‌ ‌bill‌ ‌of‌ ‌lading‌‌ delivered‌ ‌to‌ ‌the‌ ‌consignee,‌ ‌with‌ ‌full‌ ‌knowledge‌ ‌of‌ ‌its‌‌ contents;‌‌OR‌ ‌ When‌‌a‌‌shipper‌‌enforces‌‌a‌‌contractual‌‌obligation‌‌under‌‌the‌‌contract‌‌ of‌ ‌carriage‌ ‌as‌ ‌contained‌ ‌in‌ ‌the‌ ‌bills‌ ‌of‌‌lading,‌‌such‌‌bills‌‌of‌‌lading‌‌ can‌ ‌be‌ ‌categorized‌ ‌as‌ a ‌ ctionable‌ ‌documents‌ ‌which‌‌under‌‌the‌‌ Rules‌‌must‌‌be‌‌properly‌‌pleaded.‌(‌ Philam‌‌v.‌‌Sweet‌‌Lines)‌ ‌ Period‌ ‌for‌ ‌delivery‌ ‌—‌ ‌When‌ ‌a‌ ‌common‌ ‌carrier‌ ‌undertakes‌ ‌to‌‌ convey‌ ‌goods,‌ ‌the‌ ‌law‌ ‌implies‌ ‌a‌ ‌contract‌ ‌that‌ ‌they‌ ‌shall‌ ‌be‌‌ delivered‌ ‌at‌‌destination‌‌within‌‌a‌‌‌reasonable‌‌time‌,‌‌in‌‌the‌‌absence‌‌ of‌‌any‌‌agreement‌‌as‌‌to‌‌the‌‌time‌‌of‌‌delivery.‌ ‌ Reasonable‌‌time.‌‌Expected‌‌date‌‌of‌‌arrival‌‌in‌‌the‌‌bill‌‌of‌‌lading‌‌may‌‌ be‌‌considered.‌‌It‌‌may‌‌also‌‌depend‌‌upon‌‌the‌n ‌ ature‌‌of‌‌the‌‌goods‌.‌ ‌ Delivery‌‌without‌‌surrender‌‌of‌‌bill‌‌of‌‌lading‌‌‌—‌‌While‌‌surrender‌‌ of‌ ‌the‌ ‌original‌ ‌bill‌ ‌of‌ ‌lading‌ ‌is‌ ‌not‌ ‌a‌ ‌condition‌ ‌precedent‌ ‌for‌ ‌the‌‌ common‌ ‌carrier‌ ‌to‌ ‌be‌ ‌discharged‌ ‌from‌ ‌its‌ ‌contractual‌ ‌obligation,‌‌ there‌ ‌must‌ ‌be,‌ ‌at‌ ‌the‌ ‌very‌ ‌least,‌ ‌an‌ ‌acknowledgement‌ ‌of‌ ‌the‌‌ delivery‌ ‌by‌ ‌signing‌ ‌the‌ ‌delivery‌ ‌receipt‌,‌ ‌if‌ ‌surrender‌ ‌of‌ ‌the‌‌ original‌‌of‌‌the‌‌bill‌‌of‌‌lading‌‌is‌‌not‌‌possible.‌‌ ‌ There‌ ‌was‌ ‌neither‌ ‌surrender‌ ‌of‌ ‌the‌ ‌original‌ ‌copies‌ ‌of‌ ‌the‌ ‌bills‌ ‌of‌‌ lading‌‌nor‌‌was‌‌there‌‌acknowledgment‌‌of‌‌the‌‌delivery‌‌in‌‌the‌‌present‌‌ case.‌ ‌This‌ ‌leads‌ ‌to‌ ‌the‌ ‌conclusion‌ ‌that‌ ‌the‌ ‌contract‌ ‌of‌ ‌carriage‌‌ still‌ ‌subsists‌ ‌and‌ ‌petitioners‌ ‌could‌ ‌be‌ ‌held‌ ‌liable‌ ‌for‌ ‌the‌ ‌breach‌‌ thereof.‌‌(N ‌ edlloyd‌‌Lijnen‌‌B.V.‌‌Rotterdam‌‌v.‌‌Glow‌‌Laks‌)‌ ‌ What‌‌are‌‌the‌‌valid‌‌grounds‌‌for‌‌refusal‌‌to‌‌take‌‌delivery?‌‌ ‌ a) If‌ ‌those‌ ‌not‌ ‌delivered‌ ‌form‌ ‌part‌ ‌of‌ ‌the‌ ‌goods‌‌transported,‌‌the‌‌ consignee‌‌may‌‌refuse‌‌to‌‌receive‌‌the‌‌latter,‌‌when‌‌he‌‌proves‌‌that‌‌ he‌‌‌cannot‌‌make‌‌use‌‌of‌‌them‌‌independently‌‌of‌‌the‌‌others‌.‌ (‌Art‌‌363,‌‌Code‌‌of‌‌Commerce‌)‌ ‌ b) If‌ ‌the‌ ‌cargo‌ ‌should‌ ‌consist‌ ‌of‌ ‌liquids‌ ‌and‌ ‌should‌ ‌they‌ ‌have‌‌ leaked‌‌out,‌‌there‌‌is‌‌not‌‌remaining‌‌in‌‌the‌‌containers‌‌more‌‌than‌‌ one-quarter‌o ‌ f‌‌their‌‌contents.‌‌(A ‌ rt‌‌687,‌‌Code‌‌of‌‌Commerce‌)‌ ‌ c) If,‌ ‌in‌ ‌consequence‌ ‌of‌ ‌the‌ ‌damage,‌ ‌the‌ ‌goods‌ ‌are‌ ‌rendered‌ useless‌‌for‌‌sale‌‌and‌‌consumption‌‌for‌‌the‌‌purposes‌‌for‌‌which‌‌ they‌‌are‌‌properly‌‌destined,‌‌the‌‌consignee‌‌shall‌‌not‌‌be‌‌bound‌‌to‌‌ receive‌‌them.‌ ‌(A ‌ rt‌‌365,‌‌Code‌‌of‌‌Commerce‌)‌ ‌ d) In‌‌case‌‌of‌‌‌delay‌‌‌through‌‌the‌‌fault‌‌of‌‌the‌‌carrier.‌‌(‌Art‌‌371,‌‌Code‌‌ c) Availment‌ ‌of‌ ‌the‌ ‌stipulation‌ ‌pour‌ ‌autrui‌,‌ ‌i.e.‌ ‌when‌ ‌the‌‌ of‌‌Commerce‌)‌ ‌ 3rd‌ ‌person‌ ‌consignee‌ ‌demands‌ ‌before‌ ‌the‌ ‌carrier‌ ‌the‌‌ Delivery‌‌of‌‌Goods‌ ‌ Period‌‌for‌‌Filing‌‌ ‌ fulfillment‌ ‌of‌ ‌the‌ ‌stipulation‌ ‌made‌ ‌by‌ ‌the‌‌ If‌‌a‌‌‌period‌‌has‌‌been‌‌fixed‌‌for‌‌the‌‌delivery‌‌of‌‌the‌‌goods,‌‌it‌‌must‌‌be‌‌ consignor/shipper‌ ‌in‌ ‌the‌‌consignee’s‌‌favor.‌‌(‌MOF‌‌Co.,‌‌Inc.‌‌ Notice‌ ‌of‌ ‌Claim‌.‌ ‌In‌ ‌an‌ ‌action‌ ‌for‌ ‌damages‌ ‌due‌ ‌to‌ ‌a‌ ‌breach‌ ‌of‌ ‌a‌‌ made‌ w ‌ ithin‌ ‌the‌ ‌same,‌ ‌otherwise‌ ‌the‌ ‌carrier‌ ‌shall‌ ‌pay‌ ‌the‌‌ v.‌‌Shin‌‌Yang‌‌Brokerage‌)‌ ‌ contract,‌‌it‌‌is‌‌essential‌‌that‌‌the‌‌claimant‌‌proves‌‌ ‌ indemnity‌ ‌agreed‌ ‌upon‌ ‌in‌ ‌the‌ ‌bill‌ ‌of‌ ‌lading.‌ ‌(‌Art‌ ‌370,‌ ‌Code‌ ‌of‌‌ Commerce‌)‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 25‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ 1) the‌‌existence‌‌of‌‌a‌‌perfected‌‌contract,‌ 2) the‌‌breach‌‌thereof‌‌by‌‌the‌‌other‌‌contracting‌‌party‌‌and‌ ‌ 3) the‌‌damages‌‌which‌‌he/she‌‌sustained‌‌due‌‌to‌‌such‌‌breach.‌ ‌ It‌ ‌is‌ ‌also‌ ‌essential‌ ‌that‌ ‌the‌ ‌mandatory‌ ‌formal‌ ‌requirements‌,‌‌ such‌‌as‌‌a‌‌‌notice‌‌of‌‌claim‌,‌‌that‌‌are‌‌imposed‌‌by‌‌law‌‌and‌‌the‌‌‌Statute‌‌ of‌‌Limitations‌‌‌are‌‌complied‌‌with.‌ ‌ Claim‌‌in‌‌Overland‌‌Transportation‌‌and‌‌Coastwise‌‌Shipping.‌ ‌ 1) If‌‌damage‌‌is‌‌APPARENT,‌‌file‌‌claim‌I‌ MMEDIATELY‌;‌‌OR‌ ‌ 1. Within‌‌‌ONE‌‌YEAR‌‌from‌‌discharge‌‌of‌‌goods.‌‌The‌‌period‌‌is‌‌not‌‌ b) It‌‌is‌‌fairly‌‌and‌‌freely‌‌agreed‌‌upon.‌ ‌ suspended‌ ‌by‌ ‌an‌ ‌extrajudicial‌ ‌demand.‌ ‌The‌ ‌period‌ ‌is‌ ‌not‌ ‌ applicable‌ ‌to‌ ‌misdelivery‌ ‌of‌ ‌goods.‌ ‌What‌ ‌is‌ ‌contemplated‌ ‌by‌‌ Maritime‌‌Commerce‌ ‌ Sec‌‌3(6)‌‌of‌‌COGSA‌‌is‌‌LOSS‌‌of‌‌cargo.‌‌The‌‌1-year‌‌period‌‌may‌‌be‌‌ extended‌‌by‌‌agreement.‌ ‌ Charter‌‌Parties‌ ‌ 2. If‌ ‌the‌ ‌damage‌ ‌is‌ ‌due‌ ‌to‌ ‌delay‌,‌ ‌the‌ ‌applicable‌ ‌period‌ ‌is‌ ‌10‌‌ A‌ c ‌ harter‌ ‌party‌ ‌is‌ ‌a‌ ‌contract‌ ‌by‌ ‌which‌‌the‌‌entire‌‌ship‌‌or‌‌some‌‌ YEARS.‌ ‌ principal‌ ‌part‌ ‌thereof‌ ‌is‌ ‌let‌ ‌by‌ ‌the‌ ‌owner‌ ‌to‌ ‌another‌ ‌person‌ ‌for‌‌a‌‌ Effects‌‌of‌‌Stipulations‌ ‌ specified‌‌period‌‌of‌‌time‌‌or‌‌use.‌ ‌ 1) Prohibited‌‌Stipulations‌‌—‌T ‌ hose‌‌ ‌ 2) If‌‌NOT‌‌apparent,‌‌within‌2 ‌ 4‌‌HOURS‌f‌ rom‌‌receipt.‌ ‌ After‌ ‌the‌ ‌periods‌ ‌mentioned‌ ‌have‌ ‌elapsed,‌ ‌or‌ ‌the‌ ‌transportation‌‌ charges‌ ‌have‌ ‌been‌ ‌paid,‌ ‌no‌ ‌claim‌ ‌shall‌ ‌be‌ ‌admitted‌ ‌against‌ ‌the‌‌ carrier‌‌with‌‌regard‌‌to‌‌the‌‌condition‌‌in‌‌which‌‌the‌‌goods‌‌transported‌‌ were‌ ‌delivered.‌ ‌(Art‌ ‌366‌ ‌of‌ ‌the‌ ‌Code‌‌of‌‌Commerce)‌‌‌This‌‌does‌‌not‌‌ apply‌‌to‌‌misdelivery‌‌of‌‌goods.‌ ‌ The‌‌period‌‌prescribed‌‌herein‌‌may‌‌be‌‌‌modified‌‌‌by‌‌stipulation‌‌or‌‌be‌‌ waived‌‌‌by‌‌the‌‌carrier.‌‌ ‌ Is‌ ‌the‌ ‌presentation‌ ‌of‌‌a‌‌bill‌‌of‌‌lading‌‌indispensable‌‌for‌‌the‌‌goods‌‌ to‌‌be‌‌released‌‌to‌‌the‌‌consignee?‌N ‌ O‌.‌ ‌ The‌ ‌general‌ ‌rule‌ ‌is‌ ‌that‌ ‌upon‌ ‌receipt‌ ‌of‌ ‌the‌ ‌goods,‌ ‌the‌ ‌consignee‌‌ surrenders‌ ‌the‌ ‌bill‌ ‌of‌ ‌lading‌ ‌to‌ ‌the‌ ‌carrier‌ ‌and‌ ‌their‌ ‌respective‌‌ obligations‌‌are‌‌considered‌‌canceled.‌‌ ‌ a) exempting‌‌the‌‌carrier‌‌from‌‌any‌‌and‌‌all‌‌liability‌‌for‌‌loss‌‌ or‌‌damage‌‌occasioned‌‌by‌‌its‌‌own‌‌negligence‌‌or‌‌ ‌ b) providing‌ ‌for‌ ‌an‌ ‌unqualified‌ ‌limitation‌ ‌of‌ ‌such‌‌ liability‌‌to‌‌an‌‌agreed‌‌valuation‌‌ ‌ are‌N ‌ OT‌‌VALID‌f‌ or‌‌being‌‌contrary‌‌to‌‌public‌‌policy.‌ ‌ Prescription‌ ‌in‌‌Overland‌‌Transportation,‌‌Coastwise‌‌Shipping‌‌and‌‌ Carriage‌‌of‌‌Passengers‌‌for‌‌Domestic‌‌Transportation.‌ ‌ 1) NO‌‌written‌‌contract‌‌=‌‌6‌‌YEARS;‌ ‌ 2) WITH‌‌written‌‌contract‌‌=‌‌10‌‌YEARS‌ ‌ Prescription‌‌in‌‌International‌‌Carriage‌‌of‌‌Goods‌.‌‌ ‌ As‌ ‌the‌ ‌carrier‌ ‌of‌ ‌the‌ ‌subject‌ ‌shipment,‌ ‌HEUNG-A‌ ‌was‌ ‌bound‌ ‌to‌‌ exercise‌‌extraordinary‌‌diligence‌‌in‌‌conveying‌‌the‌‌same‌‌and‌‌its‌‌slot‌‌ charter‌ ‌agreement‌ ‌with‌ ‌DONGNAMA‌ ‌DID‌ ‌NOT‌ ‌DIVEST‌ ‌it‌ ‌of‌‌ such‌ ‌characterization‌ ‌nor‌ ‌relieve‌ ‌it‌ ‌of‌ ‌any‌ ‌accountability‌ ‌for‌‌ the‌‌shipment.‌(‌ Philam‌‌Insurance‌‌v.‌‌Heung-A‌‌Shipping)‌ ‌ Effect‌‌of‌‌Charter‌‌Party‌ ‌ 2) Limiting‌ ‌Stipulations‌ ‌—‌ ‌Those‌ ‌provided‌ ‌under‌ ‌Arts‌ ‌1746‌ ‌-‌‌ A‌‌charter‌‌party‌‌‌may‌‌transform‌‌a‌‌common‌‌carrier‌‌into‌‌a‌‌private‌‌carrier.‌ ‌ 1750‌ ‌of‌ ‌the‌ ‌NCC.‌ ‌They‌ ‌are‌ ‌intended‌ ‌to‌ ‌protect‌ ‌the‌ ‌common‌‌ carrier‌‌from‌‌unscrupulous‌‌shippers.‌‌The‌‌limiting‌‌stipulation‌‌in‌‌ 1. However,‌‌it‌‌must‌‌be‌‌a‌‌‌bareboat‌‌or‌‌demise‌‌charter‌‌where‌‌ the‌‌carriage‌‌of‌‌goods‌‌CANNOT‌b ‌ e‌‌invoked:‌ ‌ the‌ ‌charterer‌ ‌mans‌ ‌the‌ ‌vessel‌ ‌with‌ ‌his‌ ‌own‌ ‌people‌ ‌and‌‌ becomes,‌ ‌in‌ ‌effect,‌ ‌the‌‌‌owner‌‌p ‌ ro‌‌hac‌‌vice‌ ‌of‌‌the‌‌voyage‌‌or‌‌ a) When‌ ‌the‌ ‌agreement‌ ‌limiting‌ ‌the‌ ‌common‌ ‌carrier’s‌‌ service‌‌stipulated.‌ ‌ liability‌ ‌is‌ ‌annulled‌ ‌by‌ ‌the‌ ‌shipper‌ ‌or‌ ‌owner‌ ‌if‌ ‌the‌‌ common‌‌carrier‌‌refused‌‌to‌‌carry‌‌the‌‌goods‌‌unless‌‌the‌‌ former‌‌agreed‌‌to‌‌such‌‌stipulation;‌ ‌ The‌ ‌law,‌ ‌however,‌ ‌provides‌ ‌two‌ ‌exceptions‌ ‌—‌ ‌when‌ ‌the‌ ‌bill‌ ‌of‌‌ lading‌‌‌gets‌‌lost‌‌or‌‌for‌‌other‌‌cause‌.‌‌ ‌ In‌ ‌either‌ ‌case,‌ ‌the‌ ‌consignee‌ ‌must‌‌issue‌‌a‌‌receipt‌‌to‌‌the‌‌carrier‌‌ upon‌‌the‌‌release‌‌of‌‌the‌‌goods.‌‌Such‌‌receipt‌‌shall‌‌produce‌‌the‌‌same‌‌ effect‌‌as‌‌the‌‌surrender‌‌of‌‌the‌‌bill‌‌of‌‌lading.‌‌(‌Designer‌‌Baskets‌‌v.‌‌Air‌‌ Sea‌‌Transport‌‌‌2016‌)‌ ‌ Slot‌‌charter‌‌party‌‌and‌‌its‌‌effect‌‌on‌‌diligence‌‌of‌‌common‌‌carrier‌ ‌ 2. If‌ ‌the‌ ‌charter‌ ‌party‌ ‌is‌ ‌a‌ ‌contract‌ ‌of‌ ‌affreightment‌ ‌like‌ ‌a‌‌ voyage‌ ‌charter‌ ‌or‌ ‌time‌ ‌charter‌,‌ ‌no‌ ‌transformation‌ ‌occurs.‌‌ Here,‌‌the‌‌charter‌‌party‌‌provides‌‌for‌‌the‌‌hire‌‌of‌‌the‌‌vessel‌‌ONLY.‌ ‌ 3. Thus,‌‌Bareboat‌‌or‌‌demise‌‌charter‌‌‌=‌‌PRIVATE‌‌carrier;‌ ‌ b) If‌‌the‌‌carrier‌‌delays‌i‌ n‌‌the‌‌transportation‌‌of‌‌goods;‌ ‌ c) If‌‌the‌‌carrier‌‌changes‌‌the‌‌stipulated‌‌or‌‌usual‌r‌ oute‌.‌ ‌ 3) Stipulation‌ ‌Reducing‌ ‌Diligence‌ ‌—‌ ‌The‌ ‌parties‌ ‌may‌‌‌reduce‌‌ the‌‌required‌‌diligence‌‌to‌‌one‌‌that‌‌is‌‌ordinary‌‌in‌‌the‌‌carriage‌‌of‌‌ goods‌,‌‌so‌‌long‌‌as‌‌Article‌‌1744‌‌is‌‌followed.‌‌ ‌ Voyage‌‌‌or‌‌time‌‌charter‌‌‌=‌‌COMMON‌‌carrier.‌ ‌ 4. A‌ ‌slot‌ ‌or‌ ‌space‌ ‌charter‌ ‌agreement‌ ‌is‌ ‌in‌ ‌the‌ ‌nature‌ ‌of‌ ‌a‌‌ contract‌‌of‌‌affreightment.‌ ‌ However,‌ ‌in‌ ‌no‌ ‌case‌ ‌shall‌ ‌diligence‌‌be‌‌reduced‌‌in‌‌carriage‌‌of‌‌ Bareboat‌‌or‌‌Demise‌‌Charter‌ ‌ passengers‌.‌ ‌ By‌ ‌the‌ ‌terms‌ ‌of‌ ‌which‌ ‌the‌ ‌WHOLE‌ ‌vessel‌ ‌is‌ ‌let‌ ‌to‌ ‌the‌ ‌charterer‌‌ 4) Stipulations‌ ‌Fixing‌ ‌the‌ ‌Limit‌‌of‌‌Recovery‌‌—‌‌Only‌‌requires‌‌ which‌ ‌transfers‌ ‌to‌ ‌him‌ ‌its‌ ‌entire‌ ‌command‌ ‌and‌ ‌possession‌ ‌and‌‌ that:‌ ‌ consequent‌ ‌control‌ ‌over‌ ‌its‌ ‌navigation,‌ ‌including‌ ‌the‌ ‌master‌ ‌and‌‌ crew‌‌who‌‌are‌‌his‌‌servants.‌ ‌ a) It‌‌is‌‌reasonable‌‌and‌‌just‌‌under‌‌the‌‌circumstances;‌‌and‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 26‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ the‌ ‌creditor‌ ‌proves‌ ‌that‌ ‌the‌ ‌amount‌ ‌claimed‌ ‌was‌ ‌invested‌‌ therein.‌ ‌ Contract‌‌of‌‌Affreightment‌ ‌ Generally,‌‌the‌‌character‌‌of‌‌the‌‌common‌‌carrier‌‌is‌‌NOT‌‌affected‌‌by‌‌ the‌‌charter‌‌party‌‌if‌‌same‌‌is‌‌a‌c‌ ontract‌‌of‌‌affreightment.‌‌ ‌ 2. This‌‌involves‌‌the‌‌use‌‌of‌‌shipping‌‌space‌‌leased‌‌by‌‌the‌‌owner‌‌in‌‌part‌‌ or‌‌as‌‌a‌‌whole,‌‌to‌‌carry‌‌goods‌‌for‌‌others.‌‌There‌‌are‌‌two‌‌types:‌ ‌ 1. Time‌‌Charter‌‌‌—‌‌leased‌‌for‌‌a‌‌fixed‌‌period‌‌of‌‌time;‌‌and‌ ‌ 2. Voyage/Trip‌‌Charter‌— ‌ ‌‌for‌‌a‌‌single‌‌voyage.‌ ‌ 3. Liability‌‌of‌‌Shipowners‌‌and‌‌Shipping‌‌Agents‌ ‌ Persons‌‌involved‌‌in‌‌Maritime‌‌Commerce‌ ‌ a) Shipowners‌‌and‌‌ship‌‌agents;‌ ‌ 4. The‌ ‌agent‌ ‌shall‌ ‌also‌ ‌be‌ ‌civilly‌ ‌liable‌ ‌for‌ ‌the‌ ‌indemnities‌ ‌in‌‌ favor‌ ‌of‌ ‌third‌ ‌persons‌ ‌which‌ ‌arise‌ ‌from‌ ‌the‌ ‌conduct‌ ‌of‌ ‌the‌‌ captain‌‌in‌‌the‌‌‌care‌‌of‌‌the‌‌goods‌‌‌which‌‌the‌‌vessel‌‌carried;‌‌but‌‌ he‌ ‌may‌ ‌exempt‌ ‌himself‌ ‌therefrom‌ ‌by‌ ‌abandoning‌ ‌the‌ ‌vessel‌‌ with‌ ‌all‌ ‌her‌ ‌equipments‌ ‌and‌ ‌the‌ ‌freight‌ ‌he‌ ‌may‌ ‌have‌ ‌earned‌‌ during‌‌the‌‌voyage.‌ ‌ Neither‌‌the‌‌owner‌‌of‌‌the‌‌vessel‌‌nor‌‌the‌‌agent‌‌shall‌‌be‌‌liable‌‌for‌‌ the‌ ‌obligations‌ ‌contracted‌ ‌by‌ ‌the‌‌captain‌‌if‌‌the‌‌latter‌‌‌exceeds‌‌ his‌ ‌powers‌ ‌and‌ ‌privileges‌ ‌which‌ ‌are‌ ‌his‌ ‌by‌ ‌reason‌ ‌of‌ ‌his‌‌ position‌‌or‌‌have‌‌been‌‌conferred‌‌upon‌‌him‌‌by‌‌the‌‌former.‌ ‌ However,‌ ‌if‌ ‌the‌ ‌amounts‌ ‌claimed‌ ‌were‌ ‌made‌ ‌use‌ ‌of‌ ‌for‌ ‌the‌‌ benefit‌‌of‌‌the‌‌vessel,‌‌the‌‌owner‌‌or‌‌agent‌‌shall‌‌be‌‌liable.‌ ‌ The‌ ‌ship‌ ‌agent‌ ‌is‌ ‌entrusted‌ ‌with‌ ‌the‌ ‌provisioning‌ ‌and‌‌ representing‌ ‌the‌ ‌vessel‌ ‌in‌ ‌the‌ ‌port‌ ‌in‌ ‌which‌ ‌it‌ ‌may‌‌be‌‌found.‌‌ Role‌‌of‌‌Captain‌‌vs.‌‌Role‌‌of‌‌Maritime‌‌Pilot‌ ‌ His‌‌liability‌‌to‌‌passengers‌‌and‌‌cargo‌‌owners‌‌for‌‌loss‌‌or‌‌injury‌‌ Where‌ ‌a‌ ‌compulsory‌ ‌pilot‌ ‌is‌‌in‌‌charge‌‌of‌‌a‌‌ship,‌‌the‌‌master‌‌being‌‌ is‌‌the‌‌SAME‌‌as‌‌the‌‌shipowner.‌ ‌ required‌‌to‌‌permit‌‌him‌‌to‌‌navigate‌‌it,‌‌if‌‌the‌‌master‌‌observes‌‌that‌‌the‌‌ b) Captains‌‌and‌‌masters‌‌‌of‌‌the‌‌vessel;‌ ‌ pilot‌ ‌is‌ ‌incompetent‌ ‌or‌‌physically‌‌incapable,‌‌then‌‌it‌‌is‌‌the‌‌duty‌‌of‌‌ the‌‌master‌‌to‌‌refuse‌‌to‌‌permit‌‌the‌‌pilot‌‌to‌‌act.‌‌But‌‌if‌‌no‌‌such‌‌reasons‌‌ c) Officers‌‌and‌‌crew‌‌‌of‌‌the‌‌vessel;‌ ‌ are‌‌present,‌‌then‌‌the‌‌master‌‌is‌‌justified‌‌in‌‌relying‌‌upon‌‌the‌‌pilot,‌‌but‌‌ d) Supercargoes‌.‌ ‌ not‌‌blindly.‌ ‌ For‌‌Acts‌‌of‌‌Captain‌ ‌ Exceptions‌‌to‌‌Limited‌‌Liability‌ ‌ The‌‌‌captain‌‌‌of‌‌a‌‌vessel‌‌is‌‌a‌‌confidential‌‌and‌‌managerial‌‌employee.‌‌ A‌‌captain‌‌commonly‌‌performs‌‌three‌‌(3)‌‌distinct‌‌roles:‌‌ ‌ 1) he‌‌is‌‌a‌‌general‌‌agent‌o ‌ f‌‌the‌‌shipowner;‌ ‌ 2) he‌ ‌is‌ ‌also‌ ‌commander‌ ‌and‌ ‌technical‌ ‌director‌ ‌of‌ ‌the‌‌ vessel;‌‌and‌ ‌ 3) he‌ ‌is‌ ‌a‌ ‌representative‌ ‌of‌ ‌the‌‌country‌‌under‌‌whose‌‌flag‌‌ he‌‌navigates.‌ ‌ Real‌ ‌and‌‌Hypothecary‌‌Nature.‌‌‌Article‌‌837‌‌applies‌‌the‌‌‌limited‌‌ liability‌‌rule‌ ‌in‌‌cases‌‌of‌‌‌collision‌.‌‌Meanwhile,‌‌Articles‌‌‌587‌‌and‌‌ 590‌‌embody‌‌the‌‌universal‌‌principle‌‌of‌‌limited‌‌liability‌‌in‌‌all‌‌cases‌‌ wherein‌‌the‌‌shipowner‌‌or‌‌agent‌‌may‌‌be‌‌properly‌‌held‌‌liable‌‌‌for‌‌the‌‌ negligent‌‌or‌‌illicit‌‌acts‌‌of‌‌the‌‌captain‌.‌‌“No‌‌vessel,‌‌No‌‌liability.”‌ ‌ Taken‌‌together,‌t‌ he‌‌limited‌‌liability‌‌rule‌‌covers‌‌only‌:‌ ‌ 1) liability‌‌to‌‌third‌‌persons,‌ ‌ Of‌ ‌these‌ ‌roles,‌ ‌by‌ ‌far‌ ‌the‌ ‌most‌ ‌important‌ ‌is‌ ‌the‌ ‌role‌‌ 2) acts‌‌of‌‌the‌‌captain,‌‌and‌ ‌ performed‌‌by‌‌the‌‌captain‌‌as‌‌commander‌‌of‌‌the‌‌vessel.‌ ‌ 3) collisions.‌ ‌ 1. The‌‌‌owner‌‌of‌‌a‌‌vessel‌‌AND‌‌the‌‌agent‌‌shall‌‌be‌‌civilly‌‌liable‌‌ for‌‌the‌‌acts‌‌of‌‌the‌‌captain‌‌and‌‌for‌‌the‌‌obligations‌‌contracted‌‌by‌‌ the‌ ‌latter‌ ‌to‌ ‌repair,‌ ‌equip,‌ ‌and‌ ‌provision‌ ‌the‌ ‌vessel,‌ ‌provided‌‌ When‌‌inapplicable?‌ ‌ Nonetheless,‌ ‌the‌ ‌limited‌ ‌liability‌ ‌rule‌ ‌is‌ ‌not‌ ‌absolute‌ ‌and‌ ‌is‌ ‌without‌‌ exceptions.‌‌It‌d ‌ oes‌‌not‌‌apply‌‌‌in‌‌cases:‌‌ ‌ 1) where‌‌the‌‌‌injury‌‌or‌‌death‌‌to‌‌a‌‌passenger‌‌is‌‌due‌‌either‌‌to‌‌the‌‌ fault‌ ‌of‌ ‌the‌ ‌shipowner,‌ ‌or‌ ‌to‌ ‌the‌ ‌concurring‌ ‌negligence‌ ‌of‌‌the‌‌ shipowner‌‌and‌‌the‌‌captain;‌ ‌ 2) where‌‌the‌‌vessel‌‌is‌i‌ nsured‌;‌‌ ‌ 3) in‌‌workmen's‌‌compensation‌‌‌claims;‌‌and‌ ‌ 4) Involves‌‌repairs‌‌of‌‌the‌‌vessel‌‌prior‌‌to‌‌the‌‌voyage.‌ ‌ Also‌‌inapplicable‌ ‌ 5) if‌‌the‌‌carrier‌‌failed‌‌to‌‌overcome‌‌the‌‌presumption‌‌of‌‌negligence;‌ ‌ 6) claim‌ ‌for‌ ‌death‌ ‌benefits‌ ‌under‌ ‌POEA-SEC‌ ‌(‌Phil-Nippon‌ ‌Kyoei‌‌ Corp‌‌v.‌‌Gudelosao‌);‌ 7) if‌‌the‌‌claim‌‌is‌‌‌not‌‌maritime‌;‌ ‌ a) collision‌‌of‌‌vessels‌‌in‌‌rivers;‌ ‌ b) claims‌‌of‌‌shipper‌‌against‌‌arrastre‌‌operator;‌ ‌ c) claims‌‌of‌‌arrastre‌‌against‌‌carrier;‌ ‌ d) claims‌‌of‌‌cost‌‌for‌‌repairs‌‌made‌‌before‌‌the‌‌voyage.‌ ‌ 8) if‌‌there‌‌is‌‌no‌‌abandonment,‌e‌ xcept‌‌‌when‌‌vessel‌‌is‌‌totally‌‌lost.‌ ‌ Accidents‌‌and‌‌Damages‌ ‌ What‌‌are‌‌averages?‌ ‌ 1. All‌‌‌extraordinary‌‌or‌‌accidental‌‌expenses‌‌which‌‌may‌‌be‌‌ incurred‌ ‌during‌ ‌the‌ ‌navigation‌ ‌for‌ ‌the‌ ‌preservation‌ ‌of‌ ‌the‌‌ vessel‌‌or‌‌cargo,‌‌or‌‌both.‌ ‌ 2. All‌‌damages‌‌or‌‌deterioration‌t‌ he‌‌vessel‌‌may‌‌suffer.‌ ‌ Simple‌ ‌or‌ ‌particular‌ ‌averages‌ ‌shall‌ ‌be,‌ ‌as‌ ‌a‌ ‌general‌ ‌rule,‌‌all‌‌the‌‌ expenses‌‌and‌‌damages‌‌caused‌‌to‌‌the‌‌vessel‌‌or‌‌to‌‌her‌‌cargo‌‌which‌‌have‌‌ not‌‌redounded‌‌to‌‌the‌‌benefit‌‌and‌‌common‌‌profit‌‌of‌‌all‌‌the‌‌persons‌‌ interested‌‌in‌‌the‌‌vessel‌‌and‌‌her‌‌cargo.‌ ‌ The‌ ‌owner‌ ‌of‌ ‌the‌ ‌goods‌ ‌which‌ ‌gave‌ ‌rise‌ ‌to‌ ‌the‌ ‌expense‌ ‌or‌‌ suffered‌ ‌the‌ ‌damage‌ ‌shall‌ ‌bear‌ ‌the‌ ‌simple‌ ‌or‌ ‌particular‌‌ averages.‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 27‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ General‌‌Averages‌ ‌ General‌ ‌or‌ ‌gross‌ ‌averages‌ ‌shall‌ ‌be,‌ ‌as‌ ‌a‌‌‌general‌‌rule‌,‌‌all‌‌the‌‌ damages‌ ‌and‌‌expenses‌‌which‌‌are‌‌deliberately‌‌caused‌‌‌in‌‌order‌‌to‌ save‌‌the‌‌vessel,‌‌her‌‌cargo,‌‌or‌‌both‌‌at‌‌the‌‌same‌‌time,‌‌from‌‌a‌‌real‌‌and‌‌ known‌‌risk.‌ ‌ In‌ ‌order‌ ‌to‌‌satisfy‌‌the‌‌amount‌‌of‌‌the‌‌gross‌‌or‌‌general‌‌averages,‌‌‌all‌‌ the‌‌persons‌‌having‌‌an‌‌interest‌‌in‌‌the‌‌vessel‌‌and‌‌cargo‌‌therein‌‌ at‌‌the‌‌time‌‌of‌‌the‌‌occurrence‌‌of‌‌the‌‌average‌‌shall‌‌contribute‌.‌ ‌ The‌‌following‌‌are‌‌the‌r ‌ equisites‌f‌ or‌‌‌general‌‌average‌:‌ ‌ 1) There‌‌must‌‌be‌‌a‌‌common‌‌danger‌.‌‌ ‌ 2) That‌‌for‌‌the‌‌common‌‌safety‌‌part‌‌of‌‌the‌‌vessel‌‌or‌‌of‌‌the‌‌cargo‌‌or‌‌ both‌‌is‌‌sacrificed‌‌deliberately.‌ ‌ 3) That‌ ‌from‌ ‌the‌ ‌expenses‌ ‌or‌ ‌damages‌ ‌caused‌ ‌follows‌ ‌the‌‌ successful‌‌saving‌‌‌of‌‌the‌‌vessel‌‌and‌‌cargo.‌ ‌ 4) That‌ ‌the‌ ‌expenses‌ ‌or‌ ‌damages‌ ‌should‌ ‌have‌ ‌been‌ ‌incurred‌ ‌or‌‌ inflicted‌‌after‌‌taking‌p ‌ roper‌‌legal‌‌steps‌a‌ nd‌‌authority.‌ ‌ Effect‌‌of‌‌presence‌‌of‌‌negligence‌ ‌ Claims‌‌for‌‌averages‌‌shall‌‌not‌‌be‌‌admitted‌‌if‌‌they‌‌do‌‌not‌‌exceed‌‌ ‌ 1. 2. Collisions‌‌and‌‌Allisions‌ ‌ A‌‌‌collision‌‌‌is‌‌an‌‌impact‌‌or‌‌sudden‌‌contact‌‌of‌‌a‌‌moving‌‌body‌‌with‌‌ an‌ ‌obstruction‌ ‌in‌ ‌its‌ ‌line‌ ‌of‌ ‌motion,‌ ‌whether‌ ‌both‌ ‌bodies‌ ‌are‌ ‌in‌‌ motion‌‌or‌‌one‌‌stationary‌‌and‌‌the‌‌other,‌‌no‌‌matter‌‌which,‌‌in‌‌motion.‌ ‌ An‌ ‌allision‌ ‌is‌ ‌the‌ ‌running‌ ‌of‌ ‌one‌ ‌ship‌ ‌upon‌ ‌another‌‌ship‌‌that‌‌is‌‌ stationary.‌ ‌ Doctrine‌‌of‌‌error‌i‌ n‌‌extremis‌ ‌ deducting‌ ‌in‌ ‌both‌ ‌cases‌ ‌the‌ ‌expenses‌ ‌of‌ ‌appraisal,‌ ‌unless‌ ‌there‌ ‌is‌ ‌an‌ agreement‌‌to‌‌the‌‌contrary.‌ ‌ Does‌‌the‌‌law‌‌on‌‌averages‌‌apply?‌ ‌ In‌ ‌so‌ ‌far‌ ‌as‌ ‌the‌ ‌damages‌ ‌caused‌ ‌to‌ ‌persons‌ ‌or‌ ‌to‌ ‌the‌ ‌cargo‌ ‌are‌‌ concerned,‌‌the‌‌absence‌‌of‌‌a‌‌protest‌c ‌ annot‌p ‌ rejudice‌‌ ‌ 1) the‌‌persons‌‌interested‌‌who‌‌were‌‌not‌‌on‌‌board‌‌or‌‌ ‌ 2) were‌‌not‌‌in‌‌a‌‌condition‌‌to‌‌make‌‌known‌‌their‌‌wishes.‌ ‌ In‌‌the‌‌‌first‌‌zone‌‌no‌‌rules‌‌apply.‌‌In‌‌the‌‌‌second‌‌‌the‌‌burden‌‌is‌‌on‌‌the‌‌ Doctrine‌‌of‌‌Inscrutable‌‌Fault‌ ‌ vessel‌‌required‌‌to‌‌keep‌‌away‌‌and‌‌avoid‌‌the‌‌danger.‌‌The‌‌‌third‌‌zone‌‌ Under‌ t‌ he‌ ‌Doctrine‌ ‌of‌ ‌Inscrutable‌ ‌Fault‌,‌ ‌where‌ ‌fault‌ ‌is‌‌ covers‌ ‌the‌ ‌period‌ ‌in‌ ‌which‌ e ‌ rrors‌ ‌in‌ ‌extremis‌ ‌occur;‌ ‌and‌ ‌the‌‌ established‌ ‌but‌ ‌it‌ ‌cannot‌ ‌be‌ ‌determined‌ ‌which‌ ‌of‌‌the‌‌two‌‌vessels‌‌ rule‌ ‌is‌ ‌that‌ ‌the‌ ‌vessel‌ ‌which‌ ‌has‌ ‌forced‌‌the‌‌privileged‌‌vessel‌‌into‌‌ were‌‌at‌‌fault,‌‌BOTH‌‌shall‌‌be‌‌deemed‌‌to‌‌have‌‌been‌‌at‌‌fault.‌ ‌ danger‌ ‌is‌ ‌responsible‌ ‌even‌ ‌if‌ ‌the‌‌privileged‌‌vessel‌‌has‌‌committed‌‌ an‌‌error‌‌within‌‌that‌‌zone.‌ ‌ Aleson‌‌Shipping‌L ‌ ines‌‌v.‌‌CGU‌‌International‌2 ‌ 020‌‌Leonen,‌‌J‌ ‌ Zones‌‌in‌‌Collision‌ ‌ a) First‌ ‌zone.‌ ‌time‌ ‌up‌ ‌to‌ ‌the‌ ‌moment‌ ‌when‌ ‌risk‌ ‌of‌ ‌collision‌‌ begins;‌ ‌ b) Second‌ ‌zone.‌ ‌time‌ ‌between‌ ‌moment‌ ‌when‌ ‌risk‌ ‌of‌ ‌collision‌‌ begins‌‌up‌‌to‌‌the‌‌moment‌‌it‌‌becomes‌‌practically‌‌certain;‌‌and‌ ‌ In‌‌cases‌‌of‌‌damages‌‌resulting‌‌from‌‌maritime‌‌collision,‌‌the‌‌‌Civil‌‌Code‌‌ provisions‌‌on‌‌common‌‌carrier‌‌are‌‌applicable‌‌if‌‌the‌‌cause‌‌of‌‌action‌‌is‌ based‌‌on‌‌‌contract‌‌of‌‌carriage.‌‌ ‌ However,‌ ‌if‌ ‌the‌ ‌cause‌ ‌of‌ ‌action‌ ‌is‌ ‌based‌ ‌on‌ ‌maritime‌ ‌tort‌,‌ ‌the‌‌ provisions‌‌of‌‌the‌C ‌ ode‌‌of‌‌Commerce‌a‌ re‌‌applicable.‌ ‌ c) Third‌ ‌zone.‌ ‌time‌ ‌when‌ ‌collision‌ ‌is‌ ‌certain‌ ‌up‌ ‌to‌ ‌the‌ ‌time‌ ‌of‌‌ Carriage‌‌of‌‌Goods‌‌by‌‌Sea‌‌Act‌ ‌ impact.‌ ‌ Application‌ ‌ 5%‌ ‌of‌‌the‌‌interest‌‌which‌‌the‌‌claimant‌‌may‌‌have‌‌in‌‌the‌‌vessel‌‌ or‌‌cargo‌‌if‌‌it‌‌is‌g ‌ ross‌‌average‌,‌‌and‌‌ ‌ Liability‌‌Rules‌ ‌ 1%‌‌‌of‌‌the‌‌goods‌‌damaged‌‌if‌‌particular‌‌average,‌‌ ‌ presented‌‌‌within‌‌twenty-four‌‌hours‌‌to‌‌the‌‌competent‌‌authority‌‌of‌‌ the‌‌point‌‌where‌‌the‌‌collision‌‌took‌‌place,‌‌or‌‌that‌‌of‌‌the‌‌first‌‌port‌‌of‌‌ arrival‌‌of‌‌the‌‌vessel,‌‌if‌‌in‌‌PH‌‌territory,‌‌and‌‌to‌‌the‌‌consul‌‌of‌‌PH‌‌if‌‌it‌‌ should‌‌have‌‌occurred‌‌in‌‌a‌‌foreign‌‌country.‌ ‌ Applicable‌‌to‌‌INTERNATIONAL‌‌shipping‌‌TO‌‌the‌‌Philippines.‌ a) If‌‌‌both‌‌‌vessels‌‌may‌‌be‌‌blamed‌‌for‌‌the‌‌collision,‌‌each‌‌one‌‌shall‌‌ INAPPLICABLE‌‌‌in‌‌cases‌‌of:‌ ‌ be‌ ‌liable‌ ‌for‌ ‌his‌ ‌own‌ ‌damages,‌ ‌and‌ ‌both‌ ‌shall‌ ‌be‌ ‌jointly‌‌ 1) Insurance;‌ ‌ responsible‌ ‌for‌ ‌the‌ ‌losses‌ ‌and‌ ‌damages‌ ‌suffered‌ ‌by‌ ‌their‌‌ cargoes.‌ ‌Thus‌,‌ ‌the‌ ‌doctrine‌ ‌of‌ ‌last‌ ‌clear‌ ‌chance‌ ‌and‌‌ 2) Misdelivery;‌‌or‌ ‌ contributory‌‌negligence‌‌shall‌‌NOT‌‌apply.‌ ‌ 3) Liability‌‌under‌‌Contract‌‌of‌‌Carriage;‌ ‌ b) If‌‌it‌‌cannot‌‌be‌‌determined‌‌which‌‌vessel‌‌is‌‌at‌‌fault,‌‌each‌‌vessel‌‌ 4) When‌‌invoked‌‌by‌‌an‌‌arrastre‌‌operator.‌ ‌ shall‌ ‌also‌ ‌suffer‌ ‌its‌ ‌own‌ ‌losses‌‌and‌‌both‌‌shall‌‌be‌‌s ‌ olidarily‌‌ Up‌‌to‌‌when‌‌are‌‌the‌‌provisions‌‌of‌‌COGSA‌‌applicable?‌ ‌ liable‌‌for‌‌losses‌‌or‌‌damages‌‌on‌‌the‌‌cargoes.‌ ‌ The‌‌Court‌‌ruled‌‌that‌‌common‌‌carriers‌‌cannot‌‌limit‌‌their‌‌liability‌‌for‌‌ injury‌‌or‌‌loss‌‌of‌‌goods‌‌where‌‌such‌‌injury‌‌or‌‌loss‌‌was‌‌caused‌‌by‌‌its‌‌ own‌‌negligence.‌‌Otherwise‌‌stated,‌‌‌the‌‌law‌‌on‌‌averages‌‌under‌‌the‌‌ Code‌‌of‌‌Commerce‌‌‌cannot‌‌‌be‌‌applied‌‌in‌‌determining‌‌liability‌‌ Maritime‌‌Protest‌‌—‌‌When‌‌NOT‌‌required?‌ ‌ where‌‌there‌‌is‌n ‌ egligence‌.‌‌(American‌‌Home‌‌Assurance‌‌v.‌‌CA)‌ ‌ The‌ ‌action‌ ‌for‌ ‌the‌ ‌recovery‌ ‌of‌ ‌losses‌ ‌and‌ ‌damages‌ ‌arising‌ ‌from‌‌ collisions‌ ‌can‌ ‌not‌ ‌be‌ ‌admitted‌ ‌if‌ ‌a‌ ‌protest‌ ‌or‌ ‌declaration‌ ‌is‌ ‌not‌‌ From‌‌the‌‌time‌‌when‌‌the‌‌goods‌‌have‌‌been‌‌discharged‌‌from‌‌the‌‌ship‌‌ and‌ ‌given‌ ‌to‌ ‌the‌ ‌custody‌ ‌of‌ ‌the‌ ‌arrastre‌ ‌operator,‌ ‌COGSA‌ ‌is‌ ‌NO‌‌ longer‌ ‌applicable.‌ ‌(‌Insurance‌ ‌Company‌ ‌of‌ ‌North‌ ‌America‌‌v.‌‌Asian‌‌ Terminals‌‌‌2012‌)‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 28‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ To‌‌what‌‌contract‌‌does‌‌COGSA‌‌apply?‌ ‌ All‌‌contracts‌‌for‌‌the‌‌carriage‌‌of‌‌goods‌‌by‌‌sea‌‌to‌‌and‌‌from‌‌Philippine‌‌ ports‌‌in‌‌foreign‌‌trade.‌ Meaning‌‌of‌‌foreign‌‌trade‌‌ ‌ The‌‌term‌‌"foreign‌‌trade"‌‌means‌‌the‌‌transportation‌‌of‌‌goods‌‌between‌‌ the‌‌ports‌‌of‌‌the‌‌PH‌‌and‌‌ports‌‌of‌‌foreign‌‌countries.‌‌ ‌ Who‌‌are‌‌the‌‌parties‌‌in‌‌COGSA?‌ ‌ The‌‌carrier‌‌and‌‌the‌‌shipper,‌‌as‌‌well‌‌as‌‌the‌‌charterer,‌‌if‌‌so‌‌present.‌ ‌ Notice‌‌of‌‌Loss‌‌or‌‌Damage‌ ‌ Notice‌ ‌is‌ ‌REQUIRED‌.‌ ‌The‌ ‌notice‌ ‌of‌ ‌claim‌ ‌must‌ ‌be‌ ‌made‌ ‌within‌‌ three‌ ‌(3)‌ ‌days‌ ‌from‌ ‌delivery‌ ‌if‌ ‌the‌ ‌damage‌ ‌is‌ ‌not‌ ‌apparent.‌ ‌The‌ same‌‌period‌‌is‌‌NOT‌‌mandatory.‌‌However,‌‌the‌‌prescriptive‌‌period‌‌of‌‌ ONE‌ ‌(1)‌ ‌YEAR‌ ‌from‌ ‌delivery‌ ‌for‌ ‌filing‌ ‌of‌ ‌the‌ ‌case‌‌is‌‌a‌‌condition‌‌ precedent.‌ ‌ 1) If‌‌damage‌‌is‌‌APPARENT,‌‌file‌‌claim‌I‌ MMEDIATELY‌;‌‌OR‌ ‌ 2) If‌‌NOT‌‌apparent,‌‌within‌3 ‌ ‌‌DAYS‌‌‌from‌‌delivery.‌ ‌ the‌ ‌present‌ ‌case‌ ‌involves‌ ‌loss‌ ‌of‌ ‌goods‌ ‌or‌ ‌cargo.‌ ‌(‌Pioneer‌‌ Insurance‌‌v.‌‌APL‌‌2 ‌ 017‌)‌ ‌ How‌‌about‌‌extending‌‌the‌‌prescriptive‌‌period?‌ ‌ Jurisprudence‌‌has‌‌recognized‌‌the‌‌validity‌‌of‌‌an‌‌agreement‌‌between‌‌ the‌‌carrier‌‌and‌‌shipper‌‌extending‌‌the‌‌one-year‌‌period‌‌to‌‌file‌‌a‌‌claim.‌‌ (‌Cua‌‌v.‌‌W‌‌Allem‌‌Phils.‌‌Shipping‌‌2 ‌ 012‌)‌ ‌ Meaning‌‌of‌‌delivery‌‌under‌‌Section‌‌3(6)‌‌on‌‌prescription‌ ‌ declared‌ ‌by‌ ‌the‌ ‌shipper‌ ‌before‌ ‌shipment‌ ‌and‌ ‌inserted‌ ‌in‌‌ the‌‌bill‌‌of‌‌lading.‌ ‌ Public‌‌Service‌‌Act‌ ‌ Public‌‌Utility‌ ‌ A‌ ‌"‌public‌ ‌utility‌"‌ ‌is‌ ‌a‌ ‌business‌ ‌or‌ ‌service‌ ‌engaged‌ ‌in‌ ‌regularly‌‌ supplying‌ ‌the‌ ‌public‌ ‌with‌ ‌some‌ ‌commodity‌ ‌or‌ ‌service‌ ‌of‌ ‌public‌‌ consequence‌ ‌such‌ ‌as‌ ‌electricity,‌ ‌gas,‌ ‌water,‌ ‌transportation,‌‌ telephone‌ ‌or‌ ‌telegraph‌ ‌service.‌ ‌The‌ ‌term‌ ‌implies‌ ‌public‌ ‌use‌ ‌and‌‌ service.‌ ‌ If‌ ‌the‌ ‌issue‌ ‌pertains‌ ‌to‌ ‌the‌ ‌liability‌ ‌of‌ ‌the‌ ‌carrier‌ ‌under‌ ‌its‌‌ contract‌‌of‌‌carriage‌‌‌and‌‌not‌‌its‌‌liability‌‌for‌‌its‌‌handling‌‌of‌‌goods‌‌ as‌‌provided‌‌by‌‌§3(6)‌‌of‌‌the‌‌COGSA,‌‌then‌‌its‌‌liability‌‌is‌‌covered‌‌by‌‌ laws‌‌of‌‌more‌‌general‌‌application,‌‌and‌‌NOT‌‌COGSA.‌‌(M ‌ itsui‌‌v.‌‌CA‌)‌‌ ‌ Public‌‌service?‌ ‌ As‌‌long‌‌as‌‌it‌‌is‌‌claimed‌‌that‌‌the‌‌losses‌‌or‌‌damages‌‌suffered‌‌by‌‌the‌‌ shipper‌ ‌or‌ ‌consignee‌ ‌were‌ ‌due‌ ‌to‌ ‌the‌ ‌arrival‌ ‌of‌ ‌the‌ ‌goods‌ ‌in‌‌ damaged‌ ‌or‌ ‌deteriorated‌‌condition‌,‌‌the‌‌action‌‌is‌‌still‌‌basically‌‌ one‌‌for‌‌damage‌‌to‌‌the‌‌goods,‌‌and‌‌must‌‌be‌‌filed‌‌within‌‌the‌‌period‌‌of‌‌ one‌‌year‌‌from‌‌delivery‌‌or‌‌receipt‌,‌‌under‌‌COGSA.‌‌(L ‌ iao‌‌v.‌‌APL‌)‌ ‌ Invocation‌‌by‌‌arrastre‌‌operator‌‌of‌‌prescription‌ ‌ The‌‌term‌‌"p ‌ ublic‌‌service‌"‌‌includes‌‌ ‌ a) every‌ ‌person‌ ‌that‌ ‌now‌ ‌or‌ ‌hereafter‌ ‌may‌ ‌own,‌ ‌operate,‌‌ manage,‌‌or‌‌control‌‌in‌‌the‌‌Philippines,‌‌ ‌ b) for‌‌hire‌‌or‌‌compensation,‌‌ ‌ c) with‌‌general‌‌or‌‌limited‌‌clientele,‌‌ ‌ It‌‌has‌‌been‌‌held‌‌that‌‌not‌‌only‌‌the‌‌shipper,‌‌but‌‌also‌‌the‌‌consignee‌‌or‌ d) whether‌‌permanent,‌‌occasional‌‌or‌‌accidental,‌‌and‌‌ ‌ legal‌ ‌holder‌ ‌of‌ ‌the‌ ‌bill‌ ‌may‌ ‌invoke‌ ‌the‌ ‌prescriptive‌ ‌period.‌‌ e) done‌‌for‌‌general‌‌business‌‌purposes,‌‌ ‌ However,‌‌the‌‌COGSA‌‌does‌‌not‌‌mention‌‌that‌‌an‌‌arrastre‌‌operator‌‌may‌‌ invoke‌ ‌the‌ ‌prescriptive‌ ‌period‌ ‌of‌ ‌one‌ ‌year;‌ ‌hence,‌ ‌it‌ ‌DOES‌ ‌NOT‌‌ f) any‌‌common‌‌carrier,‌‌xxx‌‌and‌‌other‌‌similar‌‌public‌‌services.‌ ‌ cover‌ t ‌ he‌ a ‌ rrastre‌ o ‌ perator‌ . ‌ ( ‌ Insurance‌ C ‌ o‌ o ‌ f‌ N ‌ orth‌ A ‌ merica‌‌ v .‌‌ Period‌‌of‌‌Prescription‌ ‌ What‌‌is‌‌a‌‌franchise?‌‌ ‌ Asian‌‌Terminals)‌ ‌ Where‌‌to‌‌reckon?‌‌ ‌ It‌‌is‌‌generally‌‌recognized‌‌that‌‌a‌‌franchise‌‌may‌‌be‌‌derived‌‌indirectly‌‌ Limitation‌‌of‌‌Liability‌ ‌ from‌‌the‌‌state‌‌through‌‌a‌‌duly‌‌designated‌‌agency.‌ ‌ Within‌ ‌one‌ ‌year‌ ‌after‌ ‌delivery‌ ‌of‌ ‌the‌ ‌goods‌ ‌or‌ ‌the‌ ‌date‌‌ Package‌ ‌Limitation‌ ‌Rule.‌ ‌In‌ ‌case‌ ‌of‌ ‌the‌ ‌shipper’s‌ ‌failure‌ ‌to‌‌ when‌‌the‌‌goods‌‌should‌‌have‌‌been‌‌delivered‌.‌ ‌ Collateral‌‌attack‌‌on‌‌a‌‌franchise‌‌is‌‌not‌‌allowed‌.‌‌A‌‌franchise‌‌is‌‌a‌‌ declare‌ ‌the‌ ‌value‌ ‌of‌ ‌the‌ ‌goods‌ ‌in‌ ‌the‌‌bill‌‌of‌‌lading‌,‌‌Section‌‌4,‌‌ property‌ ‌right‌ ‌and‌ ‌cannot‌ ‌be‌ ‌revoked‌ ‌or‌ ‌forfeited‌ ‌without‌ ‌due‌‌ Effect‌‌of‌‌transshipment‌‌—‌d ‌ oes‌‌not‌‌operate‌‌to‌‌remove‌‌the‌‌transaction‌‌ paragraph‌‌5‌‌of‌‌the‌‌COGSA‌‌provides:‌ ‌ process‌ ‌of‌ ‌law.‌ ‌The‌ ‌determination‌ ‌of‌ ‌the‌ ‌right‌‌to‌‌the‌‌exercise‌‌of‌‌a‌‌ from‌‌the‌‌operation‌‌of‌‌the‌‌COGSA.‌ ‌ Neither‌ ‌the‌ ‌carrier‌ ‌nor‌ ‌the‌ ‌ship‌ ‌shall‌ ‌in‌ ‌any‌ ‌event‌ ‌be‌ ‌or‌ ‌become‌‌ franchise‌ ‌is‌ ‌more‌ ‌properly‌ ‌the‌ ‌subject‌ ‌of‌ ‌the‌ ‌prerogative‌ ‌writ‌ ‌of‌‌ What‌‌if‌‌there‌‌is‌‌a‌‌letter‌‌of‌‌credit?‌‌The‌‌date‌‌of‌‌delivery‌‌to‌‌the‌‌notified‌‌ liable‌ ‌for‌ ‌any‌ ‌loss‌ ‌or‌ ‌damage‌ ‌to‌ ‌or‌ ‌in‌ ‌connection‌ ‌with‌ ‌the‌‌ quo‌‌warranto‌.‌ ‌ party‌‌is‌‌controlling.‌(‌ Asian‌‌Terminals‌‌v.‌‌Philam‌‌Insurance)‌ ‌ transportation‌ ‌of‌ ‌goods‌ ‌in‌ ‌an‌ ‌amount‌ ‌exceeding‌ ‌$500‌ ‌per‌‌ package‌‌lawful‌‌money‌‌of‌‌the‌‌United‌‌States,‌‌or‌‌in‌‌case‌‌of‌‌goods‌‌not‌‌ Necessity‌‌for‌‌Certificate‌‌of‌‌Public‌‌Convenience‌ ‌ Is‌‌a‌‌stipulated‌‌shorter‌‌prescriptive‌‌period‌‌allowed?‌ ‌ shipped‌ ‌in‌‌packages,‌‌per‌‌customary‌‌freight‌‌unit,‌‌or‌‌the‌‌equivalent‌‌ While‌ ‌a‌ ‌franchise‌ ‌is‌‌a‌‌grant‌‌of‌‌privilege‌‌from‌‌the‌‌sovereign‌‌power‌‌ Strictly‌ ‌applying‌ ‌the‌ ‌terms‌ ‌of‌ ‌the‌ ‌Bill‌ ‌of‌ ‌Lading,‌ ‌the‌ ‌one-year‌‌ of‌‌that‌‌sum‌‌in‌‌other‌‌currency,‌‌ ‌ through‌ ‌its‌ ‌legislature,‌ ‌a‌ ‌Certificate‌ ‌of‌ ‌Public‌ ‌Convenience‌‌ prescriptive‌ ‌period‌ ‌under‌ ‌the‌ ‌COGSA‌ ‌should‌ ‌govern‌ ‌because‌‌ EXC:‌‌ ‌unless‌ ‌the‌ ‌nature‌ ‌and‌ ‌value‌ ‌of‌ ‌such‌ ‌goods‌ ‌have‌ ‌been‌‌ Such‌‌period‌‌is‌‌NOT‌‌mandatory,‌‌in‌‌that‌‌the‌‌shipper‌‌can‌‌still‌‌bring‌‌an‌‌ action‌ ‌to‌ ‌recover‌ ‌said‌ ‌loss‌ ‌or‌ ‌damage,‌ ‌WITHIN‌ ‌1‌ ‌YEAR‌ ‌after‌ ‌the‌‌ delivery‌‌of‌‌the‌‌goods.‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 29‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ (CPC)‌ ‌is‌ ‌a‌ ‌form‌ ‌of‌ ‌regulation‌ ‌through‌ ‌the‌ ‌administrative‌‌ agencies.‌ ‌ Requisites‌ ‌ The‌ ‌requisites‌ ‌before‌ ‌such‌ ‌a‌ ‌certificate‌ ‌may‌ ‌be‌ ‌granted‌ ‌are‌ ‌the‌‌ following:‌ ‌ 1) the‌ ‌applicant‌ ‌must‌ ‌be‌ ‌a‌ ‌citizen‌ ‌of‌ ‌the‌ ‌Philippines,‌ ‌or‌ ‌a‌‌ corporation‌ ‌or‌ ‌co-partnership,‌ ‌association‌ ‌or‌ ‌joint-stock‌‌ company‌ ‌constituted‌ ‌and‌ ‌organized‌ ‌under‌ ‌the‌ ‌laws‌ ‌of‌ ‌the‌‌ Philippines,‌ ‌60%‌ ‌at‌ ‌least‌ ‌of‌ ‌the‌ ‌stock‌ ‌or‌ ‌paid-up‌ ‌capital‌ ‌of‌‌ which‌‌belong‌‌entirely‌‌to‌‌citizens‌‌of‌‌the‌‌Philippines‌ ‌ 2) the‌ ‌applicant‌ ‌must‌ ‌be‌ ‌financially‌ ‌capable‌ ‌of‌ ‌undertaking‌‌ the‌‌proposed‌‌service‌‌and‌‌meeting‌‌the‌‌responsibilities‌‌incident‌‌ to‌‌its‌‌operation;‌‌and‌‌ ‌ 3) the‌ ‌applicant‌ ‌must‌ ‌prove‌ ‌that‌ ‌the‌ ‌operation‌ ‌of‌ ‌the‌ ‌public‌‌ service‌ ‌proposed‌ ‌and‌ ‌the‌ ‌authorization‌ ‌to‌ ‌do‌ ‌business‌ ‌will‌‌ promote‌ ‌the‌ ‌public‌ ‌interest‌ ‌in‌ ‌a‌ ‌proper‌ ‌and‌ ‌suitable‌‌ manner.‌ ‌ When‌‌CPC‌‌NOT‌‌required‌ ‌ 2) where‌ ‌the‌ ‌operator‌ ‌ceased‌ ‌operation‌ ‌and‌ ‌placed‌‌his‌‌buses‌‌on‌‌ storage;‌‌and‌‌ ‌ 3) where‌‌the‌‌operator‌‌abandons‌‌the‌‌service‌‌entirely.‌ ‌ Instances‌‌when‌‌legislative‌‌franchise‌‌NECESSARY‌ ‌ a) To‌ ‌persons‌ ‌engaged‌ ‌in‌ ‌the‌ ‌transmission‌ ‌and‌ ‌distribution‌ ‌of‌‌ electricity‌‌under‌‌the‌‌EPIRA‌‌law;‌ ‌ b) Operation‌‌of‌‌radio‌‌and‌‌television‌‌companies;‌ ‌ c) Broadcast‌‌stations.‌ ‌ What‌‌is‌‌a‌‌CPCN?‌ ‌ A‌‌‌Certificate‌‌of‌‌Public‌‌Convenience‌‌and‌‌Necessity‌‌(CPCN)‌‌ requires‌‌prior‌‌issuance‌‌of‌‌a‌m ‌ unicipal‌f‌ ranchise.‌ ‌ Prior‌‌Operator‌‌Rule‌ ‌ 1) Prior‌ ‌operator‌ ‌rule‌.‌ ‌Is‌ ‌the‌ ‌rule‌ ‌that‌ ‌allows‌ ‌an‌ ‌existing‌‌ franchise‌ ‌operator‌ ‌to‌ ‌invoke‌ ‌a‌ ‌preferential‌ ‌right‌ ‌within‌ ‌the‌‌ territory‌‌he‌‌operates‌‌for‌‌as‌‌long‌‌as‌‌he‌‌can‌‌provide‌‌satisfactory‌‌ and‌‌economical‌‌service.‌ ‌ The‌ ‌regulating‌ ‌agency‌ ‌protects‌ ‌the‌ ‌first‌ ‌licensee’s‌ ‌investment‌‌ and‌‌will‌‌not‌‌be‌‌subjected‌‌to‌r‌ uinous‌‌competition‌.‌‌ ‌ a) Warehouses;‌ ‌ b) Vehicles‌ ‌drawn‌ ‌by‌ ‌animals‌ ‌and‌ ‌bancas‌ ‌moved‌ ‌by‌ ‌oar‌‌or‌‌sail,‌‌ and‌‌tugboats‌‌and‌‌lighters;‌ ‌ c) Airships‌ ‌within‌ ‌the‌ ‌Philippines‌‌except‌‌as‌‌regards‌‌the‌‌fixing‌‌of‌‌ their‌‌maximum‌‌rates‌‌on‌‌freight‌‌and‌‌passengers;‌ ‌ d) Radio‌‌companies‌e‌ xcept‌w ‌ ith‌‌respect‌‌to‌‌the‌‌fixing‌‌of‌‌rates;‌ ‌ e) Public‌ ‌services‌ ‌owned‌ ‌or‌ ‌operated‌ ‌by‌ ‌any‌ ‌instrumentality‌ ‌of‌‌ the‌‌National‌‌Government‌‌or‌‌by‌‌any‌‌GOCCs,‌‌‌except‌‌‌with‌‌respect‌‌ to‌‌the‌‌fixing‌‌of‌‌rates.‌ ‌ Revocation‌‌or‌‌Cancellation‌ ‌ The‌‌following‌‌are‌‌some‌‌instances‌‌where‌‌the‌‌cancellation‌‌of‌‌a‌‌certificate‌‌ of‌‌public‌‌convenience‌‌were‌‌held‌‌valid:‌‌ ‌ 1) where‌‌the‌‌holder‌‌is‌‌a‌‌mere‌‌dummy;‌ ‌ 2) Prior‌‌applicant‌‌rule‌.‌‌Priority‌‌in‌‌the‌‌filing‌‌of‌‌application‌‌for‌‌ a‌ ‌CPC‌ ‌is,‌ ‌other‌ ‌conditions‌ ‌being‌ ‌equal,‌ ‌an‌‌important‌‌factor‌‌in‌‌ determining‌‌the‌‌rights‌‌of‌‌the‌‌public‌‌service‌‌companies.‌ ‌ 3) Third‌ ‌operator‌ ‌rule‌.‌ ‌A‌ ‌variation‌ ‌of‌‌the‌‌prior‌‌operator‌‌rule‌‌ wherein‌‌here,‌‌there‌‌are‌‌2‌‌prior‌‌operators.‌ ‌ possibility‌‌of‌‌reduction‌‌in‌‌the‌‌earnings‌‌of‌‌a‌‌business‌‌is‌‌not‌‌sufficient‌‌to‌‌ prove‌‌ruinous‌‌competition.‌‌(E ‌ RB‌‌v.‌‌CA‌)‌ ‌ Fixing‌‌of‌‌Rate‌ ‌ Nowhere‌‌under‌‌provisions‌‌of‌‌law‌‌are‌‌the‌‌regulatory‌‌bodies,‌‌the‌‌PSC‌‌ and‌ ‌LTFRB,‌ ‌authorized‌ ‌to‌ ‌delegate‌ ‌the‌ ‌power‌ ‌to‌ ‌fix‌ ‌rates‌ ‌to‌ ‌a‌‌ common‌‌carrier,‌‌a‌‌transport‌‌operator,‌‌or‌‌other‌‌public‌‌service.‌‌(‌KMU‌‌ Labor‌‌Center‌‌v.‌‌Garcia,‌‌Jr.‌)‌ ‌ In‌ ‌determining‌ ‌the‌ ‌just‌ ‌and‌ ‌reasonable‌ ‌rates‌ ‌to‌ ‌be‌‌charged‌‌by‌‌a‌‌ public‌ ‌utility,‌ ‌three‌ ‌major‌ ‌factors‌ ‌are‌‌considered‌‌by‌‌the‌‌regulating‌‌ agency:‌‌ ‌ a) rate‌‌of‌‌return;‌ ‌ b) rate‌‌base‌‌and‌ ‌ c) the‌ ‌return‌ ‌itself‌ ‌or‌ ‌the‌‌computed‌‌revenue‌‌to‌‌be‌‌earned‌‌by‌‌ the‌‌public‌‌utility‌‌based‌‌on‌‌the‌‌rate‌‌of‌‌return‌‌and‌‌rate‌‌base.‌ ‌ The‌‌‌rate‌‌of‌‌return‌‌‌is‌‌a‌‌judgment‌‌percentage‌‌which,‌‌if‌‌multiplied‌ with‌‌the‌‌rate‌‌base,‌‌provides‌‌a‌‌fair‌‌return‌‌on‌‌the‌‌public‌‌utility‌‌for‌‌the‌‌ use‌ ‌of‌ ‌its‌ ‌property‌ ‌for‌ ‌service‌ ‌to‌ ‌the‌ ‌public.‌ ‌This‌ ‌Court‌ ‌has‌‌ consistently‌ ‌adopted‌ ‌a‌ ‌12%‌ ‌rate‌ ‌of‌ ‌return‌ ‌for‌ ‌public‌‌ utilities‌.‌ ‌ INCOME‌ ‌TAX‌ ‌should‌ ‌NOT‌ ‌be‌ ‌included‌ ‌in‌ ‌the‌ ‌computation‌ ‌of‌‌ operating‌‌expenses‌‌of‌‌a‌‌public‌‌utility‌.‌‌‌Accordingly,‌‌the‌‌burden‌‌ of‌ ‌paying‌ ‌income‌ ‌tax‌ ‌should‌ ‌be‌ ‌Meralco's‌ ‌alone‌ ‌and‌ ‌should‌‌ not‌‌be‌‌shifted‌‌to‌‌the‌‌consumers‌‌by‌‌including‌‌the‌‌same‌‌in‌‌the‌‌ computation‌‌of‌‌its‌‌operating‌‌expenses.‌(‌ ‌Republic‌‌v.‌‌Meralco‌)‌ ‌ Unlawful‌‌Arrangements‌ ‌ 4) Protection‌‌of‌‌investment‌‌rule.‌‌The‌‌law‌‌aims‌‌to‌‌protect‌‌not‌‌ Boundary‌‌System‌ ‌ only‌‌the‌‌public,‌‌but‌‌the‌‌investment‌‌of‌‌the‌‌operators‌‌as‌‌well.‌ ‌ It‌ ‌cannot‌ ‌be‌ ‌overemphasized‌ ‌that‌ ‌the‌ ‌PRIMARY‌ ‌concern‌ ‌is‌ ‌still‌‌ PUBLIC‌ ‌INTEREST,‌ ‌CONVENIENCE‌ ‌and‌ ‌NECESSITY.‌ ‌Also‌‌ consider‌‌the‌‌aim‌‌to‌‌promote‌C ‌ OMPETITION‌.‌‌ ‌ It‌‌is‌‌settled‌‌that‌‌the‌‌relationship‌‌between‌‌jeepney‌‌owners/operators‌‌ and‌ ‌jeepney‌ ‌drivers‌ ‌under‌ ‌the‌ ‌boundary‌ ‌system‌ ‌is‌ ‌that‌ ‌of‌‌ employer-employee‌ ‌and‌ ‌not‌ ‌of‌ ‌lessor-lessee.‌ ‌(‌Ambayan‌ ‌v.‌‌ Ambayan‌)‌ ‌ Ruinous‌‌Competition‌‌—‌‌In‌‌order‌‌that‌‌the‌‌opposition‌‌based‌‌on‌‌ruinous‌‌ competition‌‌may‌‌prosper,‌‌it‌‌must‌‌be‌‌shown‌‌that‌‌the‌‌opponent‌‌‌would‌‌be‌‌ deprived‌‌of‌‌fair‌‌profits‌‌on‌‌the‌‌capital‌‌invested‌‌in‌‌its‌‌business.‌‌The‌‌mere‌‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 30‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ Kabit‌S ‌ ystem‌ ‌ The‌ ‌Registered‌ ‌Owner‌ ‌Rule‌ ‌applies‌ ‌when‌‌the‌‌transfer‌‌is‌‌not‌‌duly‌‌ A‌ ‌person‌ ‌who‌‌has‌‌been‌‌granted‌‌a‌‌certificate‌‌of‌‌public‌‌convenience‌‌ approved‌‌by‌‌the‌‌regulating‌‌agency.‌ ‌ ‌ allows‌ ‌another‌ ‌person‌ ‌who‌‌owns‌‌motor‌‌vehicles‌‌to‌‌operate‌‌under‌‌ such‌‌franchise‌‌for‌‌a‌‌fee.‌ ‌ The‌‌Warsaw‌‌Convention‌ ‌ In‌‌case‌‌of‌‌an‌‌accident‌‌involving‌‌a‌‌vehicle‌‌operated‌‌under‌‌the‌‌‌Kabit‌‌ system,‌ ‌BOTH‌ ‌the‌ ‌owner‌ ‌and‌‌the‌‌‌kabit‌‌operator‌‌may‌‌be‌‌held‌‌ liable‌.‌‌(‌Lita‌‌Enterprises‌‌v.‌‌IAC‌)‌ ‌ Registered‌‌owner‌‌rule‌‌and‌‌kabit‌‌system‌ ‌ By‌ ‌reason‌ ‌of‌ ‌public‌ ‌policy,‌‌the‌‌law‌‌allows‌‌victims‌‌of‌‌accidents‌‌to‌‌ sue‌‌those‌‌who,‌‌strictly‌‌speaking,‌‌are‌‌third‌‌parties.‌‌The‌‌person‌‌who‌‌ is‌ ‌the‌ ‌registered‌ ‌owner‌ ‌of‌ ‌a‌ ‌vehicle‌ ‌is‌ ‌LIABLE‌ ‌for‌ ‌any‌ ‌damage‌‌ caused‌‌by‌‌the‌‌negligent‌‌operation‌‌of‌‌the‌‌vehicle‌‌although‌‌the‌‌same‌‌ was‌ ‌already‌ ‌sold‌ ‌or‌‌conveyed‌‌to‌‌another‌‌person‌‌at‌‌the‌‌time‌‌of‌‌the‌‌ accident.‌ ‌ Applicability‌ ‌ 1) If‌ ‌the‌ ‌passenger‌ ‌or‌ ‌consignor‌ ‌has‌ ‌made,‌ ‌at‌‌the‌‌time‌‌when‌‌the‌‌ package‌‌was‌‌handed‌‌over‌‌to‌‌the‌‌carrier,‌‌a‌‌special‌‌declaration‌‌of‌‌ interest‌ ‌in‌ ‌delivery‌ ‌at‌ ‌destination‌ ‌and‌ ‌has‌ ‌paid‌ ‌a‌‌ supplementary‌‌sum‌‌if‌‌the‌‌case‌‌so‌‌requires.‌ ‌ 2) In‌‌case‌‌the‌‌damage‌‌or‌‌loss‌‌was‌‌due‌‌to‌‌ ‌ a) wilful‌‌misconduct;‌‌or‌ ‌ The‌‌Warsaw‌‌Convention‌‌applies‌‌to‌‌the‌‌two‌‌categories‌‌of‌‌‌international‌‌ transportation‌,‌‌viz.,‌‌ ‌ 1) that‌ ‌where‌ ‌the‌ ‌place‌ ‌of‌ ‌departure‌ ‌and‌ ‌the‌ ‌place‌ ‌of‌‌ destination‌ ‌are‌ ‌situated‌ ‌within‌ ‌the‌ ‌territories‌ ‌of‌ ‌TWO‌ ‌High‌‌ Contracting‌‌Parties;‌‌and‌ ‌ b) gross‌‌negligence;‌ ‌ 3) Absence‌‌of‌‌a‌‌baggage‌‌check;‌ ‌ 4) The‌‌carrier‌‌did‌‌not‌‌issue‌‌a‌‌ticket;‌‌and‌ ‌ 5) In‌‌case‌‌of‌‌waiver‌‌by‌‌the‌‌carrier.‌ ‌ 2) that‌ ‌where‌ ‌the‌ ‌place‌ ‌of‌ ‌departure‌ ‌and‌ ‌the‌ ‌place‌ ‌of‌‌ For‌‌hand-carried‌‌baggage‌‌—‌5 ‌ ,000‌‌francs‌‌‌per‌‌passenger‌.‌ ‌ destination‌ ‌are‌ ‌within‌ ‌the‌ ‌territory‌ ‌of‌ ‌a‌ ‌SINGLE‌ ‌High‌‌ Contracting‌‌Party‌‌‌if‌‌there‌‌is‌‌an‌‌agreed‌‌stopping‌‌place‌‌‌within‌‌a‌‌ Notice‌ ‌of‌ ‌Claim‌ ‌and‌ ‌Prescription‌ ‌in‌ ‌Air‌ ‌Transportation.‌ ‌Art‌ ‌26‌‌of‌‌ territory‌ ‌subject‌ ‌to‌ ‌the‌ ‌sovereignty,‌ ‌mandate,‌ ‌or‌ ‌authority‌ ‌of‌‌ the‌‌Warsaw‌‌Convention‌‌provides:‌ ‌ 1. The‌‌rule‌‌DOES‌‌NOT‌‌apply‌‌if‌‌the‌‌vehicle‌‌was‌‌taken‌‌without‌‌his‌‌ 1) Receipt‌ ‌by‌ ‌the‌ ‌person‌ ‌entitled‌ ‌to‌ ‌the‌ ‌delivery‌ ‌of‌ ‌baggage‌ ‌or‌‌ another‌ ‌power,‌ ‌even‌ ‌though‌ ‌the‌ ‌power‌ ‌is‌ ‌not‌ ‌a‌ ‌party‌ ‌of‌ ‌the‌‌ knowledge‌‌or‌‌consent.‌ ‌ Convention.‌ ‌ goods‌‌without‌‌complaint‌‌shall‌‌be‌‌‌prima‌‌facie‌‌evidence‌‌that‌‌the‌‌ 2. The‌ ‌rule‌ ‌APPLIES‌ ‌even‌ ‌if‌ ‌the‌ ‌registered‌ ‌owner‌ ‌leased‌ ‌the‌‌ same‌‌have‌‌been‌‌delivered‌‌in‌‌good‌‌condition‌‌and‌‌in‌‌accordance‌‌ Limitation‌‌of‌‌Liability‌ ‌ vehicle‌‌to‌‌another‌‌who‌‌is‌‌the‌‌actual‌‌operator.‌ ‌ with‌‌the‌‌document‌‌of‌‌transportation‌ ‌ 3. The‌‌rule‌‌also‌‌APPLIES‌‌in‌‌a‌‌‌financial‌‌lease.‌‌However,‌‌under‌‌Sec‌‌ To‌‌passengers‌— ‌ ‌‌injury‌‌took‌‌place:‌ ‌ 2) In‌ ‌case‌ ‌of‌ ‌damage‌,‌ ‌the‌ ‌person‌ ‌entitled‌ ‌to‌ ‌delivery‌ ‌must‌‌ 12‌‌of‌‌RA‌‌8556,‌‌‌registration‌‌‌of‌‌the‌‌financial‌‌lease‌‌absolves‌‌the‌‌ 1) On‌‌board‌‌the‌‌aircraft;‌ ‌ complain‌ ‌to‌ ‌the‌ ‌carrier‌ ‌forthwith‌ ‌after‌ ‌the‌ ‌discovery‌ ‌of‌ ‌the‌‌ financing‌‌company‌‌from‌‌liability.‌ ‌ damage,‌‌and,‌‌at‌‌the‌‌latest,‌ ‌ 2) In‌‌the‌‌course‌‌of‌‌any‌‌of‌‌the‌‌operations‌‌of‌‌embarking;‌ ‌ 4. The‌ ‌rule‌ ‌also‌ ‌APPLIES‌ ‌in‌ ‌the‌ ‌“Kabit‌ ‌System”‌.‌ ‌It‌ ‌is‌ ‌an‌‌ a) within‌ ‌3‌ ‌days‌ ‌from‌ ‌the‌ ‌date‌ ‌of‌ ‌receipt‌‌in‌‌the‌‌case‌‌of‌‌ arrangement‌‌whereby‌‌a‌‌person‌‌who‌‌is‌‌granted‌‌a‌‌certificate‌‌of‌‌ 3) In‌‌the‌‌course‌‌of‌‌disembarking;‌‌OR‌ ‌ baggage‌‌and‌‌ ‌ public‌ ‌convenience‌ ‌allows‌ ‌other‌ ‌persons‌ ‌who‌ ‌own‌ ‌motor‌‌ 4) When‌‌there‌‌was‌‌or‌‌because‌‌of‌‌delay.‌ ‌ vehicles‌ ‌to‌ ‌operate‌ ‌them‌ ‌under‌ ‌his‌ ‌license‌ ‌for‌ ‌a‌ ‌fee‌ ‌or‌‌ b) 7‌‌days‌‌‌from‌‌the‌‌date‌‌of‌‌receipt‌‌in‌‌the‌‌case‌‌of‌‌goods.‌‌ ‌ percentage‌ ‌of‌ ‌earnings.‌ ‌It‌ ‌is‌‌invariably‌‌recognized‌‌as‌‌contrary‌‌ 250,000‌‌francs.‌‌‌Exceptions‌:‌ ‌ In‌ ‌case‌ ‌of‌ ‌delay‌ ‌the‌ ‌complaint‌ ‌must‌ ‌be‌ ‌made‌ ‌at‌ ‌the‌ ‌latest‌‌ to‌‌public‌‌policy‌‌and‌‌therefore‌V ‌ OID‌a‌ nd‌‌inexistent.‌ ‌ 1) By‌‌special‌‌contract,‌‌the‌‌parties‌‌may‌‌agree‌‌to‌‌a‌‌‌higher‌‌‌limit‌‌of‌‌ within‌ ‌14‌ ‌days‌ ‌from‌ ‌the‌ ‌date‌ ‌on‌‌which‌‌the‌‌baggage‌‌or‌‌goods‌‌ Approval‌‌of‌‌Sale,‌‌Encumbrance‌‌or‌‌Lease‌‌of‌‌Property‌ ‌ liability;‌ ‌ have‌‌been‌‌placed‌‌at‌‌his‌‌disposal.‌ ‌ 2) The‌ ‌limit‌ ‌for‌ ‌passenger‌ ‌death‌ ‌or‌ ‌injury‌ ‌is‌ ‌$75K‌ ‌inclusive‌ ‌of‌‌ Transfer‌ ‌of‌‌CPC‌‌—‌‌‌The‌‌PSC‌‌has‌‌the‌‌power‌‌and‌‌authority‌‌to‌‌approve‌‌a‌‌ 3) Every‌ ‌complaint‌ ‌must‌ ‌be‌ ‌made‌ ‌in‌ ‌WRITING‌ ‌upon‌ ‌the‌‌ legal‌ ‌fees‌‌and‌‌costs‌‌where‌‌the‌‌‌US‌‌is‌‌the‌‌origin,‌‌destination,‌‌or‌‌ sale‌‌or‌‌transfer‌‌of‌‌a‌‌CPC‌‌if‌ ‌ document‌ ‌of‌ ‌transportation‌ ‌or‌ ‌by‌ ‌separate‌ ‌notice‌ ‌in‌ ‌writing‌‌ stopping‌‌place.‌ ‌ dispatched‌‌within‌‌the‌‌times‌‌aforesaid.‌ ‌ 1) there‌ ‌are‌ ‌just‌ ‌and‌ ‌reasonable‌‌grounds‌‌for‌‌making‌‌the‌‌transfer;‌‌ For‌‌checked‌‌baggage‌‌—‌‌damage‌‌occurred‌‌during‌‌air‌‌transportation‌‌or‌‌ and‌ ‌ 4) Failing‌ ‌complaint‌ ‌within‌ ‌the‌ ‌times‌‌aforesaid,‌‌‌no‌‌action‌‌shall‌‌ when‌‌there‌‌is‌‌delay.‌E ‌ xceptions‌:‌ ‌ lie‌‌‌against‌‌the‌‌carrier,‌s‌ ave‌‌in‌‌the‌‌case‌‌of‌‌fraud‌‌‌on‌‌his‌‌part.‌ ‌ 2) the‌‌sale‌‌or‌‌transfer‌‌is‌‌NOT‌‌detrimental‌‌to‌‌the‌‌public‌‌interest.‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 31‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ Limited‌‌Partnership‌ ‌ Willful‌‌Misconduct‌ ‌ Partnership‌‌as‌‌a‌‌juridical‌‌person‌ ‌ The‌‌carrier‌‌shall‌‌not‌‌be‌‌entitled‌‌to‌‌avail‌‌himself‌‌of‌‌the‌‌provisions‌‌of‌‌ a.‌‌General‌‌Provisions‌ ‌ this‌‌convention‌‌which‌‌exclude‌‌or‌‌limit‌‌his‌‌liability,‌‌if‌‌the‌‌damage‌‌is‌‌ caused‌‌by‌‌his‌‌wilful‌‌misconduct‌‌or‌‌by‌‌such‌‌default‌‌on‌‌his‌‌part‌‌as,‌‌ Definition‌ ‌ in‌ ‌accordance‌ ‌with‌ ‌the‌ ‌law‌ ‌of‌ ‌the‌ ‌court‌ ‌to‌ ‌which‌ ‌the‌ ‌case‌ ‌is‌‌ submitted,‌ ‌is‌ ‌considered‌ ‌to‌ ‌be‌ ‌equivalent‌ ‌to‌ ‌wilful‌ ‌misconduct.‌‌ By‌‌the‌c‌ ontract‌‌of‌‌partnership‌‌ ‌ (‌Art‌‌25[1]‌)‌ ‌ 1. two‌o ‌ r‌‌more‌‌persons‌‌‌bind‌‌themselves‌‌ ‌ Jurisdiction‌‌or‌‌Venue‌ ‌ 1) The‌‌court‌‌where‌‌the‌c‌ arrier‌‌ ‌ a) Is‌‌domiciled;‌ ‌ c) Has‌ ‌an‌ ‌establishment‌‌by‌‌which‌‌the‌‌contract‌‌has‌‌been‌‌ made;‌‌or‌ ‌ to‌c‌ ontribute‌m ‌ oney,‌‌property,‌‌or‌‌industry‌‌ ‌ 1. if‌‌an‌‌inventory‌o ‌ f‌‌said‌‌property‌‌is‌‌not‌‌made,‌‌ ‌ 3. to‌‌a‌c‌ ommon‌‌fund‌,‌‌ ‌ 2. signed‌‌by‌‌the‌‌parties,‌‌and‌‌ ‌ 4. with‌‌the‌‌intention‌‌of‌d ‌ ividing‌‌the‌‌‌profits‌a‌ mong‌‌themselves.‌ ‌ 3. attached‌‌to‌‌the‌‌public‌‌instrument.‌ ‌ Characteristic‌‌Elements‌ ‌ 1) Consensual‌‌—‌‌perfected‌‌by‌‌mere‌‌consent;‌ ‌ 2) The‌‌court‌‌of‌‌the‌p ‌ lace‌‌of‌‌destination‌.‌ ‌ considered‌‌as‌‌the‌‌equivalent‌‌of‌‌that‌‌of‌‌the‌‌others;‌ ‌ ‌ References:‌‌Aquino‌‌&‌‌Hernando,‌‌2016;‌‌Sundiang‌‌&‌‌Aquino‌‌2019‌ ‌ 6) Principal‌‌—‌‌does‌‌not‌‌depend‌‌upon‌‌some‌‌other‌‌contracts;‌ ‌ 7) Preparatory‌‌—‌‌a‌‌means‌‌to‌‌an‌‌end.‌ ‌ ‌Essential‌‌Features‌ ‌ General‌‌Provisions‌ ‌ Rights‌‌and‌‌Obligations‌‌of‌‌Partnerships‌ ‌ Rights‌‌and‌‌Obligations‌‌of‌‌Partners‌ ‌ Dissolution‌‌and‌‌Winding‌‌Up‌ ‌ 1. whose‌‌articles‌‌are‌‌kept‌‌secret‌‌among‌‌the‌‌members,‌‌and‌‌ ‌ 2. wherein‌‌any‌‌one‌‌of‌‌the‌‌members‌‌may‌‌contract‌‌in‌‌his‌‌own‌‌name‌‌ with‌‌third‌‌persons,‌‌ ‌ shall‌ ‌have‌ ‌no‌ ‌juridical‌ ‌personality‌,‌ ‌and‌ ‌shall‌ ‌be‌ ‌governed‌ ‌by‌ ‌the‌‌ 3) Bilateral‌‌—‌‌entered‌‌into‌‌by‌‌2‌‌or‌‌more‌‌persons‌‌with‌‌reciprocal‌‌ provisions‌‌relating‌‌to‌c‌ o-ownership‌.‌ ‌ rights‌‌and‌‌obligations;‌ ‌ A‌‌partnership‌‌for‌‌the‌‌practice‌‌of‌‌law,‌‌constituted‌‌in‌‌accordance‌‌with‌‌ 4) Onerous‌‌—‌‌parties‌‌aspire‌‌to‌‌gain‌‌some‌‌benefit;‌ ‌ the‌ ‌Civil‌ ‌Code‌ ‌provisions‌ ‌on‌ ‌partnership,‌ ‌acquires‌ ‌juridical‌‌ personality‌‌by‌‌operation‌‌of‌‌law‌.‌‌(‌Saludo,‌‌Jr.‌‌v.‌‌PNB‌‌‌2018‌)‌ ‌ 5) Commutative‌ ‌—‌ ‌the‌ ‌undertaking‌ ‌of‌ ‌each‌ ‌of‌ ‌the‌ ‌partners‌ ‌is‌‌ b) Allegations‌ ‌of‌ ‌tortious‌ ‌conduct‌ ‌committed‌‌against‌‌an‌‌ airline‌‌passenger‌‌during‌‌the‌‌course‌‌of‌‌the‌‌international‌‌ carriage‌‌do‌‌not‌‌bring‌‌the‌‌case‌‌outside‌‌the‌‌ambit‌‌of‌‌the‌‌ Warsaw‌‌Convention.‌‌(L ‌ huillier‌‌v.‌‌British‌‌Airways‌)‌ ‌ Title‌‌IX‌‌Book‌‌IV‌‌of‌‌the‌‌Civil‌‌Code‌ Secret‌‌Associations‌‌and‌‌Societies.‌A ‌ ssociations‌‌and‌‌societies,‌‌ ‌ 2) Nominate‌‌—‌‌has‌‌a‌‌special‌‌name‌‌in‌‌law;‌ ‌ a) Art‌‌28(1)‌‌is‌j‌ urisdictional‌i‌ n‌‌character;‌ Partnership‌ ‌ However‌,‌ ‌a‌ ‌contract‌ ‌of‌ ‌partnership‌ ‌is‌ ‌void‌,‌ ‌whenever‌ ‌immovable‌‌ property‌‌is‌‌contributed‌‌thereto‌ ‌ 2. General‌ ‌professional‌ ‌partnership.‌ ‌Two‌ ‌or‌ ‌more‌ ‌persons‌ ‌may‌ ‌also‌‌ form‌‌a‌‌partnership‌‌for‌‌the‌‌exercise‌‌of‌‌a‌p ‌ rofession‌.‌ ‌ b) Has‌‌its‌‌principal‌‌place‌‌of‌‌business;‌‌OR‌ ‌ The‌ ‌partnership‌ ‌has‌ ‌a‌ ‌juridical‌ ‌personality‌ ‌separate‌ ‌and‌‌ distinct‌‌from‌‌that‌‌of‌‌each‌‌of‌‌the‌‌partners,‌‌‌even‌‌‌in‌‌case‌‌of‌‌failure‌‌to‌‌ execute‌ ‌a‌ ‌public‌ ‌instrument‌ ‌and‌ ‌register‌ ‌the‌ ‌same‌ ‌with‌‌the‌‌SEC‌‌if‌‌ such‌‌partnership‌‌has‌‌a‌‌capital‌‌of‌‌at‌‌least‌‌P3K.‌ ‌ 1) There‌‌must‌‌be‌‌a‌‌valid‌‌contract‌;‌ ‌ 2) The‌‌parties‌‌have‌‌‌legal‌‌capacity‌‌‌to‌‌enter‌‌into‌‌the‌‌contract;‌ ‌ 3) There‌ ‌must‌ ‌be‌ ‌a‌‌‌mutual‌‌contribution‌‌‌of‌‌money,‌‌property‌‌or‌‌ industry‌‌to‌‌a‌c‌ ommon‌‌fund‌;‌ ‌ 4) The‌‌object‌‌must‌‌be‌‌lawful‌;‌‌and‌ ‌ 5) The‌‌primary‌‌purpose‌‌is‌‌to‌‌carry‌‌on‌‌a‌‌‌business‌‌for‌‌profits‌‌‌and‌‌ to‌d ‌ ivide‌‌the‌‌same‌‌‌among‌‌the‌‌parties.‌ ‌ Rules‌‌to‌‌determine‌‌existence‌‌of‌‌partnership‌ ‌ 1) Persons‌‌who‌‌are‌‌not‌‌partners‌‌as‌‌to‌‌each‌‌other‌‌are‌‌not‌‌partners‌‌ as‌ ‌to‌ ‌third‌ ‌persons‌ ‌except‌ ‌as‌ ‌provided‌ ‌by‌ ‌Article‌ ‌1825‌ ‌on‌‌ partnership‌‌by‌‌estoppel‌;‌ ‌ 2) Co-ownership‌ ‌or‌‌co-possession‌‌does‌‌not‌‌of‌‌itself‌‌establish‌‌a‌‌ partnership,‌ ‌whether‌ ‌such‌ ‌co-owners‌ ‌or‌ ‌co-possessors‌ ‌do‌ ‌or‌‌ do‌‌not‌‌share‌‌any‌‌profits‌‌made‌‌by‌‌the‌‌use‌‌of‌‌the‌‌property;‌ ‌ 3) The‌ ‌sharing‌ ‌of‌ ‌gross‌ ‌returns‌ ‌does‌ ‌not‌ ‌of‌ ‌itself‌ ‌establish‌ ‌a‌‌ partnership,‌ ‌whether‌ ‌or‌ ‌not‌ ‌the‌ ‌persons‌ ‌sharing‌ ‌them‌ ‌have‌ ‌a‌‌ joint‌ ‌or‌ ‌common‌ ‌right‌ ‌or‌‌interest‌‌in‌‌any‌‌property‌‌from‌‌which‌‌ the‌‌returns‌‌are‌‌derived;‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 32‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ 4) The‌ ‌receipt‌ ‌by‌ ‌a‌ ‌person‌ ‌of‌ ‌a‌ ‌share‌ ‌of‌ ‌the‌ ‌profits‌ ‌of‌ ‌a‌‌ business‌ ‌is‌ ‌prima‌ ‌facie‌ ‌evidence‌ ‌that‌ ‌he‌ ‌is‌ ‌a‌ ‌partner‌ ‌in‌‌the‌‌ business,‌‌except‌i‌ f‌‌such‌‌profits‌‌were‌‌received‌‌in‌‌payment‌‌as:‌ ‌ a) Debt‌b ‌ y‌‌installments‌‌or‌‌otherwise;‌ ‌ b) Wages‌o ‌ f‌‌an‌‌employee‌‌or‌‌rent‌‌to‌‌a‌‌landlord;‌ ‌ 3) The‌ ‌instruments‌‌or‌‌tools‌‌and‌‌proceeds‌‌of‌‌the‌‌crime‌‌shall‌‌also‌‌ be‌‌forfeited;‌‌and‌ ‌ Form‌‌of‌‌partnership‌‌contract‌ ‌ GR‌:‌ ‌ o‌ ‌special‌ ‌form‌ ‌is‌ ‌required‌ ‌for‌ ‌the‌ ‌validity‌ ‌or‌ ‌existence‌ ‌of‌‌ N partnership.‌‌The‌‌contract‌‌may‌‌be‌‌made‌‌orally‌‌or‌‌in‌‌writing.‌ ‌ EXC‌:‌ Where‌i‌ mmovable‌p ‌ roperty‌‌or‌‌real‌‌rights‌‌are‌c‌ ontributed‌.‌ ‌ Incidents‌‌of‌‌a‌‌partnership‌ ‌ 1) Partners‌ ‌share‌ ‌in‌ ‌profits‌ ‌and‌ ‌losses.‌ ‌There‌ ‌is‌ ‌community‌ ‌of‌‌ interest‌;‌‌(‌1767,‌‌1797,‌‌1798‌)‌ ‌ In‌‌such‌‌case,‌‌a‌‌‌public‌‌instrument‌‌is‌‌necessary.‌‌To‌‌affect‌‌third‌‌ persons,‌ ‌the‌ ‌transfer‌ ‌of‌ ‌real‌ ‌property‌ ‌to‌‌the‌‌partnership‌‌must‌‌ be‌‌duly‌‌registered‌‌in‌‌the‌‌Registry‌‌of‌‌Property.‌ ‌ 2) They‌ ‌have‌ ‌equal‌ ‌rights‌‌in‌‌the‌‌management‌‌and‌‌conduct‌‌of‌‌the‌‌ business;‌‌(‌1803‌)‌ ‌ 3) Every‌ ‌partner‌ ‌is‌ ‌an‌ ‌agent‌ ‌of‌ ‌the‌ ‌partnership‌ ‌who‌ ‌binds‌ ‌the‌‌ others‌‌for‌‌his‌‌acts‌‌for‌‌the‌‌purpose‌‌of‌‌its‌‌business;‌‌(1 ‌ 818‌)‌ ‌ 4) All‌ ‌partners‌ ‌are‌ ‌personally‌ ‌liable‌ ‌for‌ ‌the‌ ‌debts‌ ‌of‌ ‌the‌‌ partnership‌ ‌with‌ ‌their‌ ‌separate‌ ‌property‌ ‌(‌1816,‌ ‌1822-1824‌)‌‌ exc‌l‌ imited‌‌partners;‌‌(1 ‌ 843‌)‌ ‌ 5) The‌ ‌books‌ ‌shall‌ ‌be‌ ‌kept‌ ‌at‌ ‌the‌ ‌principal‌ ‌place‌ ‌of‌ ‌business;‌‌ (‌1805‌)‌ ‌ 6) A‌‌fiduciary‌‌relation‌‌exists‌‌between‌‌partners;‌‌(1 ‌ 807‌)‌ ‌ An‌ ‌inventory‌ ‌of‌ ‌the‌ ‌contributed‌ ‌property‌ ‌duly‌ ‌signed‌ ‌by‌‌the‌‌ parties‌ ‌should‌ ‌also‌‌be‌‌attached‌‌to‌‌the‌‌public‌‌instrument.‌‌This‌‌ is‌‌‌indispensable‌‌to‌‌the‌‌validity‌‌of‌‌the‌‌partnership.‌‌(‌Litonjua‌‌ v.‌‌Litonjua‌)‌ ‌ This‌‌is‌‌‌presumed‌‌‌if‌‌the‌‌nature‌‌of‌‌articles‌‌of‌‌universal‌‌ partnership‌‌is‌‌not‌‌specified.‌ ‌ b) Particular‌ ‌—‌‌‌has‌‌for‌‌its‌‌object‌‌determinate‌‌things,‌‌their‌‌ use‌‌or‌‌fruits,‌‌or‌‌a‌‌specific‌‌undertaking,‌‌or‌‌the‌‌exercise‌‌of‌‌a‌‌ profession‌‌or‌‌vocation.‌ ‌ 2) As‌‌to‌‌l‌ iability‌‌of‌‌partners‌ ‌ a) General‌ ‌—‌ ‌one‌ ‌consisting‌ ‌of‌ ‌general‌ ‌partners‌ ‌who‌ ‌are‌‌ liable‌‌‌pro‌‌rata‌‌and‌‌subsidiarily,‌‌and‌‌sometimes‌‌solidarily‌‌ with‌‌their‌‌separate‌‌property‌‌for‌‌partnership‌‌debts;‌ ‌ b) Limited‌ ‌—‌ ‌one‌ ‌formed‌ ‌by‌ ‌2‌ ‌or‌ ‌more‌ ‌persons‌ ‌having‌ ‌as‌‌ members‌ ‌one‌ ‌or‌ ‌more‌ ‌general‌ ‌partners‌ ‌and‌ ‌one‌ ‌or‌ ‌more‌‌ limited‌ ‌partners,‌ ‌the‌ ‌latter‌ ‌not‌‌being‌‌personally‌‌liable‌‌for‌‌ the‌‌obligation‌‌of‌‌the‌‌partnership.‌ ‌ 3) As‌‌to‌‌d ‌ uration‌ ‌ a) At‌‌will‌‌—‌‌ ‌ i) no‌‌time‌‌is‌‌specified‌‌and‌‌is‌‌not‌‌formed‌‌for‌‌a‌‌particular‌‌ undertaking‌‌and‌‌which‌‌may‌‌be‌‌terminated‌‌anytime‌‌by‌‌ mutual‌‌agreement‌‌of‌‌the‌‌partners‌‌or‌‌by‌‌the‌‌will‌‌of‌‌one‌‌ of‌‌them;‌‌OR‌ ‌ ii) one‌ ‌for‌ ‌a‌ ‌fixed‌ ‌term‌ ‌or‌ ‌particular‌ ‌undertaking‌‌that‌‌is‌ continued‌ ‌after‌ ‌the‌ ‌termination‌ ‌of‌ ‌such‌ ‌term‌ ‌or‌‌ particular‌‌undertaking‌‌without‌‌any‌‌express‌‌agreement‌ ‌ 1) shall‌‌appear‌‌in‌‌a‌‌public‌‌instrument‌,‌‌ ‌ 2) which‌‌must‌‌be‌‌recorded‌‌in‌‌the‌‌SEC.‌ ‌ 1) As‌‌to‌e ‌ xtent‌‌of‌‌its‌‌subject‌‌matter‌ ‌ 8) The‌ ‌partnership‌ ‌is‌ ‌not‌ ‌terminated‌ ‌upon‌ ‌dissolution,‌ ‌but‌‌ continues‌‌until‌‌the‌‌winding‌‌up‌‌is‌‌completed.‌‌(1 ‌ 828‌)‌ ‌ Effects‌‌of‌‌an‌‌unlawful‌‌partnership‌ ‌ 1) The‌‌contract‌‌is‌‌void‌‌‌ab‌‌initio‌‌and‌‌the‌‌partnership‌‌never‌‌existed‌‌ in‌‌the‌‌eyes‌‌of‌‌the‌‌law;‌ ‌ a) Universal‌ ‌which‌ ‌refers‌ ‌to‌ ‌all‌ ‌the‌‌present‌‌property‌‌or‌‌to‌‌ all‌‌the‌‌profits.‌ ‌ i) Universal‌ ‌partnership‌ ‌of‌ ‌all‌‌present‌‌property‌ ‌—‌‌ that‌ ‌in‌ ‌which‌ ‌the‌ ‌partners‌‌contribute‌‌all‌‌the‌‌property‌‌ which‌ ‌actually‌ ‌belongs‌ ‌to‌ ‌them‌ ‌to‌ ‌a‌ ‌common‌ ‌fund,‌‌ with‌ ‌the‌ ‌intention‌ ‌of‌ ‌dividing‌ ‌the‌ ‌same‌ ‌among‌‌ ✔‌ ‌Universal‌‌partnership‌‌‌of‌‌profits‌ ‌—‌‌‌comprises‌‌all‌‌ that‌ ‌the‌ ‌partners‌ ‌may‌ ‌acquire‌ ‌by‌‌their‌‌industry‌‌or‌‌ work‌‌‌during‌‌the‌‌existence‌‌of‌‌the‌‌partnership.‌ ‌ If‌‌capital‌‌is‌‌at‌‌least‌‌P3K‌,‌‌in‌‌money‌‌or‌‌property,‌‌the‌‌contract‌ ‌ 7) A‌ ‌capitalist‌ ‌partner‌ ‌cannot‌ ‌carry‌ ‌on‌ ‌a‌ ‌competing‌ ‌business‌‌ Classifications‌‌of‌‌partnership‌ ‌ unless‌ ‌expressly‌ ‌allowed‌ ‌(‌1808‌),‌‌while‌‌an‌‌‌industrial‌‌‌partner‌‌ is‌ ‌absolutely‌ ‌prohibited‌ ‌from‌ ‌engaging‌ ‌in‌‌any‌‌other‌‌business;‌‌ (‌1789‌)‌ ‌ ii) 4) The‌ ‌contributions‌ ‌of‌ ‌partners‌ ‌shall‌ ‌not‌ ‌be‌ ‌confiscated‌‌unless‌‌ they‌‌fall‌‌under‌‌No.‌‌3.‌ ‌ c) Annuity‌ ‌to‌ ‌a‌ ‌widow‌ ‌or‌ ‌representative‌ ‌of‌ ‌a‌ ‌deceased‌‌ A‌ ‌partnership‌ ‌is‌ ‌dissolved‌ ‌ipso‌ ‌facto‌ ‌upon‌ ‌the‌‌happening‌‌of‌‌an‌‌event‌‌ partner;‌ ‌ which‌ ‌makes‌ ‌it‌ ‌unlawful‌ ‌for‌ ‌the‌ ‌business‌ ‌to‌ ‌be‌ ‌carried‌ ‌on,‌ ‌or‌‌for‌‌the‌‌ d) Interest‌ ‌on‌ ‌a‌ ‌loan,‌ ‌though‌ ‌the‌ ‌amount‌ ‌of‌ ‌payment‌‌ members‌ ‌to‌ ‌carry‌ ‌it‌ ‌on‌ ‌in‌ ‌partnership.‌ ‌A‌ ‌judicial‌ ‌decree‌ ‌is‌ ‌NOT‌‌ necessary‌t‌ o‌‌dissolve‌‌an‌‌unlawful‌‌partnership.‌ ‌ vary‌‌with‌‌the‌‌profits‌‌of‌‌the‌‌business;‌ ‌ e) Consideration‌‌‌for‌‌the‌‌sale‌‌of‌‌a‌‌goodwill‌‌of‌‌a‌‌business‌‌ or‌‌other‌‌property‌‌by‌‌installments‌‌or‌‌otherwise.‌ ‌ themselves,‌ ‌as‌ ‌well‌‌as‌‌all‌‌the‌‌profits‌‌which‌‌they‌‌may‌‌ acquire‌‌therewith.‌ ‌ 2) The‌‌‌profits‌‌are‌‌confiscated‌‌‌in‌‌favor‌‌of‌‌the‌‌government;‌ ‌ b) With‌ ‌a‌ ‌fixed‌ ‌term‌ ‌—‌ ‌one‌ ‌in‌ ‌which‌ ‌the‌ ‌term‌ ‌is‌ ‌fixed‌ ‌or‌‌ agreed‌ ‌upon‌ ‌or‌ ‌formed‌ ‌for‌ ‌a‌ ‌particular‌ ‌undertaking,‌ ‌and‌‌ upon‌ ‌expiration‌ ‌of‌ ‌the‌ ‌term‌ ‌or‌ ‌completion‌ ‌of‌ ‌the‌‌ undertaking,‌ ‌the‌ ‌partnership‌ ‌is‌ ‌dissolved,‌ ‌unless‌‌ continued‌‌by‌‌the‌‌partners.‌ ‌ 4) As‌‌to‌‌the‌ ‌legality‌‌of‌‌its‌‌existence‌‌‌—‌‌as‌‌to‌‌compliance‌‌with‌‌ all‌‌legal‌‌requirements‌‌for‌‌establishment:‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 33‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ a) De‌‌jure‌— ‌ ‌‌complied‌;‌ ‌ b) De‌‌facto‌— ‌ ‌‌failed‌;‌ ‌ 5) As‌‌to‌‌r ‌ epresentation‌‌to‌‌others‌ ‌ a) Ordinary‌ ‌or‌ ‌real‌ ‌—‌ ‌exists‌ ‌among‌ ‌partners‌ ‌as‌ ‌also‌‌as‌‌to‌‌ third‌‌persons;‌ ‌ Obligations‌‌of‌‌the‌‌Partners‌‌Among‌‌Themselves‌ ‌ When‌‌does‌‌a‌‌partnership‌‌commence?‌ ‌ GR‌:‌ From‌‌the‌‌moment‌‌of‌‌the‌‌execution‌‌of‌‌the‌‌contract.‌ ‌ EXC‌:‌ Unless‌‌otherwise‌‌stipulated.‌ ‌ 2) The‌ ‌majority‌ ‌of‌ ‌the‌ ‌capitalist‌ ‌partners‌ ‌are‌ ‌of‌ ‌the‌ ‌opinion‌‌ that‌‌an‌‌additional‌‌contribution‌‌to‌‌the‌‌common‌‌fund‌‌would‌‌save‌‌ the‌‌business;‌ ‌ 3) The‌ ‌capitalist‌ ‌partner‌ ‌refuses‌‌deliberately‌‌to‌‌contribute‌‌an‌‌ additional‌‌share‌‌to‌‌the‌‌capital;‌‌and‌ ‌ 4) There‌‌is‌‌no‌‌agreement‌‌that‌‌even‌‌in‌‌case‌‌of‌‌an‌‌imminent‌‌loss‌‌of‌‌ b) Ostensible‌ ‌or‌ ‌by‌ ‌estoppel‌ ‌—‌ ‌in‌ ‌reality‌ ‌is‌ ‌not‌ ‌a‌‌ Obligations‌‌of‌‌partners‌‌with‌‌respect‌‌to‌‌contribution‌‌of‌‌ the‌‌business,‌‌the‌‌partners‌‌are‌‌not‌‌obliged‌‌to‌‌contribute.‌ ‌ property‌ ‌ partnership,‌‌but‌‌is‌‌considered‌‌one‌‌only‌‌in‌‌relation‌‌to‌‌those‌‌ who,‌‌by‌‌their‌‌conduct‌‌or‌‌admission,‌‌are‌‌precluded‌‌to‌‌deny‌‌ 1) To‌ ‌contribute‌ ‌at‌ ‌the‌ ‌beginning‌ ‌of‌ ‌the‌ ‌partnership‌ ‌or‌ ‌at‌ ‌the‌‌ Here,‌ ‌an‌‌‌industrial‌‌‌partner‌‌is‌‌‌exempt‌‌‌from‌‌contributing‌‌an‌‌additional‌‌ or‌‌disprove‌‌its‌‌existence.‌ ‌ ‌ e‌‌has‌‌already‌‌contributed‌‌his‌‌entire‌‌industry.‌ ‌ stipulated‌‌time‌‌the‌‌money,‌‌property,‌‌or‌‌industry‌‌which‌‌he‌‌may‌‌ share.‌H have‌‌promised‌‌to‌‌contribute;‌ ‌ 6) As‌‌to‌‌p ‌ ublicity‌ ‌ Obligation‌‌of‌‌managing‌‌partner‌‌who‌‌collects‌‌debt‌ ‌ a) Secret‌ ‌—‌ ‌the‌ ‌existence‌ ‌of‌ ‌certain‌ ‌persons‌ ‌as‌ ‌partners‌ ‌is‌‌ not‌‌made‌‌known‌‌to‌‌the‌‌public;‌ ‌ 2) To‌ ‌answer‌ ‌for‌ ‌eviction‌ ‌in‌ ‌case‌ ‌the‌‌partnership‌‌is‌‌deprived‌‌of‌‌ the‌‌determinate‌‌property‌‌contributed;‌ ‌ b) Open‌‌or‌‌notorious‌‌‌—‌‌whose‌‌existence‌‌is‌‌made‌‌known‌‌to‌‌ the‌‌public‌‌by‌‌the‌‌members.‌ ‌ 3) To‌ ‌answer‌ ‌for‌ ‌the‌ ‌fruits‌ ‌of‌ ‌the‌ ‌property‌ ‌the‌ ‌contribution‌ ‌of‌‌ which‌ ‌he‌ ‌delayed,‌ ‌from‌ ‌the‌ ‌date‌ ‌they‌ ‌should‌ ‌have‌ ‌been‌‌ contributed‌‌up‌‌to‌‌the‌‌time‌‌of‌‌actual‌‌delivery.‌ ‌ 7) As‌‌to‌‌p ‌ urpose‌ ‌ a) Commercial‌ ‌or‌ ‌trading‌ ‌—‌ ‌formed‌ ‌for‌‌the‌‌transaction‌‌of‌‌ business;‌ ‌ b) Professional‌‌‌or‌‌‌non-trading‌‌‌—‌‌formed‌‌for‌‌the‌‌exercise‌‌of‌‌ a‌‌profession.‌ ‌ Prohibition‌‌against‌‌engaging‌‌in‌‌business‌ ‌ 1) Industrial‌ ‌partner‌ ‌—‌ ‌Absolutely‌ ‌prohibited,‌ ‌regardless‌ ‌of‌‌ the‌‌nature‌‌of‌‌the‌‌business‌‌whether‌‌of‌‌the‌‌same‌‌kind‌‌or‌‌not.‌ ‌ Unless‌ ‌expressly‌ ‌allowed,‌ ‌not‌ ‌merely‌ ‌by‌ ‌toleration.‌ ‌The‌‌ remedies‌‌of‌‌the‌‌other‌‌partners‌‌would‌‌be‌ ‌ b.‌‌Rights‌‌and‌‌Obligations‌‌of‌‌Partnerships‌ ‌ a) To‌‌‌exclude‌‌‌the‌‌erring‌‌industrial‌‌partner‌‌from‌‌the‌‌firm;‌‌ or‌ ‌ Obligations‌‌of‌‌partnership‌‌to‌‌the‌‌partners‌ ‌ 1) Refund‌ ‌amounts‌ ‌disbursed‌ ‌by‌ ‌the‌ ‌partner‌ ‌in‌ ‌behalf‌ ‌of‌ ‌the‌‌ partnership‌ ‌plus‌ ‌the‌ ‌corresponding‌ ‌interest‌‌from‌‌the‌‌time‌‌the‌‌ expenses‌‌are‌‌made;‌ ‌ 2) Answer‌ ‌for‌‌the‌‌obligations‌‌the‌‌partner‌‌may‌‌have‌‌contracted‌‌in‌‌ good‌‌faith‌‌in‌‌the‌‌interest‌‌of‌‌the‌‌business;‌‌and‌ ‌ b) To‌ ‌avail‌ ‌themselves‌ ‌of‌ ‌the‌ ‌benefits‌ ‌which‌ ‌he‌ ‌may‌‌ have‌‌obtained;‌ ‌ c) Plus‌‌right‌‌to‌d ‌ amages‌‌in‌‌either‌‌case.‌ ‌ 2) Capitalist‌ ‌partner‌ ‌—‌ ‌Relative‌ ‌prohibition,‌ ‌only‌ ‌to‌ ‌any‌‌ business‌ ‌of‌ ‌the‌ ‌same‌ ‌kind,‌ ‌unless‌‌there‌‌is‌‌a‌‌stipulation‌‌to‌‌the‌‌ contrary.‌‌Sanctions‌‌for‌‌violating‌‌the‌‌prohibition‌‌include:‌ ‌ 3) Answer‌‌for‌‌risks‌‌in‌‌consequence‌‌of‌‌its‌‌management.‌ ‌ ‌ c.‌‌Rights‌‌and‌‌Obligations‌‌of‌‌Partners‌ ‌ Where‌ ‌ 1) There‌‌exists‌‌at‌‌least‌‌2‌‌debts,‌‌one‌‌where‌‌the‌‌collecting‌‌partner‌‌is‌‌ creditor,‌‌and‌‌the‌‌other,‌‌the‌‌partnership‌‌is‌‌the‌‌creditor;‌ ‌ 2) Both‌‌debts‌‌are‌‌demandable;‌‌and‌ ‌ 3) The‌ ‌collecting‌ ‌partner‌ ‌is‌ ‌authorized‌ ‌to‌ ‌manage‌ ‌and‌ ‌actually‌‌ manages‌‌the‌‌partnership,‌‌the‌‌RULE‌‌is‌‌as‌‌follows:‌ ‌ GR‌:‌ The‌ ‌sum‌ ‌received‌ ‌is‌ ‌to‌ ‌be‌ ‌applied‌ ‌to‌ ‌the‌ ‌2‌ ‌credits‌ ‌in‌‌ proportion‌t‌ o‌‌their‌‌amounts.‌ ‌ EXC‌:‌ If‌‌received,‌‌for‌‌the‌‌account‌‌of‌‌the‌‌partnership,‌‌shall‌‌be‌‌applied‌‌ to‌‌the‌p ‌ artnership‌‌credit‌‌only.‌ ‌ EXC‌‌to‌‌EXC‌:‌ ‌ If‌‌credit‌‌to‌‌the‌‌collecting‌‌partner‌‌is‌‌more‌‌onerous‌,‌‌the‌‌debtor‌‌ is‌‌given‌‌the‌‌right‌‌to‌‌prefer‌‌payment‌‌to‌‌the‌‌former.‌ ‌ Obligation‌‌of‌‌partner‌‌who‌‌receives‌‌share‌‌of‌‌partnership‌‌credit‌ ‌ A‌ ‌partner‌ ‌shall‌ ‌be‌ ‌obliged‌ ‌to‌‌‌bring‌‌to‌‌the‌‌partnership‌‌capital‌‌what‌‌ he‌‌received‌e‌ ven‌‌though‌‌he‌‌may‌‌have‌‌given‌‌receipt‌‌for‌‌his‌‌share‌‌only,‌‌IF‌ ‌ a) Bringing‌ ‌to‌ ‌the‌ ‌common‌ ‌funds‌ ‌any‌ ‌profits‌ ‌from‌ ‌the‌‌ other‌‌business;‌‌and‌ ‌ 1) He‌‌has‌‌‌received‌,‌‌in‌‌whole‌‌or‌‌in‌‌part,‌‌his‌‌share‌‌of‌‌a‌‌partnership‌‌ credit;‌ ‌ b) Personally‌‌bearing‌‌the‌‌losses.‌ ‌ 2) The‌‌other‌‌partners‌‌have‌n ‌ ot‌‌collected‌‌‌theirs;‌‌AND‌ ‌ When‌‌is‌‌a‌‌capitalist‌‌partner‌‌obliged‌‌to‌‌sell‌‌his‌‌interest‌‌to‌‌others?‌ ‌ 3) The‌‌partnership‌‌debtor‌‌has‌‌become‌i‌ nsolvent‌.‌ ‌ 1) There‌‌is‌‌an‌i‌ mminent‌‌loss‌‌of‌‌the‌‌partnership‌‌business;‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 34‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ Obligations‌‌of‌‌partner‌‌for‌‌damages‌‌to‌‌partnership‌ ‌ GR‌:‌ EXC‌:‌ The‌ ‌damages‌ ‌caused‌ ‌by‌ ‌a‌‌partner‌‌to‌‌the‌‌partnership‌‌‌CANNOT‌‌ be‌ ‌offset‌ ‌by‌ ‌the‌ ‌profits‌‌or‌‌benefits‌‌which‌‌he‌‌may‌‌have‌‌earned‌‌ for‌‌the‌‌partnership‌‌by‌‌his‌‌industry.‌ ‌ If‌ ‌through‌ ‌the‌ ‌partner's‌ ‌extraordinary‌ ‌efforts‌ ‌in‌ ‌other‌‌ activities‌ ‌of‌ ‌the‌ ‌partnership,‌ ‌unusual‌ ‌profits‌ ‌have‌ ‌been‌‌ realized,‌ ‌the‌ ‌courts‌ ‌may‌ ‌equitably‌ ‌lessen‌ ‌this‌‌ responsibility.‌ ‌ The‌ ‌share‌ ‌of‌ ‌the‌‌capitalist‌‌partner‌‌is‌‌in‌‌proportion‌‌to‌‌ his‌‌capital‌‌contribution.‌ ‌ May‌‌execute‌‌all‌‌acts‌‌of‌‌administration‌‌despite‌‌the‌‌opposition‌‌of‌‌ his‌‌partners,‌‌unless‌h ‌ e‌‌should‌‌act‌‌in‌‌bad‌‌faith;‌‌ ‌ ii) The‌‌industrial‌‌partner‌‌shall‌‌receive‌‌such‌‌share‌‌as‌‌may‌‌ be‌ ‌just‌ ‌and‌ ‌equitable‌,‌ ‌which‌‌must‌‌be‌‌satisfied‌‌first‌‌ before‌‌the‌‌capitalist‌‌partners‌‌shall‌‌divide‌‌the‌‌profits.‌ ‌ If‌ ‌appointed‌ ‌in‌ ‌articles‌ ‌of‌ ‌partnership,‌ ‌his‌ ‌power‌ ‌is‌‌ irrevocable‌‌without‌‌just‌‌or‌‌lawful‌‌cause‌.‌‌Thus,‌‌removal‌‌may‌‌ be‌‌had‌‌only‌ ‌ This‌‌means‌‌the‌‌least‌‌amount‌‌that‌‌a‌‌capitalist‌‌partner‌‌ gets.‌ ‌ 3) Losses‌ ‌ Risk‌‌of‌‌loss‌‌of‌‌things‌‌contributed‌ ‌ ‌ i) a) According‌‌to‌a ‌ greement‌;‌ ‌ Who‌‌bears‌‌loss?‌ ‌ Specific‌ ‌and‌ ‌determinate‌ ‌things,‌ ‌which‌ ‌are‌ ‌not‌‌ fungible‌‌where‌‌only‌‌use‌‌is‌‌contributed‌ ‌ Partner‌ ‌ b) If‌ ‌no‌ ‌agreement,‌ ‌but‌ ‌the‌ ‌contract‌ ‌provides‌ ‌for‌ ‌a‌‌ profit-sharing‌‌scheme‌,‌‌the‌‌losses‌‌shall‌‌be‌‌in‌‌accordance‌‌ with‌‌that‌‌scheme.‌ ‌ Specific‌ ‌and‌ ‌determinate‌ ‌things‌ ‌the‌ ‌ownership‌‌ of‌‌which‌‌is‌‌transferred‌‌to‌‌the‌‌partnership‌ ‌ Partnership‌ ‌ c) If‌ ‌there‌ ‌is‌ ‌also‌ ‌no‌ ‌profit-sharing‌ ‌stipulated,‌ ‌then‌ ‌losses‌‌ shall‌‌be‌‌borne‌‌in‌‌proportion‌‌to‌c‌ apital‌‌contribution‌.‌ ‌ Fungibles‌ ‌or‌ ‌things‌ ‌which‌ ‌cannot‌ ‌be‌ ‌kept‌‌ without‌ ‌deteriorating‌ ‌even‌ ‌if‌ ‌contributed‌ ‌only‌‌ for‌‌use‌ ‌ Partnership‌ ‌ Things‌‌contributed‌‌to‌‌be‌‌sold‌ ‌ Partnership‌ ‌ Things‌‌brought‌‌and‌‌appraised‌‌in‌‌the‌‌inventory‌ ‌ Partnership‌ ‌ Rules‌‌for‌‌distribution‌‌of‌‌profits‌‌and‌‌losses‌ ‌ 1) Capital‌ ‌ In‌ ‌any‌ ‌case,‌ ‌the‌ ‌purely‌ ‌industrial‌ ‌partner‌ ‌shall‌ ‌not‌ ‌be‌‌ liable‌‌for‌‌the‌‌losses.‌ ‌ Can‌‌a‌‌third‌‌person‌‌be‌‌designated‌‌to‌‌determine‌‌share‌‌in‌‌profits‌‌or‌‌ losses?‌ ‌ YES‌.‌‌If‌‌the‌‌partners‌‌have‌‌agreed‌‌to‌‌intrust‌‌to‌‌a‌‌third‌‌person.‌ ‌ Such‌ ‌designation‌ ‌may‌ ‌be‌ ‌impugned‌ ‌only‌ ‌when‌ ‌it‌ ‌is‌ ‌manifestly‌‌ inequitable‌.‌‌In‌‌no‌‌case‌‌may‌‌a‌‌partner‌‌complain‌‌of‌‌such‌‌decision‌‌if‌‌ he‌ ‌ a) According‌‌to‌a ‌ greement‌;‌ ‌ b) If‌‌no‌‌agreement,‌‌the‌‌share‌‌shall‌‌be‌e ‌ qual‌;‌ ‌ c) In‌‌case‌‌of‌‌imminent‌‌loss‌‌of‌‌the‌‌business,‌‌additional‌‌shares‌‌ may‌‌be‌‌determined‌‌by‌‌the‌‌majority.‌ ‌ 2) Profits‌ ‌ a) According‌‌to‌a ‌ greement‌;‌ ‌ b) If‌‌no‌‌agreement‌ ‌ 1. Has‌‌begun‌‌to‌‌execute‌‌the‌‌decision‌‌of‌‌the‌‌third‌‌person,‌‌or‌‌ ‌ 2. Has‌ ‌not‌ ‌impugned‌ ‌the‌ ‌same‌ ‌within‌ ‌a‌ ‌period‌ ‌of‌ ‌three‌‌ months‌‌from‌‌the‌‌time‌‌he‌‌had‌‌knowledge‌‌thereof,‌ The‌‌designation‌‌of‌‌losses‌‌and‌‌profits‌‌cannot‌‌be‌‌intrusted‌‌to‌‌one‌‌of‌‌ the‌‌partners.‌ ‌ A‌‌stipulation‌‌which‌‌excludes‌‌one‌‌or‌‌more‌‌partners‌‌from‌‌any‌‌share‌‌ in‌‌the‌‌profits‌‌or‌‌losses‌‌is‌V ‌ OID‌.‌ ‌ Management‌ ‌ a) For‌‌lawful‌‌cause‌‌of‌‌if‌‌there‌‌is‌‌bad‌‌faith;‌‌AND‌ ‌ b) Through‌ ‌the‌ ‌votes‌ ‌of‌ ‌the‌ ‌partners‌ ‌representing‌ ‌the‌‌ controlling‌‌interest.‌ ‌ If‌ ‌appointed‌ ‌after‌ ‌the‌ ‌partnership‌ ‌has‌ ‌been‌ ‌constituted,‌ ‌his‌‌ power‌‌may‌‌be‌‌‌revoked‌‌at‌‌any‌‌time‌‌by‌‌the‌‌vote‌‌of‌‌the‌‌partners‌‌ representing‌‌the‌‌controlling‌‌interest.‌ ‌ 2) If‌‌TWO‌‌OR‌‌MORE‌‌are‌‌appointed‌‌managers‌ ‌ a) without‌‌specification‌‌of‌‌their‌‌respective‌‌duties,‌‌or‌‌ ‌ b) without‌ ‌a‌ ‌stipulation‌ ‌that‌ ‌one‌ ‌of‌ ‌them‌ ‌shall‌ ‌not‌ ‌act‌‌ without‌‌the‌‌consent‌‌of‌‌all‌‌the‌‌others,‌‌ ‌ each‌‌one‌‌may‌‌‌separately‌‌execute‌‌‌all‌‌acts‌‌of‌‌‌administration‌,‌‌ but‌ ‌if‌ ‌any‌ ‌of‌ ‌them‌ ‌should‌ ‌oppose‌ ‌the‌ ‌acts‌ ‌of‌ ‌the‌ ‌others,‌ ‌the‌‌ decision‌‌of‌‌the‌‌majority‌‌‌of‌‌the‌‌managers‌‌‌shall‌‌prevail.‌‌ ‌ In‌ ‌case‌ ‌of‌ ‌a‌ ‌tie‌,‌ ‌the‌ ‌matter‌ ‌shall‌ ‌be‌‌decided‌‌by‌‌the‌partners‌ owning‌‌the‌‌controlling‌‌interest‌.‌ ‌ In‌ ‌case‌ ‌UNANIMITY‌ ‌OF‌ ‌ACTION‌ ‌is‌ ‌stipulated,‌ ‌the‌‌ CONCURRENCE‌ ‌OF‌ ‌ALL‌‌shall‌‌be‌‌necessary‌‌for‌‌the‌‌validity‌‌of‌‌ the‌‌acts.‌ ‌ The‌‌absence‌‌or‌‌disability‌‌of‌‌any‌‌one‌‌of‌‌them‌‌cannot‌‌be‌‌alleged,‌‌ unless‌ ‌there‌ ‌is‌ ‌imminent‌ ‌danger‌ ‌of‌ ‌grave‌ ‌or‌ ‌irreparable‌‌ injury‌‌‌to‌‌the‌‌partnership.‌ ‌ 3) When‌ ‌the‌ ‌manner‌ ‌of‌‌management‌‌has‌‌‌NOT‌‌‌been‌‌agreed‌‌upon,‌‌ the‌‌following‌‌rules‌‌shall‌‌be‌‌observed:‌ ‌ a) ALL‌ ‌the‌ ‌partners‌ ‌shall‌ ‌be‌ ‌considered‌ ‌agents‌ ‌and‌‌ whatever‌‌any‌‌one‌‌of‌‌them‌‌may‌‌do‌‌alone‌‌shall‌‌bind‌‌the‌‌ partnership.‌ ‌ 1) If‌‌ONE‌‌is‌‌appointed‌‌manager‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 35‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ b) UNANIMOUS‌ ‌CONSENT‌ ‌is‌ ‌required‌ ‌in‌ ‌making‌ ‌any‌‌ Property‌‌Rights‌‌of‌‌a‌‌Partner‌ ‌ important‌‌‌alteration‌‌‌in‌‌the‌‌‌immovable‌‌‌property‌‌of‌‌ 1) His‌r‌ ights‌‌in‌‌‌specific‌‌partnership‌‌property‌;‌ the‌ ‌partnership,‌ ‌even‌ ‌if‌ ‌it‌ ‌may‌ ‌be‌ ‌useful‌ ‌to‌ ‌the‌‌ partnership.‌‌ ‌ A‌‌partner‌‌is‌‌co-owner‌w ‌ ith‌‌his‌‌partners.‌ ‌ Partner‌N ‌ OT‌e‌ ntitled‌‌to‌‌compensation.‌ ‌ EXC‌:‌ The‌‌law‌‌may‌‌imply‌‌a‌‌contract‌‌for‌‌compensation.‌ ‌ Subpartnership‌ ‌ Every‌‌partner‌‌may‌‌associate‌‌another‌‌person‌‌with‌‌him‌‌in‌‌his‌‌share,‌‌ but‌ ‌the‌ ‌associate‌ ‌shall‌ ‌NOT‌ ‌be‌ ‌admitted‌ ‌into‌ ‌the‌ ‌partnership‌‌ without‌ ‌the‌ ‌consent‌ ‌of‌ ‌ALL‌ ‌the‌ ‌other‌ ‌partners‌,‌ ‌even‌ ‌if‌ ‌the‌‌ partner‌‌having‌‌an‌‌associate‌‌should‌‌be‌‌a‌‌manager.‌ ‌ Right‌‌of‌‌partner‌‌to‌‌a‌‌formal‌‌account‌ ‌ GR‌:‌ EXC‌:‌ 2) His‌‌interest‌i‌ n‌‌the‌‌partnership;‌ ‌ Refers‌ ‌to‌ ‌his‌ ‌share‌ ‌of‌ ‌the‌ ‌profits‌‌‌and‌‌‌surplus‌.‌‌These‌‌may‌‌be‌‌ assigned.‌ ‌ 3) As‌‌provided‌‌by‌‌Article‌‌1807‌‌—‌‌Every‌‌partner‌‌must‌‌account‌‌to‌‌ the‌ ‌partnership‌ ‌for‌ ‌any‌ ‌benefit,‌ ‌and‌ ‌hold‌ ‌as‌ ‌trustee‌‌for‌‌it‌‌any‌‌ profits‌ ‌derived‌ ‌by‌ ‌him‌ ‌without‌ ‌the‌ ‌consent‌ ‌of‌ ‌the‌ ‌other‌‌ partners‌ ‌from‌ ‌any‌ ‌transaction‌‌connected‌‌with‌‌the‌‌formation,‌‌ conduct,‌ ‌or‌ ‌liquidation‌ ‌of‌ ‌the‌ ‌partnership‌‌or‌‌from‌‌any‌‌use‌‌by‌‌ him‌‌of‌‌its‌‌property.‌ ‌ 2) Other‌‌remedies‌‌may‌‌include‌ ‌ a) Receivership;‌ ‌ A‌ ‌partner‌ ‌shall‌‌NOT‌‌be‌‌deprived‌‌of‌‌his‌‌right,‌‌if‌‌any,‌‌under‌‌the‌‌ exemption‌‌laws,‌a ‌ s‌‌regards‌‌his‌‌interest‌‌‌in‌‌the‌‌partnership.‌ ‌ ‌ ction‌ ‌for‌ ‌accounting.‌ ‌Any‌ ‌partner‌ ‌shall‌ ‌have‌ ‌the‌ ‌right‌ ‌to‌ ‌a‌‌ A formal‌‌account‌‌as‌‌to‌‌partnership‌‌affairs:‌ ‌ 2) If‌‌the‌‌right‌‌exists‌‌under‌‌the‌‌terms‌‌of‌‌any‌a ‌ greement‌;‌ ‌ 1) Application‌‌for‌‌a‌‌‌charging‌‌order‌‌after‌‌securing‌‌judgment‌‌on‌‌ his‌‌credit.‌‌‌However‌,‌‌claims‌‌of‌‌‌partnership‌‌creditors‌‌must‌‌be‌‌ satisfied‌‌first.‌ ‌ d) NOT‌‌subject‌‌to‌‌legal‌‌support‌.‌ ‌ During‌ ‌the‌ ‌existence‌ ‌of‌ ‌the‌ ‌partnership,‌ ‌a‌ ‌partner‌ ‌is‌ ‌NOT‌ entitled‌ ‌to‌ ‌a‌ ‌formal‌ ‌account‌ ‌of‌ ‌partnership‌ ‌affairs‌ ‌since‌ ‌his‌‌ right‌ ‌to‌ ‌know‌ ‌are‌ ‌amply‌ ‌protected‌ ‌with‌ ‌regard‌ ‌to‌ ‌access‌ ‌to‌‌ partnership‌‌books.‌ ‌ 1) If‌‌he‌‌is‌‌‌wrongfully‌‌excluded‌‌from‌‌the‌‌partnership‌‌business‌‌or‌‌ possession‌‌of‌‌its‌‌property‌‌by‌‌his‌‌co-partners;‌ ‌ a) Interfere‌‌in‌‌the‌‌management;‌ ‌ b) Require‌‌any‌‌information‌‌or‌‌account;‌‌or‌ ‌ a) Equal‌ ‌right‌ ‌to‌ ‌possess‌ ‌for‌ ‌partnership‌‌purposes‌,‌‌ c) Inspect‌‌partnership‌‌books.‌ ‌ but‌ ‌not‌ ‌for‌ ‌any‌ ‌other‌ ‌purpose‌‌without‌‌the‌‌consent‌‌of‌‌ the‌‌other‌‌partners;‌ ‌ The‌‌only‌‌rights‌‌of‌‌the‌‌assignee‌‌are:‌ ‌ b) NOT‌ ‌assignable‌ ‌except‌ ‌in‌ ‌connection‌ ‌with‌ ‌the‌‌ 1) To‌r‌ eceive‌‌the‌‌profits‌a‌ ccruing‌‌to‌‌the‌‌assigning‌‌partner;‌ ‌ assignment‌ ‌of‌ ‌rights‌ ‌of‌ ‌all‌ ‌the‌ ‌partners‌ ‌in‌ ‌the‌ ‌same‌‌ property;‌ ‌ 2) To‌ ‌avail‌ ‌of‌ ‌usual‌ ‌remedies‌ ‌in‌ ‌the‌ ‌event‌ ‌of‌ ‌fraud‌ ‌in‌ ‌the‌‌ c) NOT‌‌subject‌‌to‌‌attachment‌‌or‌‌execution‌‌‌except‌‌‌on‌‌ management;‌ ‌ a‌‌claim‌‌against‌‌the‌‌partnership;‌ ‌ 3) To‌‌‌receive‌‌assignor’s‌‌interest‌i‌ n‌‌case‌‌of‌‌dissolution;‌ ‌ When‌ ‌partnership‌ ‌property‌ ‌is‌ ‌attached‌ ‌for‌ ‌a‌‌ 4) To‌‌‌require‌‌an‌‌account‌‌of‌‌partnership‌‌affairs,‌‌‌but‌‌only‌‌in‌‌case‌‌ partnership‌ ‌debt‌ ‌the‌ ‌partners,‌ ‌or‌ ‌any‌ ‌of‌ ‌them,‌ ‌or‌‌the‌‌ of‌‌dissolution‌.‌ ‌ representatives‌ ‌of‌ ‌a‌ ‌deceased‌ ‌partner,‌ ‌cannot‌ ‌claim‌‌ any‌‌right‌‌under‌‌the‌‌homestead‌‌or‌‌exemption‌‌laws‌.‌ ‌ Remedies‌‌of‌‌separate‌‌judgment‌‌creditor‌‌of‌‌a‌‌partner‌ ‌ But‌ ‌if‌ ‌the‌ ‌refusal‌ ‌of‌ ‌consent‌ ‌by‌ ‌the‌ ‌other‌ ‌partners‌‌is‌‌ manifestly‌ ‌prejudicial‌ ‌to‌ ‌the‌ ‌interest‌ ‌of‌ ‌the‌‌ partnership‌,‌‌the‌‌court's‌‌intervention‌‌‌may‌‌be‌‌sought.‌ ‌ GR‌:‌ This‌ ‌is‌ ‌permitted‌ ‌without‌ ‌causing‌ ‌dissolution.‌ ‌However,‌ ‌such‌‌ assignment‌‌does‌‌NOT‌‌grant‌‌the‌‌assignee‌‌‌the‌‌right‌‌to:‌ ‌ 3) His‌‌right‌‌to‌p ‌ articipate‌i‌ n‌‌the‌‌management.‌ ‌ ‌ Changes‌‌ in‌‌value‌ ‌ Partnership‌‌Property‌ ‌ Partnership‌‌Capital‌ ‌ VARIES‌ ‌ CONSTANT‌ ‌ Original‌‌capital‌‌ contribution‌‌+‌‌All‌‌ Assets‌‌ property‌‌subsequently‌‌ included‌ ‌ acquired‌‌+‌‌Partnership‌‌ name‌‌+‌‌Goodwill‌ ‌ 4) Whenever‌‌‌other‌‌circumstances‌‌‌render‌‌it‌‌just‌‌and‌‌reasonable.‌‌ e.g.‌a‌ ‌‌partner‌‌has‌‌been‌‌assigned‌‌abroad‌‌for‌‌a‌‌long‌‌time.‌ ‌ Assignment‌‌of‌‌partner’s‌‌whole‌‌interest‌ ‌ Aggregate‌‌of‌‌the‌‌individual‌‌ contributions‌ ‌made‌ ‌in‌‌ establishing‌ ‌or‌ ‌continuing‌‌ the‌‌partnership‌ ‌ b) Sale‌‌of‌‌interest.‌ ‌ The‌‌interest‌‌charged‌‌may‌‌be‌r ‌ edeemed‌.‌ ‌ Obligations‌‌of‌‌the‌‌Partners‌‌with‌‌Regard‌‌to‌‌Third‌‌Persons‌ ‌ Liability‌‌for‌‌inclusion‌‌of‌‌name‌‌in‌‌firm‌‌name‌ ‌ Partners‌ ‌by‌ ‌estoppel.‌ ‌Persons‌ ‌who,‌ ‌being‌ ‌not‌ ‌partners,‌ ‌include‌‌ their‌‌names‌‌in‌‌the‌‌firm‌‌name‌‌ ‌ 1. DO‌‌NOT‌‌‌acquire‌‌the‌‌rights‌‌of‌‌a‌‌partner,‌‌ ‌ 2. but‌ ‌they‌ ‌shall‌ ‌be‌ ‌SUBJECT‌ ‌to‌ ‌the‌ ‌liability‌ ‌of‌ ‌a‌ ‌partner‌‌ insofar‌‌as‌‌third‌‌persons‌‌without‌‌notice‌‌are‌‌concerned.‌ ‌ Liability‌‌for‌‌contractual‌‌obligations‌‌of‌‌the‌‌partnership‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 36‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ EXC‌:‌ The‌ ‌general‌ ‌rule‌ ‌is‌ ‌that‌ ‌a‌ ‌partner,‌ ‌who‌‌had‌‌‌actual‌‌or‌‌apparent‌‌ authority‌,‌‌has‌‌the‌‌right‌‌to‌‌make‌‌all‌‌partners‌‌liable‌‌for‌‌the‌‌contracts‌‌ he‌‌makes‌‌for‌‌the‌‌partnership‌‌in‌‌the‌‌name‌‌and‌‌for‌‌the‌‌account‌‌of‌‌the‌‌ partnership.‌ ‌ Except‌ ‌when‌ ‌authorized‌ ‌by‌ ‌the‌ ‌other‌‌partners‌‌or‌‌ unless‌ ‌they‌ ‌have‌ ‌abandoned‌‌the‌‌business‌,‌‌one‌‌or‌‌ more‌ ‌but‌ ‌less‌ ‌than‌ ‌all‌‌the‌‌partners‌‌have‌‌no‌‌authority‌‌ to:‌ ‌ The‌ ‌individual‌ ‌liability‌ ‌of‌ ‌partners‌ ‌to‌ ‌creditors‌ ‌is‌ ‌pro‌ ‌rata‌ ‌and‌‌ subsidiary.‌ ‌ 1) Assign‌ ‌the‌ ‌partnership‌‌property‌‌in‌‌trust‌‌for‌‌creditors‌‌ or‌ ‌on‌ ‌the‌ ‌assignee's‌ ‌promise‌ ‌to‌ ‌pay‌ ‌the‌ ‌debts‌ ‌of‌ ‌the‌‌ partnership;‌ ‌ 1) Pro‌ ‌rata‌ ‌—‌ ‌based‌ ‌on‌ ‌the‌ ‌number‌‌of‌‌partners,‌‌and‌‌not‌‌on‌‌the‌‌ amount‌‌of‌‌contribution.‌ ‌ 2) Subsidiary‌ ‌or‌ ‌secondary‌ ‌—‌ ‌only‌ ‌after‌ ‌all‌ ‌the‌ ‌partnership‌‌ assets‌‌have‌‌been‌‌exhausted.‌ ‌ 2) Dispose‌‌of‌‌the‌‌goodwill‌o ‌ f‌‌the‌‌business;‌ ‌ 3) Do‌‌any‌‌other‌‌act‌‌which‌‌would‌‌make‌‌it‌‌‌impossible‌‌‌to‌‌ carry‌‌on‌‌the‌‌ordinary‌‌business‌‌of‌‌a‌‌partnership;‌ ‌ Industrial‌ ‌partners‌,‌ ‌although‌ ‌not‌ ‌liable‌ ‌for‌ ‌losses‌,‌ ‌are‌‌ personally‌ ‌liable‌ ‌for‌ ‌liabilities‌ ‌of‌ ‌the‌ ‌partnership‌ ‌to‌ ‌third‌‌ persons.‌ ‌ 4) Confess‌a‌ ‌‌judgment;‌ ‌ Losses‌‌‌=‌‌settlement‌‌of‌‌partnership‌‌affairs‌‌among‌‌partners;‌ ‌ 5) Enter‌ ‌into‌ ‌a‌ ‌compromise‌ ‌concerning‌ ‌a‌ ‌partnership‌‌ claim‌‌or‌‌liability;‌ ‌ Liabilities‌‌‌=‌‌to‌‌third‌‌persons.‌ ‌ 6) Submit‌‌a‌‌partnership‌‌claim‌‌or‌‌liability‌‌to‌a ‌ rbitration‌;‌ ‌ Stipulation‌‌against‌‌liability‌ ‌ A‌ ‌stipulation‌ ‌among‌ ‌partners‌ ‌contrary‌ ‌to‌ ‌the‌ ‌pro‌ ‌rata‌ ‌and‌‌ subsidiary‌‌liability‌‌expressly‌‌imposed‌‌is‌‌‌VOID‌‌‌and‌‌of‌‌no‌‌effect‌‌as‌‌ to‌‌third‌‌persons.‌ ‌ 7) Renounce‌a‌ ‌‌claim‌‌of‌‌the‌‌partnership.‌ ‌ 3) Acts‌‌in‌‌contravention‌‌of‌‌a‌‌restriction‌‌on‌‌authority‌ ‌ GR‌:‌ Such‌ ‌stipulation‌ ‌however‌ ‌is‌ ‌VALID‌ ‌and‌ ‌enforceable‌ ‌among‌ ‌the‌‌ partners.‌ ‌ EXC‌:‌ Liability‌‌of‌‌partnership‌‌for‌‌acts‌‌of‌‌partners‌ ‌ 1) Acts‌‌for‌‌apparently‌‌carrying‌‌out‌‌the‌‌usual‌‌way‌‌of‌‌business‌‌ of‌‌the‌‌partnership‌‌a.k.a.‌‌Acts‌‌of‌‌administration‌ ‌ GR‌:‌ Every‌ ‌partner‌ ‌is‌ ‌an‌ ‌agent‌ ‌and‌ ‌may‌ ‌execute‌ ‌such‌ ‌acts‌‌ with‌‌binding‌‌effect.‌ ‌ EXC‌:‌ If‌‌the‌‌partner‌‌so‌‌acting‌ ‌ Partnership‌ ‌is‌ ‌NOT‌ ‌liable‌ ‌to‌ ‌third‌ ‌persons‌ ‌having‌‌ actual‌‌or‌‌presumptive‌‌knowledge‌‌of‌‌the‌‌restrictions.‌ ‌ Such‌ ‌persons‌ ‌not‌ ‌having‌ ‌such‌ ‌notice‌ ‌have‌ ‌a‌ ‌right‌ ‌to‌‌ assume‌ ‌that‌ ‌the‌‌authority‌‌of‌‌a‌‌partner‌‌is‌‌co-extensive‌‌ with‌‌the‌‌business‌‌transacted‌‌by‌‌his‌‌firm.‌ ‌ Conveyance‌‌of‌‌real‌‌property‌‌owned‌‌by‌‌partnership‌ ‌ Title‌‌in‌‌ name‌‌of‌ ‌ Conveyance‌‌ in‌‌name‌‌of‌ ‌ a) Has‌‌in‌‌fact‌‌no‌‌authority;‌‌AND‌ ‌ b) The‌‌third‌‌person‌‌KNOWS.‌ ‌ Partnership‌ ‌ Partnership‌ ‌ 2) Acts‌‌of‌‌strict‌‌dominion‌‌or‌‌ownership‌ ‌ GR‌:‌ NOT‌‌binding;‌ ‌ Partnership‌ ‌ Partner’s‌‌ name‌ ‌ Buyer‌‌gets‌e ‌ quitable‌‌interest‌‌‌of‌‌the‌‌ partnership‌‌except‌‌‌if‌ ‌ a) Partnership‌‌is‌‌not‌‌engaged‌‌in‌‌ buying‌‌and‌‌selling‌‌of‌‌lands;‌‌ or‌ ‌ b) Buyer‌‌had‌‌knowledge‌‌that‌‌ the‌‌partner-seller‌‌had‌‌no‌‌ authority.‌ ‌ One‌‌or‌‌ more‌‌ partners‌ ‌ Partner/s‌‌in‌‌ whose‌‌name‌‌ the‌‌title‌‌ stands‌ ‌ Passes‌‌title,‌‌same‌‌as‌‌(1)‌ ‌ Unless‌‌authorized‌‌by‌‌the‌‌other‌‌partners.‌ ‌ One‌‌or‌‌ more‌‌or‌‌all‌‌ partners‌‌or‌‌ Partnership‌‌ a‌‌third‌‌ or‌‌partner‌ ‌ person‌‌in‌‌ trust‌‌for‌‌ partnership‌ ‌ Buyer‌‌gets‌e ‌ quitable‌‌interest‌‌‌of‌‌the‌‌ partnership,‌‌same‌‌as‌‌(2)‌ ‌ All‌‌partners‌ All‌‌partners‌ ‌ Passes‌‌title.‌ ‌ Admission‌‌by‌‌a‌‌partner‌ ‌ An‌ ‌admission‌ ‌or‌ ‌representation‌ ‌made‌ ‌by‌ ‌any‌ ‌partner‌ ‌concerning‌‌ partnership‌‌affairs‌‌‌within‌‌the‌‌scope‌‌of‌‌his‌‌authority‌‌is‌‌‌evidence‌‌ against‌‌the‌‌partnership‌.‌ ‌ Notice‌‌to,‌‌or‌‌knowledge‌‌of,‌‌a‌‌partner‌ ‌ GR‌:‌ EFFECT‌ ‌ Passes‌‌title‌,‌‌but‌‌partnership‌‌can‌‌ recover‌‌if‌ ‌ a) Conveyance‌‌was‌‌not‌‌in‌‌usual‌‌ way‌‌of‌‌business;‌‌or‌ ‌ b) Buyer‌‌had‌‌knowledge‌‌that‌‌ the‌‌partner-seller‌‌had‌‌no‌‌ authority.‌ ‌ Notice‌ ‌to‌ ‌any‌ ‌partner‌ ‌of‌ ‌any‌ ‌matter‌ ‌relating‌ ‌to‌ ‌partnership‌‌ affairs,‌‌and‌‌the‌‌knowledge‌‌of‌‌the‌‌partner‌‌acting‌‌in‌‌the‌‌particular‌‌ matter,‌‌ ‌ 1. acquired‌‌while‌‌a‌‌partner‌‌or‌ ‌ 2. then‌‌present‌‌to‌‌his‌‌mind,‌‌and‌‌ ‌ the‌‌knowledge‌‌of‌‌any‌‌other‌‌partner‌‌ ‌ 3. who‌‌reasonably‌‌could‌‌and‌‌should‌‌have‌‌communicated‌‌it‌‌to‌‌the‌‌ acting‌‌partner,‌‌ ‌ operate‌‌as‌‌notice‌‌to‌‌or‌‌knowledge‌‌of‌‌the‌‌partnership‌.‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 37‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ EXC‌:‌ NB:‌ in‌‌the‌‌case‌‌of‌‌‌fraud‌‌‌on‌‌the‌‌partnership,‌‌committed‌‌by‌‌or‌‌with‌‌ the‌‌consent‌‌of‌‌that‌‌partner.‌ ‌ Notice‌‌to‌‌any‌‌partner,‌‌under‌‌certain‌‌circumstances,‌‌operates‌‌as‌‌ notice‌ ‌to‌ ‌or‌ ‌knowledge‌ ‌to‌ ‌the‌ ‌partnership‌ ‌only.‌ ‌Evidently,‌ ‌it‌‌ does‌‌not‌‌provide‌‌for‌‌the‌‌reverse‌‌situation‌,‌‌or‌‌that‌‌notice‌‌to‌‌the‌‌ partnership‌‌is‌‌notice‌‌to‌‌the‌‌partners.‌‌(G ‌ uy‌‌v.‌‌Gacott‌‌‌2016‌)‌ ‌ Liability‌‌arising‌‌from‌‌partner’s‌‌wrongful‌‌act,‌‌omission,‌‌or‌‌ breach‌‌of‌‌trust‌ ‌ When‌‌is‌‌liability‌‌separate?‌ ‌ a) When‌‌there‌‌is‌‌NO‌‌existing‌‌partnership,‌‌and‌‌only‌‌some‌‌of‌‌those‌‌ represented‌‌consented;‌‌or‌ ‌ b) When‌‌there‌‌is‌‌an‌‌existing‌‌partnership,‌‌and‌‌none‌‌of‌‌the‌‌partners‌‌ consented.‌ ‌ Elements‌‌to‌‌establish‌‌liability‌‌as‌‌a‌‌partner‌‌on‌‌ground‌‌of‌‌estoppel‌ ‌ 1) Proof‌ ‌by‌ ‌plaintiff‌ ‌that‌ ‌he‌ ‌was‌ ‌individually‌ ‌aware‌ ‌of‌ ‌the‌‌ defendant’s‌‌representations;‌ ‌ The‌‌partners‌‌and‌‌partnership‌‌are‌S ‌ OLIDARILY‌l‌ iable‌‌for:‌ ‌ 2) Reliance‌o ‌ n‌‌such‌‌representation‌‌by‌‌the‌‌plaintiff;‌‌and‌ ‌ 1) Loss‌ ‌or‌ ‌injury‌ ‌caused‌ ‌to‌ ‌third‌ ‌persons‌ ‌—‌ ‌Requisites‌ ‌for‌‌ liability‌ ‌ a) Partner‌ ‌must‌ ‌be‌‌guilty‌‌of‌‌a‌‌wrongful‌‌act‌‌or‌‌omission;‌‌ AND‌ ‌ 3) Lack‌ ‌of‌ ‌any‌ ‌denial‌ ‌or‌ ‌refutation‌ ‌of‌ ‌the‌ ‌statements‌ ‌by‌ ‌the‌‌ defendant.‌ ‌ Liability‌‌of‌‌incoming‌‌partner‌‌for‌‌partnership‌‌obligations‌ ‌ 1) Limited‌ ‌to‌ ‌his‌ ‌share‌ ‌in‌ ‌the‌ ‌partnership‌ ‌property‌ ‌for‌‌ existing‌o ‌ bligations.‌ ‌ b) He‌‌must‌‌be‌‌acting‌‌in‌‌the‌‌ordinary‌‌course‌‌of‌‌business,‌‌ or‌‌with‌‌the‌‌authority‌‌of‌‌his‌‌co-partners‌‌even‌‌if‌‌the‌‌act‌‌ is‌‌unconnected‌‌with‌‌the‌‌business.‌ ‌ GR‌:‌ 2) Loss‌‌‌where‌‌one‌‌partner‌‌acting‌‌within‌‌the‌‌scope‌‌of‌‌his‌‌apparent‌‌ authority‌ ‌receives‌ ‌money‌ ‌or‌ ‌property‌ ‌of‌ ‌a‌ ‌third‌ ‌person‌ ‌and‌‌ misapplies‌‌it;‌ ‌ 3) Loss‌ ‌where‌ ‌the‌ ‌partnership‌ ‌in‌ ‌the‌ ‌course‌ ‌of‌ ‌its‌ ‌business‌‌ receives‌‌money‌‌or‌‌property‌‌of‌‌a‌‌third‌‌person‌‌and‌‌the‌‌money‌‌or‌‌ property‌ ‌so‌‌received‌‌is‌‌‌misapplied‌‌‌by‌‌any‌‌partner‌‌while‌‌it‌‌is‌‌ in‌‌the‌‌custody‌‌of‌‌the‌‌partnership;‌ ‌ Partner‌‌and‌‌Partnership‌‌by‌‌estoppel‌ ‌ When‌‌does‌‌partnership‌‌liability‌‌result?‌ ‌ Partnership‌ ‌by‌ ‌estoppel‌ ‌results‌ ‌if‌ ‌ALL‌ ‌the‌ ‌actual‌ ‌partners‌‌ consented‌‌to‌‌the‌‌representation.‌ ‌ When‌‌is‌‌liability‌‌pro‌‌rata?‌ ‌ a) When‌ ‌there‌ ‌is‌ ‌NO‌ ‌existing‌ ‌partnership,‌ ‌and‌ ‌all‌ ‌those‌‌ represented‌‌as‌‌partners‌‌consented;‌‌or‌ ‌ EXC‌:‌ 3) Termination‌‌—‌‌‌point‌‌in‌‌time‌‌when‌‌all‌‌partnership‌‌affairs‌‌are‌ completely‌‌wound‌‌up‌‌and‌‌finally‌‌settled.‌‌It‌‌signifies‌‌the‌‌end‌‌of‌‌ the‌‌partnership‌‌life.‌ ‌ Causes‌‌of‌‌Dissolution‌ ‌ 1) Act‌‌of‌‌parties‌‌NOT‌‌in‌‌violation‌‌of‌‌their‌‌agreement‌‌—‌ ‌ a) Termination‌ ‌of‌ ‌the‌ ‌definite‌ ‌term‌ ‌or‌ ‌particular‌‌ undertaking‌‌‌specified‌‌in‌‌the‌‌agreement;‌ ‌ b) Express‌‌will‌‌of‌‌any‌‌partner‌,‌‌who‌‌must‌‌act‌‌in‌‌good‌‌faith,‌‌ when‌‌no‌‌definite‌‌term‌‌or‌‌particular‌‌is‌‌specified;‌ ‌ c) Express‌‌will‌‌of‌‌ALL‌‌the‌‌partners‌‌‌who‌‌have‌‌not‌‌assigned‌‌ their‌ ‌interests‌ ‌or‌ ‌suffered‌ ‌them‌ ‌to‌ ‌be‌ ‌charged‌ ‌for‌ ‌their‌‌ separate‌‌debts‌,‌‌either‌‌before‌‌or‌‌after‌‌the‌‌termination‌‌of‌‌any‌‌ specified‌‌term‌‌or‌‌particular‌‌undertaking;‌ ‌ d) Expulsion‌‌of‌‌any‌‌partner‌‌from‌‌the‌‌business‌‌bona‌‌fide‌‌in‌‌ accordance‌‌with‌‌such‌‌a‌‌power‌‌conferred‌‌by‌‌the‌‌agreement‌‌ between‌‌the‌‌partners;‌ ‌ Not‌ ‌personally‌ ‌liable‌ ‌for‌ ‌existing‌ ‌partnership‌‌ obligations.‌ ‌ 2) Act‌‌of‌‌parties‌‌in‌‌violation‌‌of‌‌their‌‌agreement;‌ ‌ ‌Unless‌‌‌there‌‌is‌‌a‌‌stipulation‌‌to‌‌the‌‌contrary.‌ ‌ 3) Operation‌‌of‌‌law‌— ‌ ‌‌ 2) Extends‌ ‌to‌ ‌his‌ ‌separate‌ ‌property‌ ‌for‌ ‌subsequent‌‌ obligations.‌ ‌ ‌ d.‌‌Dissolution‌‌and‌‌Winding‌‌Up‌ ‌ Three‌‌stages‌‌of‌‌ending‌‌a‌‌partnership:‌ ‌ a) Any‌ ‌event‌ ‌which‌ ‌makes‌ ‌it‌ ‌unlawful‌ ‌for‌‌the‌‌business‌‌of‌‌ the‌‌partnership‌‌to‌‌be‌‌carried‌‌on‌‌or‌‌for‌‌the‌‌members‌‌to‌‌ carry‌‌it‌‌on‌‌in‌‌partnership;‌ ‌ b) Loss‌ ‌of‌ ‌specific‌ ‌thing‌ ‌—‌ ‌When‌ ‌a‌ ‌specific‌ ‌thing‌ ‌which‌‌a‌‌ partner‌ ‌had‌ ‌promised‌ ‌to‌ ‌contribute‌ ‌to‌ ‌the‌ ‌partnership,‌‌ perishes‌‌before‌t‌ he‌‌delivery‌;‌‌ ‌ 1) Dissolution‌ ‌—‌ ‌is‌ ‌the‌ ‌change‌ ‌in‌ ‌the‌ ‌relation‌ ‌of‌ ‌the‌ ‌partners‌‌ caused‌‌by‌‌any‌‌partner‌‌ceasing‌‌to‌‌be‌‌associated‌‌in‌‌the‌‌carrying‌‌ on‌‌of‌‌the‌‌business.‌ ‌ c) Death‌‌of‌‌any‌‌partner;‌ ‌ 2) Winding‌‌up‌‌—‌‌‌is‌‌the‌‌actual‌‌process‌‌of‌‌settling‌‌the‌‌business‌‌or‌‌ partnership‌‌affairs‌‌after‌‌dissolution,‌‌involving‌ ‌ e) Civil‌‌interdiction‌‌‌of‌‌any‌‌partner;‌ ‌ b) When‌ ‌there‌ ‌is‌ ‌an‌ ‌existing‌ ‌partnership,‌ ‌and‌ ‌not‌ ‌all‌ ‌of‌ ‌the‌‌ partners‌‌consented.‌ ‌ a) The‌‌collection‌‌and‌‌distribution‌‌of‌‌partnership‌‌assets,‌ ‌ d) Insolvency‌o ‌ f‌‌any‌‌partner‌‌or‌‌of‌‌the‌‌partnership;‌ ‌ 4) Court‌ ‌decree‌ ‌—‌ ‌On‌ ‌application‌ ‌by‌ ‌or‌ ‌for‌ ‌a‌ ‌partner‌ ‌the‌‌ court‌‌shall‌‌decree‌‌a‌‌dissolution‌‌due‌‌to:‌ ‌ b) Payment‌‌of‌‌debts,‌‌and‌ ‌ a) Insanity‌;‌ ‌ c) Determination‌‌of‌‌the‌‌value‌‌of‌‌each‌‌partner’s‌‌interest‌‌in‌‌the‌‌ partnership.‌ ‌ b) Incapacity‌;‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 38‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ for‌ ‌the‌ ‌partnership‌ ‌as‌ ‌if‌ ‌the‌ ‌partnership‌ ‌had‌ ‌not‌‌ been‌‌dissolved‌ ‌ c) Misconduct‌;‌ ‌ d) Persistent‌‌breach‌‌of‌‌partnership‌‌agreement‌;‌ ‌ EXC‌:‌ e) The‌ ‌business‌ ‌of‌ ‌the‌ ‌partnership‌ ‌can‌ ‌only‌ ‌be‌ ‌carried‌‌ on‌‌at‌‌a‌‌loss‌;‌ ‌ f) a) knowledge‌ ‌of‌ ‌the‌ ‌dissolution‌ ‌caused‌ ‌by‌ ‌act‌ ‌of‌‌ any‌‌partner;‌‌OR‌ ‌ Other‌‌circumstances‌‌render‌‌a‌‌dissolution‌‌equitable.‌ ‌ i) ii) iii) b) knowledge‌ ‌or‌ ‌notice‌ ‌of‌ ‌the‌ ‌death‌ ‌or‌‌ insolvency‌.‌ ‌ Abandonment‌‌of‌‌the‌‌business;‌ ‌ Fraud‌‌in‌‌the‌‌management‌‌of‌‌the‌‌business;‌ ‌ Refusal‌‌without‌‌justifiable‌‌cause‌‌to‌‌render‌‌accounting‌‌ of‌‌partnership‌‌affairs,‌‌etc.‌ ‌ b) With‌‌respect‌‌to‌‌third‌‌persons‌‌—‌ ‌ i) On‌‌the‌‌application‌‌of‌‌the‌p ‌ urchaser‌‌of‌‌a‌‌partner's‌‌interest‌:‌ ‌ a) After‌ ‌the‌ ‌termination‌ ‌of‌ ‌the‌ ‌specified‌ ‌term‌ ‌or‌ ‌particular‌‌ undertaking;‌ ‌ ii) b) At‌ ‌any‌ ‌time‌ ‌if‌ ‌the‌ ‌partnership‌ ‌was‌ ‌a‌ ‌partnership‌ ‌at‌ ‌will‌‌ when‌ ‌the‌ ‌interest‌ ‌was‌ ‌assigned‌ ‌or‌ ‌when‌ ‌the‌ ‌charging‌‌ order‌‌‌was‌‌issued.‌ ‌ acts‌‌incident‌‌to‌‌winding‌‌up‌‌or‌‌ ‌ 2. completing‌‌transactions‌‌begun‌‌but‌‌not‌‌finished.‌ ‌ This‌‌rule‌‌is‌‌subject‌‌to‌‌qualifications.‌ ‌ 2) So‌‌far‌‌unknown‌‌and‌‌inactive‌‌in‌‌partnership‌‌affairs‌‌that‌‌ the‌‌business‌‌reputation‌‌of‌‌the‌‌partnership‌‌could‌‌not‌‌be‌‌ said‌‌to‌‌have‌‌been‌‌in‌‌any‌‌degree‌‌due‌‌to‌‌his‌‌connection‌‌ with‌‌it.‌ ‌ iii) a) With‌‌respect‌‌to‌‌partners‌‌themselves‌‌‌—‌‌ ‌ i) ii) If‌‌the‌‌dissolution‌‌is‌‌NOT‌‌caused‌‌by‌‌the‌‌‌act,‌‌insolvency‌‌or‌‌ death‌‌of‌‌a‌‌partner,‌‌the‌‌authority‌‌of‌‌any‌‌partner‌‌to‌‌bind‌‌the‌‌ partnership‌ ‌by‌ ‌a‌ ‌new‌ ‌contract‌ ‌is‌ ‌IMMEDIATELY‌ terminated.‌ ‌ Otherwise,‌ ‌termination‌ ‌of‌ ‌authority‌ ‌depends‌ ‌upon‌ ‌WON‌‌ the‌‌partner‌‌had‌‌knowledge‌‌or‌‌notice‌‌of‌‌the‌‌dissolution‌‌—‌‌ ‌ GR‌:‌ As‌ ‌to‌ ‌persons‌ ‌who‌ ‌had‌ ‌known‌ ‌of‌ ‌partnership’s‌‌existence‌‌ —‌‌publication‌;‌ ‌ 1) Unknown‌ ‌as‌ ‌a‌ ‌partner‌ ‌to‌ ‌the‌ ‌person‌ ‌with‌ ‌whom‌ ‌the‌‌ contract‌‌is‌‌made;‌‌and‌ ‌ Upon‌ ‌dissolution,‌ ‌a‌ ‌partnership‌ ‌ceases‌ ‌to‌ ‌be‌ ‌a‌ ‌going‌‌concern‌‌ and‌‌the‌‌partner’s‌‌power‌‌of‌‌representation‌‌is‌‌‌confined‌‌only‌‌to‌‌ ‌ 1. As‌ ‌to‌ ‌prior‌ ‌or‌‌former‌‌dealers‌‌‌—‌‌persons‌‌who‌‌extended‌‌ credit‌ ‌to‌ ‌partnership‌ ‌prior‌ ‌to‌ ‌dissolution‌ ‌—‌ ‌must‌ ‌have‌‌ knowledge‌ ‌or‌‌actual‌‌notice‌‌of‌‌the‌‌dissolution‌‌to‌‌relieve‌‌ partnership‌‌from‌‌liability;‌ ‌ In‌ ‌both‌ ‌instances,‌ ‌the‌ ‌liability‌ ‌of‌ ‌a‌ ‌partner‌ ‌shall‌ ‌be‌‌ satisfied‌ ‌out‌ ‌of‌ ‌partnership‌ ‌assets‌ ‌alone‌ ‌when‌ ‌such‌‌ partner‌‌had‌‌been‌‌prior‌‌to‌‌dissolution:‌ ‌ Effect‌‌of‌‌dissolution‌‌on‌‌authority‌‌of‌‌partner‌ ‌ GR‌:‌ Unless‌‌the‌‌partner‌‌acting‌‌for‌‌the‌‌partnership‌‌had‌‌ ‌ Each‌ ‌partner‌ ‌is‌ ‌liable‌ ‌to‌ ‌his‌ ‌co-partners‌ ‌for‌ ‌his‌‌ share‌‌of‌‌any‌‌liability‌‌created‌‌by‌‌any‌‌partner‌‌acting‌‌ The‌ ‌partnership‌ ‌is‌ ‌in‌ ‌NO‌ ‌case‌ ‌bound‌ ‌by‌ ‌any‌ ‌act‌ ‌of‌ ‌a‌‌ partner‌‌after‌‌dissolution:‌ ‌ 1) Unlawful‌ ‌to‌ ‌carry‌ ‌on‌ ‌the‌ ‌business,‌ ‌unless‌ ‌the‌ ‌act‌ ‌is‌‌ appropriate‌‌for‌‌winding‌‌up‌‌partnership‌‌affairs;‌ ‌ 2) Insolvency‌‌of‌‌partner;‌ ‌ 3) Partner‌ ‌has‌ ‌no‌ ‌authority‌ ‌to‌ ‌wind‌ ‌up‌ ‌partnership‌‌ affairs;‌e‌ xcept‌b ‌ y‌‌a‌‌transaction‌‌with‌‌one‌‌who‌‌—‌ ‌ a) Is‌‌a‌‌former‌‌dealer‌‌and‌‌had‌‌no‌‌knowledge‌‌or‌‌notice‌‌ of‌‌his‌‌want‌‌of‌‌authority;‌‌or‌ ‌ b) Is‌ ‌not‌ ‌a‌ ‌former‌‌dealer,‌‌and,‌‌having‌‌no‌‌knowledge‌‌ or‌ ‌notice‌ ‌of‌ ‌his‌ ‌want‌ ‌of‌ ‌authority,‌ ‌the‌‌fact‌‌of‌‌his‌‌ want‌‌of‌‌authority‌‌has‌‌not‌‌been‌‌duly‌‌published.‌ ‌ Winding‌‌up;‌‌manner,‌‌persons‌‌authorized‌ ‌ Winding‌‌up‌‌may‌‌be‌‌done‌j‌ udicially‌o ‌ r‌‌extrajudicially‌‌‌by‌ ‌ 1) The‌‌partners‌‌designated‌‌by‌‌the‌‌agreement;‌ ‌ 2) In‌‌the‌‌absence‌‌of‌‌such‌‌agreement,‌‌by‌‌all‌‌partners‌‌who‌‌have‌‌not‌‌ wrongfully‌‌dissolved‌‌the‌‌partnership;‌‌OR‌ ‌ 3) The‌ ‌legal‌ ‌representative‌ ‌of‌ ‌the‌ ‌last‌ ‌surviving‌ ‌partner,‌ ‌not‌‌ insolvent;‌‌OR‌ ‌ 4) A‌‌court-appointed‌r‌ eceiver‌.‌ ‌ Right‌‌of‌‌partner‌‌to‌‌application‌‌of‌‌partnership‌‌property‌‌on‌ dissolution‌ ‌ “Partner’s‌ ‌lien”‌ ‌is‌ ‌the‌ ‌right‌ ‌of‌ ‌every‌ ‌partner,‌ ‌on‌ ‌a‌ ‌dissolution,‌‌ against‌ ‌the‌ ‌other‌ ‌partners‌ ‌and‌ ‌persons‌ ‌claiming‌ ‌through‌ ‌them‌ ‌in‌‌ respect‌ ‌of‌ ‌their‌ ‌interests‌ ‌as‌ ‌partners,‌ ‌to‌ ‌have‌ ‌the‌ ‌partnership‌‌ property‌‌applied‌‌to‌‌discharge‌‌partnership‌‌liabilities‌‌and‌‌the‌‌surplus‌‌ assets,‌ ‌if‌ ‌any,‌ ‌distributed‌ ‌in‌ ‌cash‌ ‌to‌ ‌the‌ ‌respective‌ ‌partners,‌ ‌after‌‌ deducting‌‌what‌‌may‌‌be‌‌due‌‌to‌‌the‌‌firm‌‌from‌‌them‌‌as‌‌partners.‌ ‌ 1) If‌ ‌dissolution‌ ‌NOT‌ ‌in‌ ‌contravention‌ ‌of‌ ‌agreement‌ ‌—‌‌ Partners‌‌have‌‌the‌‌right‌‌to‌‌have‌ ‌ a) The‌ ‌partnership‌ ‌property‌ ‌applied‌ ‌to‌ ‌discharge‌ ‌the‌‌ liabilities‌‌of‌‌the‌‌partnership;‌‌AND‌ ‌ b) The‌ ‌surplus,‌‌if‌‌any,‌‌applied‌‌to‌‌pay‌‌in‌‌cash‌‌the‌‌net‌‌amount‌‌ owing‌‌to‌‌respective‌‌partners.‌ ‌ NO‌ ‌partner‌ ‌is‌ ‌liable‌ ‌for‌ ‌any‌ ‌loss‌ ‌sustained‌ ‌as‌ ‌a‌ ‌result‌ ‌of‌‌ dissolution.‌ ‌ 2) If‌ ‌dissolution‌ ‌in‌ ‌contravention‌‌of‌‌agreement‌‌—‌‌‌The‌‌rights‌‌ of‌‌a‌‌partner‌‌vary‌‌depending‌‌on‌‌his‌‌innocence.‌ ‌ a) If‌‌innocent‌— ‌ ‌‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 39‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ i) ii) iii) iv) To‌‌have‌‌partnership‌‌property‌‌‌applied‌‌‌for‌‌the‌‌payment‌‌ Rules‌‌in‌‌settling‌‌accounts‌‌between‌‌partners‌ ‌ of‌‌its‌‌liabilities‌‌and‌‌to‌‌receive‌‌in‌‌cash‌‌his‌‌share‌‌of‌‌the‌‌ 1) Assets‌‌of‌‌the‌‌partnership.‌‌—‌‌ ‌ surplus;‌ ‌ a) Partnership‌‌property‌‌+‌‌Goodwill;‌‌AND‌ ‌ To‌ ‌be‌ ‌indemnified‌ ‌for‌‌damages‌‌caused‌‌by‌‌the‌‌guilty‌‌ b) Contributions‌‌of‌‌the‌‌partners‌‌necessary‌‌for‌‌the‌‌payment‌‌of‌‌ partner;‌ ‌ all‌‌liabilities.‌ ‌ To‌‌‌continue‌‌‌the‌‌business‌‌‌in‌‌the‌‌same‌‌name‌‌during‌‌the‌‌ 2) Order‌‌of‌‌application‌o ‌ f‌‌the‌‌assets.‌‌—‌‌ ‌ agreed‌‌term,‌‌by‌‌themselves‌‌or‌‌jointly‌‌with‌‌others;‌‌and‌ ‌ To‌ ‌possess‌ ‌partnership‌ ‌property‌ ‌should‌ ‌they‌‌ decide‌‌to‌‌continue‌‌the‌‌business.‌ ‌ b) If‌‌guilty‌o ‌ f‌‌wrongfully‌‌causing‌‌the‌‌dissolution‌‌—‌‌ ‌ i) ii) If‌ ‌the‌ ‌business‌ ‌is‌ ‌NOT‌ ‌continued‌ ‌—‌ ‌To‌ ‌have‌‌ partnership‌ ‌property‌ ‌applied‌ ‌for‌ ‌the‌ ‌payment‌ ‌of‌ ‌its‌‌ liabilities‌ ‌and‌ ‌to‌ ‌receive‌ ‌in‌ ‌cash‌ ‌his‌ ‌share‌ ‌of‌ ‌the‌‌ surplus‌‌‌less‌‌damages‌.‌ ‌ If‌‌the‌‌business‌‌is‌c‌ ontinued‌ ‌ c) Return‌‌of‌c‌ apital‌‌contribution‌o ‌ f‌‌partners;‌ ‌ 3) Prior‌ ‌right‌ ‌of‌ ‌dissolved‌ ‌partnership‌ ‌creditors‌ ‌as‌ ‌against‌‌ purchaser‌.‌‌—‌‌When‌‌a‌‌retiring‌‌or‌‌deceased‌‌partner‌‌has‌‌sold‌‌his‌‌ interest‌ ‌without‌ ‌a‌ ‌final‌ ‌settlement‌ ‌with‌‌partnership‌‌creditors,‌‌ such‌ ‌creditors‌ ‌have‌ ‌an‌ e ‌ quitable‌ ‌lien‌ ‌on‌‌the‌‌consideration‌‌ paid‌‌to‌‌the‌‌retiring‌‌or‌‌deceased‌‌partner‌‌by‌‌the‌‌purchaser.‌ ‌ 3) Right‌ ‌of‌ ‌a‌ ‌partner‌ ‌where‌ ‌assets‌ ‌insufficient.‌ ‌—‌ ‌The‌‌ following‌‌shall‌‌have‌‌the‌‌right‌‌to‌‌enforce‌‌the‌‌contributions‌ ‌ c) Any‌‌person‌‌appointed‌‌by‌‌the‌‌court‌‌ ‌ b) An‌‌assignee‌‌for‌‌the‌‌benefit‌‌of‌‌creditors;‌‌or‌‌ ‌ 4) Liability‌ ‌of‌ ‌deceased‌ ‌partner’s‌ ‌individual‌ ‌property.‌ ‌—‌‌ shall‌ ‌be‌ ‌liable‌ ‌for‌ ‌his‌ ‌share‌ ‌of‌‌the‌‌contributions‌‌necessary‌‌to‌‌ satisfy‌‌the‌‌liabilities‌‌incurred‌‌while‌‌he‌‌was‌‌a‌‌partner.‌ ‌ 5) Priority‌ ‌to‌ ‌payment‌ ‌of‌ ‌partnership‌ ‌creditors/‌ ‌partners’‌‌ creditors.‌ ‌—‌ ‌When‌ ‌partnership‌ ‌property‌ ‌and‌ ‌the‌ ‌individual‌‌ properties‌ ‌of‌ ‌the‌ ‌partners‌ ‌are‌ ‌in‌ ‌possession‌ ‌of‌ ‌a‌ ‌court‌ ‌for‌‌ distribution‌ ‌ 3) Right‌ ‌of‌ ‌indemnification‌ ‌by‌ ‌the‌ ‌guilty‌ ‌partner‌ ‌against‌ ‌all‌‌ debts‌‌and‌‌liabilities‌‌of‌‌the‌‌partnership.‌ ‌ Rights‌‌of‌‌creditors‌‌of‌‌dissolved‌‌partnership‌‌which‌‌is‌‌continued‌ ‌ 2) Liability‌ ‌of‌ ‌persons‌ ‌continuing‌ ‌the‌ ‌business.‌ ‌—‌ ‌shall‌ ‌be‌‌ satisfied‌ ‌out‌‌of‌‌the‌‌partnership‌‌property‌‌only‌,‌‌‌unless‌‌‌there‌‌ is‌‌a‌‌stipulation‌‌to‌‌the‌‌contrary.‌ ‌ d) Profits‌.‌ ‌ 2) Right‌‌to‌‌‌subrogation‌‌‌in‌‌place‌‌of‌‌partnership‌‌creditors‌‌after‌‌ payment‌‌of‌‌partnership‌‌liabilities;‌‌and‌ ‌ c) To‌‌those‌‌owing‌‌to‌p ‌ artners‌‌by‌‌way‌‌of‌‌contribution.‌ ‌ b) Those‌‌owing‌‌to‌‌partners‌‌other‌‌than‌‌for‌‌capital‌‌and‌‌profits,‌‌ such‌‌as‌‌‌loans‌‌‌given‌‌by‌‌partners‌‌or‌‌‌advances‌‌‌for‌‌business‌‌ expenses;‌‌ ‌ 2) To‌ ‌be‌ ‌released‌ ‌from‌ ‌all‌ ‌existing‌ ‌and‌ ‌future‌‌ liabilities‌‌of‌‌the‌‌partnership.‌ ‌ 1) Right‌ ‌of‌‌a‌‌‌lien‌‌‌on,‌‌or‌‌retention‌‌of,‌‌the‌‌surplus‌‌of‌‌partnership‌‌ property‌ ‌after‌ ‌satisfying‌‌partnership‌‌liabilities‌‌for‌‌any‌‌sum‌‌of‌‌ money‌‌paid‌‌or‌‌contributed‌‌by‌‌him;‌ ‌ b) To‌‌those‌‌owing‌‌to‌p ‌ artnership‌‌creditors;‌‌and‌ ‌ 1) Equal‌‌rights‌o ‌ f‌‌dissolved‌‌and‌‌new‌‌partnership‌‌creditors.‌ ‌ a) Any‌‌partner‌‌or‌‌his‌‌legal‌‌representative,‌‌to‌‌the‌‌extent‌‌of‌‌the‌‌ amount‌ ‌which‌ ‌he‌ ‌has‌ ‌paid‌ ‌in‌ ‌excess‌ ‌of‌ ‌his‌ ‌share‌ ‌of‌ ‌the‌‌ liability;‌ ‌ Rights‌‌of‌‌injured‌‌partner‌‌where‌‌partnership‌‌contract‌‌rescinded‌ ‌ a) To‌‌those‌‌owing‌s‌ eparate‌c‌ reditors;‌ ‌ a) Those‌‌owing‌‌to‌p ‌ artnership‌‌creditors‌;‌ ‌ 1) To‌‌have‌‌the‌‌value‌‌of‌‌his‌‌interest‌‌in‌‌the‌‌partnership‌‌ at‌ ‌the‌ ‌time‌ ‌of‌ ‌dissolution,‌ ‌less‌ ‌damages‌‌ ascertained‌ ‌and‌ ‌paid‌ ‌in‌ ‌cash‌ ‌or‌‌secured‌‌by‌‌bond‌‌ approved‌‌by‌‌the‌‌court;‌‌and‌ ‌ In‌ ‌ascertaining‌ ‌the‌ ‌value‌ ‌of‌ ‌the‌‌partner's‌‌interest‌‌ the‌‌value‌‌of‌‌the‌‌goodwill‌‌of‌‌the‌‌business‌‌shall‌ NOT‌‌be‌‌considered‌.‌ 6) Distribution‌ ‌of‌ ‌property‌ ‌of‌ ‌insolvent‌ ‌partner.‌ ‌—‌ ‌his‌‌ individual‌‌property‌‌shall‌‌be‌‌distributed‌‌as‌‌follows:‌ ‌ a) partnership‌ ‌creditors‌ ‌shall‌ partnership‌‌property‌;‌‌and‌‌ ‌ ‌have‌ ‌priority‌ ‌on‌‌ b) separate‌‌creditors‌‌‌on‌‌‌individual‌‌property‌.‌ ‌ The‌‌lien‌‌comes‌‌ahead‌‌of‌‌the‌‌separate‌‌creditors‌‌of‌‌said‌‌partner.‌ ‌ Rights‌‌of‌‌retiring,‌‌or‌‌of‌‌estate‌‌of‌‌deceased,‌‌partner‌‌ when‌‌business‌‌is‌‌continued‌ ‌ 1) To‌ ‌have‌ ‌the‌ ‌value‌ ‌of‌ ‌the‌ ‌interest‌ ‌of‌ ‌the‌ ‌retiring‌ ‌or‌ ‌deceased‌‌ partner‌ ‌in‌ ‌the‌ ‌partnership‌ ‌ascertained‌ ‌as‌ ‌of‌ ‌the‌ ‌date‌ ‌of‌‌ retirement‌‌or‌‌death;‌‌AND‌ ‌ 2) To‌‌receive‌‌thereafter,‌‌as‌‌an‌o ‌ rdinary‌‌creditor‌,‌‌an‌‌amount‌‌ ‌ a) equal‌ ‌to‌ ‌the‌ ‌value‌ ‌of‌ ‌his‌ ‌share‌ ‌in‌ ‌the‌ ‌dissolved‌‌ partnership‌‌ ‌ b) with‌‌interest,‌‌ ‌ c) or,‌ ‌at‌ ‌his‌ ‌option,‌ ‌in‌ ‌lieu‌ ‌of‌ ‌interest,‌ ‌the‌ ‌profits‌‌ attributable‌‌to‌‌the‌‌use‌‌of‌‌his‌‌right.‌ ‌ e.‌‌Limited‌‌Partnership‌ ‌ This‌ ‌is‌ ‌otherwise‌ ‌known‌ ‌as‌ ‌the‌ ‌doctrine‌ ‌of‌ ‌the‌‌ marshalling‌‌of‌‌assets‌.‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 40‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ Definition‌‌and‌‌Requirements‌ ‌ 2) File‌f‌ or‌‌record‌‌the‌‌certificate‌‌in‌‌the‌‌Office‌‌of‌‌the‌S ‌ EC.‌ ‌ A‌ ‌limited‌ ‌partnership‌ ‌is‌‌one‌‌formed‌‌by‌‌two‌‌or‌‌more‌‌persons,‌‌ having‌‌as‌‌members‌‌ ‌ 1. one‌‌or‌‌more‌g ‌ eneral‌p ‌ artners‌‌AND‌ ‌ 2. one‌‌or‌‌more‌l‌ imited‌p ‌ artners.‌‌ ‌ If‌‌there‌‌is‌‌‌no‌‌substantial‌‌compliance‌,‌‌the‌‌partnership‌‌‌becomes‌‌a‌‌ general‌ ‌partnership‌ ‌as‌ ‌far‌ ‌as‌ ‌third‌ ‌persons‌ ‌are‌ ‌concerned,‌ ‌in‌‌ which‌‌ALL‌‌members‌‌are‌l‌ iable‌‌as‌‌general‌‌partners‌.‌ ‌ The‌‌limited‌‌partners‌‌as‌‌such‌‌shall‌‌not‌‌be‌‌bound‌‌by‌‌the‌‌obligations‌‌ of‌‌the‌‌partnership.‌ ‌ As‌‌to‌ ‌ Liability‌ ‌ General‌ ‌ Personally‌‌liable‌ ‌ Limited‌ ‌ Extends‌‌only‌‌to‌‌capital‌‌ contribution‌ ‌ ✔‌ ‌ Management‌ ‌ Money,‌‌property‌‌or‌‌ industry‌ ‌ A‌ ‌limited‌ ‌partnership‌ ‌is‌ ‌formed‌ ‌if‌ ‌there‌ ‌has‌ ‌been‌ ‌substantial‌‌ compliance‌‌in‌‌good‌‌faith‌w ‌ ith‌‌the‌‌foregoing‌‌requirements.‌ ‌ ✘‌ ‌ When‌‌does‌‌a‌‌limited‌‌partner‌‌become‌‌liable‌‌as‌‌a‌‌general‌‌partner?‌ ‌ 1. If‌‌his‌‌surname‌‌appears‌‌in‌‌firm‌‌name;‌ ‌ 2. If‌‌he‌‌takes‌‌part‌‌in‌‌the‌‌control‌‌of‌‌the‌‌business.‌ ‌ Limited‌‌partner;‌‌specific‌‌rights‌ ‌ 2) To‌ ‌inspect‌ ‌and‌ ‌copy‌ ‌at‌‌a‌‌reasonable‌‌hour‌‌partnership‌‌books‌‌ or‌‌any‌‌of‌‌them;‌ ‌ NO‌‌‌unless‌‌‌also‌‌a‌‌general‌‌ To‌‌proceedings‌‌by‌‌or‌‌ partner,‌‌or‌‌where‌‌the‌‌object‌‌ Proper‌‌Party‌ ‌ against‌‌the‌‌ is‌‌to‌‌enforce‌‌his‌‌right‌‌ partnership‌ ‌ against,‌o ‌ r‌‌liability‌‌to,‌‌the‌‌ partnership.‌ ‌ 3) To‌ ‌demand‌ ‌true‌ ‌and‌ ‌full‌ ‌information‌ ‌of‌ ‌all‌ ‌things‌‌affecting‌‌ the‌‌partnership;‌ ‌ Assignment‌‌ of‌‌interest‌ ‌ Does‌‌not‌‌make‌‌ assignee‌‌new‌‌partner‌‌ Freely‌‌assignable‌ ‌ without‌‌consent‌‌of‌‌ others.‌ ‌ ✔‌ ‌ Name‌‌in‌‌firm‌ ‌ Other‌ business‌ ‌ ✘‌ ‌ Absolutely‌‌or‌‌ No‌‌prohibition‌ ‌ relatively‌‌prohibited‌ ‌ Dissolution‌ ‌ ✔‌ ‌ Retirement,‌‌death,‌‌insanity,‌‌ insolvency‌‌DOES‌‌NOT‌‌ dissolve‌ ‌ Statutory‌‌requirements‌ ‌ a) On‌‌ascertaining‌‌the‌‌mistake‌‌he‌‌promptly‌‌renounces‌‌his‌‌interest‌‌ in‌‌the‌‌profits‌‌of‌‌the‌‌business,‌‌or‌‌other‌‌compensation‌‌by‌‌way‌‌of‌‌ income;‌ ‌ b) His‌‌surname‌‌does‌‌NOT‌‌appear‌‌in‌‌the‌‌partnership‌‌name;‌‌and‌ ‌ c) He‌‌does‌‌NOT‌‌participate‌‌in‌‌the‌‌management‌‌of‌‌the‌‌business.‌ ‌ Transactions‌‌of‌‌limited‌‌partner‌‌with‌‌the‌‌partnership‌ ‌ 1) Allowable‌t‌ ransactions.—‌‌ ‌ a) Grant‌‌loans‌‌to‌‌the‌‌partnership;‌ ‌ 1) To‌ ‌require‌ ‌that‌ ‌the‌‌partnership‌‌‌books‌‌‌be‌‌kept‌‌at‌‌the‌‌principal‌‌ place‌‌of‌‌business;‌ ‌ At‌‌least‌‌money‌‌or‌‌property‌ ‌ Contribution‌ ‌ A‌ ‌person‌ ‌who‌ ‌has‌ ‌contributed‌ ‌to‌ ‌a‌ ‌partnership‌ ‌erroneously‌ ‌believing‌‌ that‌ ‌he‌ ‌has‌ ‌become‌ ‌a‌ ‌limited‌ ‌partner,‌ ‌is‌ ‌NOT‌ ‌personally‌ ‌liable‌ ‌as‌ ‌a‌‌ general‌‌partner,‌p ‌ rovided‌:‌ ‌ b) Transacting‌‌other‌‌business‌‌with‌‌it;‌‌and‌ ‌ c) Receiving‌ ‌a‌ ‌pro‌ ‌rata‌ ‌share‌ ‌of‌‌the‌‌partnership‌‌assets‌‌with‌‌ general‌‌creditors‌‌if‌‌he‌‌is‌‌not‌‌also‌‌a‌‌general‌‌partner.‌ ‌ 2) Prohibited‌t‌ ransactions.‌‌—‌‌ ‌ a) Receive‌ ‌or‌ ‌hold‌ ‌as‌ ‌collateral‌ ‌security‌ ‌any‌ ‌partnership‌‌ property;‌‌or‌ ‌ 4) To‌ ‌demand‌ ‌a‌‌‌formal‌‌account‌‌‌of‌‌partnership‌‌affairs‌‌whenever‌‌ circumstances‌‌render‌‌it‌‌just‌‌and‌‌reasonable;‌ b) Receive‌‌payment,‌‌conveyance‌‌or‌‌release‌‌from‌‌liability‌‌if‌‌it‌‌ will‌‌prejudice‌‌the‌‌right‌‌of‌‌third‌‌persons.‌ ‌ 5) To‌‌ask‌‌for‌d ‌ issolution‌‌and‌‌winding‌‌up‌‌by‌‌decree‌‌of‌‌court;‌ ‌ IF‌ ‌at‌ ‌the‌ ‌time‌ ‌the‌ ‌assets‌ ‌of‌ ‌the‌ ‌partnership‌ ‌are‌ ‌not‌‌ sufficient‌ ‌to‌ ‌discharge‌ ‌partnership‌ ‌liabilities‌ ‌to‌ ‌persons‌‌ not‌‌claiming‌‌as‌‌general‌‌or‌‌limited‌‌partners.‌ ‌ 6) To‌‌receive‌‌a‌‌‌share‌‌‌of‌‌the‌‌profits‌‌or‌‌other‌‌compensation‌‌by‌‌way‌‌ of‌‌income;‌‌ ‌ 7) To‌‌receive‌‌the‌‌‌return‌‌of‌‌his‌‌contribution‌‌provided‌‌there‌‌is‌‌a‌‌ surplus.‌ ‌ GR‌:‌ Unless‌ ‌he‌ ‌is‌ ‌a‌ ‌general‌ ‌partner,‌ ‌a‌ ‌limited‌ ‌partner‌ ‌is‌ ‌NOT‌ ‌a‌‌ proper‌‌party‌‌‌to‌‌proceedings‌‌by‌‌or‌‌against‌‌a‌‌partnership‌ EXC‌:‌ Where‌ ‌the‌‌object‌‌is‌‌to‌‌enforce‌‌a‌‌limited‌‌partner's‌‌right‌‌against‌‌ or‌‌liability‌‌to‌‌the‌‌partnership.‌ ‌ Status‌‌of‌‌person‌‌erroneously‌‌believing‌ ‌ himself‌‌to‌‌be‌‌a‌‌limited‌‌partner‌ ‌ 1) Sign‌‌and‌‌swear‌t‌ o‌‌a‌‌certificate;‌ ‌ Any‌ ‌violation‌ ‌of‌ ‌the‌ ‌prohibition‌ ‌will‌ ‌give‌ ‌rise‌ ‌to‌ ‌the‌‌ presumption‌ ‌that‌ ‌it‌ ‌has‌ ‌been‌ ‌made‌ ‌to‌ ‌defraud‌‌ partnership‌‌creditors‌.‌ ‌ Return‌‌of‌‌contribution‌ ‌ GR‌:‌ A‌ ‌limited‌ ‌partner‌ ‌only‌ ‌has‌ ‌the‌ ‌right‌ ‌to‌ ‌demand‌ ‌and‌ ‌receive‌‌ CASH‌ ‌for‌ ‌his‌ ‌contribution,‌ ‌whether‌ ‌he‌ ‌contributed‌ ‌money‌ ‌or‌‌ property.‌ ‌ EXC‌:‌ When‌‌there‌‌is‌‌stipulation‌‌to‌‌the‌‌contrary‌‌in‌‌the‌‌certificate;‌‌or‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 41‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ Where‌‌ALL‌‌partners‌‌consent‌‌to‌‌the‌‌return‌‌other‌‌than‌‌in‌‌form‌‌of‌‌ cash.‌ ‌ When‌‌may‌‌a‌‌limited‌‌partner‌‌have‌‌the‌‌partnership‌‌dissolved?‌ ‌ Upon‌‌petition‌‌with‌‌the‌‌court:‌ ‌ a) When‌ ‌his‌ ‌demand‌ ‌for‌ ‌the‌ ‌return‌ ‌of‌ ‌his‌ ‌contribution‌ ‌is‌‌ denied‌‌‌although‌‌he‌‌has‌‌a‌‌right‌‌to‌‌such‌‌return;‌‌or‌ ‌ f) There‌ ‌is‌ ‌failure‌ ‌to‌ ‌substantially‌ ‌comply‌ ‌with‌ ‌the‌ ‌legal‌‌ requirements‌ ‌governing‌ ‌the‌ ‌formation‌ ‌of‌ ‌limited‌‌ partnerships.‌ ‌ 2) The‌‌certificate‌‌must‌‌be‌a ‌ mended‌;‌‌and‌ ‌ 3) The‌‌amended‌‌certificate‌‌must‌‌be‌r‌ egistered‌i‌ n‌‌the‌‌SEC.‌ ‌ GR‌:‌ 3) To‌‌separate‌‌creditors‌‌—‌‌‌Charging‌‌order‌‌—‌‌The‌‌interest‌‌may‌‌ be‌ ‌redeemed‌ ‌with‌ ‌the‌ ‌separate‌ ‌property‌ ‌of‌ ‌any‌ ‌general‌‌ partner‌,‌‌but‌‌may‌‌NOT‌‌be‌‌redeemed‌‌with‌‌partnership‌‌property.‌ ‌ EXC‌:‌ A‌ ‌substituted‌ ‌limited‌ ‌partner‌ ‌is‌ ‌liable‌ ‌for‌ ‌all‌‌the‌‌liabilities‌‌of‌‌ his‌‌assignor;‌ ‌ Those‌‌of‌‌which‌‌he‌‌was‌‌ignorant‌‌at‌‌the‌‌time‌‌he‌‌became‌‌a‌‌limited‌‌ partner‌‌and‌‌which‌‌could‌‌not‌‌be‌‌ascertained‌‌from‌‌the‌‌certificate.‌ ‌ The‌‌liabilities‌‌may‌‌be‌‌waived‌‌or‌‌compromised,‌‌ ‌ b) When‌ ‌his‌ ‌contribution‌ ‌is‌ ‌not‌ ‌paid‌ ‌because‌ ‌the‌ ‌other‌‌ provided‌‌the‌‌waiver‌‌or‌‌compromise:‌ ‌ Limited‌‌Partnership;‌‌Dissolution‌ ‌ liabilities‌ ‌of‌ ‌the‌ ‌partnership‌ ‌have‌ ‌not‌ ‌been‌ ‌paid‌ ‌or‌ ‌the‌‌ 1) Is‌m ‌ ade‌‌with‌‌unanimous‌‌consent;‌‌and‌ ‌ The‌‌partnership‌‌liabilities‌‌shall‌‌be‌‌settled‌‌in‌‌the‌‌following‌‌order:‌ ‌ partnership‌‌property‌‌is‌‌insufficient‌‌for‌‌their‌‌payment.‌ ‌ 2) Does‌‌not‌‌prejudice‌‌partnership‌‌creditors‌‌who‌‌extended‌‌credit‌‌ 1) Those‌‌due‌‌to‌c‌ reditors‌,‌‌including‌‌limited‌‌partners‌,‌‌ ‌ Before‌ ‌seeking‌ ‌judicial‌ ‌redress,‌ ‌he‌ ‌may‌ ‌first‌ ‌ask‌ ‌the‌ ‌other‌‌partners‌‌to‌‌ or‌‌whose‌‌claims‌‌arose‌‌before‌‌the‌‌cancellation‌‌or‌‌amendment‌‌of‌‌ have‌‌the‌‌partnership‌‌dissolved.‌ ‌ except‌‌‌those‌‌on‌‌account‌‌of‌‌their‌‌contributions,‌‌in‌‌the‌‌order‌‌of‌‌ the‌‌certificate.‌ ‌ priority‌‌as‌‌provided‌‌by‌‌law;‌ ‌ Limited‌‌partner;‌‌liabilities‌ ‌ Limited‌‌partner;‌‌assignee‌‌to‌‌substituted‌ ‌ 1) To‌‌the‌‌partnership‌‌‌—‌‌ ‌ a) For‌ ‌the‌ ‌difference‌ ‌between‌ ‌his‌ ‌contribution‌ ‌as‌ ‌actually‌‌ made‌‌and‌‌that‌‌stated‌‌in‌‌the‌‌certificate‌‌as‌‌having‌‌been‌‌made,‌‌ and‌ ‌ b) For‌ ‌any‌ ‌unpaid‌ ‌contribution‌ ‌which‌ ‌he‌ ‌agreed‌ ‌in‌ ‌the‌‌ certificate‌ ‌to‌ ‌make‌ ‌in‌ ‌the‌ ‌future‌ ‌at‌ ‌the‌ ‌time‌ ‌and‌ ‌on‌ ‌the‌‌ conditions‌‌stated‌‌in‌‌the‌‌certificate.‌ ‌ A‌ ‌substituted‌ ‌limited‌ ‌partner‌ ‌is‌ ‌a‌ ‌person‌ ‌admitted‌ ‌to‌ ‌all‌ ‌the‌‌ rights‌‌of‌‌a‌‌limited‌‌partner‌‌who‌‌has‌‌died‌‌or‌‌has‌‌assigned‌‌his‌‌interest‌‌ in‌‌a‌‌partnership.‌ ‌ An‌‌assignee‌,‌‌who‌‌does‌‌NOT‌‌become‌‌a‌‌substituted‌‌limited‌‌partner,‌‌has‌‌ ‌ a) He‌ ‌contributes‌ ‌services,‌ ‌instead‌ ‌of‌ ‌only‌ ‌money‌ ‌or‌‌ property;‌ ‌ 2. b) He‌‌allows‌‌his‌‌surname‌‌to‌‌appear‌‌in‌‌the‌‌firm‌‌name;‌ ‌ c) He‌ ‌fails‌ ‌to‌ ‌have‌ ‌a‌ ‌false‌ ‌statement‌ ‌in‌ ‌the‌ ‌certificate‌‌ corrected,‌‌knowing‌‌it‌‌to‌‌be‌‌false;‌ ‌ d) He‌‌takes‌‌part‌‌in‌‌the‌‌control‌‌of‌‌the‌‌business;‌ ‌ e) He‌ ‌receive‌ ‌partnership‌ ‌property‌ ‌as‌ ‌collateral‌ ‌security,‌‌ payment,‌ ‌conveyance,‌ ‌or‌ ‌release‌ ‌in‌ ‌fraud‌ ‌of‌ ‌partnership‌‌ creditors;‌‌and‌ ‌ a) in‌ ‌respect‌ ‌to‌ ‌their‌ ‌share‌ ‌of‌ ‌the‌ ‌profits‌ ‌and‌ ‌other‌‌ compensation‌‌by‌‌way‌‌of‌‌income‌‌on‌‌their‌‌contributions;‌ ‌ b) in‌‌respect‌‌to‌‌the‌c‌ apital‌‌of‌‌their‌‌contributions;‌ ‌ 3) Those‌‌to‌g ‌ eneral‌p ‌ artners‌‌ ‌ 1. NO‌‌right‌‌to‌‌ ‌ 2) To‌ ‌partnership‌ ‌creditors‌ ‌and‌ ‌other‌ ‌partners‌ ‌—‌ ‌becomes‌‌ liable‌‌for‌‌partnership‌‌obligations‌‌when‌ ‌ 2) Those‌‌to‌l‌ imited‌p ‌ artners‌‌ ‌ a. require‌‌any‌‌information‌‌or‌‌ ‌ b. account‌‌of‌‌the‌‌partnership‌‌transactions‌‌or‌‌ ‌ c. to‌‌inspect‌‌the‌‌partnership‌‌books;‌‌ ‌ a) other‌‌than‌‌for‌‌capital‌‌and‌‌profits;‌ ‌ b) in‌‌respect‌‌to‌p ‌ rofits‌;‌ ‌ c) in‌ ‌respect‌ ‌to‌ ‌capital‌.‌ ‌(‌NB:‌ ‌in‌ ‌general‌ ‌partnership,‌‌capital‌‌ enjoys‌‌preference‌‌over‌‌profits)‌ ‌ He‌‌is‌‌‌only‌‌entitled‌‌to‌‌ ‌ a. receive‌ ‌the‌ ‌share‌ ‌of‌ ‌the‌ ‌profits‌‌or‌‌other‌‌compensation‌‌by‌‌ way‌‌of‌‌income,‌‌or‌‌ ‌ b. the‌‌return‌‌of‌‌his‌‌contribution,‌‌to‌‌which‌‌his‌‌assignor‌‌would‌‌ otherwise‌‌be‌‌entitled.‌ ‌ What‌‌are‌‌the‌‌requisites‌‌for‌‌an‌‌assignee‌‌ ‌ to‌‌become‌‌a‌‌substituted‌‌limited‌‌partner?‌ ‌ 1) Unanimous‌‌consent‌‌‌of‌‌all‌‌members;‌‌or‌‌if‌‌the‌‌limited‌‌partner‌‌ is‌ ‌empowered‌ ‌by‌ ‌the‌ ‌certificate,‌ ‌must‌ ‌give‌ ‌the‌ ‌assignee‌ ‌the‌‌ right‌‌to‌‌become‌‌a‌‌limited‌‌partner;‌ ‌ ‌ Reference:‌‌De‌‌Leon,‌‌2014‌ ‌ Corporation‌‌Law‌ ‌ RA‌‌No‌‌11232‌‌|‌‌Revised‌‌Corporation‌‌Code‌‌of‌‌the‌‌Philippines‌ ‌ Definition‌ ‌ Classes‌ ‌ Nationality‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 42‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ Corporate‌‌Juridical‌‌Personality‌ ‌ Capital‌‌Structure‌ ‌ Incorporation‌‌and‌‌Organization‌ ‌ Corporate‌‌Powers‌ ‌ General‌‌powers‌ ‌ Specific‌‌powers‌ ‌ Limitations‌ ‌ Investigations,‌‌Offenses,‌‌and‌‌Penalties‌ ‌ Definition‌ ‌ Stockholders‌‌and‌‌Members‌ ‌ Political‌‌Rights‌ ‌ Proprietary‌‌Rights‌ ‌ 1. an‌‌artificial‌‌being‌‌ ‌ 2. created‌‌by‌‌operation‌‌of‌‌law,‌‌ ‌ 3. having‌‌the‌‌right‌‌of‌s‌ uccession‌a‌ nd‌‌ ‌ 4. the‌ ‌powers,‌ ‌attributes,‌ ‌and‌ ‌properties‌ ‌expressly‌ ‌authorized‌‌ by‌‌law‌‌or‌i‌ ncidental‌‌to‌‌its‌‌existence.‌ ‌ Classes‌ ‌ 1. ⭐Appraisal‌‌right‌ ‌ Remedial‌‌Rights‌ ‌ Stock‌c‌ orporations‌‌are‌‌those‌‌ ‌ a. which‌‌have‌‌capital‌‌stock‌‌ ‌ b. divided‌‌into‌‌shares‌‌and‌ c. are‌ ‌authorized‌ ‌to‌‌distribute‌‌to‌‌the‌‌holders‌‌of‌‌such‌‌shares,‌‌ dividends,‌‌or‌‌allotments‌‌of‌‌the‌‌surplus‌‌profits‌‌on‌‌the‌‌basis‌‌ of‌‌the‌‌shares‌‌held.‌‌ ‌ Derivative‌‌suit‌ ‌ Board‌‌of‌‌Directors‌‌and‌‌Trustees‌ ‌ Capital‌‌Affairs‌ ‌ Dissolution‌‌and‌‌Liquidation‌ ‌ Other‌‌Corporations‌ ‌ 2. Educational‌‌Corporations‌ ‌ All‌‌other‌‌corporations‌‌are‌n ‌ onstock‌c‌ orporations.‌ ‌ Other‌‌Classifications‌ ‌ 1. Corporation‌ ‌by‌ ‌estoppel.‌ ‌All‌ ‌persons‌‌who‌‌assume‌‌to‌‌act‌‌ as‌ ‌a‌ ‌corporation‌ ‌knowing‌ ‌it‌ ‌to‌ ‌be‌ ‌without‌ ‌authority‌ ‌to‌ ‌do‌‌so‌‌ shall‌ ‌be‌ ‌liable‌ ‌as‌ ‌general‌ ‌partners‌ ‌for‌ ‌all‌ ‌debts,‌ ‌liabilities‌‌ and‌‌damages‌‌incurred‌‌or‌‌arising‌‌as‌‌a‌‌result‌‌thereof.‌‌(§ ‌ 20‌)‌ Close‌‌Corporations‌ ‌ Non-stock‌‌Corporations‌ ‌ Sawadjaan‌‌v.‌‌CA‌‌ ‌ A‌‌corporation‌i‌ s‌‌ ‌ Trust‌‌fund‌‌doctrine‌ ‌ 2. De‌‌facto‌‌Corporation.‌ ‌ a. the‌ ‌existence‌ ‌of‌ ‌a‌ ‌valid‌ ‌law‌ ‌under‌ ‌which‌ ‌it‌ ‌may‌ ‌be‌‌ incorporated;‌ ‌ One‌‌Person‌‌Corporations‌ ‌ b. an‌‌attempt‌‌in‌‌good‌‌faith‌‌to‌i‌ ncorporate‌;‌‌and‌ ‌ Foreign‌‌Corporations‌ ‌ c. assumption‌‌of‌‌corporate‌‌powers.‌ Religious‌‌Corporations‌ ‌ Merger‌‌and‌‌Consolidation‌ ‌ may‌ ‌be‌ ‌made‌ ‌by‌ ‌the‌ ‌Solicitor‌ ‌General‌ ‌in‌ ‌a‌ ‌quo‌ ‌warranto‌‌ proceeding.‌‌(§ ‌ 19‌)‌ ‌ The‌ ‌due‌ ‌incorporation‌ ‌of‌ ‌any‌ ‌corporation‌ ‌shall‌ ‌not‌ ‌be‌‌ inquired‌ ‌into‌ ‌collaterally‌ ‌in‌ ‌any‌ ‌private‌ ‌suit.‌ ‌Such‌ ‌inquiry‌‌ At‌ ‌the‌ ‌very‌ ‌least,‌ ‌by‌ ‌its‌ ‌failure‌ ‌to‌ ‌submit‌ ‌its‌ ‌by-laws‌ ‌on‌ ‌time,‌ ‌the‌‌ AIIBP‌ ‌may‌ ‌be‌ ‌considered‌ ‌a‌ ‌de‌ ‌facto‌ ‌corporation‌ ‌whose‌ ‌right‌ ‌to‌‌ exercise‌ ‌corporate‌ ‌powers‌ ‌may‌ ‌not‌ ‌be‌ ‌inquired‌ ‌into‌ ‌collaterally‌ ‌in‌‌ any‌‌private‌‌suit‌‌to‌‌which‌‌such‌‌corporations‌‌may‌‌be‌‌a‌‌party.‌ ‌ Seventh‌‌Day‌‌Adventist‌‌v.‌‌Northeastern‌‌Mindanao‌‌Mission‌‌of‌‌ Seventh‌‌Day‌‌Adventist‌ ‌ The‌‌alleged‌‌donation‌‌to‌‌petitioners‌‌was‌‌void.‌‌The‌‌donation‌‌could‌‌not‌‌ have‌‌been‌‌made‌‌in‌‌favor‌‌of‌‌an‌‌entity‌‌yet‌‌inexistent‌‌at‌‌the‌‌time‌‌it‌‌was‌‌ made.‌ ‌Nor‌ ‌could‌ ‌it‌ ‌have‌ ‌been‌ ‌accepted‌ ‌as‌ ‌there‌ ‌was‌ ‌yet‌ ‌no‌ ‌one‌ ‌to‌‌ accept‌‌it.‌ ‌ Corporate‌ ‌existence‌ ‌begins‌ ‌only‌ ‌from‌ ‌the‌ ‌moment‌ ‌a‌ ‌certificate‌ ‌of‌‌ incorporation‌ ‌is‌ ‌issued.‌ ‌No‌ ‌such‌ ‌certificate‌ ‌was‌ ‌ever‌ ‌issued‌ ‌to‌‌ petitioners‌ ‌or‌ ‌their‌ ‌supposed‌ ‌predecessor-in-interest‌ ‌at‌ ‌the‌ ‌time‌ ‌of‌‌ the‌ ‌donation.‌ ‌Petitioners‌ ‌obviously‌ ‌could‌ ‌not‌ ‌have‌ ‌claimed‌‌ succession‌ ‌to‌ ‌an‌ ‌entity‌ ‌that‌ ‌never‌ ‌came‌ ‌to‌ ‌exist.‌ ‌Neither‌ ‌could‌ ‌the‌‌ principle‌ ‌of‌ ‌separate‌ ‌juridical‌ ‌personality‌ ‌apply‌ ‌since‌ ‌there‌ ‌was‌‌ never‌‌any‌‌corporation‌‌to‌‌speak‌‌of.‌ ‌ Lozano‌‌v.‌‌De‌‌los‌‌Santos‌ ‌ Where‌ ‌there‌ ‌is‌ ‌no‌‌third‌‌person‌‌involved‌‌and‌‌the‌‌conflict‌‌arises‌‌only‌‌ among‌ ‌those‌ ‌assuming‌ ‌the‌ ‌form‌ ‌of‌ ‌a‌ ‌corporation,‌ ‌who‌ ‌therefore‌‌ know‌ ‌that‌ ‌it‌ ‌has‌ ‌not‌ ‌been‌ ‌registered,‌ ‌there‌ ‌is‌ ‌no‌ ‌corporation‌ ‌by‌‌ estoppel‌.‌ ‌ Macasaet‌‌v.‌‌Co,‌‌Jr.‌‌‌2013‌ ‌ Abante‌ ‌Tonite‌ ‌is‌ ‌a‌ ‌corporation‌ ‌by‌ ‌estoppel‌ ‌as‌ ‌the‌ ‌result‌ ‌of‌ ‌its‌‌ having‌ ‌represented‌ ‌itself‌ ‌to‌ ‌the‌ ‌reading‌ ‌public‌ ‌as‌ ‌a‌ ‌corporation‌‌ despite‌‌its‌‌not‌‌being‌‌incorporated.‌‌Its‌‌non-incorporation‌‌with‌‌the‌‌SEC‌‌ was‌‌of‌‌no‌‌consequence.‌ ‌ Missionary‌‌Sisters‌‌of‌‌Our‌‌Lady‌‌of‌‌Fatima‌‌v.‌‌Alzona‌‌‌2018‌‌ ‌ WON‌ ‌petitioner‌ ‌has‌ ‌the‌ ‌legal‌ ‌capacity‌ ‌to‌ ‌accept‌ ‌the‌ ‌donation‌ ‌of‌‌ Purificacion.‌ ‌ YES‌,‌ ‌not‌ ‌in‌ ‌the‌ ‌capacity‌ ‌as‌ ‌a‌ ‌de‌ ‌facto‌ ‌corporation‌ ‌but‌ ‌as‌ ‌a‌‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 43‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ corporation‌ ‌by‌ ‌estoppel.‌ ‌It‌ ‌is‌ ‌the‌ ‌act‌ ‌of‌ ‌registration‌ ‌with‌ ‌SEC‌‌ through‌ ‌the‌ ‌issuance‌‌of‌‌a‌‌certificate‌‌of‌‌incorporation‌‌that‌‌marks‌‌the‌‌ beginning‌ ‌of‌‌an‌‌entity's‌‌corporate‌‌existence.‌‌Here,‌‌Purificacion‌‌dealt‌‌ with‌ ‌the‌ ‌petitioner‌ ‌as‌ ‌if‌ ‌it‌ ‌were‌‌a‌‌corporation.‌‌This‌‌is‌‌evident‌‌from‌‌ the‌‌fact‌‌that‌‌Purificacion‌‌executed‌‌two‌‌(2)‌‌documents‌‌conveying‌‌her‌‌ properties‌‌in‌‌favor‌‌of‌‌the‌‌petitioner.‌ ‌ exchanges,‌‌and‌‌to‌‌ ‌ “‌Doubt‌”‌ ‌refers‌ ‌to‌ ‌various‌‌‌indicia‌‌‌that‌‌the‌‌“beneficial‌‌ownership”‌‌ and‌ ‌“control”‌ ‌of‌ ‌the‌ ‌corporation‌ ‌do‌ ‌not‌ ‌in‌ ‌fact‌ ‌reside‌ ‌in‌ ‌Filipino‌‌ shareholders‌‌but‌‌in‌‌foreign‌‌stakeholders.‌‌These‌‌indicators‌‌are:‌ ‌ Further,‌ ‌the‌ ‌subsequent‌ ‌act‌ ‌by‌ ‌Purificacion‌ ‌of‌ ‌re-conveying‌ ‌the‌‌ property‌‌in‌‌favor‌‌of‌‌the‌‌petitioner‌‌is‌‌a‌‌‌ratification‌‌‌by‌‌conduct‌‌of‌‌the‌‌ otherwise‌‌defective‌‌donation.‌ ‌ ‌ Nationality‌ ‌ Control‌‌Test‌ ‌ a. That‌ ‌the‌ ‌foreign‌ ‌investors‌ ‌provide‌ ‌practically‌ ‌all‌ ‌the‌‌ funds‌ ‌for‌ ‌the‌ ‌joint‌ ‌investment‌ ‌undertaken‌ ‌by‌ ‌these‌‌ Filipino‌‌businessmen‌‌and‌‌their‌‌foreign‌‌partner;‌ ‌ b. That‌‌the‌‌foreign‌‌investors‌‌undertake‌‌to‌‌provide‌‌‌practically‌‌ all‌‌the‌‌technological‌‌support‌f‌ or‌‌the‌‌joint‌‌venture;‌ ‌ c. That‌ ‌the‌ ‌foreign‌ ‌investors,‌ ‌while‌ ‌being‌ ‌minority‌‌ stockholders,‌ ‌manage‌ ‌the‌ ‌company‌ ‌and‌ ‌prepare‌ ‌all‌‌ economic‌ ‌viability‌ ‌studies.‌ ‌(‌Narra‌ ‌Nickel‌ ‌Mining‌ ‌v.‌‌ Redmont‌‌Consolidated‌‌Mines‌‌2 ‌ 015‌‌Resolution‌)‌ ‌ b. i. 1. 4. a. b. at‌ ‌least‌ ‌60%‌ ‌of‌ ‌the‌ ‌capital‌ ‌stock‌ ‌outstanding‌ ‌and‌‌ entitled‌ ‌to‌ ‌vote‌ ‌of‌ ‌each‌ ‌of‌ ‌both‌ ‌corporations‌ ‌must‌ ‌be‌‌ owned‌‌and‌‌held‌‌by‌‌citizens‌‌of‌‌the‌‌Philippines;‌‌AND‌ ‌ at‌‌least‌‌60%‌‌of‌‌the‌‌‌members‌‌of‌‌the‌‌Board‌‌of‌‌Directors‌‌of‌‌ each‌ ‌of‌ ‌both‌ ‌corporations‌ ‌must‌ ‌be‌ ‌citizens‌ ‌of‌ ‌the‌‌ Philippines,‌ ‌ Full‌ ‌beneficial‌ ‌ownership‌ ‌of‌ ‌60%‌ ‌of‌ ‌the‌ ‌outstanding‌‌ capital‌ ‌stock,‌ ‌coupled‌ ‌with‌ ‌60%‌ ‌of‌ ‌the‌ ‌voting‌ ‌rights,‌ ‌is‌‌ required.‌(‌ ‌Gamboa‌‌v.‌‌Teves‌‌2 ‌ 011‌‌En‌‌Banc‌)‌ ‌ 2. in‌ ‌order‌ ‌that‌ ‌the‌ ‌corporation‌ ‌shall‌ ‌be‌ ‌considered‌ ‌a‌ ‌Philippine‌‌ national.‌‌ ‌ The‌ ‌Grandfather‌ ‌Rule‌ ‌is‌ ‌the‌ ‌method‌ ‌by‌‌which‌‌the‌‌percentage‌‌of‌‌ Filipino‌ ‌equity‌ ‌in‌ ‌a‌ ‌corporation‌ ‌engaged‌ ‌in‌ ‌nationalized‌ ‌and/or‌‌ partly‌ ‌nationalized‌ ‌areas‌ ‌of‌ ‌activities‌ ‌is‌‌computed.‌‌A‌‌resort‌‌to‌‌the‌‌ Grandfather‌‌Rule‌‌is‌‌necessary‌‌if‌‌‌doubt‌‌‌exists‌‌as‌‌to‌‌the‌‌locus‌‌of‌‌the‌‌ “beneficial‌‌ownership”‌‌and‌‌“control.”‌ ‌ Both‌ ‌the‌ ‌Voting‌ ‌Control‌ ‌Test‌ ‌and‌‌the‌‌‌Beneficial‌‌Ownership‌‌ Test‌ ‌must‌ ‌be‌ ‌applied‌‌to‌‌determine‌‌whether‌‌a‌‌corporation‌‌is‌‌a‌‌ “Philippine‌‌national.”‌‌ ‌ The‌ ‌60-40‌ ‌ownership‌ ‌requirement‌ ‌in‌ ‌favor‌ ‌of‌ ‌Filipino‌‌ citizens‌ ‌must‌ ‌apply‌ ‌separately‌ ‌to‌ ‌each‌ ‌class‌ ‌of‌ ‌shares,‌‌ whether‌‌common,‌‌preferred‌‌non-voting,‌‌preferred‌‌voting‌ or‌‌any‌‌other‌‌class‌‌of‌‌shares.‌‌‌(‌Heirs‌‌of‌‌Gamboa‌‌v.‌‌Teves‌‌‌2012‌‌ En‌‌Banc‌‌Resolution‌)‌ ‌ Grandfather‌‌Rule‌ ‌ The‌ ‌Grandfather‌ ‌Rule‌ ‌may‌ ‌be‌ ‌used‌ ‌as‌ ‌a‌ ‌supplement‌ ‌to‌ ‌the‌‌ Control‌‌Test,‌‌that‌‌is,‌‌as‌‌a‌‌further‌‌check‌‌‌to‌‌ensure‌‌that‌‌control‌‌and‌‌ beneficial‌‌ownership‌‌of‌‌a‌‌corporation‌‌is‌‌in‌‌fact‌‌lodged‌‌in‌‌Filipinos.‌ ‌ The‌‌term‌‌"‌capital‌"‌‌in‌‌Section‌‌11,‌‌Article‌‌XII‌‌of‌‌the‌‌Constitution‌‌ refers‌‌only‌‌to‌‌‌shares‌‌of‌‌stock‌‌entitled‌‌to‌‌vote‌‌in‌‌the‌‌election‌‌ of‌ ‌directors‌,‌ ‌and‌ ‌thus,‌ ‌refers‌ ‌ONLY‌ ‌TO‌ ‌COMMON‌ ‌SHARES‌,‌‌ and‌ ‌NOT‌ ‌to‌‌the‌‌total‌‌outstanding‌‌capital‌‌stock‌‌comprising‌‌ both‌‌common‌‌and‌‌non-voting‌‌preferred‌‌shares.‌ ‌ Where‌‌a‌‌corporation‌‌and‌‌its‌‌non-Filipino‌‌stockholders‌‌own‌‌stocks‌‌ in‌‌a‌‌SEC‌‌registered‌‌enterprise,‌‌ ‌ 3. the‌ ‌shares‌ ‌of‌ ‌which‌ ‌are‌ ‌not‌ ‌traded‌ ‌in‌ ‌the‌‌ stock‌ ‌exchanges.‌ ‌(‌Narra‌ ‌Nickel‌ ‌Mining‌ ‌v.‌‌ Redmont‌ ‌Consolidated‌ ‌Mines‌ ‌2015‌‌ Resolution‌)‌ ‌ If‌‌the‌‌Filipino‌‌has‌‌ ‌ a. Political‌‌Rights‌‌—‌‌‌the‌‌‌voting‌‌power‌‌of‌‌the‌‌"specific‌‌ stock",‌ ‌i.e.,‌ ‌he‌ ‌can‌ ‌vote‌‌the‌‌stock‌‌or‌‌direct‌‌another‌‌to‌‌ vote‌‌for‌‌him,‌‌or‌‌ ‌ b. Economic‌‌Rights‌‌—‌‌‌the‌‌‌investment‌‌power‌‌over‌‌the‌‌ "specific‌ ‌stock",‌ ‌i.e.,‌ ‌he‌ ‌can‌ ‌dispose‌ ‌of‌ ‌the‌ ‌stock‌ ‌or‌‌ direct‌‌another‌‌to‌‌dispose‌‌of‌‌it‌‌for‌‌him,‌‌or‌‌ ‌ c. both‌,‌ ‌i.e.,‌ ‌he‌ ‌can‌ ‌vote‌ ‌and‌ ‌dispose‌ ‌of‌ ‌that‌ ‌"specific‌‌ stock"‌‌or‌‌direct‌‌another‌‌to‌‌vote‌‌or‌‌dispose‌‌it‌‌for‌‌him,‌‌ ‌ then‌‌such‌‌Filipino‌‌is‌‌the‌‌"‌beneficial‌‌owner‌"‌‌of‌‌that‌‌"specific‌‌ stock."‌‌(R ‌ oy‌‌III‌‌v.‌‌Herbosa‌‌2 ‌ 017‌‌En‌‌Banc‌‌Resolution‌)‌ ‌ ‌ Corporate‌‌Juridical‌‌Personality‌ ‌ Doctrine‌‌of‌‌Separate‌‌Juridical‌‌Personality‌ ‌ A‌ ‌corporation‌ ‌has‌ ‌a‌ ‌personality‌ ‌separate‌‌and‌‌distinct‌‌from‌‌that‌‌of‌‌ its‌ ‌stockholders‌ ‌or‌ ‌members‌ ‌composing‌ ‌it,‌ ‌as‌ ‌well‌ ‌as‌ ‌from‌ ‌the‌‌ directors,‌‌trustees‌‌and‌‌officers‌‌who‌‌act‌‌on‌‌its‌‌behalf.‌ ‌ Consequences‌ ‌ 1. The‌ ‌property‌ ‌of‌ ‌the‌ ‌corporation‌ ‌is‌ ‌not‌ ‌the‌ ‌property‌ ‌of‌ ‌its‌‌ stockholders‌‌or‌‌members.‌ ‌ 2. A‌ ‌corporation‌ ‌can‌ ‌incur‌ ‌obligations‌ ‌which‌ ‌should‌ ‌not‌ ‌be‌‌ attributed‌‌to‌‌its‌‌stockholders,‌‌directors‌‌and‌‌officers.‌ ‌ 3. Limited‌ ‌Liability‌ ‌Rule‌ ‌—‌ ‌A‌ ‌stockholder‌ ‌is‌ ‌personally‌ ‌liable‌‌ for‌ ‌the‌‌financial‌‌obligations‌‌of‌‌the‌‌corporation‌‌to‌‌the‌‌extent‌‌of‌‌ his‌‌‌unpaid‌‌subscription‌.‌ ‌ The‌‌SEC‌‌suggested‌‌applying‌‌the‌‌Grandfather‌‌Rule‌‌on‌‌ ‌ a. two‌‌(2)‌‌levels‌‌of‌‌corporate‌‌relations‌‌for‌‌ ‌ i. ii. publicly-held‌‌‌corporations‌‌or‌‌ ‌ closely‌‌held‌‌‌corporations‌‌or‌ ii. Control‌ ‌Test‌ ‌finds‌ ‌initial‌ ‌application‌ ‌and‌ ‌"must‌ ‌govern‌ ‌in‌‌ Important‌‌Jurisprudential‌‌Points‌ ‌ reckoning‌ ‌foreign‌ ‌equity‌ ‌ownership‌ ‌in‌ ‌corporations‌ ‌engaged‌ ‌in‌‌ nationalized‌e‌ conomic‌‌activities."‌ ‌ three‌‌(3)‌‌levels‌‌for‌‌ ‌ where‌ ‌the‌ ‌shares‌ ‌are‌ ‌traded‌ ‌in‌ ‌the‌ ‌stock‌‌ Liability‌‌for‌‌tort‌‌and‌‌crimes‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 44‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ The‌ ‌corporation‌ ‌should‌ ‌alone‌ ‌be‌ ‌liable‌ ‌for‌‌its‌‌own‌‌corporate‌‌acts‌‌ and‌‌liabilities‌‌entered‌‌into‌‌by‌‌its‌‌authorized‌‌officers.‌ ‌ Recovery‌‌of‌‌damages‌ ‌ GR‌:‌ EXC‌:‌ A‌‌corporation‌‌is‌‌‌not‌‌entitled‌‌to‌‌‌moral‌‌damages‌‌because,‌‌not‌ being‌ ‌a‌‌natural‌‌person,‌‌it‌‌cannot‌‌experience‌‌physical‌‌suffering‌‌ or‌ ‌sentiments‌ ‌like‌ ‌wounded‌ ‌feelings,‌ ‌serious‌ ‌anxiety,‌ ‌mental‌‌ anguish‌‌and‌‌moral‌‌shock.‌ ‌ have‌ ‌proximately‌ ‌caused‌ ‌the‌ ‌injury‌ ‌or‌ ‌unjust‌ ‌loss‌‌ 2) The‌‌doctrine‌‌can‌‌only‌‌be‌‌raised‌‌during‌‌a‌‌full-blown‌‌trial‌‌over‌‌a‌‌ complained‌‌of.‌‌(‌DBP‌‌v.‌‌Hydro‌‌Resources‌‌Contractors‌‌2 ‌ 013‌)‌ ‌ cause‌ ‌of‌ ‌action‌ ‌duly‌ ‌commenced‌ ‌involving‌ ‌parties‌ ‌duly‌‌ brought‌ ‌under‌ ‌the‌ ‌authority‌ ‌of‌ ‌the‌ ‌court‌‌by‌‌way‌‌of‌‌service‌‌of‌‌ Reverse‌‌Piercing‌‌of‌‌the‌‌Corporate‌‌Veil‌ ‌ summons‌ ‌or‌ ‌what‌ ‌passes‌ ‌as‌ ‌such‌ ‌service.‌ ‌(‌Kukan‌‌ International‌‌v.‌‌Reyes‌‌‌2010‌)‌ ‌ The‌ p ‌ laintiff‌ ‌seeks‌ ‌to‌ ‌reach‌ ‌the‌ ‌assets‌ ‌of‌ ‌a‌ ‌corporation‌ ‌to‌ ‌satisfy‌‌ claims‌ ‌against‌‌a‌‌corporate‌‌insider.‌‌It‌‌has‌‌two‌‌(2)‌‌types:‌ ‌ Stockholders‌‌of‌‌a‌‌corporation‌‌are‌‌liable‌‌for‌‌the‌‌debts‌‌of‌‌the‌‌corporation‌‌ up‌ ‌to‌ ‌the‌ ‌extent‌ ‌of‌‌their‌‌unpaid‌‌subscriptions‌.‌‌They‌‌cannot‌‌invoke‌‌ the‌‌veil‌‌of‌‌corporate‌‌identity‌‌as‌‌a‌‌shield‌‌from‌‌liability,‌‌because‌‌‌the‌‌veil‌‌ may‌ ‌be‌ ‌lifted‌ ‌to‌ ‌avoid‌ ‌defrauding‌ ‌corporate‌ ‌creditors.‌ ‌(‌Halley‌ ‌v.‌‌ A‌‌juridical‌‌person‌‌can‌‌validly‌‌claim‌‌for‌‌libel‌‌or‌‌any‌‌other‌‌form‌‌ Printwell‌‌‌2011‌)‌ ‌ of‌‌defamation‌‌and‌‌claim‌‌moral‌‌damages.‌‌ ‌ Article‌ ‌2219(7)‌ ‌of‌ ‌the‌ ‌Civil‌ ‌Code‌ ‌expressly‌ ‌authorizes‌ ‌the‌‌ recovery‌ ‌of‌ ‌moral‌ ‌damages‌ ‌in‌ ‌cases‌ ‌of‌‌‌libel,‌‌slander‌‌or‌‌any‌‌ other‌ ‌form‌ ‌of‌ ‌defamation‌.‌ ‌Article‌ ‌2219(7)‌ ‌does‌ ‌not‌ ‌qualify‌‌ whether‌‌the‌‌plaintiff‌‌is‌‌a‌‌natural‌‌or‌‌juridical‌‌person‌.‌ ‌ Silverio‌‌Jr.‌‌v.‌‌Filipino‌‌Business‌‌Consultants‌‌Inc.‌ ‌ WON‌‌FBCI's‌‌acquisition‌‌of‌‌the‌‌"substantial‌‌and‌‌controlling‌‌shares‌‌of‌‌ stocks"‌ ‌of‌ ‌Esses‌ ‌and‌ ‌Tri-Star‌ ‌entitles‌ ‌it‌ ‌to‌ ‌the‌ ‌possession‌ ‌of‌ ‌the‌‌ property‌‌owned‌‌by‌‌the‌‌latter.‌ ‌ NO‌.‌ ‌Esses‌ ‌and‌ ‌Tri-Star,‌ ‌just‌ ‌like‌ ‌FBCI,‌ ‌are‌ ‌corporations.‌ ‌A‌‌ corporation‌ ‌has‌ ‌a‌ ‌personality‌ ‌distinct‌ ‌from‌ ‌that‌ ‌of‌ ‌its‌‌ stockholders.‌ ‌Thus,‌ ‌FBCI's‌ ‌alleged‌ ‌controlling‌ ‌shareholdings‌ ‌in‌‌ Esses‌ ‌and‌ ‌Tri-Star‌ ‌merely‌ ‌represent‌ ‌a‌ ‌proportionate‌ ‌or‌ ‌aliquot‌‌ interest‌ ‌in‌ ‌the‌ ‌properties‌ ‌of‌ ‌the‌ ‌two‌ ‌corporations.‌ ‌Such‌ ‌controlling‌‌ shareholdings‌‌do‌‌not‌‌vest‌‌FBCI‌‌with‌‌any‌‌legal‌‌right‌‌or‌‌title‌‌to‌‌any‌‌of‌‌ Esses‌‌and‌‌Tri-Star's‌‌corporate‌‌properties.‌ ‌ Doctrine‌‌of‌‌Piercing‌‌the‌‌Corporate‌‌Veil‌ ‌ Under‌‌the‌‌doctrine‌‌of‌‌"‌piercing‌‌the‌‌veil‌‌of‌‌corporate‌‌fiction‌,"‌‌the‌‌ court‌‌looks‌‌at‌‌the‌‌corporation‌‌as‌‌a‌‌mere‌‌collection‌‌of‌‌individuals‌‌or‌‌ an‌ ‌aggregation‌ ‌of‌ ‌persons‌ ‌undertaking‌ ‌business‌ ‌as‌ ‌a‌ ‌group,‌‌ disregarding‌ ‌the‌ ‌separate‌ ‌juridical‌ ‌personality‌ ‌of‌ ‌the‌ ‌corporation‌‌ unifying‌‌the‌‌group.‌ ‌ The‌‌procedure‌‌for‌‌the‌‌doctrine‌‌to‌‌be‌‌properly‌‌applied:‌ ‌ 1) The‌‌court‌‌must‌‌‌first‌‌acquire‌‌jurisdiction‌‌over‌‌the‌‌corporation‌‌ or‌ ‌corporations‌ ‌involved‌ ‌before‌ ‌its‌ ‌or‌ ‌their‌ ‌separate‌‌ personalities‌‌are‌‌disregarded;‌‌and‌‌ ‌ The‌ ‌doctrine‌ ‌of‌ ‌piercing‌ ‌the‌ ‌corporate‌ ‌veil‌ ‌applies‌ ‌only‌ ‌in‌ ‌three‌ ‌(3)‌‌ basic‌‌areas,‌‌namely:‌‌ ‌ 1) Defeat‌‌of‌‌public‌‌convenience‌‌‌as‌‌when‌‌the‌‌corporate‌‌fiction‌‌is‌‌ used‌‌as‌‌a‌‌vehicle‌‌for‌‌the‌‌evasion‌‌of‌‌an‌‌existing‌‌obligation;‌‌ ‌ 2) Fraud‌ ‌cases‌ ‌or‌ ‌when‌ ‌the‌ ‌corporate‌‌entity‌‌is‌‌used‌‌to‌‌justify‌‌a‌‌ wrong,‌‌protect‌‌fraud,‌‌or‌‌defend‌‌a‌‌crime;‌‌or‌‌ ‌ 3) Alter‌‌ego‌‌cases,‌‌where‌‌a‌‌corporation‌‌is‌‌merely‌‌a‌‌farce‌‌since‌‌it‌‌ is‌ ‌a‌ ‌mere‌ ‌alter‌ ‌ego‌ ‌or‌ ‌business‌‌conduit‌‌of‌‌a‌‌person,‌‌or‌‌where‌‌ the‌ ‌corporation‌ ‌is‌ ‌so‌ ‌organized‌ ‌and‌ ‌controlled‌ ‌and‌ ‌its‌‌affairs‌‌ are‌ ‌so‌ ‌conducted‌ ‌as‌ ‌to‌ ‌make‌ ‌it‌ ‌merely‌ ‌an‌ ‌instrumentality,‌‌ agency,‌‌conduit‌‌or‌‌adjunct‌‌of‌‌another‌‌corporation.‌ ‌ Case‌‌law‌‌lays‌‌down‌‌a‌‌‌three-pronged‌‌test‌‌to‌‌determine‌‌the‌‌application‌‌ of‌ ‌the‌ ‌alter‌‌ego‌‌theory‌,‌‌which‌‌is‌‌also‌‌known‌‌as‌‌the‌‌‌instrumentality‌‌ theory‌,‌‌namely:‌ ‌ 1) Instrumentality‌ ‌or‌ ‌Control‌ ‌Test‌ ‌—‌ ‌Control,‌ ‌not‌ ‌mere‌‌ majority‌ ‌or‌ ‌complete‌ ‌stock‌ ‌control,‌ ‌but‌ ‌complete‌‌ domination‌,‌ ‌not‌ ‌only‌ ‌of‌ ‌finances‌ ‌but‌ ‌of‌ ‌policy‌‌and‌‌business‌‌ practice‌ ‌in‌ ‌respect‌ ‌to‌ ‌the‌ ‌transaction‌ ‌attacked‌ ‌so‌ ‌that‌ ‌the‌‌ corporate‌ ‌entity‌ ‌as‌ ‌to‌ ‌this‌ ‌transaction‌ ‌had‌ ‌at‌ ‌the‌ ‌time‌ ‌no‌‌ separate‌‌mind,‌‌will‌‌or‌‌existence‌‌of‌‌its‌‌own;‌ ‌ 2) Fraud‌ ‌Test‌ ‌—‌ ‌Such‌ ‌control‌ ‌must‌ ‌have‌ ‌been‌ ‌used‌ ‌by‌ ‌the‌‌ defendant‌‌to‌‌commit‌‌fraud‌‌or‌‌wrong;‌‌and‌ ‌ 3) Harm‌ ‌Test‌ ‌—‌ ‌The‌ ‌aforesaid‌‌control‌‌and‌‌breach‌‌of‌‌duty‌‌must‌‌ Outsider‌ ‌reverse‌ ‌piercing‌ ‌occurs‌ ‌when‌ ‌a‌ ‌party‌ ‌with‌ ‌a‌ ‌claim‌‌ against‌ ‌an‌ ‌individual‌ ‌or‌ ‌corporation‌ ‌attempts‌ ‌to‌ ‌be‌ ‌repaid‌ ‌with‌‌ assets‌ ‌of‌ ‌a‌ ‌corporation‌ ‌owned‌ ‌or‌ ‌substantially‌ ‌controlled‌ ‌by‌ ‌the‌‌ defendant.‌‌ ‌ In‌ ‌contrast,‌ ‌in‌‌‌insider‌‌reverse‌‌piercing‌,‌‌the‌‌controlling‌‌members‌‌ will‌ ‌attempt‌ ‌to‌ ‌ignore‌ ‌the‌ ‌corporate‌ ‌fiction‌ ‌in‌ ‌order‌ ‌to‌ ‌take‌‌ advantage‌ ‌of‌ ‌a‌ ‌benefit‌ ‌available‌ ‌to‌ ‌the‌ ‌corporation,‌ ‌such‌ ‌as‌ ‌an‌‌ interest‌‌in‌‌a‌‌lawsuit‌‌or‌‌protection‌‌of‌‌personal‌‌assets.‌‌(‌International‌‌ Academy‌‌of‌‌Management‌‌&‌‌Economics‌‌v.‌‌Litton‌‌2 ‌ 017‌)‌ ‌ Survey‌‌of‌‌Cases‌ ‌ Case‌ ‌ Circumstance‌ ‌ A‌‌corporation‌‌not‌‌impleaded‌‌in‌‌a‌‌suit‌‌ Kukan‌‌ cannot‌‌be‌‌subject‌‌to‌‌the‌‌court's‌‌ International‌‌v.‌‌ process‌o ‌ f‌‌piercing‌‌the‌‌veil‌‌of‌‌its‌‌ Reyes‌‌2 ‌ 010‌ ‌ corporate‌f‌ iction.‌ ‌ Apply‌‌ Piercing‌ ‌ ✘‌ ‌ Halley‌‌v.‌‌ Printwell,‌‌Inc.‌‌ 2011‌ ‌ The‌‌prevailing‌‌rule‌‌is‌‌that‌‌a‌‌ stockholder‌‌is‌‌personally‌‌liable‌‌for‌‌ the‌‌financial‌‌obligations‌‌of‌‌the‌‌ corporation‌‌to‌‌the‌‌extent‌‌of‌‌his‌‌unpaid‌‌ subscription.‌ ‌ ✔‌ ‌ Heirs‌‌of‌‌Tan‌‌Uy‌‌ v.‌‌International‌‌ Exchange‌‌Bank‌‌ 2013‌ ‌ Goldkey‌‌was‌‌merely‌‌an‌‌adjunct‌‌of‌‌ Hammer‌‌‌and,‌‌as‌‌such,‌‌the‌‌legal‌‌fiction‌‌ that‌‌it‌‌has‌‌a‌‌separate‌‌personality‌‌from‌‌ that‌‌of‌‌Hammer‌‌should‌‌be‌‌brushed‌‌ aside‌‌as‌‌they‌‌are,‌‌undeniably,‌‌one‌‌and‌‌ the‌‌same.‌ ‌ ✔‌ ‌ DBP‌‌v.‌‌Hydro‌‌ Resources‌‌ While‌‌ownership‌‌by‌‌one‌‌corporation‌‌ of‌‌all‌‌or‌‌a‌‌great‌‌majority‌‌of‌‌stocks‌‌of‌‌ ✘‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 45‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ Contractors‌‌ Corporation‌‌ 2013‌ ‌ WPM‌‌ International‌‌ Trading,‌‌Inc.‌‌v.‌‌ Labayen‌‌2 ‌ 014‌ ‌ another‌‌corporation‌‌and‌‌their‌‌ interlocking‌‌directorates‌‌may‌‌serve‌‌as‌‌ indicia‌‌of‌‌control,‌‌by‌‌themselves‌‌and‌‌ without‌‌more,‌‌however,‌‌these‌‌ circumstances‌‌are‌‌insufficient‌‌to‌‌ establish‌‌an‌‌alter‌‌ego‌‌relationship.‌ ‌ The‌‌mere‌‌ownership‌‌by‌‌a‌‌single‌‌ stockholder‌‌of‌‌even‌‌all‌‌or‌‌nearly‌‌all‌‌of‌‌ the‌‌capital‌‌stocks‌‌of‌‌a‌‌corporation‌‌is‌‌ not‌‌by‌‌itself‌‌a‌‌sufficient‌‌ground‌‌to‌‌ disregard‌‌the‌‌separate‌‌corporate‌‌ personality.‌‌The‌‌wrongdoing‌‌must‌‌be‌‌ clearly‌‌and‌‌convincingly‌‌established.‌ ‌ Rosales‌‌v.‌‌New‌‌ A.N.J.H.‌‌ Enterprises‌‌ 2015‌ ‌ The‌‌sale‌‌of‌‌the‌‌assets‌‌of‌‌New‌‌ANJH‌‌to‌‌ NH‌‌Oil‌‌was‌‌a‌‌circumvention‌‌of‌‌the‌‌ employees'‌‌security‌‌of‌‌tenure.‌ ‌ International‌‌ Academy‌‌of‌‌ Management‌‌&‌‌ Economics‌‌v.‌‌ Litton‌‌2 ‌ 017‌ ‌ Santos‌‌used‌‌I/AME‌‌as‌‌a‌‌means‌‌to‌‌ defeat‌‌judicial‌‌processes‌‌and‌‌to‌‌evade‌‌ his‌‌obligation‌‌to‌‌Litton.‌‌ ‌ Outsider‌‌reverse‌‌veil-piercing‌‌is‌‌ applicable‌‌in‌‌the‌‌instant‌‌case.‌ ‌ Maricalum‌‌ Mining‌‌Corp.‌‌v.‌‌ Florentino‌‌ 2018‌ ‌ G‌‌Holdings-being‌‌the‌‌majority‌‌and‌‌ controlling‌‌stockholder-had‌‌been‌ ‌ exercising‌‌significant‌‌control‌‌over‌‌ Maricalum‌‌Mining.‌ ‌ However,‌‌the‌‌fraud‌‌and‌‌harm‌‌tests‌‌ were‌‌not‌‌satisfied.‌ ‌ ✘‌ ‌ ✔‌ ‌ 5. Each‌ ‌incorporator‌ ‌of‌ ‌a‌ ‌stock‌ ‌corporation‌ ‌must‌ ‌own‌ ‌or‌ ‌be‌ ‌a‌‌ subscriber‌‌to‌‌at‌‌least‌‌one‌‌(1)‌‌share‌‌of‌‌the‌‌capital‌‌stock.‌ ‌ 6. No‌‌more‌‌prescribed‌‌minimum‌‌number‌‌of‌‌incorporators;‌ ‌ 7. Majority‌‌need‌‌not‌‌be‌‌PH‌‌residents;‌ ‌ Subscription‌‌Requirements‌ ✘‌ ‌ AOI‌ ‌as‌ ‌originally‌ ‌forming‌‌and‌‌composing‌‌the‌‌corporation‌‌and‌‌who‌‌are‌‌ signatories‌‌thereof.‌ ‌ What‌‌It‌‌Is‌ ‌ The‌‌minimum‌‌amount‌‌ Authorized‌‌ of‌‌capital‌‌which‌‌the‌‌ Capital‌‌ corporation‌‌will‌‌ Stock‌‌ receive‌‌when‌‌it‌‌issues‌‌ all‌‌its‌‌shares.‌ ‌ ✔‌ ‌ Incorporators‌‌‌are‌‌those‌‌stockholders‌‌or‌‌members‌‌mentioned‌‌in‌‌the‌‌ Singly‌‌or‌‌jointly‌‌with‌‌others;‌ ‌ Incorporators‌‌who‌‌are‌‌natural‌‌persons‌‌must‌‌be‌‌of‌‌legal‌‌age;‌ ‌ (ACS)‌ ‌ Incorporators‌ ‌ 2. 4. Type‌ ‌ Capital‌‌Structure‌ ‌ Any‌‌person,‌‌partnership,‌‌association‌‌or‌‌corporation,‌‌ ‌ Not‌‌more‌‌than‌f‌ ifteen‌‌(15)‌‌‌in‌‌number;‌ ‌ Changes‌‌from‌‌BP‌‌68‌ ‌ ‌ 1. 3. ACS‌= ‌ ‌‌No.‌‌of‌‌Shares‌‌x‌‌ Par‌‌Value‌ ‌ Subscribed‌‌ The‌‌committed‌‌ Capital‌‌ amount‌‌of‌‌capital‌‌ Stock‌‌ which‌t‌ he‌‌corporation‌‌ will‌‌receive‌‌from‌‌its‌‌ (SCS)‌ ‌ existing‌‌subscribers.‌ ‌ The‌‌amount‌‌of‌‌capital‌‌ which‌‌the‌‌corporation‌‌ already‌‌received‌f‌ rom‌‌ Paid-up‌‌ its‌‌subscribers‌‌ Capital‌‌ (represents‌‌the‌‌paid‌‌ portion‌‌of‌‌the‌‌SCS)‌‌and‌‌ (PUC)‌ ‌ the‌‌value‌‌of‌‌assets‌‌that‌‌ are‌‌available‌‌to‌‌the‌‌ corporation‌‌for‌‌its‌‌use.‌ ‌ Practical‌‌Purpose‌ ‌ Information‌‌about‌‌the‌‌ACS‌‌ permits‌‌government‌‌ regulators‌‌and‌‌major‌‌ corporate‌‌creditors‌‌to‌‌ assess‌‌the‌‌ability‌‌of‌‌the‌‌ corporation‌‌to‌‌raise‌‌their‌‌ prescribed‌‌capital.‌ ‌ The‌‌aggregate‌‌amount‌‌ of‌‌premium‌‌arising‌‌ from‌‌capital‌‌stock‌‌ Additional‌‌ subscriptions,‌‌ Paid-in‌‌ donations‌‌received,‌‌and‌‌ Capital‌‌ shareholders’‌‌ additional‌‌capital‌‌ (APIC)‌ ‌ infusion‌‌without‌‌ corresponding‌‌shares‌‌ of‌‌stock‌‌to‌‌wipe‌‌out‌‌the‌‌ corporation‌‌deficit.‌ ‌ The‌‌APIC‌‌also‌‌forms‌‌part‌‌of‌‌ the‌‌corporate‌‌‌trust‌‌fund‌;‌‌ thus,‌‌it‌‌may‌‌not‌‌be‌‌declared‌‌ as‌‌dividend‌‌not‌‌be‌‌ reclassified‌‌to‌‌absorb‌‌ deficiency‌‌except‌t‌ hrough‌‌ an‌‌organizational‌‌ restructuring‌‌approved‌‌by‌‌ the‌‌SEC.‌ ‌ Stock‌ ‌corporations‌ ‌shall‌ ‌NOT‌ ‌BE‌ ‌REQUIRED‌ ‌to‌ ‌have‌ ‌a‌ ‌minimum‌‌ capital‌‌stock,‌e‌ xcept‌a‌ s‌‌otherwise‌‌specifically‌‌provided‌‌by‌‌special‌‌law.‌ ‌ However‌,‌‌if‌‌the‌‌corporation‌‌intends‌‌to‌i‌ ncrease‌‌its‌‌capital‌‌stock‌,‌‌ ‌ 1. at‌ ‌least‌‌‌25%‌‌of‌‌the‌‌increase‌‌‌in‌‌capital‌‌stock‌‌shall‌‌have‌‌been‌‌ subscribed‌‌and‌‌that‌‌ ‌ 2. at‌‌least‌‌25%‌‌of‌‌the‌‌amount‌‌subscribed‌‌‌shall‌‌have‌‌been‌p ‌ aid‌.‌ ‌ In‌‌other‌‌words,‌a ‌ t‌‌least‌‌6.25%‌‌‌of‌‌the‌‌increase‌‌has‌‌been‌‌paid‌‌up.‌ ‌ Corporate‌‌Term‌ ‌ Represents‌‌the‌‌value‌‌of‌‌ assets‌‌that‌‌are‌‌considered‌‌as‌‌ corporate‌‌trust‌‌fund.‌‌ ‌ The‌‌reference‌‌point‌‌of‌‌the‌‌ extent‌‌of‌‌corporate‌‌earnings‌‌ that‌‌the‌‌board‌‌may‌‌retain‌‌for‌‌ use‌‌of‌‌the‌‌corporation.‌‌ ‌ Whenever‌‌a‌‌corporation‌‌ proposes‌‌to‌‌increase‌‌its‌‌ ACS,‌‌it‌‌must‌‌establish‌‌that‌‌it‌‌ has‌‌received‌‌additional‌‌PUC‌‌ of‌‌at‌‌least‌‌6.25%‌‌‌of‌‌the‌‌ proposed‌‌increase.‌ ‌ GR‌:‌ ‌ erpetual‌ ‌existence‌,‌ ‌including‌ ‌those‌ ‌already‌‌existing‌‌during‌‌ P the‌‌effectivity‌‌of‌‌the‌‌RCC.‌ ‌ EXC‌:‌ Unless‌ ‌the‌ ‌AOI‌ ‌of‌ ‌newly‌ ‌established‌ ‌corporations‌ ‌provide‌‌ otherwise.‌ ‌ Corporations‌ ‌with‌‌a‌‌limited‌‌term‌‌may‌‌extend‌‌or‌‌shorten‌‌its‌‌term‌‌by‌‌ amending‌‌its‌‌AOI‌w ‌ ithin‌‌3‌‌years‌‌prior‌t‌ o‌‌the‌‌expiration‌‌of‌‌the‌‌term.‌‌ ‌ 1. An‌‌extension‌‌may‌‌be‌‌made‌‌earlier‌‌than‌‌the‌‌three‌‌(3)‌‌year‌‌period‌‌ only‌‌for‌‌justifiable‌‌reasons.‌‌ ‌ 2. Such‌ ‌extension‌ ‌of‌ ‌the‌ ‌corporate‌ ‌term‌‌shall‌‌take‌‌effect‌‌only‌‌on‌‌ the‌‌day‌‌following‌‌the‌‌original‌‌or‌‌subsequent‌‌expiry‌‌date.‌ ‌ 3. In‌‌case‌‌of‌‌extension‌‌of‌‌corporate‌‌term,‌‌a‌‌‌dissenting‌‌‌stockholder‌‌ may‌‌exercise‌‌the‌r‌ ight‌‌of‌‌appraisal‌.‌ ‌ Corporations‌ ‌with‌ ‌expired‌ ‌terms‌ ‌may‌ ‌apply‌ ‌for‌ ‌a‌ ‌revival‌ ‌of‌ ‌its‌ corporate‌‌existence.‌‌The‌‌GR‌‌and‌‌EXC‌‌apply.‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 46‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ Action‌‌Taken‌ ‌ Voting‌‌Required‌ ‌ Opting‌‌out‌‌from‌‌the‌‌default‌‌ regime‌‌of‌‌Perpetual‌‌Existence‌ ‌ Stockholders‌‌representing‌‌ MAJORITY‌o ‌ f‌‌OCS‌ ‌ Extending‌‌or‌‌Shortening‌‌the‌‌ Corporate‌‌Term‌ ‌ Majority‌‌of‌B ‌ oard‌+ ‌‌‌ Stockholders‌‌representing‌2 ‌ /3‌‌ of‌‌OCS‌ ‌ Classification‌‌of‌‌Shares‌ ‌ Scope‌‌of‌‌voting‌‌rights‌‌subject‌‌to‌‌classification‌ ‌ Common‌ ‌shareholders‌,‌ ‌as‌ ‌residual‌ ‌owners,‌ ‌have‌ ‌full‌ ‌voting‌‌ rights‌.‌ ‌Holders‌ ‌of‌ ‌other‌ ‌shares‌ ‌have‌ ‌similar‌ ‌rights,‌ ‌except‌ ‌when‌‌ denied‌ ‌by‌ ‌the‌ ‌corporation’s‌ ‌charter‌ ‌or‌ ‌in‌ ‌compliance‌ ‌with‌ ‌the‌‌ provisions‌‌of‌‌the‌‌constitution‌‌or‌‌the‌‌law.‌ ‌ Non-voting‌ ‌shares‌ ‌are‌ ‌merely‌ ‌prevented‌ ‌from‌ ‌electing‌ ‌directors‌‌ and‌ ‌other‌ ‌matters‌ ‌presented‌ ‌to‌ ‌the‌ ‌shareholders‌ ‌in‌ ‌general‌ ‌for‌‌ approval.‌ ‌ Holders‌ ‌of‌ ‌nonvoting‌ ‌shares‌ ‌shall‌ ‌nevertheless‌‌be‌‌entitled‌‌to‌‌vote‌‌on‌‌ the‌‌following‌‌matters:‌ ‌ a) Amendment‌‌of‌‌the‌A ‌ OI‌;‌ ‌ b) Adoption‌‌and‌‌amendment‌‌of‌b ‌ ylaws‌;‌ ‌ c) Sale,‌‌lease,‌‌exchange,‌‌mortgage,‌‌pledge,‌‌or‌‌other‌‌‌disposition‌‌‌of‌‌ all‌‌or‌‌substantially‌‌all‌‌of‌‌the‌‌corporate‌‌property;‌ ‌ d) Incurring,‌‌creating,‌‌or‌‌increasing‌b ‌ onded‌‌indebtedness‌;‌ ‌ e) Increase‌‌or‌‌decrease‌‌of‌A ‌ CS‌;‌ ‌ f) Merger‌ ‌or‌ ‌consolidation‌ ‌of‌ ‌the‌ ‌corporation‌ ‌with‌ ‌another‌‌ corporation‌‌or‌‌other‌‌corporations;‌ ‌ g) Investment‌ ‌of‌ ‌corporate‌ ‌funds‌ ‌in‌ ‌another‌ ‌corporation‌ ‌or‌‌ business;‌‌and‌ ‌ classified‌ ‌into‌ ‌two:‌ ‌preferred‌ ‌shares‌ ‌as‌ ‌to‌ ‌assets‌ ‌and‌ ‌as‌ ‌to‌‌ dividends‌.‌‌ ‌ Republic‌‌Planters‌‌Bank‌‌v.‌‌Agana,‌‌Sr‌.‌ ‌ WON‌ ‌petitioner‌ ‌can‌ ‌be‌ ‌compelled‌ ‌to‌ ‌redeem‌ ‌the‌ ‌preferred‌ ‌shares‌‌ issued‌‌to‌‌the‌‌private‌‌respondent.‌ ‌ NO‌.‌‌Preferences‌‌granted‌‌to‌‌preferred‌‌stockholders‌‌do‌‌not‌‌give‌‌them‌‌ a‌‌lien‌‌upon‌‌the‌‌property‌‌of‌‌the‌‌corporation‌‌nor‌‌make‌‌them‌‌creditors‌‌ of‌ ‌the‌ ‌corporation,‌ ‌the‌‌right‌‌of‌‌the‌‌former‌‌being‌‌always‌‌subordinate‌‌ to‌ ‌the‌ ‌latter.‌ ‌Dividends‌‌are‌‌thus‌‌payable‌‌only‌‌when‌‌there‌‌are‌‌profits‌‌ earned‌ ‌by‌ ‌the‌ ‌corporation‌ ‌and‌ ‌as‌ ‌a‌ ‌general‌ ‌rule,‌ ‌even‌ ‌if‌ ‌there‌ ‌are‌‌ existing‌ ‌profits,‌ ‌the‌ ‌BOD‌ ‌has‌ ‌the‌ ‌discretion‌ ‌to‌ ‌determine‌‌ whether‌‌or‌‌not‌‌dividends‌‌are‌‌to‌‌be‌‌declared‌.‌ ‌ In‌ ‌this‌ ‌case,‌ ‌while‌ ‌the‌ ‌stock‌ ‌certificate‌ ‌does‌ ‌allow‌ ‌redemption,‌‌the‌‌ option‌ ‌to‌ ‌do‌ ‌so‌ ‌was‌ ‌clearly‌‌vested‌‌in‌‌the‌‌petitioner‌‌bank.‌‌Thus,‌‌the‌‌ redemption‌ ‌rests‌‌entirely‌‌with‌‌the‌‌corporation‌‌and‌‌the‌‌stockholder‌‌ is‌ ‌without‌‌right‌‌to‌‌either‌‌compel‌‌or‌‌refuse‌‌the‌‌redemption‌‌of‌‌its‌‌ stock.‌ ‌ Common‌ ‌ Shares‌‌with‌‌no‌‌preferences.‌‌Holders‌‌of‌‌these‌‌shares‌‌are‌‌regarded‌‌as‌‌ residual‌‌owners‌,‌‌who‌‌assume‌‌all‌‌the‌‌risks‌‌but‌‌reap‌‌all‌‌the‌‌benefits‌‌ in‌ ‌the‌ ‌affairs‌ ‌of‌‌the‌‌corporation.‌‌They‌‌may‌‌only‌‌receive‌‌dividends‌‌ and/or‌ ‌assets‌ ‌upon‌ ‌liquidation‌ ‌following‌ ‌the‌ ‌satisfaction‌ ‌of‌ ‌the‌‌ stipulated‌ ‌returns‌ ‌to‌ ‌other‌ ‌funders‌ ‌of‌ ‌the‌ ‌corporation,‌ ‌such‌ ‌as‌‌ creditors‌‌or‌‌preferred‌‌shareholders.‌ ‌ Founder's‌ ‌ Where‌‌the‌‌‌exclusive‌‌right‌‌to‌‌vote‌‌and‌‌be‌‌voted‌‌for‌‌in‌‌the‌‌election‌‌ of‌‌directors‌‌is‌‌granted,‌‌it‌‌must‌‌be‌‌for‌‌a‌‌limited‌‌period‌‌not‌‌to‌‌exceed‌‌ five‌‌(5)‌‌years‌‌from‌‌the‌‌date‌‌of‌‌incorporation‌.‌ ‌ Redeemable‌ ‌ Shares‌‌usually‌‌preferred,‌‌which‌‌by‌‌their‌‌terms‌‌are‌‌redeemable‌‌ ‌ h) Dissolution‌o ‌ f‌‌the‌‌corporation.‌ ‌ Preferred‌ ‌ One‌‌which‌‌entitles‌‌the‌‌holder‌‌thereof‌‌to‌‌certain‌‌preferences‌‌over‌‌the‌‌ holders‌ ‌of‌ ‌common‌ ‌stock.‌ ‌The‌ ‌most‌ ‌common‌ ‌forms‌ ‌may‌ ‌be‌‌ at‌ ‌a‌ ‌certain‌ ‌redemption‌ ‌price.‌ ‌A‌‌redemption‌‌by‌‌the‌‌corporation‌‌of‌‌ its‌‌stock‌‌is,‌‌in‌‌a‌‌sense,‌‌a‌r‌ epurchase‌o ‌ f‌‌it‌‌for‌‌cancellation.‌ Redemption‌ ‌of‌ ‌shares‌ ‌is‌ ‌allowed‌ ‌even‌ ‌if‌ ‌there‌ ‌are‌ ‌no‌‌ unrestricted‌ ‌retained‌‌earnings‌.‌‌However,‌‌this‌‌is‌‌‌subject‌‌to‌‌the‌‌ condition‌ ‌that‌ ‌the‌ ‌corporation‌ ‌has,‌ ‌after‌ ‌such‌ ‌redemption,‌‌ assets‌ ‌in‌ ‌its‌ ‌books‌ ‌to‌ ‌cover‌ ‌debts‌ ‌and‌ ‌liabilities‌ ‌inclusive‌ ‌of‌‌ capital‌‌stock‌.‌‌Redemption,‌‌therefore,‌m ‌ ay‌‌not‌‌be‌‌made‌‌‌where‌‌ ‌ 1. the‌‌corporation‌‌is‌i‌ nsolvent‌o ‌ r‌‌ ‌ 2. if‌ ‌such‌ ‌redemption‌ ‌will‌ ‌cause‌ ‌insolvency‌‌or‌‌inability‌‌of‌‌ the‌‌corporation‌‌to‌‌meet‌‌its‌‌debts‌‌as‌‌they‌‌mature.‌ ‌ These‌‌may‌‌be‌‌issued‌‌by‌‌the‌‌corporation‌‌when‌‌‌expressly‌‌provided‌‌ in‌‌the‌‌AOI.‌ ‌ Mandatory‌‌Redemption‌ ‌ Corporations‌‌which‌‌have‌‌issued‌‌mandatory‌‌redeemable‌‌shares‌‌with‌‌ mandatory‌‌redemption‌‌features‌‌are‌‌required‌‌to‌‌set‌‌up‌‌and‌‌maintain‌‌ a‌‌s ‌ inking‌‌fund‌ ‌to‌‌be‌‌deposited‌‌in‌‌a‌‌trustee‌‌bank,‌‌and‌‌which‌‌shall‌‌ not‌‌be‌‌invested‌‌in‌‌risky‌‌or‌‌speculative‌‌ventures.‌ ‌ Treasury‌‌ ‌ Shares‌ ‌of‌ ‌stock‌ ‌which‌ ‌have‌ ‌been‌ ‌issued‌ ‌and‌ ‌fully‌ ‌paid‌ ‌for‌,‌ ‌but‌‌ subsequently‌ ‌reacquired‌ ‌by‌ ‌the‌ ‌issuing‌ ‌corporation‌ ‌through‌‌ purchase‌,‌ ‌redemption‌,‌ ‌donation‌,‌ ‌or‌ ‌some‌ ‌other‌ ‌lawful‌ ‌means.‌ While‌ ‌held‌ ‌in‌ ‌the‌ ‌company's‌ ‌treasury,‌ ‌the‌ ‌stock‌ ‌earns‌ ‌no‌‌ dividends‌‌‌and‌‌has‌‌no‌‌vote‌i‌ n‌‌company‌‌affairs.‌ ‌ Instances‌‌giving‌‌rise‌‌to‌‌Treasury‌‌Shares‌ ‌ 1) When‌ ‌the‌ ‌corporation‌ ‌redeems‌ ‌its‌ ‌shares‌ ‌pursuant‌ ‌to‌ ‌its‌‌ contract‌‌with‌‌shareholders;‌ ‌ 2) When‌‌permitted‌‌or‌‌required‌‌by‌‌law,‌‌as‌‌when:‌ ‌ 1. at‌‌a‌‌fixed‌‌date,‌‌or‌‌ ‌ a) The‌‌corporation‌‌‌eliminates‌‌fractional‌‌shares‌‌‌arising‌‌ out‌‌of‌‌stock‌‌dividends;‌ ‌ 2. at‌ ‌the‌ ‌option‌ ‌of‌ ‌either‌ ‌issuing‌ ‌corporation,‌ ‌or‌ ‌the‌‌ stockholder,‌‌or‌‌both‌‌ ‌ b) The‌ ‌corporation‌ ‌collects‌ ‌or‌ ‌compromises‌ ‌on‌‌ delinquency‌‌subscription;‌‌or‌ ‌ c) The‌‌corporation‌‌pays‌‌a‌d ‌ issenting‌‌stockholder.‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 47‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ 3) In‌‌close‌‌corporations,‌‌in‌‌case‌‌of:‌ ‌ a) Deadlock‌(‌ §‌‌103);‌‌or‌ ‌ b) Withdrawal‌b ‌ y‌‌a‌‌shareholder‌‌(§‌‌104).‌ ‌ ‌ ‌Incorporation‌‌and‌‌Organization‌ ‌ Promoter‌ ‌ A‌‌self-constituted‌‌organizer‌‌who‌‌finds‌‌an‌‌enterprise‌‌or‌‌venture‌‌and‌‌ helps‌ ‌to‌ ‌attract‌ ‌investors,‌ ‌forms‌ ‌a‌ ‌corporation‌ ‌and‌ ‌launches‌ ‌it‌ ‌in‌‌ business,‌‌all‌‌with‌‌a‌‌view‌‌to‌‌promoting‌‌profits.‌ ‌ 1) The‌‌corporation‌‌is‌‌NOT‌‌bound‌‌by‌‌the‌‌contract‌‌entered‌‌into‌‌by‌‌ the‌ ‌promoter‌ ‌before‌ ‌incorporation‌ ‌unless‌ ‌the‌ ‌contract‌ ‌is‌‌ ratified.‌ ‌ 2) The‌‌promoter‌‌is‌‌‌personally‌‌liable‌‌for‌‌contracts‌‌or‌‌agreements‌‌ with‌ ‌third‌ ‌persons‌ ‌contracted‌ ‌in‌ ‌behalf‌ ‌of‌ ‌the‌ ‌future‌‌ corporation‌‌if‌‌the‌‌latter‌‌does‌‌not‌‌ratify‌‌the‌‌same.‌ ‌ Subscription‌‌Contract‌ ‌ Any‌ ‌contract‌ ‌for‌ ‌the‌ ‌acquisition‌‌of‌‌unissued‌‌stock‌‌‌in‌‌an‌‌existing‌‌ corporation‌ ‌or‌ ‌a‌ ‌corporation‌ ‌still‌ ‌to‌ ‌be‌‌formed‌‌shall‌‌be‌‌deemed‌‌a‌‌ subscription,‌‌notwithstanding‌‌the‌‌fact‌‌that‌‌the‌‌parties‌‌refer‌‌to‌‌it‌‌as‌‌a‌‌ purchase‌‌or‌‌some‌‌other‌‌contract.‌ ‌ Pre-incorporation‌‌Subscription‌ ‌ A‌‌subscription‌‌of‌‌shares‌‌in‌‌a‌‌corporation‌‌still‌‌to‌‌be‌‌formed‌‌shall‌‌be‌‌ irrevocable‌‌‌for‌‌a‌‌period‌‌of‌‌‌at‌‌least‌‌six‌‌(6)‌‌months‌‌from‌‌the‌‌date‌‌ of‌‌subscription,‌‌unless‌‌ ‌ 1. 2. all‌‌of‌‌the‌‌other‌‌subscribers‌‌consent‌‌to‌‌the‌‌revocation,‌‌or‌‌ ‌ the‌‌corporation‌‌fails‌‌to‌‌incorporate‌‌within‌‌the‌‌same‌‌period‌‌ or‌ ‌within‌ ‌a‌ ‌longer‌ ‌period‌ ‌stipulated‌ ‌in‌ ‌the‌ ‌contract‌ ‌of‌‌ subscription.‌‌ ‌ No‌ ‌pre-incorporation‌ ‌subscription‌ ‌may‌ ‌be‌ ‌revoked‌ ‌after‌ ‌the‌ ‌AOI‌‌ are‌‌submitted‌‌to‌‌the‌‌SEC‌.‌ ‌ Consideration‌‌for‌‌stocks‌ ‌ g) If‌‌it‌‌be‌‌a‌‌stock‌c‌ orporation,‌‌ ‌ 1) the‌‌amount‌‌of‌‌its‌‌authorized‌‌capital‌‌stock‌,‌‌ ‌ Stocks‌ ‌shall‌ ‌not‌ ‌be‌ ‌issued‌ ‌for‌ ‌a‌ ‌consideration‌ ‌less‌ ‌than‌ ‌the‌ ‌par‌ ‌or‌‌ issued‌‌price‌‌‌thereof.‌‌Consideration‌‌for‌‌the‌‌issuance‌‌of‌‌stock‌‌may‌‌be:‌ ‌ 2) number‌‌of‌‌shares‌‌‌into‌‌which‌‌it‌‌is‌‌divided,‌‌ ‌ a) Actual‌c‌ ash‌‌paid‌‌to‌‌the‌‌corporation;‌ ‌ 3) the‌‌par‌‌value‌‌‌of‌‌each,‌‌names,‌‌ ‌ b) Property‌,‌ ‌tangible‌ ‌or‌ ‌intangible,‌ ‌actually‌ ‌received‌ ‌by‌ ‌the‌‌ corporation‌‌and‌‌necessary‌‌or‌‌convenient‌‌for‌‌its‌‌use‌‌and‌‌lawful‌‌ purposes‌‌at‌‌a‌‌‌fair‌‌valuation‌‌‌equal‌‌to‌‌the‌‌par‌‌or‌‌issued‌‌value‌‌of‌‌ the‌‌stock‌‌issued;‌ ‌ 4) nationalities,‌ ‌and‌ ‌residence‌ ‌addresses‌ ‌o‌f‌ ‌the‌ ‌original‌‌ subscribers‌,‌‌ ‌ 5) amount‌ ‌subscribed‌ ‌and‌ ‌paid‌ ‌by‌ ‌each‌ ‌on‌ ‌the‌‌ subscription,‌‌and‌‌ ‌ c) Labor‌ ‌performed‌ ‌for‌ ‌or‌ ‌services‌ ‌actually‌ ‌rendered‌ ‌to‌ ‌the‌‌ corporation;‌ ‌ d) Previously‌‌incurred‌‌indebtedness‌‌‌of‌‌the‌‌corporation;‌ ‌ e) Amounts‌ ‌transferred‌ ‌from‌ ‌unrestricted‌ ‌retained‌ ‌earnings‌ ‌to‌‌ stated‌‌capital;‌ ‌ f) 6) a‌ ‌statement‌ ‌that‌‌some‌‌or‌‌all‌‌of‌‌the‌‌shares‌‌are‌‌without‌‌par‌‌ value,‌‌if‌‌applicable;‌ ‌ h) If‌‌it‌‌be‌‌a‌‌nonstock‌c‌ orporation,‌‌ ‌ 1) the‌‌amount‌‌of‌‌its‌‌capital‌,‌‌ ‌ 2) the‌ ‌names,‌ ‌nationalities,‌ ‌and‌ ‌residence‌ ‌addresses‌ ‌of‌ ‌the‌‌ contributors‌,‌‌and‌‌ ‌ Outstanding‌ ‌shares‌ ‌exchanged‌ ‌for‌ ‌stocks‌ ‌in‌ ‌the‌ ‌event‌ ‌of‌‌ reclassification‌‌or‌‌conversion;‌ ‌ 3) amount‌‌contributed‌b ‌ y‌‌each.‌ ‌ g) Shares‌‌of‌‌stock‌‌in‌a ‌ nother‌‌corporation;‌‌and/or‌ ‌ h) Other‌‌generally‌‌accepted‌‌form‌‌of‌‌consideration.‌ ‌ Articles‌‌of‌‌Incorporation‌ ‌ An‌ ‌arbitration‌ ‌agreement‌ ‌may‌ ‌be‌ ‌provided‌ ‌in‌ ‌the‌ ‌AOI‌‌ pursuant‌‌to‌‌Section‌‌181.‌ ‌ Amendment‌ ‌ Contents‌ ‌ The‌‌amendments‌‌shall‌‌take‌‌effect‌‌ ‌ a) The‌‌name‌‌of‌‌the‌‌corporation;‌ ‌ b) The‌‌‌specific‌‌purpose‌‌or‌‌purposes‌‌for‌‌which‌‌the‌‌corporation‌‌is‌‌ being‌‌formed;‌ ‌ c) The‌ ‌place‌ ‌where‌ ‌the‌ ‌principal‌‌office‌‌of‌‌the‌‌corporation‌‌is‌‌to‌‌ be‌‌located,‌‌which‌‌must‌‌be‌‌within‌‌the‌‌Philippines;‌ ‌ d) The‌ ‌term‌ ‌for‌ ‌which‌ ‌the‌ ‌corporation‌ ‌is‌ ‌to‌ ‌exist,‌ ‌if‌ ‌the‌‌ corporation‌‌has‌‌not‌‌elected‌‌perpetual‌‌existence;‌ ‌ e) The‌ ‌names,‌ ‌nationalities,‌ ‌and‌ ‌residence‌ ‌addresses‌ ‌of‌ ‌the‌‌ incorporators‌;‌ ‌ f) i) The‌‌‌number‌‌of‌‌directors‌,‌‌which‌‌shall‌‌not‌‌be‌‌more‌‌than‌‌15‌‌or‌‌ the‌‌number‌‌of‌‌trustees‌‌which‌‌may‌‌be‌‌more‌‌than‌‌15;‌ ‌ 1. upon‌‌their‌‌approval‌‌by‌‌the‌‌SEC‌‌or‌‌ ‌ 2. from‌‌the‌‌date‌‌of‌‌filing‌‌with‌‌the‌‌SEC‌‌if‌‌not‌‌acted‌‌upon‌‌‌within‌‌six‌‌ (6)‌‌months‌‌from‌‌the‌‌date‌‌of‌‌filing‌‌for‌‌a‌‌cause‌‌not‌‌attributable‌‌ to‌‌the‌‌corporation.‌ ‌ Non-amendable‌‌items‌ ‌ 1) names‌‌of‌‌the‌‌incorporators,‌‌ ‌ 2) the‌‌first‌‌set‌‌of‌‌directors‌‌and‌‌subscribers,‌‌ ‌ 3) the‌‌initial‌‌treasurer,‌‌ ‌ 4) their‌‌original‌‌subscription‌‌and‌‌ ‌ 5) the‌‌place‌‌and‌‌date‌‌of‌‌execution.‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 48‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ Corporate‌‌Name‌ ‌ election,‌‌which‌‌shall‌‌not‌‌be‌‌later‌‌than‌‌sixty‌‌(60)‌‌days‌‌from‌‌the‌‌ scheduled‌‌date‌.‌ ‌ No‌‌corporate‌‌name‌‌shall‌‌be‌‌allowed‌‌by‌‌the‌‌SEC‌‌ ‌ For‌‌the‌‌adoption‌‌of‌‌bylaws,‌‌the‌‌affirmative‌‌vote‌‌of‌‌the‌‌stockholders‌‌ representing‌‌at‌‌least‌‌a‌‌‌majority‌‌‌of‌‌the‌‌OCS,‌‌or‌‌of‌‌at‌‌least‌‌a‌‌‌majority‌‌ of‌ ‌the‌ ‌members‌ ‌in‌ ‌case‌ ‌of‌ ‌nonstock‌ ‌corporations,‌ ‌shall‌ ‌be‌‌ necessary.‌‌ ‌ If‌‌no‌‌new‌‌date‌‌has‌‌been‌‌designated,‌‌or‌‌if‌‌the‌‌rescheduled‌‌election‌‌is‌‌ likewise‌ ‌not‌ ‌held,‌ ‌the‌ ‌SEC‌ ‌may,‌ ‌upon‌ ‌the‌ ‌application‌ ‌of‌ ‌a‌‌ stockholder,‌ ‌member,‌ ‌director‌ ‌or‌ ‌trustee,‌ ‌and‌ ‌after‌ ‌verification‌ ‌of‌‌ Amendments‌ ‌ the‌ ‌unjustified‌‌non-holding‌‌of‌‌the‌‌election‌,‌‌summarily‌‌order‌‌that‌‌ 2. if‌‌such‌‌name‌‌is‌‌already‌p ‌ rotected‌‌by‌‌law‌,‌‌or‌‌ ‌ A‌‌‌majority‌‌of‌‌the‌‌board‌‌‌of‌‌directors‌‌or‌‌trustees,‌‌and‌‌the‌‌owners‌‌of‌‌ an‌‌election‌‌be‌‌held.‌‌ ‌ at‌ ‌least‌ ‌a‌ ‌majority‌ ‌of‌ ‌the‌ ‌OCS,‌ ‌or‌ ‌at‌ ‌least‌ ‌a‌ ‌majority‌ ‌of‌ ‌the‌‌ 3. when‌‌its‌u ‌ se‌‌is‌‌contrary‌t‌ o‌‌existing‌‌law,‌‌rules‌‌and‌‌regulations.‌ ‌ Bylaws‌ ‌ members‌‌of‌‌a‌‌nonstock‌‌corporation,‌‌at‌‌a‌‌regular‌‌or‌‌special‌‌meeting‌‌ Commencement‌‌of‌‌corporate‌‌existence‌ ‌ duly‌ ‌called‌ ‌for‌ ‌the‌ ‌purpose,‌ ‌may‌‌‌amend‌‌‌or‌‌‌repeal‌‌‌the‌‌bylaws‌‌or‌‌ Contents‌ ‌ adopt‌‌new‌‌bylaws.‌‌ ‌ 1. A‌ ‌person‌ ‌or‌ ‌group‌ ‌of‌ ‌persons‌ ‌desiring‌ ‌to‌ ‌incorporate‌ ‌shall‌‌ a) The‌ ‌time,‌ ‌place‌ ‌and‌ ‌manner‌ ‌of‌‌calling‌‌and‌‌conducting‌‌regular‌‌ submit‌ ‌the‌ ‌intended‌ ‌corporate‌ ‌name‌ ‌to‌ ‌the‌ ‌SEC‌ ‌for‌‌ Delegation‌ ‌to‌ ‌the‌ ‌Board‌ ‌—‌ ‌The‌ ‌owners‌ ‌of‌‌two-thirds‌‌(2/3)‌‌of‌‌ or‌‌special‌‌meetings‌‌of‌‌the‌‌directors‌‌or‌‌trustees‌;‌ ‌ verification.‌‌ ‌ the‌ ‌OCS‌ ‌or‌ ‌two-thirds‌ ‌(2/3)‌ ‌of‌ ‌the‌ ‌members‌ ‌in‌ ‌a‌ ‌nonstock‌‌ b) The‌ ‌time‌ ‌and‌ ‌manner‌ ‌of‌ ‌calling‌ ‌and‌ ‌conducting‌ ‌regular‌ ‌or‌‌ corporation‌ ‌may‌ d ‌ elegate‌ ‌to‌ ‌the‌ ‌board‌ ‌of‌‌directors‌‌or‌‌trustees‌‌ 2. If‌ ‌the‌ ‌Commission‌ ‌finds‌ ‌that‌ ‌the‌ ‌name‌‌is‌‌distinguishable,‌‌not‌‌ special‌ ‌meetings‌ ‌and‌ ‌mode‌ ‌of‌ ‌notifying‌ ‌the‌‌stockholders‌‌ protected‌ ‌by‌ ‌law‌ ‌and‌ ‌is‌ ‌not‌ ‌contrary‌ ‌to‌ ‌law,‌ ‌rules‌ ‌and‌‌ the‌‌power‌‌to‌‌amend‌‌or‌‌repeal‌‌the‌‌bylaws‌‌or‌‌adopt‌‌new‌‌bylaws.‌ ‌ or‌‌members‌‌‌thereof;‌ ‌ regulations,‌ ‌the‌ ‌name‌ ‌shall‌ ‌be‌ ‌reserved‌ ‌in‌ ‌favor‌ ‌of‌ ‌the‌‌ Revocation‌‌of‌‌the‌‌Delegation‌‌—‌‌‌Any‌‌power‌‌delegated‌‌to‌‌the‌‌board‌‌ c) The‌‌required‌‌‌quorum‌‌‌in‌‌meetings‌‌of‌‌stockholders‌‌or‌‌members‌‌ incorporators.‌‌ ‌ to‌ ‌amend,‌ ‌repeal,‌ ‌or‌ ‌adopt‌ ‌new‌ ‌bylaws‌ ‌shall‌ ‌be‌ ‌considered‌ ‌as‌‌ and‌‌the‌‌‌manner‌‌of‌‌voting‌‌‌therein;‌ 3. The‌ ‌incorporators‌ ‌shall‌ ‌then‌ ‌submit‌ ‌their‌ ‌AOI‌‌‌and‌‌‌bylaws‌‌‌to‌‌ revoked‌ ‌whenever‌ ‌stockholders‌ ‌owning‌ ‌or‌ ‌representing‌ ‌a‌‌ d) The‌ ‌form‌ ‌for‌ ‌proxies‌ ‌of‌ ‌stockholders‌ ‌and‌ ‌members‌ ‌and‌ ‌the‌‌ the‌‌SEC.‌ ‌ majority‌‌‌of‌‌the‌‌OCS‌‌or‌‌majority‌‌of‌‌the‌‌members‌‌shall‌‌so‌‌vote‌‌at‌‌a‌‌ manner‌‌of‌‌voting‌‌them;‌ ‌ regular‌‌or‌‌special‌‌meeting.‌ ‌ 4. If‌‌the‌‌SEC‌‌finds‌‌that‌‌the‌‌submitted‌‌documents‌‌and‌‌information‌‌ e) The‌ ‌time‌ ‌for‌ ‌holding‌ ‌the‌ ‌annual‌ ‌election‌ ‌of‌ ‌directors‌ ‌or‌‌ Effects‌‌of‌‌non-use‌‌of‌‌corporate‌‌charter‌ ‌ are‌ ‌fully‌ ‌compliant,‌ ‌the‌ ‌SEC‌ ‌shall‌ ‌issue‌ ‌the‌ ‌certificate‌ ‌of‌‌ trustees‌‌and‌‌the‌‌mode‌‌or‌‌manner‌‌of‌‌giving‌‌notice‌‌thereof;‌ incorporation‌.‌ ‌ 1. If‌‌a‌‌corporation‌‌does‌‌not‌‌formally‌‌organize‌‌‌AND‌‌‌commence‌‌ f) The‌‌manner‌‌of‌‌election‌‌or‌‌appointment‌‌and‌‌the‌‌term‌‌of‌‌office‌‌of‌‌ A‌ ‌private‌ ‌corporation‌ ‌organized‌ ‌under‌ ‌the‌ ‌RCC‌ ‌commences‌ ‌its‌‌ its‌ ‌business‌ ‌within‌ ‌five‌ ‌(5)‌ ‌years‌ ‌from‌ ‌the‌ ‌date‌ ‌of‌ ‌its‌‌ all‌‌officers‌‌other‌‌than‌‌‌directors‌‌or‌‌trustees;‌‌xxxx‌‌and‌ ‌ corporate‌‌existence‌‌and‌‌juridical‌‌personality‌‌from‌‌the‌‌‌date‌‌the‌‌ incorporation,‌‌its‌‌certificate‌‌of‌‌incorporation‌‌shall‌‌be‌deemed‌ SEC‌‌issues‌‌the‌‌certificate‌‌of‌‌incorporation‌.‌ ‌ revoked‌ ‌as‌ ‌of‌ ‌the‌ ‌day‌ ‌following‌ ‌the‌ ‌end‌ ‌of‌ ‌the‌ ‌five‌ ‌(5)-year‌‌ g) Such‌‌other‌‌matters‌‌as‌‌may‌‌be‌‌necessary‌‌ ‌ period.‌ ‌ Election‌‌of‌‌directors‌‌or‌‌trustees‌ ‌ (i) for‌ ‌the‌ ‌proper‌ ‌or‌ ‌convenient‌ ‌transaction‌ ‌of‌ ‌its‌‌ 2. However,‌ ‌if‌ ‌a‌ ‌corporation‌ ‌has‌ ‌commenced‌ ‌its‌ ‌business‌ ‌but‌‌ corporate‌‌affairs‌‌ ‌ GR‌:‌ Each‌ ‌stockholder‌ ‌or‌ ‌member‌ ‌shall‌‌have‌‌the‌‌right‌‌to‌‌nominate‌‌ subsequently‌‌becomes‌‌inoperative‌‌for‌‌a‌‌period‌‌of‌‌at‌‌least‌‌ any‌ ‌director‌‌or‌‌trustee‌‌who‌‌possesses‌‌all‌‌of‌‌the‌‌qualifications‌‌ (ii) for‌ ‌the‌ ‌promotion‌ ‌of‌ ‌good‌ ‌governance‌ ‌and‌ ‌anti-graft‌‌ five‌ ‌(5)‌ ‌consecutive‌‌years‌,‌‌the‌‌SEC‌‌may,‌‌after‌‌due‌‌notice‌‌and‌‌ and‌‌none‌‌of‌‌the‌‌disqualifications.‌ ‌ and‌‌corruption‌‌measures.‌ ‌ hearing,‌‌place‌‌the‌‌corporation‌‌under‌d ‌ elinquent‌s‌ tatus.‌ ‌ EXC‌:‌ When‌ ‌the‌ ‌exclusive‌ ‌right‌‌is‌‌reserved‌‌for‌‌holders‌‌of‌‌‌founders’‌‌ h) An‌‌‌arbitration‌‌agreement‌‌‌may‌b ‌ e‌‌provided‌‌in‌‌the‌‌bylaws.‌ ‌ 3. A‌‌‌delinquent‌‌‌corporation‌‌shall‌‌have‌‌a‌‌period‌‌of‌‌‌two‌‌(2)‌‌years‌‌ shares‌‌‌under‌‌Section‌‌7.‌ ‌ Binding‌‌effects‌ ‌ to‌‌resume‌‌operations‌‌and‌‌comply‌‌with‌‌all‌‌requirements‌‌that‌‌ The‌ ‌non-holding‌ ‌of‌ ‌elections‌ ‌and‌ ‌the‌ ‌reasons‌ ‌therefor‌ ‌shall‌ ‌be‌‌ the‌‌SEC‌‌shall‌‌prescribe.‌‌ ‌ Bylaws‌‌shall‌‌be‌effective‌‌‌only‌‌‌upon‌‌the‌‌issuance‌‌by‌‌the‌‌SEC‌‌of‌‌a‌‌ reported‌ ‌to‌ ‌the‌ ‌SEC‌ ‌within‌ ‌thirty‌ ‌(30)‌ ‌days‌ ‌from‌ ‌the‌ ‌date‌ ‌of‌‌the‌‌ certification‌t‌ hat‌‌the‌‌bylaws‌‌are‌‌in‌‌accordance‌‌with‌‌the‌‌Code.‌ ‌ 4. Upon‌ ‌compliance‌ ‌by‌ ‌the‌ ‌corporation,‌ ‌the‌ ‌SEC‌ ‌shall‌ ‌issue‌ ‌an‌‌ scheduled‌ ‌election.‌ ‌The‌ ‌report‌ ‌shall‌ ‌specify‌ ‌a‌ ‌new‌ ‌date‌ ‌for‌ ‌the‌‌ order‌‌lifting‌‌the‌‌delinquent‌‌status.‌‌ ‌ 1. if‌ ‌it‌ ‌is‌ ‌not‌ ‌distinguishable‌ ‌from‌ ‌that‌ ‌already‌ ‌reserved‌ ‌or‌‌ registered‌‌for‌‌the‌‌use‌‌of‌‌another‌‌corporation,‌‌or‌‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 49‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ 5. Failure‌ ‌to‌ ‌comply‌ ‌with‌ ‌the‌ ‌requirements‌ ‌and‌ ‌resume‌‌ operations‌ ‌within‌ ‌the‌ ‌period‌ ‌given‌ ‌by‌‌the‌‌SEC‌‌shall‌‌cause‌‌the‌‌ revocation‌o ‌ f‌‌the‌‌corporation’s‌‌certificate‌‌of‌‌incorporation.‌ ‌ 6. ‌ j) To‌‌establish‌‌pension,‌‌retirement,‌‌and‌‌other‌‌plans‌‌for‌‌the‌‌benefit‌‌ of‌‌its‌‌directors,‌‌trustees,‌‌officers,‌‌and‌‌employees;‌‌and‌ ‌ General‌‌powers‌ ‌ Theory‌‌of‌‌general‌‌capacity‌ ‌ a) To‌‌sue‌‌and‌‌be‌‌sued‌‌in‌‌its‌‌corporate‌‌name;‌ ‌ c) To‌‌adopt‌‌and‌‌use‌‌a‌‌corporate‌‌seal;‌ ‌ d) To‌‌amend‌‌its‌‌articles‌‌of‌‌incorporation;‌ ‌ e) To‌‌adopt‌‌bylaws;‌ ‌ f) In‌ ‌case‌ ‌of‌ ‌stock‌ ‌corporations,‌ ‌to‌ ‌issue‌ ‌or‌ ‌sell‌ ‌stocks‌ ‌to‌‌ subscribers‌‌and‌‌to‌‌sell‌‌treasury‌‌stocks;‌‌and‌‌to‌‌admit‌‌members‌‌ to‌‌the‌‌corporation‌‌if‌‌it‌‌be‌‌a‌‌nonstock‌‌corporation;‌ ‌ g) To‌ ‌purchase,‌ ‌receive,‌ ‌take‌ ‌or‌ ‌grant,‌ ‌hold,‌ ‌convey,‌ ‌sell,‌ ‌lease,‌‌ pledge,‌ ‌mortgage,‌ ‌and‌ ‌otherwise‌ ‌deal‌ ‌with‌ ‌such‌ ‌real‌ ‌and‌‌ personal‌‌property;‌ ‌ h) To‌ ‌enter‌ ‌into‌ ‌a‌ ‌partnership,‌ ‌joint‌ ‌venture,‌ ‌merger,‌‌ consolidation,‌ ‌or‌ ‌any‌ ‌other‌ ‌commercial‌ ‌agreement‌ ‌with‌‌ natural‌‌and‌‌juridical‌‌persons;‌ ‌ i) 1. those‌‌conferred‌‌by‌‌law,‌‌its‌‌AOI,‌‌ ‌ 2. those‌‌implied‌‌from‌‌express‌‌powers‌‌and‌‌ ‌ 3. those‌‌as‌‌are‌‌‌necessary‌‌‌or‌‌‌incidental‌‌‌to‌‌the‌‌exercise‌‌of‌‌the‌‌ powers‌‌so‌‌conferred.‌ The‌ ‌corporation’s‌ ‌capacity‌‌is‌‌limited‌‌to‌‌such‌‌express,‌‌implied‌‌and‌‌ incidental‌‌powers.‌ ‌ Extend‌‌or‌‌shorten‌‌corporate‌‌term‌ ‌ When‌ ‌approved‌ ‌by‌ ‌a‌ ‌majority‌ ‌vote‌ ‌of‌ ‌the‌ ‌board‌ ‌of‌ ‌directors‌ ‌or‌‌ trustees,‌‌and‌‌ratified‌‌at‌‌a‌‌meeting‌‌by‌‌the‌‌stockholders‌‌or‌‌members‌‌ representing‌ ‌at‌ ‌least‌ ‌two-thirds‌ ‌(2/3)‌ ‌of‌ ‌the‌ ‌OCS‌ ‌or‌ ‌of‌ ‌its‌‌ members.‌‌ ‌ In‌ ‌case‌ ‌of‌ ‌extension‌ ‌of‌ ‌corporate‌ ‌term,‌ ‌a‌ ‌dissenting‌ ‌stockholder‌‌ may‌‌exercise‌‌the‌‌‌right‌‌of‌‌appraisal.‌ ‌ Increase‌‌or‌‌decrease‌‌capital‌‌stock‌‌or‌‌incur,‌‌create,‌‌increase‌‌ bonded‌‌indebtedness‌ ‌ Needs‌‌to‌‌be‌‌approved‌‌by‌‌a‌‌‌majority‌‌‌vote‌‌of‌‌the‌‌board‌‌of‌‌directors‌‌ and‌ ‌by‌ ‌two-thirds‌ ‌(2/3)‌ ‌of‌ ‌the‌ ‌outstanding‌ ‌capital‌ ‌stock‌ ‌at‌ ‌a‌‌ stockholders’‌‌meeting‌‌duly‌‌called‌‌for‌‌the‌‌purpose.‌ ‌ No‌ ‌decrease‌ ‌in‌ ‌capital‌ ‌stock‌ ‌shall‌ ‌be‌ ‌approved‌‌by‌‌the‌‌SEC‌‌‌if‌‌its‌‌ To‌ ‌make‌ ‌reasonable‌ ‌donations,‌ ‌including‌ ‌those‌‌for‌‌the‌‌public‌‌ effect‌‌shall‌‌prejudice‌‌the‌‌rights‌‌of‌‌corporate‌‌creditors.‌ ‌ welfare‌ ‌or‌‌for‌‌hospital,‌‌charitable,‌‌cultural,‌‌scientific,‌‌civic,‌‌or‌‌ Deny‌‌pre-emptive‌‌rights‌ ‌ similar‌‌purposes:‌‌ ‌ Provided‌,‌ ‌That‌ ‌no‌‌‌foreign‌‌‌corporation‌‌shall‌‌give‌‌donations‌‌in‌‌ aid‌ ‌of‌ ‌any‌ ‌political‌ ‌party‌ ‌or‌ ‌candidate‌ ‌or‌ ‌for‌ ‌purposes‌ ‌of‌‌ partisan‌‌political‌‌activity;‌ ‌ The‌ ‌right‌ ‌may‌ ‌be‌ ‌restricted‌ ‌or‌ ‌denied‌ ‌under‌ ‌the‌ ‌AOI‌,‌ ‌and‌‌ subject‌‌to‌‌certain‌‌exceptions‌‌and‌‌limitations.‌ ‌ k) To‌ ‌exercise‌ ‌such‌ ‌other‌ ‌powers‌ ‌as‌ ‌may‌ ‌be‌ ‌essential‌ ‌or‌‌ necessary‌‌‌to‌‌carry‌‌out‌‌its‌‌purpose‌‌or‌‌purposes‌‌as‌‌stated‌‌in‌‌the‌‌ Stock‌‌Transactions‌‌Covered‌ ‌ articles‌‌of‌‌incorporation.‌ ‌ 1) Increase‌‌in‌‌the‌‌ACS;‌ ‌ The‌‌SEC‌‌shall‌‌give‌‌reasonable‌‌notice‌‌to,‌‌and‌‌coordinate‌‌with‌‌the‌‌ appropriate‌ ‌regulatory‌ ‌agency‌ ‌prior‌ ‌to‌ ‌the‌ ‌suspension‌ ‌or‌‌ revocation‌ ‌of‌ ‌the‌ ‌certificate‌ ‌of‌ ‌incorporation‌ ‌of‌ ‌companies‌‌ Specific‌‌powers‌ ‌ under‌‌their‌‌special‌‌regulatory‌‌jurisdiction.‌ ‌ Theory‌ ‌of‌ ‌specific‌ ‌capacity‌ ‌—‌ ‌No‌ ‌corporation‌ ‌shall‌ ‌possess‌ ‌or‌‌ exercise‌‌any‌‌corporate‌‌powers‌e‌ xcept‌‌ ‌ Corporate‌‌Powers‌ ‌ b) To‌ ‌have‌ ‌perpetual‌ ‌existence‌ ‌unless‌ ‌the‌ ‌certificate‌ ‌of‌‌ incorporation‌‌provides‌‌otherwise;‌ ‌ shareholdings.‌‌ ‌ 2) Opening‌ ‌for‌ ‌subscription‌ ‌of‌ ‌the‌ ‌unissued‌ ‌portion‌ ‌of‌ ‌existing‌‌ capital‌‌stock;‌‌and‌ ‌ 3) Disposition‌‌of‌‌treasury‌‌shares.‌ ‌ When‌‌NOT‌‌Available‌ ‌ 1) When‌‌denied‌‌by‌‌the‌‌AOI;‌ ‌ 2) Shares‌‌issued‌‌to‌‌comply‌‌with‌‌the‌‌prescribed‌‌stock‌‌offerings‌‌or‌‌ minimum‌‌stock‌‌ownership‌‌by‌‌the‌‌public;‌ ‌ 3) To‌ ‌acquire‌ ‌needed‌ ‌investment‌ ‌through‌ ‌property-for-share‌‌ exchange‌;‌‌and‌ ‌ 4) To‌‌restructure‌‌the‌‌finances‌‌of‌‌the‌‌corporation‌‌through‌‌a‌‌‌debt‌‌to‌‌ equity‌‌conversion‌.‌ ‌ Sell‌‌or‌‌dispose‌‌corporate‌‌assets‌ ‌ A‌ ‌corporation‌ ‌may,‌ ‌by‌ ‌a‌ ‌majority‌ ‌vote‌ ‌of‌ ‌its‌ ‌board‌,‌ ‌sell‌,‌‌‌lease‌,‌‌ exchange‌,‌‌‌mortgage‌,‌‌‌pledge‌,‌‌or‌‌otherwise‌‌dispose‌‌of‌‌its‌‌property‌‌ and‌‌assets.‌ ‌ a. If‌ ‌ordinary‌ ‌disposition‌ ‌=‌ ‌No‌ ‌need‌ ‌for‌ ‌authorization‌ ‌from‌‌ stockholders;‌ ‌ b. If‌ ‌it‌ ‌involves‌ ‌the‌ ‌sale‌ ‌of‌ ‌all‌ ‌or‌ ‌substantially‌ ‌all‌ ‌of‌ ‌the‌‌ corporation’s‌ ‌properties‌ ‌and‌ ‌assets,‌ ‌including‌ ‌its‌ ‌goodwill‌ ‌=‌‌ must‌ ‌be‌ ‌authorized‌ ‌by‌ ‌the‌ ‌vote‌ ‌of‌ ‌the‌ ‌stockholders‌‌ representing‌ ‌at‌ ‌least‌ ‌2/3‌ ‌of‌ ‌the‌ ‌OCS,‌ ‌or‌ ‌of‌‌the‌‌members,‌‌in‌‌a‌‌ stockholders’‌‌or‌‌members’‌‌meeting‌‌duly‌‌called‌‌for‌‌the‌‌purpose.‌ ‌ When‌‌is‌‌the‌‌sale‌‌deemed‌‌a‌‌substantial‌‌disposition?‌ ‌ If‌‌the‌‌corporation‌‌would‌‌be‌r‌ endered‌i‌ ncapable‌‌of‌‌ ‌ Pre-emptive‌‌right‌‌‌under‌‌Sec‌‌38‌‌of‌‌the‌‌RCC‌‌refers‌‌to‌‌the‌‌right‌‌of‌‌a‌‌ 1. continuing‌‌the‌‌business‌‌or‌‌ ‌ stockholder‌ ‌of‌ ‌a‌ ‌stock‌ ‌corporation‌ ‌to‌ ‌subscribe‌ ‌to‌ ‌all‌ ‌issues‌ ‌or‌‌ disposition‌‌of‌‌shares‌‌of‌‌any‌‌class,‌‌in‌‌proportion‌‌to‌‌their‌‌respective‌‌ 2. accomplishing‌‌the‌‌purpose‌‌for‌‌which‌‌it‌‌was‌‌incorporated.‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 50‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ Here,‌ ‌any‌ ‌dissenting‌ ‌stockholder‌ ‌may‌ ‌exercise‌ ‌the‌ ‌right‌ ‌of‌‌ appraisal‌.‌ ‌ Acquire‌‌own‌‌shares‌ ‌ Provided‌‌that‌‌the‌‌corporation‌‌has‌‌‌unrestricted‌‌retained‌‌earnings‌‌ in‌ ‌its‌ ‌books‌ ‌to‌ ‌cover‌ ‌the‌ ‌shares‌ ‌to‌ ‌be‌ ‌purchased‌ ‌or‌ ‌acquired,‌ ‌a‌‌ stock‌ ‌corporation‌ ‌shall‌ ‌have‌ ‌the‌‌power‌‌to‌‌purchase‌‌or‌‌acquire‌‌its‌‌ own‌ ‌shares‌ ‌for‌ ‌a‌ ‌legitimate‌ ‌corporate‌ ‌purpose,‌ ‌including‌ ‌the‌‌ following‌‌cases:‌ ‌ a) To‌‌‌eliminate‌‌fractional‌‌shares‌a‌ rising‌‌out‌‌of‌‌stock‌‌dividends;‌ ‌ b) To‌ ‌collect‌ ‌or‌ ‌compromise‌ ‌an‌ ‌indebtedness‌ ‌to‌ ‌the‌‌ corporation,‌‌ ‌ 1) arising‌‌out‌‌of‌‌unpaid‌‌subscription,‌‌ ‌ 2) in‌‌a‌‌delinquency‌‌sale,‌‌and‌‌ ‌ Declare‌‌dividends‌ ‌ The‌ ‌board‌ ‌of‌ ‌directors‌ ‌of‌ ‌a‌ ‌stock‌ ‌corporation‌ ‌may‌ ‌declare‌‌ dividends‌ ‌out‌ ‌of‌ ‌the‌ ‌unrestricted‌ ‌retained‌ ‌earnings‌ ‌to‌ ‌ALL‌‌ stockholders‌‌on‌‌the‌‌basis‌‌of‌o ‌ utstanding‌‌stock‌‌‌held‌‌by‌‌them.‌‌ ‌ Any‌ ‌cash‌ ‌dividends‌ ‌due‌ ‌on‌ ‌delinquent‌ ‌stock‌ ‌shall‌ ‌first‌ ‌be‌‌ applied‌ ‌to‌ ‌the‌ ‌unpaid‌ ‌balance‌ ‌on‌ ‌the‌ ‌subscription‌ ‌+‌‌costs‌‌and‌‌ expenses,‌ ‌while‌ ‌stock‌ ‌dividends‌ ‌shall‌ ‌be‌ ‌withheld‌ ‌from‌ ‌the‌‌ delinquent‌ ‌stockholders‌ ‌until‌ ‌their‌ ‌unpaid‌‌subscription‌‌is‌‌fully‌‌ paid.‌ ‌ c) To‌ ‌pay‌ ‌dissenting‌ ‌or‌ ‌withdrawing‌‌stockholders‌‌entitled‌‌to‌‌ payment‌‌for‌‌their‌‌shares‌‌under‌‌the‌‌provisions‌‌of‌‌this‌‌Code.‌ ‌ Majority‌‌of‌‌Board‌+ ‌‌‌ otherwise‌ ‌ Stockholders‌‌representing‌m ‌ ajority‌‌of‌‌OCS‌‌or‌‌ majority‌‌of‌‌members.‌ ‌ Voting‌‌Required‌ ‌ is‌‌reasonably‌‌necessary‌‌to‌‌accomplish‌‌ Majority‌‌of‌B ‌ oard‌ ‌ its‌‌primary‌‌purpose‌‌as‌‌stated‌‌in‌‌the‌‌AOI‌ ‌ in‌‌any‌‌other‌‌corporation,‌‌business,‌‌or‌‌ for‌‌any‌‌purpose‌‌other‌‌than‌‌the‌‌primary‌‌ purpose‌‌for‌‌which‌‌it‌‌was‌‌organized‌ ‌ Majority‌‌of‌B ‌ oard‌+ ‌‌‌ Stockholders‌‌ representing‌2 ‌ /3‌‌of‌‌OCS‌‌ or‌2 ‌ /3‌‌of‌‌members.‌ ‌ The‌ ‌board‌ ‌must‌ ‌evaluate‌ ‌whether‌ ‌the‌ ‌investment‌ ‌has‌ ‌a‌ ‌logical‌‌ relation‌ ‌to‌ ‌or‌ ‌is‌ ‌in‌ ‌direct‌ ‌and‌ ‌immediate‌ ‌furtherance‌ ‌of‌ ‌the‌‌ corporation’s‌‌main‌‌business.‌ ‌ Ratification‌‌by‌‌stockholders‌‌or‌‌members‌‌must‌‌be‌‌in‌‌a‌‌meeting‌‌duly‌‌ called‌ ‌for‌ ‌the‌ ‌purpose.‌ ‌Here,‌ ‌any‌ ‌dissenting‌ ‌stockholder‌ ‌may‌‌ exercise‌‌the‌‌‌right‌‌of‌‌appraisal.‌ ‌ Voting‌‌Required‌ ‌ In‌i‌ nterlocking‌‌ Majority‌‌of‌‌Board‌‌+‌‌ ‌ ownership‌‌‌or‌‌ Stockholders‌‌representing‌2 ‌ /3‌‌of‌‌OCS‌‌or‌2 ‌ /3‌‌of‌‌ management‌ ‌ members‌o ‌ f‌‌MANAGED‌‌corporation.‌ ‌ Invest‌‌corporate‌‌funds‌‌in‌‌another‌‌corporation‌‌or‌‌business‌ Investment‌ ‌ No‌ ‌management‌ ‌contract‌ ‌shall‌ ‌be‌ ‌entered‌ ‌into‌ ‌for‌ ‌a‌ ‌period‌‌ longer‌‌than‌‌five‌‌(5)‌‌years‌‌‌for‌‌any‌‌one‌‌(1)‌‌term.‌ ‌ EXC‌:‌ Such‌‌service‌‌contracts‌‌or‌‌operating‌‌agreements‌‌which‌‌relate‌‌to‌‌ the‌ ‌exploration,‌ ‌development,‌ ‌exploitation‌ ‌or‌ ‌utilization‌ ‌of‌‌ natural‌ ‌resources‌ ‌may‌ ‌be‌ ‌entered‌ ‌into‌ ‌for‌ ‌such‌ ‌periods‌ ‌as‌ may‌‌be‌‌provided‌‌by‌‌the‌‌pertinent‌‌laws‌‌or‌‌regulations.‌ ‌ A‌ ‌management‌ ‌contract‌ ‌amounts‌ ‌to‌ ‌a‌ ‌de‌ ‌facto‌ ‌merger‌ ‌when‌ ‌the‌‌ management‌‌relates‌‌to‌‌all‌‌or‌‌substantially‌‌all‌‌of‌‌the‌‌business‌‌of‌‌the‌‌ corporation.‌ ‌This‌ ‌does‌ ‌NOT‌ ‌trigger‌ ‌the‌ ‌exercise‌ ‌of‌ ‌appraisal‌ right‌.‌ ‌ No‌ ‌stock‌ ‌dividend‌ ‌shall‌ ‌be‌ ‌issued‌ ‌without‌ ‌the‌ ‌approval‌ ‌of‌‌ stockholders‌ ‌representing‌ ‌at‌ ‌least‌ ‌2/3‌ ‌of‌ ‌the‌ ‌OCS‌ ‌at‌ ‌a‌ ‌regular‌ ‌or‌‌ Limitations‌ ‌ special‌‌meeting‌‌duly‌‌called‌‌for‌‌the‌‌purpose.‌ ‌ Ultra‌‌vires‌‌acts‌ ‌ Enter‌‌into‌‌management‌‌contract‌ ‌ ‌ 3) to‌ ‌purchase‌ ‌delinquent‌ ‌shares‌ ‌sold‌ ‌during‌ ‌said‌ ‌sale;‌‌ and‌ ‌ GR‌:‌ a) Interlocking‌ ‌ownership‌ ‌—‌ ‌where‌ ‌a‌ ‌stockholder‌ ‌or‌‌ stockholders‌ ‌representing‌ ‌the‌ ‌same‌ ‌interest‌ ‌of‌ ‌both‌ ‌the‌‌ managing‌ ‌and‌ ‌the‌‌managed‌‌corporations‌‌own‌‌or‌‌control‌‌more‌‌ than‌ ‌one-third‌ ‌(1/3)‌ ‌of‌ ‌the‌ ‌total‌ ‌OCS‌ ‌entitled‌ ‌to‌ ‌vote‌ ‌of‌ ‌the‌‌ managing‌‌corporation;‌‌or‌ ‌ b) Interlocking‌ ‌management‌ ‌—‌ ‌where‌ ‌a‌ ‌majority‌ ‌of‌ ‌the‌‌ members‌‌of‌‌the‌‌board‌‌of‌‌directors‌‌of‌‌the‌‌managing‌‌corporation‌‌ also‌ ‌constitute‌ ‌a‌ ‌majority‌ ‌of‌ ‌the‌ ‌members‌ ‌of‌ ‌the‌ ‌board‌ ‌of‌‌ directors‌‌of‌‌the‌‌managed‌‌corporation,‌‌ ‌ Management‌ ‌Contract‌ ‌—‌ ‌contract‌ ‌whereby‌ ‌a‌ ‌corporation‌‌ undertakes‌ ‌to‌ ‌manage‌ ‌or‌ ‌operate‌ ‌all‌ ‌or‌ ‌substantially‌ ‌all‌ ‌of‌ ‌the‌‌ business‌‌of‌‌another‌‌corporation,‌‌whether‌‌such‌‌contracts‌‌are‌‌called‌‌ service‌‌contracts,‌‌operating‌‌agreements‌‌or‌‌otherwise.‌ ‌ 1. An‌ ‌illegal‌ ‌act‌ ‌contemplates‌ ‌the‌ ‌doing‌ ‌of‌ ‌an‌ ‌act‌ ‌which‌‌is‌‌ contrary‌ ‌to‌ ‌law,‌ ‌morals,‌ ‌or‌ ‌public‌ ‌order,‌ ‌or‌ ‌contravene‌‌ some‌ ‌rules‌ ‌of‌ ‌public‌ ‌policy‌ ‌or‌ ‌public‌ ‌duty,‌ ‌and‌ ‌are,‌ ‌like‌‌ similar‌‌transactions‌‌between‌‌individuals,‌V ‌ OID‌.‌‌ ‌ 2. Mere‌ ‌ultra‌ ‌vires‌ ‌acts‌,‌ ‌on‌ ‌the‌‌other‌‌hand,‌‌or‌‌those‌‌which‌‌ are‌‌not‌‌illegal‌‌and‌‌void‌ab‌‌initio‌,‌‌but‌‌are‌‌not‌‌merely‌‌within‌‌ the‌ ‌scope‌ ‌of‌ ‌the‌ ‌articles‌ ‌of‌ ‌incorporation,‌ ‌are‌ ‌merely‌‌ VOIDABLE‌‌‌and‌‌may‌‌become‌‌binding‌‌and‌‌enforceable‌‌when‌‌ ratified‌‌by‌‌the‌‌stockholders.‌‌(B ‌ ernas‌‌v.‌‌Cinco‌‌2 ‌ 015‌)‌ ‌ The‌‌test‌‌to‌‌be‌‌applied‌‌is‌‌‌whether‌‌the‌‌act‌‌in‌‌question‌‌is‌‌in‌‌direct‌‌and‌‌ immediate‌ ‌furtherance‌ ‌of‌ ‌the‌ ‌corporation's‌ ‌business,‌ ‌fairly‌‌ incidental‌‌to‌‌the‌‌express‌‌powers‌‌and‌‌reasonably‌‌necessary‌‌to‌‌their‌‌ exercise‌.‌ ‌If‌ ‌so,‌ ‌the‌ ‌corporation‌ ‌has‌ ‌the‌ ‌power‌ ‌to‌ ‌do‌ ‌it‌;‌‌ otherwise,‌ ‌not‌.‌ ‌(‌Magallanes‌ ‌Watercraft‌ ‌Association‌ ‌v.‌ ‌Auguis‌‌ 2016‌)‌ ‌ Ultra‌‌Vires‌‌‌Act‌ ‌ Consequences‌ ‌ The‌‌resulting‌‌contract‌‌is‌v ‌ oid‌.‌ ‌ Acts‌‌contrary‌‌to‌‌ law,‌‌morals‌‌or‌‌ public‌‌policy‌ ‌ The‌‌contract‌‌is‌‌not‌‌subject‌‌to‌‌ratification.‌ ‌ The‌‌action‌‌or‌‌defense‌‌for‌‌the‌ ‌ declaration‌‌of‌‌its‌‌nullity‌‌does‌‌not‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 51‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ of‌ ‌the‌ ‌corporation's‌ ‌competence‌ ‌or‌ ‌power‌ ‌to‌ ‌do‌ ‌a‌ ‌particular‌ ‌act.‌ ‌A‌‌ finding‌ ‌that‌ ‌there‌ ‌is‌ ‌apparent‌ ‌authority‌ ‌is‌‌not‌‌the‌‌same‌‌as‌‌a‌‌finding‌‌ that‌‌the‌‌corporate‌‌act‌‌in‌‌question‌‌is‌‌within‌‌the‌‌corporation's‌‌limited‌‌ powers.‌ ‌ prescribe.‌ ‌ The‌‌rule‌‌on‌i‌ n‌‌pari‌‌delicto‌‌‌applies.‌ ‌ The‌‌act‌‌is‌u ‌ nenforceable‌.‌ ‌ The‌‌act‌‌shall‌‌not‌‌prejudice‌‌third‌‌parties‌‌who‌‌ acted‌‌in‌‌good‌‌faith.‌ ‌ Acts‌‌performed‌‌ outside‌‌the‌‌scope‌‌ of‌‌the‌‌powers‌‌ Shareholders‌‌may‌‌ratify‌‌the‌‌action,‌‌prevent‌‌its‌‌ granted‌‌to‌‌the‌‌ enforcement‌‌and,‌‌if‌‌proper,‌‌institute‌‌a‌d ‌ erivative‌‌ corporation‌‌by‌‌ suit‌.‌ ‌ its‌‌articles‌‌of‌‌ incorporation‌ ‌ If‌‌the‌‌action‌‌has‌‌been‌‌implemented,‌‌the‌‌members‌‌ of‌‌the‌‌board‌‌shall‌‌be‌‌liable‌‌jointly‌‌and‌‌severally‌‌ for‌‌all‌‌damages‌‌resulting‌‌from‌‌the‌u ‌ ltra‌‌vires‌‌‌act.‌ ‌ Doctrine‌‌of‌‌individuality‌‌of‌‌subscription‌ ‌ Acts‌ ‌of‌ ‌an‌ ‌officer‌ ‌that‌ ‌are‌ ‌not‌ ‌authorized‌ ‌by‌ ‌the‌ ‌board‌ ‌of‌‌ directors/trustees‌ ‌do‌ ‌not‌ ‌bind‌ ‌the‌ ‌corporation‌ ‌unless‌ ‌the‌‌ corporation‌‌ratifies‌‌the‌‌acts‌‌or‌‌holds‌‌the‌‌officer‌‌out‌‌as‌‌a‌‌person‌‌ with‌‌authority‌‌to‌‌transact‌‌on‌‌its‌‌behalf.‌ ‌ stockholders‌o‌ r‌‌shareholders‌‌in‌‌a‌‌stock‌‌corporation‌‌or‌‌as‌‌ ‌ 2. members‌i‌ n‌‌a‌‌nonstock‌‌corporation.‌ ‌ Fundamental‌‌rights‌‌of‌‌a‌‌stockholder‌ ‌ 1) Political;‌ ‌ A‌ ‌subscription‌ ‌contract‌ ‌is‌ ‌indivisible‌.‌ ‌Consequently,‌ ‌where‌‌ stocks‌‌were‌‌subscribed‌‌and‌‌part‌‌of‌‌the‌‌subscription‌‌contract‌‌price‌‌ was‌ ‌not‌ ‌paid,‌ ‌the‌ ‌whole‌ ‌subscription‌ ‌shall‌ ‌be‌ ‌considered‌ delinquent‌.‌ ‌ 2) Economic‌o ‌ r‌‌Proprietary;‌ ‌ All‌‌stocks‌‌issued‌‌by‌‌the‌‌corporation‌‌are‌‌‌presumed‌‌equal‌‌with‌‌the‌‌ same‌ ‌privileges‌ ‌and‌ ‌liabilities,‌ ‌provided‌ ‌that‌ ‌the‌ ‌AOI‌ ‌is‌ ‌silent‌ ‌on‌‌ such‌‌differences.‌‌(C ‌ IR‌‌v.‌‌CA‌)‌ ‌ Trust‌‌fund‌‌doctrine‌ ‌ 3) Remedial.‌ ‌ Political‌‌Rights;‌‌participation‌‌in‌‌management‌ ‌ Proxy‌ ‌ A‌‌‌proxy‌‌‌is‌‌a‌‌form‌‌of‌‌agency‌‌created‌‌in‌‌instances‌‌when‌‌a‌‌person‌‌is‌‌ unable‌‌to‌‌personally‌‌cast‌‌his‌‌or‌‌her‌‌vote;‌‌hence,‌‌the‌‌act‌‌of‌‌voting‌‌is‌‌ delegated‌ ‌to‌ ‌another‌ ‌person.‌ ‌There‌‌is‌‌NO‌‌requirement‌‌that‌‌the‌‌ same‌‌be‌‌notarized.‌‌‌Proxies‌‌shall‌‌be‌‌ ‌ Under‌‌the‌‌doctrine,‌‌the‌‌capital‌‌stock,‌‌property,‌‌and‌‌other‌‌assets‌‌of‌‌a‌‌ corporation‌ ‌are‌ ‌regarded‌ ‌as‌ ‌equity‌ ‌in‌ ‌trust‌ ‌for‌ ‌the‌ ‌payment‌ ‌of‌‌ corporate‌ ‌creditors,‌ ‌who‌ ‌are‌ ‌preferred‌ ‌in‌ ‌the‌ ‌distribution‌ ‌of‌‌ corporate‌ ‌assets.‌ ‌Thus,‌ ‌any‌ ‌disposition‌ ‌of‌ ‌corporate‌ ‌funds‌ ‌and‌‌ assets‌ ‌to‌ ‌the‌ ‌prejudice‌ ‌of‌ ‌creditors‌ ‌is‌ ‌null‌ ‌and‌ ‌void‌.‌ ‌(‌Turner‌ ‌v.‌‌ Lorenzo‌‌Shipping‌‌‌2010‌)‌ ‌ UM‌‌does‌‌not‌‌have‌‌the‌‌power‌‌to‌‌mortgage‌‌its‌‌properties‌‌in‌‌order‌‌ to‌‌secure‌‌loans‌‌of‌‌other‌‌persons.‌‌As‌‌an‌‌educational‌‌institution,‌‌it‌‌is‌‌ limited‌‌to‌‌developing‌‌human‌‌capital‌‌through‌‌formal‌‌instruction.‌ ‌ The‌ ‌relationship‌ ‌between‌ ‌a‌ ‌corporation‌ ‌and‌ ‌its‌ ‌representatives‌ ‌is‌‌ governed‌ ‌by‌ ‌the‌ ‌general‌ ‌principles‌ ‌of‌ ‌agency‌.‌ ‌Unauthorized‌ ‌acts‌‌ that‌‌are‌‌merely‌‌beyond‌‌the‌‌powers‌‌of‌‌the‌‌corporation‌‌under‌‌its‌‌ articles‌ ‌of‌ ‌incorporation‌ ‌are‌ ‌NOT‌ ‌void‌ ‌ab‌ ‌initio‌.‌ ‌They‌ ‌may‌ ‌be‌ ratified.‌ ‌Here,‌ ‌it‌ ‌was‌ ‌not‌ ‌shown‌ ‌that‌ ‌petitioner‌ ‌issued‌ ‌a‌ ‌resolution‌‌ ratifying‌‌the‌‌execution‌‌of‌‌the‌‌mortgage‌‌contracts.‌‌ ‌ The‌ ‌general‌ ‌rule‌ ‌is‌ ‌that‌ ‌knowledge‌ ‌of‌‌an‌‌officer‌‌is‌‌considered‌‌ knowledge‌ ‌of‌ ‌the‌ ‌corporation.‌ ‌However,‌ ‌even‌ ‌though‌ ‌the‌ ‌Sps‌‌ Torres‌ ‌were‌ ‌officers‌ ‌of‌ ‌both‌ ‌the‌ ‌thrift‌ ‌banks‌ ‌and‌ ‌petitioner,‌ ‌their‌‌ knowledge‌ ‌of‌ ‌the‌ ‌mortgage‌ ‌contracts‌ ‌cannot‌ ‌be‌ ‌considered‌ ‌as‌‌ knowledge‌ ‌of‌ ‌the‌‌corporation.‌‌The‌‌rule‌‌that‌‌knowledge‌‌of‌‌an‌‌officer‌‌ is‌ ‌considered‌ ‌knowledge‌‌of‌‌the‌‌corporation‌‌‌applies‌‌only‌‌when‌‌the‌‌ officer‌‌is‌‌acting‌‌within‌‌the‌‌authority‌‌given‌‌to‌‌him‌‌or‌‌her‌‌by‌‌the‌‌ corporation.‌ ‌ 1. The‌‌law‌‌requires‌‌payment‌‌of‌‌the‌‌“full‌‌amount‌‌of‌‌subscription.”‌‌ ‌ Doctrine‌‌of‌‌equality‌‌of‌‌shares‌ ‌ University‌‌of‌‌Mindanao,‌‌Inc.‌‌v.‌‌BSP‌‌‌2016‌‌as‌‌to‌‌Sec‌‌41,‌L ‌ eonen‌‌J‌ ‌ Corporators‌a‌ re‌‌those‌‌who‌‌compose‌‌a‌‌corporation,‌‌whether‌‌as‌‌ ‌ This‌ ‌doctrine‌ ‌is‌ ‌the‌ ‌underlying‌ ‌principle‌ ‌in‌ ‌the‌ ‌procedure‌‌for‌‌the‌‌ distribution‌ ‌of‌ ‌capital‌ ‌assets‌ ‌which‌ ‌allows‌ ‌the‌ ‌distribution‌ ‌of‌‌ corporate‌‌capital‌‌‌only‌‌in‌‌three‌‌instances‌:‌ ‌ 1) amendment‌‌of‌‌the‌‌AOI‌‌to‌r‌ educe‌t‌ he‌‌ACS,‌ ‌ 2) purchase‌ ‌of‌ ‌redeemable‌ ‌shares‌ ‌by‌ ‌the‌ ‌corporation,‌‌ regardless‌ ‌of‌ ‌the‌ ‌existence‌ ‌of‌ ‌unrestricted‌ ‌retained‌‌ earnings,‌‌and‌ ‌ 3) dissolution‌ ‌and‌ ‌eventual‌ ‌liquidation‌ ‌of‌ ‌the‌ ‌corporation.‌‌ (‌Ong‌‌Yong‌‌v.‌‌Tiu‌)‌ ‌ ‌ ‌Stockholders‌‌and‌‌Members‌ ‌ The‌ ‌doctrine‌ ‌of‌‌apparent‌‌authority‌‌‌does‌‌not‌‌go‌‌into‌‌the‌‌question‌‌ 1. in‌‌writing,‌‌ ‌ 2. signed‌‌and‌‌filed,‌‌by‌‌the‌‌stockholder‌‌or‌‌member,‌‌ ‌ 3. in‌‌any‌‌form‌‌authorized‌‌in‌‌the‌‌bylaws‌‌and‌‌ ‌ 4. received‌ ‌by‌ ‌the‌ ‌corporate‌ ‌secretary‌ ‌within‌ ‌a‌ ‌reasonable‌‌ time‌‌before‌‌the‌‌scheduled‌‌meeting.‌‌ ‌ Unless‌‌otherwise‌‌provided‌‌in‌‌the‌‌proxy‌‌form,‌‌it‌‌shall‌‌be‌‌valid‌‌‌only‌‌ for‌‌the‌‌meeting‌‌for‌‌which‌‌it‌‌is‌‌intended‌.‌‌No‌‌proxy‌‌shall‌‌be‌‌valid‌‌ and‌‌effective‌‌for‌‌a‌‌period‌‌longer‌‌than‌f‌ ive‌‌(5)‌‌years‌‌‌at‌‌any‌‌one‌‌time.‌ ‌ Voting‌‌trust‌ ‌ One‌ ‌or‌ ‌more‌ ‌stockholders‌ ‌of‌ ‌a‌ ‌stock‌ ‌corporation‌ ‌may‌ ‌create‌ ‌a‌‌ voting‌ ‌trust‌ ‌for‌ ‌the‌ ‌purpose‌ ‌of‌ ‌conferring‌ ‌upon‌ ‌a‌ ‌trustee‌ ‌or‌‌ trustees‌‌the‌‌right‌‌to‌‌vote‌‌and‌‌other‌‌rights‌‌pertaining‌‌to‌‌the‌‌shares.‌ ‌ GR‌:‌ For‌‌a‌‌period‌‌not‌‌exceeding‌f‌ ive‌‌(5)‌‌years‌‌‌at‌‌any‌‌time.‌ ‌ EXC‌:‌ In‌‌the‌‌case‌‌of‌‌a‌‌voting‌‌trust‌‌specifically‌‌required‌‌as‌‌a‌‌‌condition‌‌ in‌ ‌a‌ ‌loan‌ ‌agreement‌,‌ ‌said‌ ‌voting‌ ‌trust‌ ‌may‌ ‌be‌ ‌for‌ ‌a‌ ‌period‌‌ exceeding‌‌five‌‌(5)‌‌years‌‌but‌‌shall‌‌‌automatically‌‌expire‌‌upon‌‌ full‌‌payment‌‌of‌‌the‌‌loan‌.‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 52‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ Proxy‌ ‌ Voting‌‌Trust‌‌Agreement‌ ‌ By‌‌a‌‌2/3‌‌vote‌ ‌ Legal‌‌title‌‌is‌‌NOT‌‌transferred‌ ‌ Legal‌‌title‌‌to‌‌the‌‌shares‌‌ transferred‌‌to‌‌transferee‌ ‌ 1) Amendment‌‌of‌‌the‌‌AOI;‌ ‌ Revocable‌‌‌at‌‌any‌‌time,‌u ‌ nless‌‌ coupled‌‌with‌‌interest‌ ‌ Irrevocable‌‌‌for‌‌a‌‌definite‌‌and‌‌ limited‌‌period‌‌of‌‌time‌ ‌ 3) Increasing‌‌or‌‌decreasing‌‌capital‌‌stock‌‌or‌‌incurring,‌‌creating‌‌or‌‌ increasing‌‌bonded‌‌indebtedness;‌ ‌ Can‌‌only‌‌act‌‌at‌‌the‌‌specified‌‌ meeting‌ ‌ NOT‌‌limited‌‌to‌‌any‌‌particular‌‌ meeting‌ ‌ 4) Sale‌ ‌of‌ ‌all‌ ‌or‌ ‌substantially‌ ‌all‌ ‌of‌ ‌the‌ ‌corporation’s‌ ‌properties‌‌ and‌‌assets,‌‌including‌‌its‌‌goodwill;‌ ‌ Votes‌‌only‌‌in‌‌the‌‌absence‌‌of‌‌the‌‌ owner‌‌of‌‌the‌‌stock‌ ‌ Can‌‌vote‌‌and‌‌exercise‌‌all‌‌rights‌‌of‌‌ the‌‌transferor‌‌even‌‌when‌‌the‌‌ latter‌‌is‌‌present.‌ ‌ 2) Extending‌‌or‌‌shortening‌‌corporate‌‌term;‌ ‌ 5) Approval‌ ‌of‌ ‌the‌ ‌plan‌ ‌of‌ ‌merger‌ ‌or‌ ‌consolidation‌ ‌(and‌ ‌any‌‌ amendment‌‌thereto)‌‌(§76);‌ ‌ 6) Removal‌‌of‌‌director‌‌or‌‌trustees;‌ ‌ When‌‌so‌‌authorized‌‌in‌‌the‌‌bylaws‌‌or‌‌by‌‌a‌‌majority‌‌of‌‌the‌‌board‌‌of‌‌ directors,‌ ‌the‌ ‌stockholders‌ ‌or‌ ‌members‌ ‌of‌ ‌corporations‌‌may‌‌also‌‌ vote‌‌through‌r‌ emote‌‌communication‌o ‌ r‌‌in‌‌absentia‌.‌ ‌ Proprietary‌‌Rights‌ ‌ Right‌‌to‌‌Dividends‌ ‌ Dividends‌ ‌is‌ ‌the‌ ‌unrestricted‌ ‌retained‌‌earnings‌‌set‌‌apart‌‌from‌‌the‌‌ general‌‌mass‌‌of‌‌the‌‌funds‌‌of‌‌the‌‌corporation‌‌and‌‌distributed‌‌among‌ the‌ ‌stockholders‌ ‌in‌ ‌proportion‌ ‌to‌ ‌their‌ ‌shares‌ ‌or‌ ‌interest‌ ‌in‌ ‌the‌‌ corporation,‌‌in‌‌the‌‌form‌‌of‌‌cash,‌‌property‌‌or‌‌stocks.‌ ‌ Who‌‌may‌‌declare‌‌dividends?‌ ‌ 1. BOD‌‌alone‌‌—‌‌for‌c‌ ash‌,‌‌property‌d ‌ ividends;‌ ‌ 2. BOD‌‌+‌‌stockholders‌‌representing‌‌‌not‌‌less‌‌than‌‌2/3‌‌of‌‌the‌‌OCS‌‌ in‌‌a‌‌meeting‌‌called‌‌for‌‌the‌‌purpose‌‌—‌‌for‌s‌ tock‌d ‌ ividends.‌ ‌ Need‌‌NOT‌‌be‌‌notarized‌‌or‌‌a‌‌copy‌‌ Must‌‌be‌‌notarized‌‌and‌‌filed‌‌with‌‌ be‌‌filed‌‌with‌‌SEC‌ ‌ SEC‌ ‌ 7) Ratifying‌ ‌an‌ ‌act‌ ‌which‌ ‌amounts‌ ‌to‌ ‌disloyalty‌ ‌of‌ ‌a‌ ‌director‌‌ (‌corporate‌‌business‌‌opportunity‌‌rule‌);‌ ‌ NO‌‌right‌‌of‌‌inspection‌ ‌ 8) Approving‌ ‌property-for-share‌ ‌exchange‌ ‌and‌ ‌debt‌ ‌to‌ ‌equity‌‌ conversion‌‌(§38);‌ ‌ ⭐Appraisal‌‌right‌ ‌ 9) Investing‌ ‌funds‌ ‌in‌ ‌any‌ ‌other‌‌corporation,‌‌business,‌‌or‌‌for‌‌any‌‌ purpose‌ ‌other‌ ‌than‌ ‌the‌ ‌primary‌ ‌purpose‌ ‌for‌ ‌which‌ ‌the‌‌ corporation‌‌was‌‌organized‌‌(§41);‌ ‌ Any‌ ‌stockholder‌ ‌of‌ ‌a‌ ‌corporation‌ ‌shall‌ ‌have‌ ‌the‌ ‌right‌‌to‌‌dissent‌‌and‌‌ demand‌ ‌payment‌ ‌of‌ ‌the‌ ‌fair‌ ‌value‌ ‌of‌ ‌the‌ ‌shares‌ ‌in‌ ‌the‌ ‌following‌‌ instances:‌ ‌ HAS‌‌the‌‌right‌‌of‌‌inspection‌ ‌ Cases‌‌when‌‌stockholders'‌‌action‌‌is‌‌required‌ ‌ By‌‌a‌‌majority‌‌vote‌ ‌ 1) Electing‌ ‌to‌ ‌retain‌ ‌specific‌ ‌corporate‌ ‌term‌‌indicated‌‌in‌‌the‌‌AOI‌‌ (§11);‌ ‌ 2) Calling‌ ‌a‌ ‌special‌ ‌meeting‌ ‌of‌ ‌the‌ ‌stockholders‌‌or‌‌members‌‌for‌‌ the‌‌purpose‌‌of‌‌removing‌‌any‌‌director‌‌or‌‌trustee‌‌(§27);‌ ‌ 3) Granting‌ ‌compensation‌ ‌to‌ ‌directors‌ ‌or‌ ‌trustees‌‌(including‌‌the‌‌ amount‌‌thereof)‌‌(§);‌ ‌ 4) Concluding‌ ‌a‌ ‌management‌ ‌contract‌ ‌with‌ ‌another‌ ‌corporation‌‌ (§43);‌ ‌ 10) Issuing‌‌stock‌‌dividends‌‌(§42);‌ ‌ 11) Approving‌ ‌the‌ ‌conclusion‌ ‌of‌ ‌a‌ ‌management‌ ‌contract‌ ‌where‌‌ there‌ ‌is‌ ‌interlocking‌ ‌ownership‌ ‌or‌ ‌interlocking‌ ‌management‌‌ (§43);‌ ‌ 12) Delegating‌ ‌to‌ ‌the‌ ‌board‌ ‌of‌ ‌directors‌ ‌or‌ ‌trustees‌ ‌the‌ ‌power‌ ‌to‌‌ amend‌‌or‌‌repeal‌‌the‌‌bylaws‌‌or‌‌adopt‌‌new‌‌bylaws‌‌(§47);‌ ‌ 5) Adoption‌‌of‌‌the‌‌by‌‌laws‌‌(§45);‌ 13) Approving‌ ‌a‌ ‌plan‌ ‌for‌ ‌the‌ ‌distribution‌ ‌of‌ ‌assets‌ ‌in‌ ‌non-stock‌‌ corporations‌‌(§94);‌ ‌ 6) Amendment,‌‌repeal,‌‌or‌‌adoption‌‌of‌‌a‌‌new‌‌bylaws‌‌(§47);‌ ‌ 14) Voluntary‌‌dissolution‌‌(§135).‌ ‌ 7) Quorum‌‌in‌‌meetings‌‌(§51);‌ ‌ 8) Fixing‌‌the‌‌issue‌‌price‌‌of‌‌no-par‌‌value‌‌shares‌‌(§61);‌ ‌ 9) Voluntary‌‌dissolution‌‌where‌‌no‌‌creditors‌‌are‌‌affected‌‌(§134).‌ ‌ Manner‌‌of‌‌voting‌ ‌ Stockholders‌‌and‌‌members‌‌may‌‌vote‌‌in‌‌person‌‌or‌‌by‌‌‌proxy‌‌‌in‌‌all‌‌ meetings‌‌of‌‌stockholders‌‌or‌‌members.‌ ‌ a) In‌‌case‌‌an‌‌amendment‌‌to‌‌the‌‌AOI‌h ‌ as‌‌the‌‌effect‌‌of‌‌ ‌ 1) changing‌ ‌or‌ ‌restricting‌ ‌the‌ ‌rights‌ ‌of‌‌any‌‌stockholder‌‌ or‌‌class‌‌of‌‌shares,‌‌or‌‌ ‌ 2) authorizing‌ ‌preferences‌ ‌in‌ ‌any‌ ‌respect‌ ‌superior‌ ‌to‌‌ those‌‌of‌‌outstanding‌‌shares‌‌of‌‌any‌‌class,‌‌or‌‌of‌ ‌ 3) extending‌ ‌or‌ ‌shortening‌ ‌the‌ ‌term‌ ‌of‌ ‌corporate‌‌ existence;‌ ‌ b) In‌ ‌case‌ ‌of‌ ‌sale,‌ ‌lease,‌ ‌exchange,‌ ‌transfer,‌ ‌mortgage,‌ ‌pledge‌ ‌or‌‌ other‌ ‌disposition‌ ‌of‌ ‌all‌‌or‌‌substantially‌‌all‌‌of‌‌the‌‌corporate‌‌ property‌‌and‌‌assets;‌ ‌ c) In‌‌case‌‌of‌‌merger‌‌or‌‌consolidation‌;‌‌and‌ ‌ d) In‌ ‌case‌ ‌of‌ ‌investment‌ ‌of‌ ‌corporate‌ ‌funds‌ ‌for‌ ‌any‌ ‌purpose‌‌ other‌‌than‌‌the‌‌primary‌‌purpose‌‌‌of‌‌the‌‌corporation.‌ ‌ The‌‌Corporation‌‌Code‌‌defines‌‌‌how‌‌the‌‌right‌‌of‌‌appraisal‌‌is‌‌exercised‌‌ as‌‌follows:‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 53‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ 1. 2. Written‌ ‌Demand‌ ‌—‌ by‌ ‌making‌ ‌a‌ ‌written‌ ‌demand‌ ‌on‌ ‌the‌‌ corporation‌ ‌within‌ ‌30‌ ‌days‌ ‌after‌ ‌the‌ ‌date‌ ‌on‌ ‌which‌ ‌the‌‌ vote‌‌was‌‌taken‌.‌ ‌ Appraisal‌ ‌Committee‌ ‌—‌ ‌If‌ ‌the‌‌withdrawing‌‌stockholder‌‌and‌‌ the‌‌corporation‌‌‌cannot‌‌agree‌‌on‌‌the‌‌fair‌‌value‌‌of‌‌the‌‌shares‌‌ within‌‌a‌‌period‌‌of‌‌6 ‌ 0‌‌days‌ ‌from‌‌the‌‌date‌‌the‌‌stockholders‌‌ approved‌ ‌the‌ ‌corporate‌ ‌action‌,‌ ‌the‌ ‌fair‌ ‌value‌ ‌shall‌ ‌be‌‌ determined‌‌and‌‌appraised‌‌by‌‌‌three‌‌disinterested‌‌persons‌.‌‌ ‌ The‌ ‌right‌ ‌is‌ ‌regarded‌ ‌as‌ ‌sufficient‌ ‌to‌ ‌redress‌ ‌a‌ ‌perceived‌ ‌wrong‌‌ committed‌ ‌to‌ ‌the‌ ‌corporation;‌ ‌thus,‌ ‌its‌ ‌availability‌ ‌precludes‌ ‌a‌‌ shareholder‌ ‌from‌ ‌instituting‌ ‌a‌ ‌derivative‌ ‌action‌ ‌against‌‌ corporate‌‌controllers.‌ ‌ Right‌‌to‌‌inspect‌‌corporate‌‌books‌ ‌ A‌‌requesting‌‌party‌‌who‌‌is‌‌ ‌ The‌ ‌findings‌ ‌and‌ ‌award‌ ‌of‌ ‌the‌ ‌majority‌ ‌of‌ ‌the‌ ‌appraisers‌‌ shall‌‌be‌‌‌final‌,‌‌and‌‌the‌‌corporation‌‌shall‌‌pay‌‌their‌‌award‌‌within‌‌ 30‌‌days‌‌‌after‌‌the‌‌award‌‌is‌‌made‌.‌ ‌ 3. 4. not‌‌a‌‌stockholder‌‌or‌‌member‌‌of‌‌record,‌‌or‌‌ ‌ 2. a‌ ‌competitor,‌ ‌director,‌ ‌officer,‌ ‌controlling‌ ‌stockholder‌ ‌or‌‌ otherwise‌‌represents‌‌the‌‌interests‌‌of‌‌a‌‌competitor‌‌ ‌ shall‌ ‌have‌ ‌no‌ ‌right‌ ‌to‌ ‌inspect‌ ‌or‌ ‌demand‌ ‌reproduction‌ ‌of‌‌ corporate‌‌records.‌ ‌ Suspension‌ ‌of‌ ‌Rights‌ ‌—‌ ‌All‌ ‌rights‌ ‌accruing‌ ‌to‌ ‌the‌‌ withdrawing‌ ‌stockholder's‌ ‌shares,‌ ‌including‌ ‌voting‌ ‌and‌‌ Insigne‌‌v.‌‌Abra‌‌Valley‌‌Colleges,‌‌Inc.‌‌‌2015‌ ‌ dividend‌ ‌rights‌,‌ ‌shall‌ ‌be‌ ‌suspended‌ ‌from‌ ‌the‌ ‌time‌ ‌of‌‌ WON‌‌petitioners‌‌were‌‌entitled‌‌to‌‌demand‌‌the‌‌production‌‌of‌‌the‌‌STB‌‌ demand‌ ‌for‌ ‌the‌ ‌payment‌ ‌of‌ ‌the‌ ‌fair‌ ‌value‌ ‌of‌‌the‌‌shares‌‌until‌‌ of‌‌Abra‌V ‌ alley‌ ‌ either‌‌ ‌ YES‌.‌‌A‌‌person‌‌becomes‌‌a‌‌stockholder‌‌of‌‌a‌‌corporation‌‌by‌‌acquiring‌‌a‌‌ a. the‌‌abandonment‌‌of‌‌the‌‌corporate‌‌action‌‌involved‌‌or‌‌ ‌ share‌‌through‌‌either‌‌purchase‌‌or‌‌subscription.‌ ‌Considering‌‌that‌‌Abra‌‌ Valley’s‌‌STB‌‌was‌‌not‌‌in‌‌the‌‌possession‌‌of‌‌the‌‌petitioners,‌‌or‌‌at‌‌their‌‌ b. the‌‌purchase‌‌of‌‌the‌‌shares‌‌by‌‌the‌‌corporation,‌‌ ‌ disposal,‌ ‌they‌‌could‌‌not‌‌be‌‌reasonably‌‌expected‌‌or‌‌justly‌‌compelled‌‌ to‌‌prove‌‌that‌‌their‌‌stock‌‌subscriptions‌‌and‌‌purchases‌‌were‌‌recorded‌‌ except‌‌‌the‌‌right‌‌of‌‌such‌‌stockholder‌‌to‌‌receive‌‌payment‌‌of‌‌the‌‌ therein.‌ ‌This‌ ‌was‌ ‌precisely‌ ‌why‌ ‌they‌ ‌filed‌ ‌their‌ ‌Motion‌ ‌for‌‌ fair‌‌value‌‌of‌‌the‌‌shares.‌ ‌ Production/Inspection‌‌of‌‌Documents.‌ ‌ Surrender‌ ‌Certificate‌ ‌of‌ ‌Stocks‌ ‌for‌ ‌Notation‌ ‌—‌‌‌Within‌‌‌10‌ days‌ ‌after‌‌demanding‌‌payment‌‌for‌‌his‌‌or‌‌her‌‌shares.‌‌A‌‌failure‌‌ to‌‌do‌‌so‌‌shall,‌‌at‌‌the‌‌option‌‌of‌‌the‌‌corporation,‌‌‌terminate‌‌‌his‌‌ appraisal‌‌rights.‌ ‌ 5. 1. The‌ ‌only‌ ‌time‌ ‌when‌ ‌the‌ ‌demand‌ ‌to‌ ‌examine‌ ‌and‌ ‌copy‌ ‌the‌‌ corporation's‌‌records‌‌and‌‌minutes‌‌could‌‌be‌‌refused‌‌is‌‌when‌‌the‌‌ corporation‌‌puts‌‌up‌a ‌ s‌‌a‌‌defense‌‌‌to‌‌any‌‌action‌‌that:‌ ‌ Unrestricted‌ ‌Retained‌ ‌Earnings‌ ‌Required‌ ‌—‌ ‌No‌ ‌payment‌‌ shall‌ ‌be‌ ‌made‌ ‌to‌ ‌any‌ ‌dissenting‌ ‌stockholder‌ ‌unless‌ ‌the‌‌ corporation‌‌has‌‌‌unrestricted‌‌retained‌‌earnings‌‌in‌‌its‌‌books‌‌ to‌‌cover‌‌the‌‌payment.‌‌ ‌ In‌ ‌case‌ ‌the‌ ‌corporation‌ ‌has‌ ‌no‌ ‌available‌‌unrestricted‌‌retained‌‌ earnings‌‌in‌‌its‌‌books,‌‌Section‌‌82‌‌of‌‌the‌‌RCC‌‌provides‌‌that‌‌if‌‌the‌‌ dissenting‌ ‌stockholder‌ ‌is‌ ‌not‌ ‌paid‌ ‌the‌ ‌value‌ ‌of‌ ‌his‌ ‌shares‌‌ within‌ 3 ‌ 0‌ ‌days‌ ‌after‌ ‌the‌ ‌award‌,‌‌his‌‌‌voting‌‌and‌‌dividend‌‌ rights‌ ‌shall‌ ‌immediately‌ ‌be‌ ‌restored‌.‌ ‌(‌Turner‌ ‌v.‌ ‌Lorenzo‌‌ Shipping‌)‌ ‌ 1. the‌ ‌person‌ ‌demanding‌ ‌had‌ ‌improperly‌ ‌used‌ ‌any‌‌ information;‌‌ ‌ 2. secured‌ ‌through‌ ‌any‌ ‌prior‌ ‌examination‌ ‌of‌ ‌the‌ ‌records‌ ‌or‌‌ minutes‌ ‌of‌ ‌such‌ ‌corporation‌ ‌or‌ ‌of‌ ‌any‌‌other‌‌corporation,‌‌ or‌‌ ‌ 3. was‌‌not‌‌acting‌‌in‌‌good‌‌faith‌‌or‌‌for‌‌a‌‌legitimate‌‌purpose‌‌in‌‌ making‌‌his‌‌demand.‌ ‌ Among‌‌the‌‌improper‌‌purposes‌‌which‌‌may‌‌justify‌‌denial‌‌of‌‌the‌‌right‌‌of‌‌ inspection‌‌are:‌‌ ‌ 1) Obtaining‌ ‌of‌ ‌information‌ ‌as‌ ‌to‌ ‌business‌ ‌secrets‌ ‌or‌ ‌to‌ ‌aid‌ ‌a‌‌ competitor‌;‌ ‌ 2) to‌ ‌secure‌ ‌business‌ ‌"prospects"‌ ‌or‌ ‌investment‌ ‌or‌ ‌advertising‌ lists;‌‌ ‌ 3) to‌ ‌find‌ ‌technical‌ ‌defects‌ ‌in‌ ‌corporate‌ ‌transactions‌ ‌in‌ ‌order‌‌to‌‌ bring‌‌"strike‌‌suits"‌‌for‌‌purposes‌‌of‌‌blackmail‌‌or‌‌extortion.‌‌ ‌ The‌‌right‌‌of‌‌the‌‌shareholder‌‌to‌‌inspect‌‌the‌‌books‌‌and‌‌records‌‌of‌‌the‌‌ petitioner‌‌should‌‌not‌‌be‌‌made‌‌subject‌‌to‌‌the‌‌condition‌‌of‌‌a‌‌showing‌‌ of‌ ‌any‌ ‌particular‌ ‌dispute‌ ‌or‌ ‌of‌ ‌proving‌ ‌any‌ ‌mismanagement‌ ‌or‌‌ other‌ ‌occasion‌ ‌rendering‌ ‌an‌ ‌examination‌ ‌proper.‌ ‌(‌Terelay‌‌ Investment‌‌and‌‌Development‌‌v.‌‌Yulo‌‌‌2015‌)‌ ‌ A‌‌criminal‌‌action‌‌based‌‌on‌‌the‌‌violation‌‌of‌‌a‌‌stockholder's‌‌right‌‌to‌‌ examine‌‌or‌‌inspect‌‌the‌‌corporate‌‌records‌‌and‌‌the‌‌stock‌‌and‌‌transfer‌‌ book‌ ‌of‌ ‌a‌ ‌corporation‌ ‌under‌ ‌the‌ ‌second‌ ‌and‌ ‌fourth‌ ‌paragraphs‌‌of‌‌ Section‌ ‌73‌ ‌can‌ ‌only‌ ‌be‌‌maintained‌‌‌against‌‌corporate‌‌officers‌‌or‌‌ any‌‌other‌‌persons‌‌acting‌‌on‌‌behalf‌‌of‌‌such‌‌corporation.‌‌Thus,‌‌ the‌ ‌provision‌ ‌can‌ ‌only‌‌be‌‌violated‌‌by‌‌a‌‌corporation‌.‌‌(‌Yujuico‌‌v.‌‌ Quiambao‌‌‌2014‌)‌ ‌ Among‌‌the‌‌actions‌‌that‌‌may‌‌be‌‌filed‌‌is‌‌ ‌ 1. an‌‌action‌‌for‌s‌ pecific‌‌performance‌,‌‌ ‌ 2. damages,‌‌ ‌ 3. petition‌‌for‌m ‌ andamus‌,‌‌or‌‌ ‌ 4. for‌‌violation‌‌of‌‌Section‌‌73,‌‌in‌‌relation‌‌to‌‌Section‌‌158‌‌of‌‌the‌‌RCC.‌ ‌ The‌‌corporation‌‌carries‌‌the‌‌burden‌‌of‌‌proving‌‌ ‌ a) that‌‌the‌‌stockholder‌‌has‌‌improperly‌‌used‌‌information‌‌before;‌‌ ‌ b) lack‌‌of‌‌good‌‌faith;‌‌or‌ ‌ c) lack‌‌of‌‌legitimate‌‌purpose.‌‌(‌Philippine‌‌Associated‌‌Smelting‌‌and‌ Refining‌‌Corp‌‌v.‌‌Lim‌‌‌2016‌‌Leonen,‌‌J)‌ ‌ ‌ In‌ ‌order‌ ‌therefore‌ ‌for‌ ‌the‌ ‌penal‌ ‌provision‌ ‌to‌ ‌apply,‌ ‌the‌ ‌following‌‌ elements‌m ‌ ust‌‌be‌‌present:‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 54‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ 1. First‌.‌ ‌A‌ ‌director,‌ ‌trustee,‌ ‌stockholder‌ ‌or‌ ‌member‌ ‌has‌ ‌made‌ ‌a‌‌ Preemptive‌‌right‌ ‌ prior‌‌demand‌‌in‌‌writing‌;‌ ‌ 2. Second‌.‌ ‌The‌‌demand‌‌was‌r‌ efused‌;‌ ‌ 3. Third‌.‌ ‌If‌‌such‌‌refusal‌‌is‌‌made‌‌pursuant‌‌to‌‌a‌‌resolution‌‌or‌‌order‌‌ of‌ ‌the‌ ‌board,‌‌the‌‌liability‌‌shall‌‌be‌‌imposed‌‌upon‌‌the‌‌directors‌‌ or‌‌trustees‌‌who‌‌voted‌‌for‌‌such‌‌refusal;‌‌and,‌ ‌ Individual‌‌suit‌ ‌ Pre-emptive‌‌right‌‌‌refers‌‌to‌‌the‌‌right‌‌of‌‌a‌‌stockholder‌‌of‌‌a‌‌stock‌‌ 4. corporation‌ ‌to‌ ‌subscribe‌ ‌to‌ ‌all‌ ‌issues‌ ‌or‌ ‌disposition‌ ‌of‌ ‌shares‌ ‌of‌‌ any‌‌class,‌‌in‌‌proportion‌‌to‌‌their‌‌respective‌‌shareholdings.‌‌(‌Lu‌‌Ym‌‌v.‌‌ Lu‌‌‌2018‌)‌ ‌ The‌ ‌preemptive‌ ‌right‌ ‌of‌‌stockholders‌‌in‌‌close‌‌corporations‌‌shall‌‌ extend‌ ‌to‌ ‌ALL‌ ‌stock‌‌to‌‌be‌‌issued,‌‌including‌‌reissuance‌‌of‌‌treasury‌‌ shares,‌ ‌whether‌ ‌for‌ ‌money,‌ ‌property‌ ‌or‌ ‌personal‌ ‌services,‌ ‌or‌ ‌in‌‌ payment‌‌of‌‌corporate‌‌debts,‌u ‌ nless‌t‌ he‌‌AOI‌‌provides‌‌otherwise.‌ ‌ Fourth‌.‌ ‌Where‌ ‌the‌ ‌defense‌ ‌that‌ ‌the‌ ‌person‌ ‌demanding‌ ‌has‌‌ improperly‌ ‌used‌ ‌any‌ ‌information‌ ‌secured‌ ‌through‌ ‌any‌ ‌prior‌‌ examination,‌‌or‌‌was‌‌not‌‌acting‌‌in‌‌good‌‌faith‌‌or‌‌for‌‌a‌‌legitimate‌‌ purpose,‌‌the‌‌contrary‌‌must‌‌be‌‌shown‌‌or‌‌proved.‌‌(‌Ang-Abaya‌‌v.‌‌ Right‌‌to‌‌vote‌ ‌ Ang‌)‌ ‌ No‌ ‌share‌ ‌may‌ ‌be‌ ‌deprived‌ ‌of‌ ‌the‌ ‌right‌ ‌to‌ ‌vote‌ ‌except‌ ‌those‌‌ ⭐Corporations‌ ‌may‌ ‌raise‌ ‌their‌ ‌objections‌ ‌to‌ ‌the‌ ‌right‌ ‌of‌‌ classified‌‌and‌‌issued‌‌as‌‌“preferred”‌‌or‌‌“redeemable”‌‌shares.‌‌ ‌ inspection‌ ‌through‌ a ‌ ffirmative‌ ‌defense‌ ‌in‌ ‌an‌ ‌ordinary‌ ‌civil‌‌ Non-voting‌ ‌shares‌‌may‌‌vote‌‌on‌‌corporate‌‌actions‌‌that‌‌‌materially‌‌ action‌‌for‌‌specific‌‌performance‌‌or‌‌damages,‌‌or‌‌through‌‌a‌‌comment‌‌ change‌ ‌the‌ ‌premises‌ ‌and‌ ‌conditions‌ ‌when‌ ‌they‌ ‌subscribed‌ ‌to‌‌ in‌‌a‌‌petition‌‌for‌‌mandamus.‌ ‌ their‌‌shares.‌ ‌ NB:‌‌ ‌Thus,‌ ‌a‌ ‌corporation‌ ‌cannot‌ ‌preempt‌ ‌a‌ ‌stockholder‌ ‌from‌‌ Remedial‌‌Rights‌ ‌ exercising‌ ‌his‌ ‌right‌ ‌to‌ ‌inspect‌ ‌corporate‌ ‌books‌ ‌by‌ ‌filing‌ ‌an‌‌ action‌‌for‌‌injunction‌‌as‌‌the‌‌exception‌‌to‌‌the‌‌right‌‌may‌‌only‌‌be‌‌ Suits‌ ‌by‌ ‌stockholders‌ ‌or‌ ‌members‌ ‌of‌ ‌a‌ ‌corporation‌ ‌based‌ ‌on‌‌ raised‌‌as‌‌a‌‌defense.‌ ‌ wrongful‌ ‌or‌ ‌fraudulent‌ ‌acts‌ ‌of‌ ‌directors‌ ‌or‌ ‌other‌ ‌persons‌ ‌may‌‌be‌‌ classified‌‌into‌‌individual‌‌suits,‌‌class‌‌suits,‌‌and‌‌derivative‌‌suits.‌‌ ‌ Philippine‌‌Associated‌‌Smelting‌‌and‌‌Refining‌‌Corp‌‌v.‌‌Lim‌‌‌2016‌‌ Leonen,‌‌J‌ ‌ WON‌ ‌a‌ ‌petition‌ ‌for‌ ‌injunction‌ ‌with‌ ‌prayer‌ ‌for‌ ‌writ‌ ‌of‌ ‌preliminary‌‌ injunction‌ ‌is‌ ‌proper‌ ‌to‌ ‌prevent‌ ‌stockholders‌ ‌from‌ ‌inspecting‌‌ corporate‌‌books.‌‌ ‌ NO‌.‌ ‌When‌ ‌the‌ ‌corporation,‌ ‌through‌ ‌its‌ ‌officers,‌ ‌denies‌ ‌the‌‌ stockholders‌ ‌of‌ ‌such‌ ‌right,‌ ‌the‌ ‌latter‌ ‌could‌ ‌then‌ ‌go‌ ‌to‌ ‌court‌ ‌and‌‌ enforce‌ ‌their‌ ‌rights.‌ ‌It‌ ‌is‌ ‌then‌ ‌that‌ ‌the‌‌corporation‌‌could‌‌‌set‌‌up‌‌its‌‌ defenses‌‌‌and‌‌the‌‌reasons‌‌for‌‌the‌‌denial‌‌of‌‌such‌‌right.‌‌ ‌ Thus,‌‌the‌‌proper‌‌remedy‌‌is‌‌the‌‌writ‌‌of‌‌‌mandamus‌‌‌to‌‌be‌‌filed‌‌by‌‌the‌‌ stockholders‌ ‌and‌ ‌not‌ ‌a‌ ‌petition‌ ‌for‌ ‌injunction‌ ‌filed‌ ‌by‌ ‌the‌‌ corporation.‌ ‌ Florete,‌‌Jr‌‌v.‌‌Florete‌‌‌2016‌‌Leonen,‌‌J‌ ‌ The‌ ‌determination‌ ‌of‌ ‌the‌ ‌stockholder's‌ ‌appropriate‌ ‌remedy‌ ‌hinges‌‌ on‌‌the‌‌object‌‌of‌‌the‌‌wrong‌‌done.‌ ‌ 1) Individual‌‌suit‌‌—‌‌when‌‌the‌‌object‌‌is‌‌a‌‌specific‌‌stockholder‌‌ and‌‌the‌‌remedy‌‌is‌‌specific‌‌to‌‌him.‌ 2) Representative‌ ‌or‌ ‌class‌ ‌suit‌ ‌—‌ ‌when‌ ‌the‌ ‌object‌ ‌is‌ ‌a‌‌ definite‌ ‌class‌ ‌of‌ ‌stockholder‌ ‌and‌ ‌the‌ ‌remedy‌ ‌is‌ ‌specific‌‌to‌‌ them.‌ ‌ 3) Derivative‌‌suit‌‌‌—‌‌when‌‌the‌‌object‌‌of‌‌the‌‌wrong‌‌done‌‌is‌‌the‌‌ corporation‌ ‌itself‌ ‌or‌ ‌the‌ ‌whole‌ ‌body‌ ‌of‌ ‌its‌ ‌stock‌ ‌and‌‌ property‌ ‌without‌ ‌any‌ ‌severance‌ ‌or‌ ‌distribution‌ ‌among‌‌ individual‌‌holders.‌ ‌ Where‌ ‌a‌ ‌stockholder‌ ‌or‌ ‌member‌ ‌is‌‌denied‌‌the‌‌right‌‌of‌‌inspection,‌‌ his‌ ‌suit‌ ‌would‌ ‌be‌ ‌individual‌ ‌because‌ ‌the‌ ‌wrong‌ ‌is‌ ‌done‌ ‌to‌ ‌him‌‌ personally‌‌and‌‌not‌‌to‌‌the‌‌other‌‌stockholders‌‌or‌‌the‌‌corporation.‌ ‌ Representative‌‌suit‌ ‌ Where‌ ‌the‌ ‌wrong‌ ‌is‌ ‌done‌ ‌to‌ ‌a‌ ‌group‌ ‌of‌ ‌stockholders,‌ ‌as‌ ‌where‌‌ preferred‌ ‌stockholders’‌ ‌rights‌ ‌are‌ ‌violated,‌ ‌a‌ ‌class‌ ‌or‌‌ representative‌ ‌suit‌ ‌will‌ ‌be‌ ‌proper‌ ‌for‌ ‌the‌ ‌protection‌ ‌of‌ ‌all‌‌ stockholders‌‌belonging‌‌to‌‌the‌‌same‌‌group.‌‌ ‌ Derivative‌‌suit‌ ‌ A‌‌suit‌‌by‌‌a‌‌shareholder‌‌to‌‌enforce‌‌a‌‌corporate‌‌cause‌‌of‌‌action.‌‌It‌‌is‌‌ the‌‌corporation‌‌that‌‌is‌‌properly‌‌regarded‌‌as‌‌the‌‌REAL‌‌PARTY‌‌ IN‌ ‌INTEREST,‌ ‌while‌ ‌the‌ ‌relator-stockholder‌ ‌is‌ ‌merely‌ ‌a‌‌ NOMINAL‌‌party.‌(‌ ‌Ang‌‌v.‌‌Sps‌‌Ang‌‌2 ‌ 013‌)‌ ‌ Since‌ ‌the‌ ‌derivative‌ ‌suit‌ ‌is‌ ‌a‌ ‌remedy‌ ‌of‌ ‌last‌ ‌resort,‌ ‌it‌ ‌must‌ ‌be‌‌ shown‌ ‌that‌ ‌the‌ ‌board,‌ ‌to‌ ‌the‌ ‌detriment‌ ‌of‌ ‌the‌ ‌corporation‌ ‌and‌‌ without‌ ‌a‌ ‌valid‌ ‌business‌ ‌consideration,‌ ‌refuses‌ ‌to‌ ‌remedy‌ ‌a‌‌ corporate‌‌wrong.‌‌A‌‌derivative‌‌suit‌‌may‌‌only‌‌be‌‌instituted‌‌after‌‌such‌‌ an‌‌omission.‌‌(‌Ago‌‌Realty‌‌&‌‌Development‌‌Corp.‌‌v.‌‌Ago‌‌2 ‌ 019‌)‌ ‌ ⭐The‌ ‌requisites‌ ‌are‌ ‌enumerated‌ ‌in‌ ‌the‌ ‌Interim‌ ‌Rules‌ ‌of‌‌ Procedure‌‌for‌‌Intra-Corporate‌‌Controversies‌:‌ ‌ 1. He‌ ‌was‌ ‌a‌ ‌stockholder‌‌or‌‌member‌‌at‌‌the‌‌time‌‌the‌‌acts‌‌or‌‌ transactions‌‌subject‌‌of‌‌the‌‌action‌‌occurred‌‌and‌‌the‌‌time‌‌the‌‌ action‌‌was‌‌filed;‌ ‌ 2. He‌‌‌exerted‌‌all‌‌reasonable‌‌efforts‌,‌‌and‌‌alleges‌‌the‌‌same,‌‌ to‌ ‌exhaust‌ ‌all‌ ‌remedies‌ ‌available‌ ‌to‌ ‌obtain‌ ‌the‌ ‌relief‌ ‌he‌‌ desires;‌‌ ‌ 3. No‌ ‌appraisal‌ ‌rights‌ ‌are‌ ‌available‌ ‌for‌ ‌the‌ ‌acts‌ ‌or‌ ‌acts‌‌ complained‌‌of;‌‌and‌ ‌ 4. The‌‌suit‌‌is‌‌not‌‌a‌‌nuisance‌‌or‌‌harassment‌s‌ uit;‌ ‌ 5. The‌‌action‌‌brought‌‌by‌‌the‌‌stockholder‌‌or‌‌member‌‌must‌‌be‌‌ in‌‌the‌‌name‌‌of‌‌the‌‌corporation‌‌‌or‌‌association.‌ ‌ Ching‌‌v.‌‌Subic‌‌Bay‌‌Golf‌‌and‌‌Country‌‌Club,‌‌Inc.‌‌‌2014‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 55‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ WON‌‌the‌‌complaint‌‌filed‌‌by‌‌petitioners‌‌is‌‌a‌‌derivative‌‌suit‌‌and‌‌such‌‌is‌‌ NOT‌‌properly‌‌filed.‌ ‌ 5. YES‌.‌ ‌Although‌ ‌the‌ ‌shareholdings‌‌of‌‌petitioners‌‌are‌‌indeed‌‌only‌‌two‌‌ Regular‌ ‌ out‌ ‌of‌ ‌the‌ ‌409‌ ‌alleged‌ ‌outstanding‌ ‌shares‌ ‌or‌ ‌0.24%,‌ ‌the‌ ‌Court‌ ‌has‌‌ held‌ ‌that‌ ‌it‌ ‌is‌ ‌enough‌ ‌that‌ ‌a‌ ‌member‌ ‌or‌ ‌a‌ ‌minority‌ ‌of‌‌ stockholders‌ ‌file‌ ‌a‌ ‌derivative‌ ‌suit‌ ‌for‌ ‌and‌ ‌on‌ ‌behalf‌ ‌of‌ ‌a‌‌ corporation.‌ ‌ With‌ ‌regard,‌ ‌however,‌ ‌to‌ ‌the‌ ‌second‌ ‌requisite,‌ ‌the‌ ‌Court‌ ‌finds‌ ‌that‌‌ petitioners‌ ‌failed‌ ‌to‌ ‌state‌ ‌with‌ ‌particularity‌ ‌in‌ ‌the‌ ‌Complaint‌‌ that‌ ‌they‌ ‌had‌ ‌exerted‌ ‌all‌ ‌reasonable‌ ‌efforts‌ ‌to‌ ‌exhaust‌ ‌all‌‌ remedies‌ ‌available‌.‌ ‌Such‌ ‌failure‌ ‌allows‌ ‌the‌ ‌RTC‌ ‌to‌ ‌dismiss‌ ‌the‌‌ Complaint,‌‌even‌‌‌motu‌‌proprio‌,‌‌in‌‌accordance‌‌with‌‌the‌‌Interim‌‌Rules.‌‌ ‌ Obligations‌‌of‌‌a‌‌Stockholder‌ ‌ 1) Liability‌‌to‌‌the‌‌corporation‌‌for‌‌unpaid‌‌subscription;‌‌(§66-69)‌ ‌ 2) Liability‌‌to‌‌the‌‌corporation‌‌for‌‌interest‌‌on‌‌unpaid‌‌subscription‌‌ if‌‌so‌‌required‌‌by‌‌the‌‌bylaws;‌‌(§65-66)‌ ‌ 3) Liability‌ ‌to‌ ‌the‌ ‌creditors‌ ‌of‌ ‌the‌ ‌corporation‌ ‌for‌ ‌unpaid‌‌ subscription‌s‌ ubject‌‌‌to‌‌the‌‌Limited‌‌Liability‌‌Rule;‌ ‌ 4) Liability‌‌for‌‌watered‌‌stock;‌‌(§64)‌ ‌ 5) Liability‌‌for‌‌dividends‌‌unlawfully‌‌paid;‌‌(§42)‌ ‌ 6) Administrative,‌ ‌civil‌ ‌and‌ ‌criminal‌ ‌liability‌ ‌of‌ ‌a‌ ‌stockholder‌‌ responsible‌ ‌for‌ ‌violation‌ ‌or‌ ‌for‌ ‌acts‌ ‌indispensable‌ ‌to‌ ‌the‌‌ violation‌‌of‌‌the‌‌RCC.‌‌(§171)‌ ‌ Meetings‌ ‌ A‌ ‌stockholders'‌ ‌or‌‌members'‌‌meeting‌‌must‌‌comply‌‌with‌‌the‌‌following‌‌ requisites‌t‌ o‌‌be‌‌valid:‌ ‌ 1. 2. The‌‌meeting‌‌must‌‌be‌‌held‌‌on‌‌the‌‌date‌‌fixed‌‌in‌‌the‌‌By‌‌Laws‌‌or‌‌in‌‌ accordance‌‌with‌‌law;‌ ‌ Prior‌ ‌written‌ ‌notice‌ ‌of‌ ‌such‌ ‌meeting‌ ‌must‌ ‌be‌ ‌sent‌ ‌to‌ ‌all‌‌ stockholders/members‌‌of‌‌record;‌ ‌ 3. It‌‌must‌‌be‌‌called‌‌by‌‌the‌‌proper‌‌party;‌ ‌ 4. It‌‌must‌‌be‌‌held‌‌at‌‌the‌‌proper‌‌place;‌‌and‌ ‌ Quorum‌‌and‌‌voting‌‌requirements‌‌must‌‌be‌‌met.‌‌(‌Lim‌‌v.‌‌Moldex‌‌ Land‌‌2 ‌ 017‌)‌ ‌ Place‌‌and‌‌time‌ ‌ Meetings‌‌shall‌‌be‌‌held‌‌in‌‌ ‌ 1. the‌ ‌principal‌‌office‌‌of‌‌the‌‌corporation‌‌as‌‌set‌‌forth‌‌in‌‌the‌‌AOI,‌‌ or,‌‌if‌‌not‌‌practicable,‌‌ ‌ 2. Regular‌‌meetings‌‌of‌‌stockholders‌‌or‌‌members‌‌shall‌‌be‌‌held‌‌ ‌ 1. annually‌‌ ‌ 2. on‌‌a‌‌date‌‌fixed‌‌in‌‌the‌‌bylaws,‌‌or‌‌ ‌ in‌ ‌the‌ ‌city‌ ‌or‌ ‌municipality‌ ‌where‌ ‌the‌ ‌principal‌ ‌office‌ ‌of‌ ‌the‌‌ corporation‌‌is‌‌located.‌ ‌ 3. if‌‌not‌‌so‌‌fixed,‌‌on‌‌‌any‌‌date‌‌after‌‌April‌‌15‌‌‌of‌‌every‌‌year‌‌as‌‌ determined‌‌by‌‌the‌b ‌ oard‌.‌‌ ‌ Any‌ ‌city‌ ‌or‌ ‌municipality‌ ‌in‌ ‌Metropolitan‌ ‌areas‌ ‌shall‌ ‌be‌‌ considered‌‌a‌‌city‌‌or‌‌municipality.‌ ‌ Written‌‌notice‌‌of‌‌regular‌‌meetings‌‌shall‌‌be‌‌sent‌‌to‌‌all‌‌stockholders‌‌ or‌‌members‌‌of‌‌record‌‌‌at‌‌least‌‌twenty-one‌‌(21)‌‌days‌‌prior‌‌‌to‌‌the‌‌ meeting,‌‌‌unless‌‌‌a‌‌different‌‌period‌‌is‌‌required‌‌in‌‌the‌‌bylaws,‌‌law,‌‌or‌‌ regulation.‌‌Written‌‌notice‌‌of‌‌regular‌‌meetings‌‌may‌‌be‌‌sent‌‌through‌‌ email‌.‌ ‌ Quorum‌ ‌ A‌‌quorum‌‌shall‌‌consist‌‌of‌‌the‌‌stockholders‌‌representing‌‌a‌‌‌majority‌‌ of‌‌the‌‌OCS‌‌or‌‌a‌m ‌ ajority‌‌of‌‌the‌‌members.‌ ‌ SEC‌‌Intervention‌ ‌ Whenever‌ ‌for‌ ‌any‌ ‌cause,‌ ‌there‌ ‌is‌ ‌no‌ ‌person‌ ‌authorized‌ ‌or‌ ‌the‌‌ person‌‌authorized‌‌unjustly‌‌refuses‌‌to‌‌call‌‌a‌‌meeting,‌‌the‌‌SEC,‌‌upon‌‌ petition‌ ‌of‌ ‌a‌ ‌stockholder‌ ‌or‌‌member‌‌on‌‌a‌‌showing‌‌of‌‌good‌‌cause‌‌ therefor,‌‌may‌‌issue‌‌an‌‌order‌‌directing‌‌the‌‌petitioning‌‌stockholder‌‌or‌‌ member‌ ‌to‌ ‌call‌ ‌a‌ ‌meeting‌ ‌of‌ ‌the‌ ‌corporation‌ ‌by‌ ‌giving‌ ‌proper‌‌ notice.‌‌ ‌ Special‌ Shall‌ ‌be‌ ‌held‌ ‌at‌ ‌any‌ ‌time‌ ‌deemed‌‌necessary‌‌or‌‌as‌‌provided‌‌in‌‌the‌‌ bylaws.‌‌At‌‌least‌‌‌one‌‌(1)‌‌week‌‌written‌‌notice‌‌shall‌‌be‌‌sent,‌‌‌unless‌‌ a‌‌different‌‌period‌‌is‌‌provided‌‌in‌‌the‌‌bylaws,‌‌law‌‌or‌‌regulation.‌ ‌ Notice‌ ‌ The‌ ‌petitioning‌ ‌stockholder‌ ‌or‌ ‌member‌‌shall‌‌preside‌‌thereat‌‌until‌‌ at‌ ‌least‌ ‌a‌ ‌majority‌ ‌of‌ ‌the‌ ‌stockholders‌ ‌or‌‌members‌‌‌present‌‌‌have‌‌ chosen‌‌from‌‌among‌‌themselves,‌‌a‌‌presiding‌‌officer.‌ ‌ Notice‌ ‌of‌ ‌meetings‌ ‌shall‌ ‌be‌ ‌sent‌ ‌through‌ ‌the‌ ‌means‌ ‌of‌‌ communication‌‌provided‌‌in‌‌the‌‌bylaws,‌‌which‌‌shall‌‌state‌‌the‌‌‌time‌,‌‌ place‌a‌ nd‌‌purpose‌‌of‌‌the‌‌meetings.‌ ‌ Each‌‌notice‌‌of‌‌meeting‌‌shall‌‌further‌‌be‌‌accompanied‌‌by‌‌the‌‌following:‌ ‌ Closing‌‌of‌‌Books‌ ‌ a) The‌‌agenda‌‌for‌‌the‌‌meeting;‌ ‌ Unless‌ ‌the‌ ‌bylaws‌ ‌provide‌ ‌for‌ ‌a‌ ‌longer‌ ‌period,‌ ‌the‌ ‌stock‌ ‌and‌‌ transfer‌‌book‌o ‌ r‌‌membership‌‌book‌‌shall‌‌be‌‌closed‌‌at‌‌least‌‌ ‌ b) A‌ ‌proxy‌ ‌form‌ ‌which‌ ‌shall‌ ‌be‌ ‌submitted‌ ‌to‌ ‌the‌ ‌corporate‌‌ secretary‌‌within‌‌a‌‌reasonable‌‌time‌‌prior‌‌to‌‌the‌‌meeting;‌ ‌ c) When‌ ‌attendance,‌ ‌participation,‌ ‌and‌ ‌voting‌ ‌are‌ ‌allowed‌ ‌by‌‌ remote‌ ‌communication‌ ‌or‌ ‌in‌ ‌absentia‌,‌ ‌the‌ ‌requirements‌ ‌and‌‌ procedures‌ ‌to‌ ‌be‌ ‌followed‌ ‌when‌ ‌a‌ ‌stockholder‌ ‌or‌ ‌member‌‌ elects‌‌either‌‌option;‌‌and‌ ‌ d) When‌ ‌the‌ ‌meeting‌ ‌is‌ ‌for‌ ‌the‌ ‌election‌ ‌of‌ ‌directors‌ ‌or‌‌trustees,‌‌ the‌ ‌requirements‌ ‌and‌ ‌procedure‌ ‌for‌ ‌nomination‌ ‌and‌‌ election‌.‌ ‌ 1. 20‌‌‌days‌‌for‌r‌ egular‌m ‌ eetings‌‌and‌‌ ‌ 2. 7‌‌‌days‌‌for‌s‌ pecial‌‌meetings‌‌ ‌ before‌‌the‌‌scheduled‌‌date‌‌of‌‌the‌‌meeting.‌ ‌ ‌ Board‌‌of‌‌Directors‌‌and‌‌Trustees‌ ‌ The‌‌directors‌‌of‌‌a‌‌corporation‌‌must‌‌formally‌‌organize‌‌and‌‌elect:‌‌ ‌ a) a‌‌president‌,‌‌who‌‌must‌‌be‌‌a‌d ‌ irector‌;‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 56‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ b) a‌‌treasurer‌,‌‌who‌‌must‌‌be‌‌a‌r‌ esident‌;‌ ‌ a) Convicted‌‌by‌f‌ inal‌‌judgment:‌ ‌ c) a‌ ‌secretary‌,‌ ‌who‌ ‌must‌ ‌be‌ ‌a‌ ‌citizen‌ ‌and‌ ‌resident‌ ‌of‌ ‌the‌‌ Philippines;‌‌and‌ ‌ 1) Of‌ ‌an‌ ‌offense‌ ‌punishable‌ ‌by‌ ‌imprisonment‌ ‌for‌ ‌a‌‌ period‌‌exceeding‌‌‌six‌‌(6)‌‌years‌;‌ ‌ d) such‌‌other‌‌officers‌‌as‌‌may‌‌be‌‌provided‌‌in‌‌the‌‌bylaws.‌‌ ‌ 2) For‌‌violating‌‌this‌‌Code;‌‌and‌ ‌ If‌ ‌the‌ ‌corporation‌ ‌is‌ ‌vested‌ ‌with‌ ‌public‌ ‌interest‌,‌‌the‌‌board‌‌shall‌‌also‌‌ elect‌‌a‌‌compliance‌‌officer‌.‌‌ ‌ The‌ ‌same‌ ‌person‌ ‌may‌ ‌hold‌ ‌two‌ ‌(2)‌ ‌or‌ ‌more‌ ‌positions‌ ‌concurrently,‌‌ except‌t‌ hat‌‌no‌‌one‌‌shall‌‌act‌‌as‌‌ ‌ 1. president‌‌and‌‌secretary‌‌or‌‌ ‌ 2. president‌‌and‌‌treasurer‌‌at‌‌the‌‌same‌‌time.‌ Repository‌‌of‌‌corporate‌‌powers‌ ‌ Doctrine‌ ‌of‌ ‌Centralized‌ ‌Management‌ ‌or‌ ‌Principle‌ ‌of‌ ‌Board‌‌ Supremacy‌‌—‌T ‌ he‌‌board‌‌of‌‌directors‌‌or‌‌trustees‌‌shall‌‌ ‌ 1. exercise‌‌the‌‌corporate‌‌powers,‌‌ ‌ 2. conduct‌‌all‌‌business,‌‌and‌‌ ‌ 3. control‌‌all‌‌properties‌‌of‌‌the‌‌corporation.‌ ‌ Tenure,‌‌qualifications‌‌and‌‌disqualifications‌‌of‌‌directors‌ ‌ 1. Directors‌ ‌shall‌ ‌be‌ ‌elected‌ ‌for‌ ‌a‌ ‌term‌ ‌of‌ ‌one‌ ‌(1)‌ ‌year‌ ‌from‌‌ among‌ ‌the‌ ‌holders‌ ‌of‌ ‌stocks‌ ‌registered‌ ‌in‌ ‌the‌ ‌corporation’s‌‌ books,‌‌ ‌ 2. While‌‌‌trustees‌‌‌shall‌‌be‌‌elected‌‌for‌‌a‌‌term‌‌not‌‌exceeding‌‌‌three‌‌ (3)‌‌years‌‌‌from‌‌among‌‌the‌‌members‌‌of‌‌the‌‌corporation.‌‌ ‌ 3. Each‌‌director‌‌and‌‌trustee‌‌shall‌‌hold‌‌office‌‌until‌‌the‌‌successor‌‌is‌‌ elected‌‌and‌‌qualified.‌‌ ‌ 4. A‌‌director‌‌who‌‌‌ceases‌‌to‌‌own‌‌at‌‌least‌‌one‌‌(1)‌‌share‌‌of‌‌stock‌‌ or‌‌a‌‌trustee‌‌who‌‌ceases‌‌to‌‌be‌‌a‌‌member‌‌of‌‌the‌‌corporation‌‌shall‌‌ cease‌‌to‌‌be‌‌such.‌ ‌ A‌‌person‌‌shall‌‌be‌‌‌disqualified‌‌‌from‌‌being‌‌a‌‌director,‌‌trustee‌‌or‌‌officer‌‌ of‌ ‌any‌ ‌corporation‌ ‌if,‌ ‌within‌ ‌five‌ ‌(5)‌ ‌years‌ ‌prior‌ ‌to‌ ‌the‌ ‌election‌ ‌or‌‌ appointment‌‌as‌‌such,‌‌the‌‌person‌‌was:‌ ‌ 3) For‌‌violating‌‌the‌‌SRC;‌ ‌ b) Found‌ ‌administratively‌ ‌liable‌ ‌for‌ ‌any‌ ‌offense‌ ‌involving‌‌ fraudulent‌‌acts‌;‌‌and‌ ‌ c) By‌‌a‌‌foreign‌‌court‌‌or‌‌equivalent‌‌foreign‌‌regulatory‌‌authority‌‌for‌‌ acts,‌ ‌violations‌ ‌or‌‌misconduct‌‌similar‌‌to‌‌those‌‌enumerated‌‌in‌‌ paragraphs‌‌(a)‌‌and‌‌(b)‌‌above.‌ ‌ Requirement‌‌of‌‌independent‌‌directors‌ ‌ An‌ ‌independent‌ ‌director‌ ‌is‌ ‌a‌ ‌person‌ ‌who,‌ ‌apart‌ ‌from‌‌ shareholdings‌ ‌and‌ ‌fees‌ ‌received‌ ‌from‌ ‌the‌ ‌corporation,‌ ‌is‌‌ independent‌ ‌of‌ ‌management‌ ‌and‌ ‌free‌ ‌from‌ ‌any‌ ‌business‌ ‌or‌ ‌other‌‌ relationship.‌ ‌ The‌ ‌board‌ ‌of‌ ‌the‌ ‌following‌ ‌corporations‌ ‌vested‌ ‌with‌ ‌public‌‌ interest‌ ‌shall‌ ‌have‌ ‌independent‌ ‌directors‌ ‌constituting‌ ‌at‌ ‌least‌‌ Elections‌ ‌ Quorum‌ ‌ Owners‌ ‌of‌ ‌majority‌ of‌ ‌the‌ ‌outstanding‌ ‌capital‌ ‌stock‌ ‌must‌ ‌be‌‌ present‌‌either‌‌in‌‌person,‌‌by‌‌proxy‌‌or‌‌in‌‌absentia.‌ ‌ The‌‌law‌‌follows‌‌‌plurality‌‌‌voting.‌‌The‌‌nominees‌‌who‌‌received‌‌the‌‌ highest‌‌number‌‌of‌‌votes‌‌shall‌‌be‌‌elected‌‌as‌‌members‌‌of‌‌the‌‌board.‌ ‌ The‌‌election‌‌is‌‌generally‌‌done‌‌through‌ ‌ a) straight‌‌voting;‌‌or‌ b) cumulative‌‌voting.‌ ‌ Cumulative‌‌voting‌‌ ‌ Allows‌ ‌minority‌ ‌shareholders‌ ‌to‌ ‌bundle‌ ‌their‌ ‌votes‌‌together‌‌and‌‌ cast‌‌them‌‌in‌‌favor‌‌of‌‌one‌‌or‌‌some‌‌nominees.‌‌ ‌ Removal‌ ‌ 1. Any‌‌director‌‌or‌‌trustee‌‌of‌‌a‌‌corporation‌‌may‌‌be‌‌removed‌‌from‌‌ office‌ ‌by‌ ‌a‌‌vote‌‌of‌‌the‌‌stockholders‌‌holding‌‌or‌‌representing‌‌at‌‌ least‌ ‌two-thirds‌ ‌(2/3)‌ ‌of‌ ‌the‌ ‌OCS,‌ ‌or‌ ‌in‌ ‌a‌ ‌nonstock‌‌ corporation,‌ ‌by‌ ‌a‌ ‌vote‌ ‌of‌ ‌at‌ ‌least‌ ‌two-thirds‌ ‌(2/3)‌ ‌of‌ ‌the‌‌ members‌‌entitled‌‌to‌‌vote.‌ ‌ 2. Such‌‌removal‌‌shall‌‌take‌‌place‌‌either‌‌at‌‌a‌‌‌regular‌‌‌meeting‌‌of‌‌the‌‌ corporation‌‌or‌‌at‌‌a‌‌‌special‌‌‌meeting‌‌called‌‌for‌‌the‌‌purpose,‌‌and‌‌ in‌ ‌either‌ ‌case,‌ ‌after‌ ‌previous‌ ‌notice‌ ‌to‌ ‌stockholders‌ ‌or‌‌ members‌ ‌of‌ ‌the‌ ‌corporation‌ ‌of‌ ‌the‌ ‌intention‌ ‌to‌ ‌propose‌‌such‌‌ removal‌‌at‌‌the‌‌meeting.‌‌ ‌ 3. A‌ ‌special‌ ‌meeting‌ ‌of‌ ‌the‌ ‌stockholders‌ ‌or‌ ‌members‌ ‌for‌ ‌the‌‌ purpose‌‌of‌‌removing‌‌any‌‌director‌‌or‌‌trustee‌‌must‌‌be‌‌called‌‌ ‌ 20%‌‌‌of‌‌such‌‌board:‌ ‌ a) Corporations‌‌covered‌‌by‌‌Section‌‌17.2‌‌of‌‌the‌‌SRC,‌‌namely‌‌those‌‌ ‌ i) ii) whose‌‌securities‌‌are‌‌registered‌‌with‌‌the‌‌SEC,‌‌ ‌ corporations‌‌listed‌‌with‌‌an‌‌exchange‌‌or‌‌with‌‌assets‌‌of‌‌ at‌‌least‌‌P50M‌‌AND‌‌having‌‌‌200‌‌or‌‌more‌‌holders‌‌of‌‌ shares,‌ ‌each‌ ‌holding‌ ‌at‌ ‌least‌ ‌100‌ ‌shares‌‌of‌‌a‌‌class‌‌of‌‌ its‌‌equity‌‌shares;‌ ‌ b) Banks‌ ‌and‌ ‌quasi-banks,‌ ‌NSSLAs,‌ ‌pawnshops,‌ ‌corporations‌‌ engaged‌ ‌in‌ ‌money‌ ‌service‌ ‌business,‌ ‌pre-need,‌ ‌trust‌ ‌and‌‌ insurance‌ ‌companies,‌ ‌and‌ ‌other‌ ‌financial‌ ‌intermediaries‌;‌‌ and‌ ‌ c) Other‌ ‌corporations‌ ‌engaged‌ ‌in‌ ‌business‌ ‌vested‌ ‌with‌ ‌public‌‌ interest‌.‌ ‌ a. by‌‌the‌‌secretary‌‌on‌‌order‌‌of‌‌the‌‌president,‌‌or‌ b. upon‌‌written‌‌demand‌‌of‌‌the‌‌stockholders‌‌representing‌‌ or‌ ‌holding‌ ‌at‌ ‌least‌ ‌a‌ ‌majority‌ ‌of‌ ‌the‌ ‌OCS,‌ ‌or‌ ‌a‌‌ majority‌‌of‌‌the‌‌members‌‌entitled‌‌to‌‌vote.‌‌ ‌ If‌‌there‌‌is‌‌no‌‌secretary,‌‌or‌‌if‌‌the‌‌secretary,‌‌despite‌‌demand,‌‌fails‌‌ or‌ ‌refuses‌‌to‌‌call‌‌the‌‌special‌‌meeting‌‌or‌‌to‌‌give‌‌notice‌‌thereof,‌‌ the‌‌stockholder‌‌or‌‌member‌‌of‌‌the‌‌corporation‌‌signing‌‌the‌‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 57‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ demand‌ ‌may‌ ‌call‌ ‌for‌ ‌the‌ ‌meeting‌ ‌by‌ ‌directly‌ ‌addressing‌ ‌the‌‌ stockholders‌‌or‌‌members.‌‌ ‌ 4. Removal‌‌may‌‌be‌‌WITH‌‌or‌‌WITHOUT‌‌cause.‌‌ ‌ Removal‌ ‌without‌ ‌cause‌ ‌may‌ ‌NOT‌ ‌be‌ ‌used‌ ‌to‌ ‌deprive‌‌ minority‌ ‌stockholders‌ ‌or‌ ‌members‌ ‌of‌ ‌the‌ ‌right‌ ‌of‌‌ representation‌ ‌to‌ ‌which‌ ‌they‌ ‌may‌ ‌be‌ ‌entitled‌ ‌under‌ ‌Section‌‌ 23.‌ ‌ 5. majority‌‌of‌‌the‌‌ remaining;‌‌ ‌ otherwise‌,‌‌same‌‌as‌‌ above‌ ‌ The‌‌SEC‌‌shall,‌‌‌motu‌‌proprio‌‌or‌‌upon‌‌‌verified‌‌complaint‌,‌‌and‌‌ after‌‌due‌‌notice‌‌and‌‌hearing,‌‌order‌‌the‌‌removal‌‌of‌‌a‌‌director‌‌or‌‌ trustee‌‌ ‌ a. elected‌‌despite‌‌the‌‌disqualification,‌‌or‌‌ ‌ b. whose‌ ‌disqualification‌ ‌arose‌ ‌or‌ ‌is‌ ‌discovered‌‌ subsequent‌‌to‌‌an‌‌election.‌‌ ‌ The‌ ‌removal‌ ‌of‌ ‌a‌ ‌disqualified‌ ‌director‌ ‌shall‌ ‌be‌ ‌without‌‌ prejudice‌ ‌to‌ ‌other‌ ‌sanctions‌ ‌that‌ ‌the‌ ‌SEC‌ ‌may‌ ‌impose‌ ‌on‌ ‌the‌ board‌ ‌of‌ ‌directors‌ ‌or‌ ‌trustees‌ ‌who,‌ ‌with‌ ‌knowledge‌ ‌of‌ ‌the‌‌ disqualification‌,‌‌failed‌‌to‌‌remove‌‌‌such‌‌director‌‌or‌‌trustee.‌ ‌ Vacancies‌ ‌ Reason‌‌ ‌ Removal‌ ‌ Manner‌‌of‌‌Filling‌ ‌ On‌‌the‌‌‌same‌‌day‌‌of‌‌the‌‌ meeting‌‌‌authorizing‌‌the‌‌ removal‌ ‌ Three-Fold‌‌Duty‌‌ ‌ When‌‌applicable‌ ‌ 1. 2. When‌ ‌the‌ ‌vacancy‌ ‌prevents‌ ‌the‌ ‌remaining‌ ‌directors‌ ‌from‌‌ constituting‌‌a‌‌quorum‌‌and‌‌ ‌ Scope‌ ‌—‌ ‌The‌ ‌action‌ ‌by‌ ‌the‌ ‌designated‌ ‌director‌ ‌or‌ ‌trustee‌ ‌shall‌ ‌be‌‌ limited‌ ‌to‌ ‌the‌ ‌emergency‌ ‌action‌ ‌necessary,‌ ‌and‌ ‌the‌ ‌term‌ ‌shall‌ ‌cease‌‌ within‌‌a‌‌reasonable‌‌time‌‌ ‌ 1. from‌‌the‌‌termination‌‌of‌‌the‌‌emergency‌‌or‌‌ ‌ 2. upon‌‌election‌‌of‌‌the‌‌replacement‌‌director‌‌or‌‌trustee,‌‌ ‌ Notice‌‌to‌‌SEC‌‌—‌‌‌The‌‌corporation‌‌must‌‌notify‌‌the‌‌SEC‌‌within‌‌‌three‌‌(3)‌‌ days‌ ‌from‌ ‌the‌ ‌creation‌ ‌of‌ ‌the‌ ‌emergency‌ ‌board,‌ ‌stating‌ ‌therein‌ ‌the‌‌ reason‌‌for‌‌its‌‌creation.‌ ‌ If‌‌still‌‌constituting‌‌ No‌‌later‌‌than‌f‌ orty-five‌‌(45)‌‌ a‌‌quorum‌,‌‌by‌‌the‌‌ days‌‌‌from‌‌the‌‌time‌‌the‌‌vacancy‌‌ vote‌‌of‌‌at‌‌least‌‌a‌‌ arose‌ ‌ 2. DUTY‌ ‌OF‌ ‌DILIGENCE‌ ‌—‌ ‌shall‌ ‌not‌ ‌willfully‌ ‌and‌ ‌knowingly‌‌ vote‌ ‌for‌ ‌or‌ ‌assent‌‌to‌‌patently‌‌unlawful‌‌acts‌‌of‌‌the‌‌corporation‌‌ or‌ ‌act‌ ‌in‌ ‌bad‌ ‌faith‌ ‌or‌ ‌with‌ ‌gross‌ ‌negligence‌ ‌in‌ ‌directing‌ ‌the‌‌ affairs‌‌of‌‌the‌‌corporation.‌ ‌ 3. DUTY‌ ‌OF‌ ‌LOYALTY‌ ‌—‌ ‌shall‌ ‌not‌ ‌acquire‌ ‌any‌ ‌personal‌ ‌or‌‌ pecuniary‌‌interest‌‌in‌‌conflict‌‌with‌‌their‌‌duty‌‌as‌‌such‌‌directors‌‌ or‌ ‌trustees.‌ ‌(‌Strategic‌‌Alliance‌‌Development‌‌Corp.‌‌v.‌‌Radstock‌‌ Securities‌)‌ ‌ Contracts‌ ‌intra‌ ‌vires‌ ‌entered‌ ‌into‌ ‌by‌ ‌the‌ ‌board‌ ‌of‌ ‌directors‌ ‌are‌‌ binding‌ ‌upon‌ ‌the‌ ‌corporation‌ ‌and‌ ‌courts‌ ‌will‌ ‌not‌‌interfere‌‌unless‌‌ such‌‌contracts‌‌are‌‌so‌‌unconscionable‌‌and‌‌oppressive‌‌as‌‌to‌‌amount‌‌ to‌ ‌wanton‌ ‌destruction‌ ‌to‌ ‌the‌ ‌rights‌ ‌of‌ ‌the‌ ‌minority.‌ ‌(‌Ong‌ ‌Yong‌ ‌v.‌‌ Tiu‌)‌ ‌ The‌‌duty‌‌of‌‌diligence‌‌requires‌‌the‌‌members‌‌of‌‌the‌‌board‌‌to‌‌ ‌ Compensation‌ ‌ EXC‌:‌ DUTY‌ ‌OF‌ ‌OBEDIENCE‌ ‌—‌ ‌shall‌ ‌direct‌ ‌the‌ ‌affairs‌ ‌of‌ ‌the‌‌ corporation‌‌only‌‌in‌‌accordance‌‌with‌‌the‌‌purposes‌‌for‌‌which‌‌it‌‌ was‌‌organized.‌ ‌ Business‌‌Judgment‌‌Rule‌ ‌ whichever‌‌comes‌‌earlier.‌‌ ‌ GR‌:‌ 1. Emergency‌‌action‌‌is‌‌required‌‌to‌‌prevent‌‌grave,‌‌substantial,‌‌and‌‌ irreparable‌‌loss‌‌or‌‌damage‌‌to‌‌the‌‌corporation,‌‌ ‌ The‌‌vacancy‌‌may‌‌be‌‌‌temporarily‌‌‌filled‌‌from‌‌among‌‌the‌‌officers‌‌of‌‌the‌‌ corporation‌‌by‌‌‌unanimous‌‌vote‌‌‌of‌‌the‌‌remaining‌‌directors‌‌or‌‌trustees.‌‌ ‌ Period‌‌to‌‌Fill‌‌Up‌ ‌ No‌‌later‌‌than‌‌the‌‌day‌‌of‌‌such‌‌ Expiration‌‌ By‌‌the‌‌stockholders‌‌ expiration‌‌at‌‌a‌‌meeting‌‌called‌‌ of‌‌Term‌ ‌ or‌‌members‌‌in‌‌a‌‌ for‌‌that‌‌purpose‌ ‌ regular‌‌or‌‌special‌‌ meeting‌‌called‌‌for‌‌ At‌‌a‌‌regular‌o ‌ r‌‌at‌‌a‌‌special‌‌ the‌‌purpose‌ ‌ meeting‌‌duly‌‌called‌‌for‌‌the‌‌ Increase‌‌in‌‌ purpose,‌‌or‌‌in‌‌the‌‌same‌‌ number‌ ‌ meeting‌‌authorizing‌‌the‌‌ increase‌i‌ f‌‌so‌‌stated‌‌in‌‌the‌‌ notice‌o ‌ f‌‌the‌‌meeting.‌ ‌ All‌‌other‌‌ causes‌ ‌ Emergency‌‌Board:‌‌Matling‌‌Doctrine‌ ‌ In‌ ‌no‌ ‌case‌ ‌shall‌ ‌the‌ ‌total‌ ‌yearly‌ ‌compensation‌ ‌of‌ ‌directors‌‌ exceed‌ ‌ten‌ ‌(10%)‌ ‌percent‌ ‌of‌ ‌the‌ ‌net‌ ‌income‌ ‌before‌ ‌income‌‌ tax‌‌of‌‌the‌‌corporation‌‌during‌‌the‌‌preceding‌‌year.‌ ‌ In‌ ‌the‌ ‌absence‌ ‌of‌ ‌any‌ ‌provision‌ ‌in‌ ‌the‌ ‌bylaws‌ ‌fixing‌ ‌their‌‌ compensation,‌ ‌the‌ ‌directors‌ ‌or‌‌trustees‌‌shall‌‌‌not‌‌receive‌‌‌any‌‌ compensation‌‌in‌‌their‌‌capacity‌‌as‌‌such,‌‌‌except‌‌‌for‌‌‌reasonable‌‌ per‌‌diems‌.‌ ‌ 1. The‌‌stockholders‌‌representing‌‌at‌‌least‌‌a‌‌‌majority‌‌‌of‌‌the‌‌OCS‌‌or‌‌ majority‌ ‌of‌ ‌the‌ ‌members‌‌may‌‌grant‌‌directors‌‌or‌‌trustees‌‌with‌‌ 2. compensation‌ ‌and‌ ‌approve‌ ‌the‌ ‌amount‌ ‌thereof‌ ‌at‌‌a‌‌regular‌‌or‌‌ special‌‌meeting.‌ ‌ 3. a) take‌ ‌steps‌ ‌to‌ ‌sufficiently‌ ‌inform‌ ‌themselves‌ ‌of‌ ‌relevant‌‌ information‌‌before‌‌making‌‌a‌‌decision‌‌(p ‌ rocess‌‌due‌‌care‌)‌‌and‌‌ ‌ b) act‌‌in‌‌good‌‌faith‌‌and‌‌in‌‌the‌‌honest‌‌belief‌‌that‌‌their‌‌action‌‌is‌‌in‌‌ the‌‌best‌‌interest‌‌of‌‌the‌‌corporation‌‌(s‌ ubstantive‌‌due‌‌care‌).‌ ‌ The‌ ‌business‌ ‌judgment‌ ‌rule‌ ‌does‌ ‌not‌ ‌apply‌ ‌in‌ ‌process‌ ‌due‌ ‌care‌‌ (‌oversight‌‌cases‌).‌‌ ‌ There‌ ‌is‌ ‌gross‌ ‌negligence‌ ‌if‌ ‌there‌ ‌is‌ ‌sustained‌ ‌or‌ ‌systematic‌‌ failure‌‌‌of‌‌the‌‌board‌‌to‌‌exercise‌‌oversight.‌‌ ‌ The‌ ‌business‌ ‌judgment‌ ‌rule‌ ‌applies‌ ‌in‌ ‌the‌ ‌observance‌ ‌of‌‌ substantive‌ ‌due‌ ‌care‌ ‌(‌hindsight‌ ‌cases).‌ ‌The‌ ‌substantive‌ ‌due‌ ‌care‌‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 58‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ standard‌ ‌depends‌ ‌on‌ ‌the‌ ‌actual‌ ‌abilities‌‌of‌‌the‌‌concerned‌‌director‌‌ or‌‌trustee.‌ ‌ 4. Under‌‌the‌‌substantive‌‌due‌‌care‌‌standard,‌‌there‌‌must‌‌be‌‌‌no‌‌obvious‌‌ corporate‌ ‌waste‌ ‌and‌ ‌the‌ ‌action‌ ‌must‌ ‌have‌ ‌a‌ ‌rational‌ ‌business‌‌ purpose‌‌‌or‌‌actuated‌‌by‌‌legitimate‌‌business‌‌reasons.‌ ‌ As‌‌a‌‌Defense‌ ‌ The‌‌law‌‌upholds‌‌board‌‌supremacy.‌‌Thus,‌‌the‌‌business‌‌judgment‌‌rule‌‌is‌‌ a‌‌defense‌‌when:‌‌ ‌ a) the‌‌act‌‌is‌‌intra‌‌vires‌;‌ ‌ Where‌ ‌a‌ ‌director,‌ ‌by‌ ‌virtue‌ ‌of‌ ‌such‌ ‌office,‌ ‌acquires‌ ‌a‌ ‌business‌‌ opportunity‌ ‌which‌ ‌should‌ ‌belong‌ ‌to‌ ‌the‌ ‌corporation‌,‌ ‌thereby‌‌ obtaining‌ ‌profits‌ ‌to‌ ‌the‌ ‌prejudice‌‌of‌‌such‌‌corporation,‌‌the‌‌director‌‌ must‌a ‌ ccount‌‌for‌‌and‌‌refund‌‌to‌‌the‌‌latter‌‌all‌‌such‌‌profits‌.‌ ‌ Unless‌ ‌the‌ ‌act‌ ‌has‌ ‌been‌ ‌ratified‌ ‌by‌ ‌a‌ ‌vote‌ ‌of‌ ‌the‌ ‌stockholders‌‌ owning‌‌or‌‌representing‌‌at‌‌least‌2 ‌ /3‌‌‌of‌‌the‌‌OCS.‌ ‌ Material‌‌Related‌‌Party‌‌Transactions‌ ‌ 1. b) the‌‌members‌‌of‌‌the‌‌board‌‌observed‌‌‌process‌‌due‌‌care‌;‌‌and‌ ‌ c) the‌‌action‌‌has‌‌a‌‌‌rational‌‌business‌‌purpose‌,‌‌with‌‌‌no‌‌obvious‌‌ corporate‌‌waste‌.‌ ‌ Legal‌‌Effects‌ ‌ 1. First‌ ‌Branch‌.‌ ‌The‌ ‌resolutions,‌ ‌contracts‌ ‌and‌ ‌transactions‌ ‌of‌‌ the‌ ‌board‌ ‌cannot‌ ‌be‌ ‌overturned‌ ‌by‌ ‌the‌ ‌stockholders‌ ‌or‌‌ members,‌‌and‌‌not‌‌even‌‌by‌‌the‌‌courts.‌ 2. Second‌ ‌Branch‌.‌ ‌Directors‌ ‌and‌ ‌authorized‌‌officers‌‌‌cannot‌‌be‌‌ held‌ ‌personally‌ ‌liable‌ ‌for‌ ‌acts‌ ‌or‌ ‌contracts‌ ‌done‌ ‌with‌ ‌the‌‌ exercises‌‌of‌‌their‌‌business‌‌judgment,‌e‌ xcept‌:‌‌ ‌ a) When‌‌otherwise‌‌provided‌‌by‌‌law;‌ ‌ b) When‌‌the‌‌directors‌‌or‌‌officers‌‌acted‌‌with‌‌fraud,‌‌gross‌‌ negligence‌o ‌ r‌‌‌in‌‌bad‌‌faith‌;‌‌and‌ ‌ c) When‌ ‌directors‌ ‌or‌ ‌officers‌ ‌act‌ ‌against‌ ‌the‌‌ corporation‌‌‌in‌‌conflict‌‌of‌‌interest‌s‌ ituation.‌ ‌ Disloyalty‌ ‌ Observance‌ ‌of‌ ‌the‌ ‌duty‌ ‌of‌ ‌loyalty‌ ‌is‌ ‌relevant‌ ‌when‌ ‌directors‌ ‌or‌‌ trustees‌‌enter‌‌in‌‌to‌‌a‌ ‌ 1) contract‌‌with‌‌the‌‌corporation‌‌(s‌ elf-dealing‌‌contracts‌),‌ ‌ 2) negotiate‌‌on‌‌their‌‌compensation,‌‌and‌ ‌ 3) personally‌‌acquire‌‌a‌‌corporate‌‌opportunity.‌ ‌ 2. “‌Material‌”.‌ ‌A‌ ‌transaction‌ ‌is‌ ‌material‌ ‌if‌ ‌its‌ ‌value‌ ‌is‌ ‌at‌ ‌least‌‌ 10%‌‌‌of‌‌the‌‌corporation’s‌‌total‌‌assets,‌‌as‌‌provided‌‌in‌‌its‌‌latest‌‌ AFS.‌ ‌ “‌Related‌ ‌Party‌”.‌ ‌A‌ ‌party‌ ‌is‌ ‌regarded‌ ‌as‌ ‌related‌ ‌party‌ ‌if‌ ‌such‌‌ person‌‌is‌‌ ‌ 1. which‌‌the‌‌corporation‌‌is‌‌financially‌‌able‌‌to‌‌undertake,‌‌ ‌ 2. is‌‌from‌‌its‌‌nature,‌‌in‌‌the‌‌line‌‌of‌‌the‌‌corporation's‌‌business‌‌ and‌‌is‌‌of‌‌practical‌‌advantage‌‌to‌‌it,‌‌ ‌ 3. is‌ ‌one‌ ‌in‌ ‌which‌ ‌the‌ ‌corporation‌ ‌has‌ ‌an‌ ‌interest‌ ‌or‌ ‌a‌‌ reasonable‌‌expectancy,‌‌and‌‌ ‌ 4. by‌ ‌embracing‌ ‌the‌ ‌opportunity,‌ ‌the‌ ‌self-interest‌ ‌of‌ ‌the‌‌ officer‌‌or‌‌director‌‌will‌‌be‌‌brought‌‌into‌‌‌conflict‌‌‌with‌‌that‌‌of‌‌ his‌ ‌corporation,‌ ‌the‌ ‌law‌ ‌will‌ ‌not‌ ‌permit‌ ‌him‌ ‌to‌‌seize‌‌the‌‌ opportunity‌‌for‌‌himself.‌‌ ‌ And,‌ ‌if,‌ ‌in‌‌such‌‌circumstances,‌‌the‌‌interests‌‌of‌‌the‌‌corporation‌‌are‌‌ betrayed,‌‌the‌‌corporation‌‌may‌‌elect‌‌to‌‌claim‌‌all‌‌of‌‌the‌‌benefits‌‌ of‌‌the‌‌transaction‌‌for‌‌itself‌.‌‌(‌Gokongwei,‌‌Jr.‌‌v.‌‌SEC‌)‌ ‌ a‌‌director,‌‌trustee,‌‌officer,‌‌or‌‌a‌‌substantial‌‌shareholder‌‌ Solidary‌‌liabilities‌‌for‌‌damages‌ (one‌‌who‌‌is‌‌directly‌‌or‌‌indirectly‌‌a‌‌beneficial‌‌owner‌‌of‌‌ Directors‌‌or‌‌trustees‌‌who‌‌ ‌ at‌‌least‌‌10%‌‌of‌‌any‌‌class‌‌of‌‌equity‌‌security),‌‌and‌‌ ‌ 1. willfully‌‌and‌‌knowingly‌‌vote‌‌for‌‌or‌‌assent‌‌to‌‌patently‌‌unlawful‌‌ b. his‌‌spouse‌‌or‌‌relative‌‌within‌‌the‌4 ‌ th‌‌CDCA‌.‌ ‌ acts‌‌of‌‌the‌‌corporation‌‌or‌‌ ‌ 3. Rule‌ ‌if‌ ‌no‌ ‌disinterested‌ ‌board‌.‌ ‌The‌ ‌law‌ ‌only‌ ‌requires‌ ‌the‌‌ 2. are‌ ‌guilty‌ ‌of‌ ‌gross‌ ‌negligence‌ ‌or‌ ‌bad‌ ‌faith‌ ‌in‌ ‌directing‌ ‌the‌‌ approval‌ ‌of‌ ‌the‌ ‌shareholders‌ ‌or‌ ‌members‌ ‌if‌ ‌there‌ ‌is‌ ‌no‌‌ affairs‌‌of‌‌the‌‌corporation‌‌or‌‌ ‌ disinterested‌‌board‌‌that‌‌may‌‌approve‌‌the‌‌transaction.‌ ‌ 3. acquire‌‌any‌‌personal‌‌or‌‌pecuniary‌‌interest‌‌in‌‌conflict‌‌with‌‌their‌‌ 4. Rule‌ ‌if‌ ‌disinterested‌ ‌board‌ ‌disapproves‌.‌ ‌Where‌ ‌the‌‌ duty‌‌as‌‌such‌‌directors‌‌or‌‌trustees‌‌ ‌ disinterested‌ ‌board‌ ‌disapproves‌ ‌the‌ ‌self-dealing‌ ‌transaction,‌‌ the‌ ‌shareholders‌ ‌or‌‌members‌‌cannot‌‌override‌‌‌such‌‌decision‌‌ shall‌‌be‌‌liable‌‌‌jointly‌‌and‌‌severally‌‌for‌‌all‌‌damages‌.‌ ‌ of‌ ‌the‌ ‌board,‌ ‌consistent‌ ‌with‌ ‌the‌ ‌principle‌ ‌of‌ ‌board‌‌ Solidary‌ ‌liability‌ ‌will‌ ‌only‌ ‌attach‌ ‌to‌ ‌the‌ ‌directors,‌ ‌officers‌ ‌or‌‌ supremacy‌.‌ ‌ employees‌‌of‌‌the‌‌corporation‌‌in‌‌certain‌‌circumstances,‌‌such‌‌as:‌ ‌ Doctrine‌‌of‌‌Corporate‌‌Opportunity‌ ‌ 1. When‌ ‌directors‌ ‌and‌ ‌trustees‌ ‌or,‌ ‌in‌ ‌appropriate‌ ‌cases,‌ ‌the‌‌ Corporate‌ ‌officers‌ ‌"are‌ ‌not‌ ‌permitted‌‌to‌‌use‌‌their‌‌position‌‌of‌‌trust‌‌ officers‌‌of‌‌a‌‌corporation:‌‌ ‌ and‌‌confidence‌‌to‌‌further‌‌their‌‌private‌‌interests."‌‌ ‌ a) vote‌ ‌for‌ ‌or‌ ‌assent‌ ‌to‌ ‌patently‌ ‌unlawful‌ ‌acts‌ ‌of‌ ‌the‌‌ The‌ ‌doctrine‌ ‌of‌ ‌"corporate‌ ‌opportunity"‌ ‌is‌ ‌precisely‌ ‌a‌‌ corporation;‌ ‌ recognition‌‌by‌‌the‌‌courts‌‌that‌‌the‌‌fiduciary‌‌standards‌‌could‌‌not‌‌be‌‌ b) act‌ ‌in‌ ‌bad‌ ‌faith‌ ‌or‌ ‌with‌ ‌gross‌ ‌negligence‌ ‌in‌‌ upheld‌ ‌where‌ ‌the‌ ‌fiduciary‌ ‌was‌ ‌acting‌ ‌for‌ ‌two‌ ‌entities‌ ‌with‌‌ directing‌‌the‌‌corporate‌‌affairs;‌‌and‌ ‌ competing‌‌interests.‌‌ ‌ c) are‌ ‌guilty‌ ‌of‌ ‌conflict‌ ‌of‌ ‌interest‌ ‌to‌ ‌the‌ ‌prejudice‌ ‌of‌‌ If‌ ‌there‌ ‌is‌ ‌presented‌ ‌to‌ ‌a‌ ‌corporate‌ ‌officer‌ ‌or‌ ‌director‌ ‌a‌ ‌business‌‌ the‌ ‌corporation,‌ ‌its‌ ‌stockholders‌ ‌or‌ ‌members,‌ ‌and‌‌ opportunity‌‌ ‌ other‌‌persons;‌ ‌ a. ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 59‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ 2. 3. 4. When‌ ‌a‌ ‌director‌ ‌or‌ ‌officer‌ ‌has‌ ‌consented‌ ‌to‌ ‌the‌ ‌issuance‌ ‌of‌‌ watered‌ ‌stocks‌ ‌or‌ ‌who,‌ ‌having‌ ‌knowledge‌ ‌thereof,‌ ‌did‌ ‌not‌‌ forthwith‌‌file‌‌with‌‌the‌‌corporate‌‌secretary‌‌his‌‌written‌‌objection‌‌ thereto;‌ ‌ 2. Effects‌ ‌of‌ ‌non-use‌ ‌of‌ ‌corporate‌ ‌charter‌ ‌and‌ ‌continuous‌‌ inoperation‌‌of‌‌a‌‌corporation‌‌(§21);‌ ‌ 3. Liability‌‌of‌‌directors,‌‌trustees‌‌or‌‌officers‌‌(§30);‌ ‌ When‌ ‌a‌ ‌director,‌ ‌trustee‌ ‌or‌ ‌officer‌ ‌has‌ ‌contractually‌‌agreed‌‌ or‌‌stipulated‌‌to‌‌hold‌‌himself‌‌personally‌‌and‌‌solidarily‌‌liable‌‌ with‌‌the‌‌corporation;‌‌or‌ ‌ 4. Disloyalty‌‌of‌‌a‌‌director‌‌(§33);‌ ‌ 5. Liability‌‌of‌‌directors‌‌for‌‌watered‌‌stocks‌‌(§64);‌‌ ‌ 6. Interest‌‌on‌‌unpaid‌‌subscriptions‌‌(§65);‌ ‌ b) The‌‌‌vote‌‌‌of‌‌such‌‌director‌‌or‌‌trustee‌‌was‌‌not‌‌necessary‌‌for‌‌the‌‌ approval‌‌of‌‌the‌‌contract;‌ ‌ 7. Payment‌‌of‌‌balance‌‌of‌‌subscription‌‌(§66);‌‌and‌ ‌ c) The‌‌contract‌‌is‌‌‌fair‌‌and‌‌reasonable‌u ‌ nder‌‌the‌‌circumstances;‌ ‌ 8. Books‌‌to‌‌be‌‌kept‌‌(§73).‌ ‌ d) In‌ ‌case‌ ‌of‌ ‌corporations‌ ‌vested‌ ‌with‌ ‌public‌ ‌interest‌,‌‌material‌‌ contracts‌‌are‌‌approved‌‌by‌‌ ‌ When‌ ‌a‌ ‌director,‌ ‌trustee‌ ‌or‌ ‌officer‌ ‌is‌ ‌made,‌ ‌by‌ ‌specific‌‌ provision‌ ‌of‌ ‌law‌,‌ ‌personally‌ ‌liable‌ ‌for‌ ‌his‌ ‌corporate‌ ‌action.‌‌ (‌Heirs‌‌of‌‌Tan‌‌Uy‌‌v.‌‌International‌‌Exchange‌‌Bank‌‌‌2013‌)‌ ‌ Personal‌‌liabilities‌ ‌ A‌‌director,‌‌trustee,‌‌or‌‌officer‌‌shall‌‌not‌‌attempt‌‌to‌‌acquire,‌‌or‌‌acquire‌‌ any‌‌interest‌‌adverse‌‌to‌‌the‌‌corporation‌‌ ‌ 1. 2. in‌ ‌respect‌ ‌of‌ ‌any‌ ‌matter‌ ‌which‌ ‌has‌ ‌been‌ ‌reposed‌ ‌in‌ ‌them‌ ‌in‌‌ confidence,‌‌and‌‌ ‌ upon‌ ‌which,‌ ‌equity‌ ‌imposes‌ ‌a‌ ‌disability‌ ‌upon‌ ‌themselves‌ ‌to‌‌ deal‌‌in‌‌their‌‌own‌‌behalf;‌‌ ‌ Otherwise‌‌he‌‌shall‌‌be‌‌liable‌‌as‌‌a‌‌‌trustee‌‌‌for‌‌the‌‌corporation‌‌and‌‌‌must‌‌ account‌‌for‌‌the‌‌profits‌‌which‌‌otherwise‌‌would‌‌have‌‌accrued‌‌to‌‌the‌‌ corporation‌.‌‌The‌‌following‌‌requisites‌‌must‌‌concur:‌ ‌ Special‌‌Fact‌‌Doctrine‌ ‌ In‌‌the‌‌absence‌‌of‌‌special‌‌facts,‌‌any‌‌director,‌‌officer‌‌or‌‌shareholder‌‌is‌‌ entitled‌ ‌to‌ ‌sell‌ ‌his‌ ‌stock‌ ‌to‌ ‌a‌ ‌third‌ ‌person‌ ‌for‌ ‌such‌ ‌price;‌ ‌and‌‌on‌‌ such‌‌terms‌‌as‌‌he‌‌may‌‌desire.‌‌ ‌ However‌,‌ ‌officers,‌ ‌directors,‌ ‌and‌ ‌controlling‌ ‌stockholders‌ ‌of‌ ‌a‌‌ corporation‌ ‌owe‌ ‌a‌ ‌limited‌ ‌fiduciary‌ ‌duty‌ toward‌ ‌minority‌ stockholders‌‌in‌‌the‌‌matter‌‌of‌‌sales‌‌of‌‌stock‌‌where‌‌there‌‌are‌‌‌special‌‌ facts‌ ‌which‌ ‌make‌ ‌it‌ ‌inequitable‌ ‌for‌ ‌them‌ ‌to‌ ‌act‌‌without‌‌regard‌‌to‌‌ the‌‌interests‌‌of‌‌other‌‌shareholders.‌‌ ‌ Under‌ ‌the‌ ‌law,‌ ‌what‌ ‌is‌ ‌required‌ ‌to‌ ‌be‌ ‌disclosed‌ ‌is‌ ‌a‌ ‌fact‌ ‌of‌ ‌“‌special‌‌ significance‌”‌‌which‌‌may‌‌be‌‌ ‌ is‌‌‌voidable‌,‌‌at‌‌the‌‌option‌‌of‌‌such‌‌corporation,‌‌‌unless‌‌‌all‌‌the‌‌following‌‌ conditions‌‌are‌‌present:‌ ‌ a) The‌‌‌presence‌‌‌of‌‌such‌‌director‌‌or‌‌trustee‌‌in‌‌the‌‌board‌‌meeting‌‌ in‌ ‌which‌ ‌the‌ ‌contract‌ ‌was‌ ‌approved‌ ‌was‌ ‌not‌ ‌necessary‌ ‌to‌‌ constitute‌‌a‌‌quorum‌f‌ or‌‌such‌‌meeting;‌ ‌ i) at‌ ‌least‌ ‌two-thirds‌ ‌(2/3)‌ ‌of‌ ‌the‌ ‌entire‌‌ membership‌‌‌of‌‌the‌‌board,‌‌with‌‌ ‌ ii) at‌ ‌least‌ ‌a‌ ‌majority‌ ‌of‌ ‌the‌ ‌independent‌ ‌directors‌‌ voting‌‌to‌‌approve‌‌the‌‌material‌‌contract;‌‌and‌ ‌ e) In‌ ‌case‌ ‌of‌ ‌an‌ ‌officer‌,‌ ‌the‌ ‌contract‌ ‌has‌ ‌been‌ ‌previously‌‌ authorized‌‌‌by‌‌the‌‌board‌‌of‌‌directors.‌ ‌ Where‌‌any‌‌of‌‌the‌‌first‌‌three‌‌(3)‌‌conditions‌‌is‌‌absent,‌‌in‌‌the‌‌case‌‌of‌‌a‌‌ contract‌ ‌with‌ ‌a‌ ‌director‌ ‌or‌ ‌trustee,‌‌such‌‌contract‌‌‌may‌‌be‌‌ratified‌‌ by‌‌the‌‌vote‌‌of‌‌the‌‌stockholders‌‌representing‌‌at‌‌least‌‌2/3‌‌‌of‌‌the‌‌OCS‌‌ or‌‌of‌‌the‌‌members‌‌in‌‌a‌‌meeting‌‌called‌‌for‌‌the‌‌purpose.‌ ‌ 1) The‌‌complainant‌‌must‌‌allege‌‌in‌‌the‌‌complaint‌‌that‌‌the‌‌director‌‌ or‌‌officer‌‌assented‌‌to‌‌patently‌‌unlawful‌‌acts‌‌of‌‌the‌‌corporation,‌‌ or‌ ‌that‌ ‌the‌ ‌officer‌ ‌was‌ ‌guilty‌ ‌of‌‌gross‌‌negligence‌‌or‌‌bad‌‌faith;‌‌ AND‌ ‌ a) a‌ ‌material‌ ‌fact‌ ‌which‌ ‌would‌ ‌be‌ ‌likely,‌ ‌on‌ ‌being‌ ‌made‌‌ Between‌‌corporations‌‌with‌‌interlocking‌‌directors‌ ‌ generally‌‌available,‌‌to‌‌affect‌‌the‌‌market‌‌price‌‌of‌‌a‌‌security‌‌to‌‌a‌‌ Except‌ i‌ n‌ ‌cases‌ ‌of‌ ‌fraud‌,‌ ‌and‌ ‌provided‌ ‌the‌ ‌contract‌‌is‌‌fair‌‌and‌‌ significant‌‌extent,‌‌or‌ ‌ reasonable‌‌‌under‌‌the‌‌circumstances,‌‌a‌‌contract‌‌between‌‌two‌‌(2)‌‌or‌‌ more‌ ‌corporations‌ ‌having‌ ‌interlocking‌ ‌directors‌ ‌shall‌ ‌not‌ ‌be‌‌ b) one‌ ‌which‌ ‌a‌ ‌reasonable‌ ‌person‌ ‌would‌ ‌consider‌ ‌especially‌‌ 2) The‌ ‌complainant‌ ‌must‌ ‌clearly‌ ‌and‌ ‌convincingly‌ ‌prove‌ ‌such‌‌ invalidated‌‌‌on‌‌that‌‌ground‌‌alone.‌ ‌ important‌ ‌in‌ ‌determining‌ ‌his‌ ‌course‌ ‌of‌ ‌action‌ ‌with‌ ‌regard‌ ‌to‌‌ unlawful‌ ‌acts,‌ ‌negligence‌ ‌or‌ ‌bad‌ ‌faith.‌ ‌(‌Heirs‌ ‌of‌ ‌Tan‌ ‌Uy‌ ‌v.‌‌ the‌‌shares‌‌of‌‌stock.‌‌(S‌ EC‌‌v.‌‌Interport‌‌Resources‌)‌ ‌ If‌‌the‌‌interest‌‌of‌‌the‌‌interlocking‌‌director‌‌in‌‌one‌‌(1)‌‌corporation‌‌is‌‌ International‌‌Exchange‌‌Bank‌‌‌2013‌)‌ ‌ substantial‌ ‌and‌ ‌the‌ ‌interest‌ ‌in‌ ‌the‌ ‌other‌ ‌corporation‌ ‌or‌‌ Contracts‌ ‌ Responsibility‌‌for‌‌Crimes‌ ‌ corporations‌‌is‌‌merely‌‌‌nominal‌,‌‌the‌‌contract‌‌shall‌‌be‌‌subject‌‌to‌‌the‌‌ By‌‌self-dealing‌‌directors‌‌with‌‌the‌‌corporation‌ ‌ provisions‌ ‌regarding‌ ‌self-dealing‌ ‌directors‌ ‌insofar‌ ‌as‌ ‌the‌ ‌latter‌‌ The‌ ‌following‌ ‌provisions‌ ‌of‌ ‌the‌ ‌RCC‌ ‌provide‌ ‌specific‌ ‌penalties,‌‌ corporation‌‌or‌‌corporations‌‌are‌‌concerned.‌ ‌ which‌ ‌render‌ ‌the‌ ‌non-application‌ ‌of‌ ‌the‌ ‌“other‌ ‌violations”‌‌ A‌‌contract‌‌of‌‌the‌‌corporation‌‌with‌‌ ‌ provision‌‌under‌‌Section‌‌170:‌‌ ‌ Stockholdings‌‌‌exceeding‌‌twenty‌‌percent‌‌(‌20%‌)‌‌of‌‌the‌‌OCS‌‌shall‌‌ a. (1)‌‌one‌‌or‌‌more‌‌of‌‌its‌‌directors,‌‌trustees,‌‌officers‌‌OR‌‌ ‌ 1. Corporation‌‌by‌‌estoppel‌‌(§20);‌ ‌ b. their‌ ‌spouses‌ ‌and‌ ‌relatives‌ ‌within‌ ‌the‌ ‌fourth‌‌civil‌‌degree‌‌‌of‌‌ consanguinity‌‌or‌‌affinity‌‌ ‌ be‌‌considered‌s‌ ubstantial‌f‌ or‌‌purposes‌‌of‌‌interlocking‌‌directors.‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 60‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ Executive‌‌and‌‌other‌‌special‌‌committees‌ ‌ Manner‌‌of‌‌Creation‌ ‌ Limitation‌‌on‌‌Powers‌ ‌ The‌‌decision‌‌of‌‌the‌‌ executive‌‌committee‌‌is‌‌ considered‌‌the‌‌decision‌‌of‌‌ the‌‌board.‌ ‌ ‌ The‌‌law‌‌does‌‌not‌‌permit‌‌an‌‌executive‌‌ committee‌‌to:‌‌ ‌ a) Initiate‌‌extraordinary‌‌actions‌‌ needing‌‌shareholders’‌‌approval;‌‌ ‌ b) Fill‌‌vacancies‌‌in‌‌the‌‌board;‌‌ ‌ c) Amend‌‌or‌‌repeal‌‌bylaws‌‌or‌‌the‌‌ adoption‌‌of‌‌bylaws;‌ ‌ d) Amend‌‌or‌‌repeal‌‌of‌‌any‌‌resolution‌‌ which‌‌by‌‌its‌‌express‌‌terms‌‌is‌‌not‌‌ amendable‌‌or‌‌repealable;‌‌and‌ ‌ e) Distribute‌‌cash‌‌dividends‌‌to‌‌the‌‌ shareholders‌ ‌ Management‌‌Committee‌ ‌ May‌‌only‌‌be‌‌created‌w ‌ hen‌‌there‌‌is‌‌ imminent‌‌danger‌‌of:‌ ‌ Specifically‌‌created‌‌by‌‌a‌‌ 1) Dissipation‌,‌ ‌loss,‌ ‌wastage‌ ‌or‌‌ court‌‌and,‌‌thus,‌‌under‌‌the‌‌ destruction‌ ‌of‌ ‌assets‌ ‌or‌ ‌other‌‌ latter's‌‌control‌‌and‌‌ properties;‌‌and‌ ‌ supervision,‌‌for‌‌the‌‌purpose‌‌ 2) Paralyzation‌ ‌of‌ ‌its‌ ‌business‌‌ of‌‌preserving‌‌properties‌‌ operations‌ ‌which‌ ‌may‌ ‌be‌‌ involved‌‌in‌‌a‌‌suit‌‌and‌‌ prejudicial‌ ‌to‌ ‌the‌ ‌interest‌ ‌of‌ ‌the‌‌ protecting‌‌the‌‌rights‌‌of‌‌the‌‌ minority‌ ‌stockholders,‌‌ parties.‌ ‌ parties-litigants‌ ‌or‌ ‌the‌ ‌general‌‌ public.‌ ‌ Special‌‌Committee‌ ‌ The‌‌board‌‌may‌‌create‌‌ special‌‌committees‌e ‌ ven‌‌if‌‌ not‌‌explicitly‌‌authorized‌‌ in‌‌the‌‌bylaws‌.‌‌ ‌ The‌‌committee‌‌need‌‌not‌‌be‌‌ comprised‌‌of‌‌directors,‌‌and‌‌ A‌ ‌majority‌ ‌shall‌ ‌constitute‌ ‌a‌ ‌quorum‌ ‌to‌ ‌transact‌ ‌corporate‌‌ business‌ ‌ F‌‌&‌‌S‌‌Velasco‌‌Co.,‌‌Inc.‌‌v.‌‌Madrid‌‌‌2015‌ ‌ Executive‌‌Committee‌ ‌ ‌ The‌‌board‌‌may‌‌delegate‌‌its‌‌ managerial‌‌authority‌‌to‌‌an‌‌ executive‌‌committee,‌‌but‌‌ only‌‌if‌‌authorized‌‌in‌‌the‌‌ bylaws.‌‌ ‌ Quorum‌ ‌ may‌‌even‌‌be‌‌temporary‌‌or‌‌ permanent.‌ ‌ The‌‌board‌‌may‌‌assign‌‌them‌‌to‌‌ perform‌‌tasks‌‌for‌‌consideration‌‌of‌‌the‌‌ board.‌‌ ‌ Their‌‌action‌‌does‌N ‌ OT‌h ‌ ave‌‌the‌‌effect‌‌ of‌‌a‌‌board‌‌decision.‌ ‌ WON‌ ‌a‌ ‌Management‌ ‌Committee‌ ‌should‌ ‌be‌ ‌appointed‌ ‌or‌‌ constituted‌‌to‌‌take‌‌over‌‌the‌‌corporate‌‌and‌‌business‌‌affairs‌‌of‌‌FSVCI.‌ ‌ Unless‌t‌ he‌‌AOI‌‌or‌‌the‌‌bylaws‌‌provides‌‌for‌‌a‌g ‌ reater‌‌majority‌.‌ ‌ GR‌:‌ Every‌‌decision‌‌reached‌‌by‌‌‌at‌‌least‌‌a‌‌majority‌‌of‌‌the‌‌directors‌‌ or‌ ‌trustees‌ ‌constituting‌ ‌a‌ ‌quorum‌ ‌shall‌ ‌be‌ ‌valid‌ ‌as‌ ‌a‌‌ corporate‌‌act;‌ ‌ EXC‌:‌ For‌ ‌the‌ ‌election‌ ‌of‌ ‌officers‌ ‌which‌ ‌shall‌ ‌require‌ ‌the‌‌vote‌‌of‌‌a‌‌ majority‌‌of‌‌ALL‌‌the‌‌members‌‌of‌‌the‌‌board.‌ ‌ NO‌.‌ ‌The‌ ‌CA‌ ‌merely‌ ‌based‌ ‌its‌ ‌directive‌ ‌of‌ ‌creating‌ ‌a‌ ‌Management‌‌ Committee‌‌for‌‌FSVCI‌‌on‌‌its‌‌finding‌‌of‌‌the‌‌persisting‌‌conflict‌‌between‌‌ the‌ ‌Saturnino‌ ‌and‌ ‌Madrid‌ ‌Groups.‌ ‌However,‌ ‌absent‌ ‌any‌ ‌actual‌‌ evidence‌‌from‌‌the‌‌records‌‌showing‌‌such‌‌imminent‌‌danger‌,‌‌the‌‌CA's‌‌ findings‌ ‌have‌ ‌no‌ ‌legal‌ ‌or‌ ‌factual‌ ‌basis‌ ‌to‌ ‌support‌ ‌the‌‌ appointment/constitution‌‌of‌‌a‌‌Management‌‌Committee‌‌for‌‌FSVCI.‌ ‌ Rule‌‌on‌‌abstention‌ ‌ A‌ ‌director‌‌or‌‌trustee‌‌who‌‌has‌‌a‌‌potential‌‌interest‌‌‌in‌‌any‌‌related‌‌ party‌‌transaction‌‌must‌‌recuse‌‌from‌‌voting‌‌on‌‌the‌‌approval‌‌of‌‌the‌ related‌ ‌party‌‌transaction‌‌without‌‌prejudice‌‌to‌‌compliance‌‌with‌‌the‌‌ requirements‌‌of‌‌Section‌‌31.‌ ‌ Meetings‌ ‌ When‌‌and‌‌where‌ ‌ Regular‌‌‌meetings‌‌shall‌‌be‌‌held‌‌monthly,‌‌‌unless‌‌‌the‌‌bylaws‌‌provide‌‌ otherwise.‌‌‌Special‌‌‌meetings‌‌may‌‌be‌‌held‌‌at‌‌any‌‌time‌‌‌upon‌‌the‌‌call‌‌ of‌‌the‌‌president‌‌‌or‌‌as‌‌provided‌‌in‌‌the‌‌bylaws.‌‌Meetings‌‌may‌‌be‌‌held‌‌ anywhere‌.‌‌ ‌ Lao‌‌v.‌‌Yao‌‌Bio‌‌Lim‌‌2 ‌ 017‌‌Leonen,‌‌J‌ ‌ WON‌ ‌the‌ ‌March‌ ‌15,‌ ‌2002‌ ‌stockholders'‌ ‌meeting‌ ‌was‌ ‌a‌ ‌special‌ meeting.‌ ‌ Notice‌ ‌ NO‌.‌ ‌It‌ ‌was‌ ‌a‌ ‌regular‌ ‌meeting‌.‌ ‌Hence,‌ ‌the‌ ‌requirement‌‌to‌‌state‌‌ Notice‌‌stating‌‌the‌‌‌date‌,‌‌‌time‌‌‌and‌‌‌place‌‌‌of‌‌the‌‌meeting‌‌must‌‌be‌‌sent‌‌ to‌ ‌every‌ ‌director‌ ‌or‌ ‌trustee‌ ‌at‌ ‌least‌ ‌two‌ ‌(2)‌ ‌days‌ ‌prior‌ ‌to‌ ‌the‌‌ scheduled‌‌meeting.‌ ‌ Attendance‌‌in‌‌meetings‌ ‌ the‌‌object‌‌and‌‌purpose‌‌in‌‌case‌‌of‌‌a‌‌special‌‌meeting‌‌‌as‌‌provided‌‌ for‌ ‌in‌ ‌Article‌ ‌VIII‌ ‌(5)‌ ‌of‌ ‌the‌ ‌PSI’s‌ ‌by-laws‌ ‌does‌ ‌not‌ ‌apply‌ ‌to‌ ‌the‌‌ Notice‌‌for‌‌the‌‌March‌‌15,‌‌2002‌‌annual‌‌stockholders'‌‌meeting.‌ ‌ ‌ Capital‌‌Affairs‌ ‌ Directors‌‌or‌‌trustees‌‌who‌‌cannot‌‌physically‌‌attend‌‌or‌‌vote‌‌at‌‌board‌‌ meetings‌ ‌can‌ ‌participate‌ ‌and‌ ‌vote‌ ‌through‌ ‌remote‌‌ communication‌.‌ ‌Directors‌ ‌or‌‌trustees‌‌‌cannot‌‌attend‌‌or‌‌vote‌‌by‌‌ Certificate‌‌of‌‌stock‌ ‌ proxy‌‌‌at‌‌board‌‌meetings.‌ ‌ A‌‌‌certificate‌‌of‌‌stock‌‌is‌‌a‌‌written‌‌instrument‌‌signed‌‌by‌‌the‌‌proper‌‌ officer‌ ‌of‌ ‌a‌ ‌corporation‌ ‌stating‌ ‌or‌ ‌acknowledging‌ ‌that‌ ‌the‌ ‌person‌‌ Who‌‌presides‌ ‌ named‌ ‌in‌ ‌the‌ ‌document‌ ‌is‌ ‌the‌ ‌owner‌ ‌of‌ ‌a‌ ‌designated‌ ‌number‌ ‌of‌‌ 1. The‌‌chairman‌‌or,‌‌in‌‌his‌‌absence,‌‌ ‌ shares‌‌of‌‌its‌‌stock.‌‌ ‌ 2. the‌‌president‌‌ ‌ It‌ ‌is‌ ‌prima‌ ‌facie‌ ‌evidence‌ ‌that‌‌the‌‌holder‌‌is‌‌a‌‌shareholder‌‌‌of‌‌a‌‌ shall‌ ‌preside‌‌at‌‌all‌‌meetings‌‌of‌‌the‌‌directors‌‌or‌‌trustees‌‌as‌‌well‌‌as‌‌ corporation.‌ ‌A‌ ‌certificate,‌ ‌however,‌ ‌is‌ ‌merely‌ ‌a‌ ‌tangible‌‌ of‌ ‌the‌ ‌stockholders‌ ‌or‌ ‌members,‌ ‌unless‌ ‌the‌ ‌bylaws‌ ‌provide‌‌ evidence‌‌of‌‌ownership‌‌of‌‌shares‌‌of‌‌stock.‌‌‌(‌Teng‌‌v.‌‌SEC‌‌‌2016‌)‌ ‌ otherwise.‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 61‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ No‌ ‌transfer,‌‌shall‌‌be‌‌valid,‌‌‌except‌‌as‌‌between‌‌the‌‌parties‌,‌‌until‌‌the‌ transfer‌‌is‌‌recorded‌‌‌in‌‌the‌‌books‌‌of‌‌the‌‌corporation‌‌showing‌‌the‌‌ ‌ 1. names‌‌of‌‌the‌‌parties‌‌to‌‌the‌‌transaction,‌‌ ‌ 2. the‌‌date‌‌of‌‌the‌‌transfer,‌‌ ‌ 3. the‌‌number‌‌of‌‌the‌‌certificate‌‌or‌‌certificates,‌‌and‌‌ ‌ 4. the‌‌number‌‌of‌‌shares‌‌transferred.‌ ‌ No‌‌shares‌‌of‌‌stock‌‌against‌‌which‌‌the‌‌corporation‌‌holds‌‌any‌‌unpaid‌‌ claim‌‌‌shall‌‌be‌‌transferable‌‌in‌‌the‌‌books‌‌of‌‌the‌‌corporation.‌ ‌ In‌ ‌Bitong‌ ‌v.‌ ‌CA,‌ ‌the‌ ‌Court‌ ‌outlined‌ ‌the‌ ‌procedure‌ ‌for‌‌the‌‌‌issuance‌‌of‌‌ NEW‌‌certificates‌‌of‌‌stock‌i‌ n‌‌the‌‌name‌‌of‌‌a‌‌transferee‌:‌ ‌ 1. First‌,‌ ‌the‌ ‌certificates‌ ‌must‌ ‌be‌ ‌signed‌ ‌by‌ ‌the‌ ‌president‌ ‌or‌‌ vice-president,‌ ‌countersigned‌ ‌by‌ ‌the‌ ‌secretary‌ ‌or‌ ‌assistant‌‌ secretary,‌‌and‌s‌ ealed‌‌with‌‌the‌‌seal‌‌of‌‌the‌‌corporation,‌‌ ‌ 2. Second‌,‌ ‌delivery‌ ‌of‌ ‌the‌‌certificate‌‌is‌‌an‌‌essential‌‌element‌‌of‌‌ its‌‌issuance,‌‌ ‌ 3. Insigne‌‌v.‌‌Abra‌‌Valley‌‌Colleges,‌‌Inc.‌‌‌2015‌ ‌ Is‌‌the‌‌presentation‌‌of‌‌a‌‌stock‌‌certificate‌‌a‌‌condition‌‌sine‌‌qua‌‌non‌‌for‌‌ proving‌‌one’s‌‌shareholding‌‌in‌‌a‌‌corporation?‌ ‌ 4. NO‌.‌ ‌To‌ ‌establish‌ ‌their‌ ‌stock‌ ‌ownership,‌ ‌the‌ ‌petitioners‌ ‌adduced‌‌ competent‌ ‌proof‌ ‌showing‌ ‌that‌ ‌the‌ ‌respondents‌ ‌had‌ ‌allowed‌ ‌the‌‌ petitioners‌ ‌to‌ ‌become‌ ‌members‌ ‌of‌ ‌the‌ ‌Board‌ ‌of‌ ‌Directors.‌‌ Considering‌ ‌that‌ ‌Section‌ ‌23‌ ‌of‌ ‌the‌ ‌Corporation‌ ‌Code‌‌requires‌‌every‌‌ director‌ ‌to‌ ‌be‌‌the‌‌holder‌‌of‌‌at‌‌least‌‌one‌‌share‌‌of‌‌capital‌‌stock‌‌of‌‌the‌‌ corporation,‌‌the‌‌respondents‌‌would‌‌not‌‌have‌‌then‌‌allowed‌‌any‌‌of‌‌the‌‌ petitioners‌‌to‌‌be‌‌elected‌‌to‌‌sit‌‌in‌‌the‌‌Board‌‌unless‌‌they‌‌believed‌‌that‌‌ the‌ ‌petitioners‌ ‌so‌ ‌elected‌ ‌were‌ ‌not‌ ‌disqualified‌ ‌for‌ ‌lack‌ ‌of‌ ‌stock‌‌ ownership.‌ ‌Conformably‌ ‌with‌ ‌the‌ ‌doctrine‌ ‌of‌ ‌estoppel‌,‌ ‌the‌‌ respondents‌ ‌could‌ ‌no‌ ‌longer‌ ‌deny‌ ‌the‌ ‌petitioners’‌ ‌status‌ ‌as‌‌ stockholders‌‌of‌‌Abra‌‌Valley.‌ ‌ Uncertified‌‌Shares‌ ‌ Uncertificated‌‌shares‌‌are‌‌shares‌‌that‌‌are‌‌tracked‌‌and‌‌represented‌‌in‌‌ the‌‌books‌‌of‌‌a‌‌company.‌‌These‌‌shares‌‌are‌‌recorded‌‌in‌‌the‌‌company‌‌ as‌‌a‌‌“‌book‌‌entry‌”‌‌and‌‌are‌‌not‌‌represented‌‌with‌‌a‌‌paper‌‌certificate.‌ ‌ The‌ ‌SEC‌ ‌may‌ ‌require‌ ‌corporations‌ ‌whose‌ ‌securities‌ ‌are‌ ‌traded‌ ‌in‌‌ trading‌ ‌markets‌ ‌and‌ ‌which‌ ‌can‌ ‌reasonably‌ ‌demonstrate‌ ‌their‌‌ capability‌ ‌to‌ ‌do‌ ‌so‌ ‌to‌ ‌issue‌ ‌their‌‌securities‌‌or‌‌shares‌‌of‌‌stocks‌‌in‌‌ uncertificated‌o ‌ r‌‌scripless‌‌form.‌ ‌ Third‌,‌ ‌the‌ ‌par‌ ‌value,‌ ‌as‌ ‌to‌ ‌par‌ ‌value‌ ‌shares,‌ ‌or‌ ‌the‌ ‌full‌ subscription‌‌as‌‌to‌‌no‌‌par‌‌value‌‌shares,‌‌must‌‌first‌‌be‌‌fully‌‌paid.‌‌ —‌‌Indivisibility‌‌of‌‌Subscription‌ ‌ Fourth‌,‌‌the‌‌‌original‌‌certificate‌‌must‌‌be‌‌surrendered‌‌where‌‌ the‌ ‌person‌ ‌requesting‌ ‌the‌ ‌issuance‌ ‌of‌ ‌a‌ ‌certificate‌ ‌is‌ ‌a‌‌ transferee‌‌from‌‌a‌‌stockholder.‌ ‌ The‌ ‌surrender‌ ‌of‌ ‌the‌ ‌original‌ ‌certificate‌ ‌of‌ ‌stock‌ ‌is‌ ‌necessary‌‌ before‌‌the‌‌issuance‌‌of‌‌a‌‌new‌‌one‌‌so‌‌that‌‌the‌‌old‌‌certificate‌‌may‌‌be‌‌ cancelled‌.‌‌(‌Teng‌‌v.‌‌SEC‌‌‌2016‌)‌ ‌ Stock‌‌and‌‌Transfer‌‌Book‌ ‌ a) Contents‌.‌ ‌—‌ ‌The‌ ‌stock‌‌and‌‌transfer‌‌book‌‌shall‌‌be‌‌kept‌‌in‌‌the‌‌ principal‌ ‌office‌ ‌of‌ ‌the‌ ‌corporation‌ ‌or‌‌in‌‌the‌‌office‌‌of‌‌its‌‌stock‌‌ transfer‌‌agent‌‌and‌‌shall‌‌be‌‌open‌‌for‌‌inspection‌‌by‌‌any‌‌director‌‌ or‌ ‌stockholder‌ ‌of‌ ‌the‌ ‌corporation‌ ‌at‌ ‌reasonable‌ ‌hours‌ ‌on‌‌ business‌‌days.‌ ‌ b) Who‌ ‌is‌ ‌authorized‌ ‌to‌ ‌make‌ ‌entries?‌ ‌Only‌ ‌the‌ ‌corporate‌‌ secretary‌.‌ ‌Entries‌ ‌made‌ ‌by‌ ‌the‌ ‌Chairman‌ ‌or‌ ‌President‌ ‌are‌‌ INVALID.‌‌(T ‌ orres,‌‌Jr.‌‌v.‌‌CA‌)‌ ‌ c) Stock‌ ‌transfer‌ ‌agent‌ ‌—‌ ‌one‌ ‌engaged‌ ‌principally‌ ‌in‌ ‌the‌‌ business‌ ‌of‌ ‌registering‌‌transfers‌‌of‌‌stocks‌‌in‌‌behalf‌‌of‌‌a‌‌stock‌‌ corporation‌‌shall‌‌be‌‌allowed‌‌to‌‌operate‌‌in‌‌the‌‌Philippines‌‌upon‌‌ ‌ Issuance‌ ‌ No‌‌certificate‌‌of‌‌stock‌‌shall‌‌be‌‌issued‌‌to‌‌a‌‌subscriber‌‌until‌‌the‌‌full‌‌ amount‌ ‌of‌‌the‌‌subscription‌‌together‌‌with‌‌interest‌‌and‌‌expenses,‌‌in‌ case‌‌of‌‌delinquent‌‌shares,‌‌if‌‌any‌‌is‌‌due,‌‌has‌‌been‌‌paid.‌ ‌ 1. securing‌‌a‌‌license‌‌from‌‌the‌‌SEC‌‌and‌‌ ‌ 2. the‌‌payment‌‌of‌‌a‌‌fee‌‌to‌‌be‌‌fixed‌‌by‌‌the‌‌SEC,‌‌which‌‌shall‌‌be‌‌ renewable‌‌annually.‌ ‌ Lost‌‌or‌‌destroyed‌‌certificates‌ ‌ a) The‌‌registered‌‌owner‌‌or‌‌his‌‌legal‌‌representative‌‌shall‌‌file‌‌with‌‌ the‌‌corporation‌‌an‌a ‌ ffidavit‌i‌ n‌‌triplicate;‌‌and‌ ‌ b) After‌‌verifying‌‌the‌‌affidavit‌‌and‌‌other‌‌information‌‌and‌‌evidence‌‌ with‌ ‌the‌ ‌books‌ ‌of‌ ‌the‌ ‌corporation,‌ ‌the‌ ‌corporation‌ ‌shall‌‌ publish‌ ‌a‌ ‌notice‌ ‌in‌‌a‌‌newspaper‌‌of‌‌general‌‌circulation‌‌in‌‌the‌‌ place‌ ‌where‌ ‌the‌ ‌corporation‌ ‌has‌ ‌its‌ ‌principal‌ ‌office,‌ ‌once‌ ‌a‌‌ week‌ ‌for‌ ‌three‌‌(3)‌‌consecutive‌‌weeks‌‌‌at‌‌the‌‌expense‌‌of‌‌the‌‌ registered‌‌owner‌‌of‌‌the‌‌certificate‌‌of‌‌stock‌‌which‌‌has‌‌been‌‌lost,‌‌ stolen‌‌or‌‌destroyed.‌‌ ‌ The‌‌notice‌‌shall‌‌state‌‌that‌‌after‌‌the‌‌expiration‌‌of‌‌‌one‌‌(1)‌‌year‌‌ from‌‌the‌‌date‌‌of‌‌the‌‌last‌‌publication‌,‌‌if‌‌no‌‌contest‌‌has‌‌been‌‌ presented‌ ‌to‌ ‌the‌ ‌corporation‌‌regarding‌‌the‌‌certificate‌‌of‌‌stock,‌‌ the‌ ‌right‌ ‌to‌ ‌make‌ ‌such‌ ‌contest‌ ‌shall‌ ‌be‌ ‌barred‌ ‌and‌ ‌the‌‌ corporation‌‌shall‌‌cancel‌‌the‌‌lost,‌‌destroyed‌‌or‌‌stolen‌‌certificate‌‌ of‌‌stock‌‌in‌‌its‌‌books.‌‌ ‌ A‌ ‌new‌ ‌certificate‌ ‌may‌ ‌be‌ ‌issued‌ ‌even‌ ‌before‌ ‌the‌‌ expiration‌ ‌of‌ ‌the‌ ‌one‌ ‌(1)‌ ‌year‌ ‌period‌ ‌if‌ ‌the‌ ‌registered‌‌ owner‌‌files‌‌a‌‌bond‌.‌ ‌ Watered‌‌Stocks‌ ‌ Are‌‌those‌‌issued‌‌not‌‌in‌‌exchange‌‌for‌‌its‌‌equivalent‌‌in‌‌cash,‌‌property,‌‌ share,‌‌stock‌‌dividends,‌‌or‌‌services.‌‌Such‌‌issuance‌‌is‌p ‌ rohibited‌.‌ ‌ Trust‌ ‌fund‌ ‌doctrine‌ ‌for‌ ‌liability‌ ‌for‌ ‌watered‌ ‌stocks‌ ‌—‌ ‌The‌‌ issuance‌‌of‌‌watered‌‌stocks‌‌constitutes‌‌fraud‌‌on‌‌creditors.‌‌ ‌ Payment‌‌of‌‌balance‌‌of‌‌subscription‌ ‌ Call‌ ‌by‌ ‌Board‌‌of‌‌Directors‌‌—‌The‌‌board‌‌of‌‌directors‌‌may,‌‌at‌‌any‌‌ time,‌ ‌declare‌ ‌due‌ ‌and‌ ‌payable‌ ‌to‌ ‌the‌ ‌corporation‌ ‌unpaid‌‌ subscriptions‌‌and‌‌may‌‌collect‌‌the‌‌same‌‌or‌‌such‌‌percentage‌‌thereof‌‌ with‌‌accrued‌‌interest.‌‌Payment‌‌shall‌‌be‌‌made‌‌on‌‌the‌‌date‌‌ ‌ 1. specified‌‌in‌‌the‌‌subscription‌‌contract‌‌‌or‌‌ ‌ 2. stated‌‌in‌‌the‌c‌ all‌‌made‌‌by‌‌the‌‌board.‌‌ ‌ Failure‌‌to‌‌pay‌‌on‌‌such‌‌date‌‌shall‌‌render‌‌the‌‌entire‌‌balance‌‌due‌‌and‌‌ payable‌a‌ nd‌‌shall‌‌make‌‌the‌‌stockholder‌l‌ iable‌‌for‌‌interest‌.‌‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 62‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ If‌‌no‌‌payment‌‌is‌‌made‌‌‌within‌‌thirty‌‌(30)‌‌days‌‌‌from‌‌the‌‌said‌‌date,‌‌ Alienation‌‌of‌‌Shares‌ ‌ all‌ ‌stocks‌ ‌covered‌ ‌by‌ ‌the‌ ‌subscription‌ ‌shall‌ ‌thereupon‌ ‌become‌‌ Allowable‌‌restrictions‌‌on‌‌the‌‌sale‌‌of‌‌shares‌‌—‌‌Deny‌‌recognition‌‌ delinquent‌a‌ nd‌‌shall‌‌be‌‌subject‌‌to‌‌sale‌.‌ ‌ of‌‌share‌‌transfers.‌‌No‌‌shares‌‌of‌‌stock‌‌against‌‌which‌‌the‌‌corporation‌‌ Delinquency‌‌Sale‌ ‌ holds‌ ‌any‌ ‌unpaid‌ ‌claim‌ ‌shall‌ ‌be‌ ‌transferable‌ ‌in‌ ‌the‌ ‌books‌ ‌of‌ ‌the‌‌ corporation.‌ ‌ Effect‌‌of‌‌delinquency‌ ‌ Sale‌ ‌of‌ ‌partially‌ ‌paid‌ ‌shares‌ ‌—‌ ‌The‌‌incomplete‌‌payment‌‌of‌‌the‌ Delinquency‌ ‌suspends‌ ‌the‌ ‌political‌ ‌and‌ ‌economic‌ ‌rights‌ ‌of‌ ‌the‌‌ subscription‌ ‌does‌ ‌not‌ ‌preclude‌ ‌the‌ ‌subscriber‌‌from‌‌alienating‌‌his‌‌ subscriber,‌e‌ xcept‌t‌ he‌‌right‌‌to‌‌receive‌‌dividends.‌‌ ‌ shares‌‌of‌‌stock.‌‌ ‌ Call‌ ‌by‌ ‌resolution‌‌of‌‌the‌‌board‌‌of‌‌directors‌‌—‌‌order‌‌the‌‌sale‌‌of‌‌ Requisites‌‌of‌‌a‌‌valid‌‌transfer‌‌ ‌ delinquent‌‌stock‌‌and‌‌shall‌‌specifically‌‌state‌‌ ‌ a) there‌‌must‌‌be‌d ‌ elivery‌o ‌ f‌‌the‌‌stock‌‌certificate;‌‌ ‌ 1. the‌ ‌amount‌ ‌due‌ ‌on‌ ‌each‌ ‌subscription‌ ‌plus‌ ‌all‌ ‌accrued‌‌ interest,‌‌and‌‌ ‌ b) the‌ ‌certificate‌ ‌must‌ ‌be‌ ‌endorsed‌ ‌by‌ ‌the‌ ‌owner‌ ‌or‌ ‌his‌‌ attorney-in-fact‌‌or‌‌other‌‌persons‌‌legally‌‌authorized‌‌to‌‌make‌‌the‌‌ 2. the‌ ‌date,‌ ‌time‌ ‌and‌ ‌place‌‌of‌‌the‌‌sale‌‌‌which‌‌shall‌‌not‌‌be‌‌ transfer;‌‌and‌‌ ‌ less‌ ‌than‌ ‌thirty‌ ‌(30)‌ ‌days‌ ‌nor‌ ‌more‌ ‌than‌ ‌sixty‌ ‌(60)‌‌days‌‌ from‌‌the‌‌date‌‌the‌‌stocks‌‌become‌‌delinquent.‌ ‌ c) to‌‌be‌‌valid‌‌against‌‌third‌‌parties,‌‌the‌‌transfer‌‌must‌‌be‌‌‌recorded‌‌ in‌‌the‌‌books‌‌of‌‌the‌‌corporation.‌ ‌ Notice‌‌of‌‌sale‌‌‌—‌‌the‌‌same‌‌shall‌‌be‌‌‌published‌‌‌once‌‌a‌‌week‌‌for‌‌two‌‌ (2)‌‌consecutive‌‌weeks.‌ ‌ The‌ ‌delivery‌ ‌contemplated‌ ‌in‌ ‌Section‌ ‌62‌ ‌pertains‌ ‌to‌ ‌the‌‌ delivery‌‌of‌‌the‌‌certificate‌‌of‌‌shares‌‌‌by‌‌the‌‌transferor‌‌to‌‌the‌‌ Auction‌‌sale‌ ‌ transferee‌.‌‌(‌Teng‌‌v.‌‌SEC‌‌‌2016‌)‌ ‌ A‌‌delinquent‌‌stock‌‌shall‌‌be‌‌sold‌‌at‌‌a‌‌public‌‌auction‌‌to‌‌such‌‌bidder‌‌ F‌‌&‌‌S‌‌Velasco‌‌Co.,‌‌Inc.‌‌v.‌‌Madrid‌‌‌2015‌ ‌ who‌‌shall‌‌offer‌‌to‌‌pay‌‌ ‌ 1. the‌‌full‌‌amount‌‌of‌‌the‌‌balance‌‌on‌‌the‌‌subscription‌‌ ‌ 2. together‌‌with‌‌accrued‌‌interest,‌‌ ‌ 3. costs‌‌of‌‌advertisement‌‌and‌‌ ‌ 4. expenses‌ ‌of‌ ‌sale,‌ ‌for‌ ‌the‌‌smallest‌‌number‌‌of‌‌shares‌‌or‌‌ fraction‌‌of‌‌a‌‌share.‌‌ ‌ The‌ ‌remaining‌ ‌shares‌,‌ ‌if‌ ‌any,‌ ‌shall‌ ‌be‌ ‌credited‌ ‌in‌ ‌favor‌ ‌of‌ ‌the‌‌ delinquent‌ ‌stockholder‌ ‌who‌ ‌shall‌ ‌likewise‌ ‌be‌ ‌entitled‌ ‌to‌ ‌the‌‌ issuance‌‌of‌‌a‌‌certificate‌‌of‌‌stock‌‌covering‌‌such‌‌shares.‌ ‌ What‌‌happens‌‌when‌‌there’s‌‌no‌‌bidder‌‌who‌‌can‌‌fully‌‌pay?‌ ‌ The‌‌‌corporation‌‌may‌‌bid‌‌for‌‌the‌‌same‌,‌‌and‌‌the‌‌total‌‌amount‌‌due‌‌ shall‌‌be‌‌credited‌‌as‌‌fully‌‌paid‌‌in‌‌the‌‌books‌‌of‌‌the‌‌corporation.‌‌Title‌‌ shall‌‌be‌‌vested‌‌in‌‌the‌‌corporation‌‌as‌t‌ reasury‌‌shares‌.‌ ‌ WON‌ ‌the‌ ‌November‌ ‌18,‌ ‌2009‌‌Meeting‌‌organized‌‌by‌‌Madrid‌‌is‌‌legal‌‌ and‌‌valid;‌‌ ‌ Guy‌‌v.‌‌Guy‌‌‌2016‌ ‌ Cheu‌‌was‌‌not‌‌a‌‌stockholder‌‌of‌‌record‌‌of‌‌GCI‌‌and‌‌was‌‌therefore‌‌not‌‌ entitled‌‌to‌‌any‌‌notice‌‌of‌‌meeting.‌ ‌ The‌ ‌corporation‌ ‌shall‌ ‌not‌ ‌consider‌ ‌any‌ ‌transfer‌ ‌effective‌ ‌until‌ ‌the‌ indorsed‌ ‌certificate‌ ‌is‌ ‌submitted‌ ‌for‌ ‌cancellation‌ ‌and‌ ‌a‌ ‌new‌ ‌one‌‌ issued‌‌in‌‌the‌‌name‌‌of‌‌the‌‌transferee.‌ Corporate‌‌Books‌‌and‌‌Records‌ ‌ Effect‌‌of‌‌refusal‌‌to‌‌inspect‌ ‌ Any‌‌officer‌‌or‌‌agent‌‌of‌‌the‌‌corporation‌‌who‌‌shall‌‌refuse‌‌to‌‌allow‌‌the‌‌ inspection‌ ‌and/or‌ ‌reproduction‌ ‌of‌ ‌records‌ ‌shall‌ ‌be‌ ‌liable‌ ‌for‌‌ damages‌,‌‌and‌‌in‌‌addition,‌‌shall‌‌be‌‌guilty‌‌of‌‌an‌‌offense‌‌which‌‌shall‌‌ be‌‌punishable‌‌under‌‌Section‌‌161‌‌‌of‌‌this‌‌Code.‌ ‌ If‌ ‌such‌‌refusal‌‌is‌‌made‌‌‌pursuant‌‌to‌‌a‌‌resolution‌‌or‌‌order‌‌of‌‌the‌‌ board‌ ‌of‌ ‌directors‌‌or‌‌trustees,‌‌the‌‌liability‌‌shall‌‌be‌‌imposed‌‌‌upon‌‌ the‌‌directors‌‌or‌‌trustees‌‌who‌‌voted‌‌‌for‌‌such‌‌refusal.‌ ‌ Dissolution‌‌and‌‌Liquidation‌ ‌ Voluntary‌‌Dissolution‌ ‌ ‌ All‌ ‌transfers‌ ‌of‌ ‌shares‌ ‌of‌ ‌stock‌ ‌must‌ ‌be‌ ‌registered‌ ‌in‌ ‌the‌‌ corporate‌ ‌books‌ ‌in‌ ‌order‌ ‌to‌ ‌be‌ ‌binding‌ ‌on‌ ‌the‌ ‌corporation.‌‌ Specifically,‌ ‌this‌ ‌refers‌ ‌to‌ ‌the‌ ‌Stock‌ ‌and‌ ‌Transfer‌ ‌Book‌,‌ ‌which‌ ‌is‌‌ described‌‌in‌‌Section‌‌74.‌‌ ‌ Jurisprudence‌ ‌in‌ ‌Lao‌ ‌v.‌ ‌Lao‌ ‌is‌ ‌instructive‌ ‌on‌ ‌this‌ ‌matter,‌ ‌that‌ ‌the‌‌ mere‌ ‌inclusion‌ ‌as‌ ‌shareholder‌ ‌in‌ ‌the‌ ‌General‌ ‌Information‌‌ Sheet‌ ‌is‌ ‌insufficient‌ ‌proof‌ ‌that‌ ‌one‌ ‌is‌ ‌a‌ ‌shareholder‌ ‌of‌ ‌the‌‌ company.‌ ‌ With‌‌Creditors‌ ‌ What‌‌to‌‌file‌ ‌ Request‌‌‌for‌‌ dissolution‌ ‌ Verified‌p ‌ etition‌ ‌ Vote‌‌ required‌ ‌ Majority‌‌vote‌‌of‌‌the‌‌ board‌‌+‌‌by‌‌a‌‌resolution‌ adopted‌‌by‌‌at‌‌least‌‌a‌‌ majority‌‌of‌‌the‌‌OCS‌ ‌ Petition‌‌signed‌‌by‌‌majority‌‌ vote‌‌of‌‌the‌‌board‌‌+‌‌petition‌‌ is‌‌resolved‌‌upon‌‌by‌‌ affirmative‌‌vote‌‌of‌‌at‌‌least‌‌ 2/3‌‌of‌‌the‌‌OCS‌ ‌ NO‌.‌ ‌Madrid's‌ ‌inheritance‌ ‌of‌ ‌Angela's‌ ‌shares‌ ‌of‌‌stock‌‌does‌‌not‌‌ipso‌‌ facto‌ ‌afford‌ ‌him‌ ‌the‌ ‌rights‌ ‌accorded‌ ‌to‌ ‌such‌ ‌majority‌‌ownership‌‌of‌‌ FSVCI's‌ ‌shares‌ ‌of‌ ‌stock.‌ ‌Section‌ ‌63‌ ‌of‌ ‌the‌ ‌Corporation‌ ‌Code‌‌ governs‌‌the‌‌rule‌‌on‌‌transfers‌‌of‌‌shares‌‌of‌‌stock.‌ ‌ Without‌‌Creditors‌ ‌ At‌‌least‌2 ‌ 0‌‌days‌‌prior‌‌ to‌‌the‌‌meeting;‌‌ Notice,‌‌ published‌‌once‌‌in‌‌a‌‌ publication‌‌ newspaper‌‌in‌‌the‌‌ and‌‌posting‌ corporation’s‌‌principal‌‌ office‌ ‌ 1. 2. Notice‌t‌ o‌‌the‌‌ stockholders;‌‌ ‌ the‌‌order‌‌of‌‌the‌‌SEC‌‌ reciting‌‌the‌‌purpose‌‌of‌‌ the‌‌petition‌‌and‌‌fixing‌‌ the‌‌deadline‌‌for‌‌filing‌‌ objections‌‌shall‌‌be‌‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 63‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ 3. 1. 2. Documents‌‌ to‌‌submit‌‌ 3. to‌‌SEC‌ ‌ published‌‌once‌‌a‌‌ week‌‌for‌‌3‌‌ consecutive‌‌weeks;‌‌ ‌ order‌‌to‌‌be‌p ‌ osted‌f‌ or‌‌ 3‌‌consecutive‌‌weeks‌‌ in‌‌3‌‌public‌‌places‌ ‌ copy‌‌of‌‌the‌r‌ esolution‌a‌ uthorizing‌‌dissolution,‌‌ certified‌b ‌ y‌‌a‌‌majority‌‌of‌‌the‌‌board‌‌of‌‌directors‌‌ or‌‌trustees‌‌and‌c‌ ountersigned‌b ‌ y‌‌the‌‌secretary‌‌ of‌‌the‌‌corporation;‌ ‌ proof‌o ‌ f‌‌ publication;‌‌and‌ ‌ favorable‌‌ recommendation‌‌ from‌‌the‌‌ appropriate‌‌ regulatory‌‌agency,‌‌ when‌‌necessary‌ ‌ What‌‌is‌‌ issued‌ ‌ ✘‌ ‌ In‌‌writing‌‌and‌‌verified‌‌ ‌ In‌‌the‌‌form‌‌a‌‌verified‌‌ motion‌ ‌ Vote‌‌ required‌ ‌ Majority‌‌vote‌‌of‌‌the‌‌ board‌‌+‌‌by‌‌a‌‌resolution‌ adopted‌‌by‌‌at‌‌least‌‌a‌‌ majority‌‌of‌‌the‌‌OCS‌ ‌ Petition‌‌signed‌‌by‌‌ majority‌‌vote‌‌of‌‌the‌‌ board‌‌+‌‌petition‌‌is‌‌ resolved‌‌upon‌‌by‌‌ affirmative‌‌vote‌‌of‌‌at‌‌ least‌‌‌2/3‌‌of‌‌the‌‌OCS‌ ‌ Period‌‌to‌‌ withdraw‌ ‌ 2.‌‌list‌‌of‌‌all‌‌its‌c‌ reditors‌.‌ ‌ Involuntary‌‌Dissolution‌ ‌ Hearing‌‌on‌‌the‌‌petition‌‌and‌‌ trial‌‌on‌‌any‌‌issued‌‌raised‌‌ in‌‌the‌‌objections‌‌filed,‌‌if‌‌ any‌ ‌ Certificate‌‌of‌‌dissolution‌ ‌ By‌‌shortening‌‌of‌‌corporate‌‌term‌ ‌ 1. 2. Upon‌ ‌the‌ ‌expiration‌ ‌of‌ ‌the‌ ‌shortened‌ ‌term,‌ ‌as‌ ‌stated‌ ‌in‌ ‌the‌‌ approved‌ ‌amended‌ ‌AOI,‌ ‌the‌ ‌corporation‌ ‌shall‌ ‌be‌ ‌deemed‌‌ dissolved‌‌‌without‌‌any‌‌further‌‌proceedings;‌ ‌ In‌ ‌the‌ ‌case‌ ‌of‌ ‌expiration‌‌‌of‌‌corporate‌‌term,‌‌dissolution‌‌shall‌‌ automatically‌‌take‌‌effect‌‌on‌‌the‌‌day‌‌following‌‌the‌‌last‌‌day‌‌of‌‌ the‌‌corporate‌‌term‌‌stated‌‌in‌‌the‌‌AOI,‌‌‌without‌‌the‌‌need‌‌for‌‌the‌‌ issuance‌‌by‌‌the‌‌SEC‌‌of‌‌a‌‌certificate‌‌of‌‌dissolution.‌ ‌ Withdrawal‌ ‌ ‌ of‌‌Request‌ ‌ filed‌‌prior‌‌to‌‌ no‌‌later‌‌than‌f‌ ifteen‌‌(15)‌‌ publication‌‌of‌‌the‌‌ days‌‌‌from‌‌receipt‌‌by‌‌the‌‌ order‌s‌ etting‌t‌ he‌‌ SEC‌‌of‌‌the‌‌request‌‌for‌‌ deadline‌‌for‌‌filing‌‌ dissolution.‌ ‌ objections‌‌to‌‌the‌‌petition‌ ‌ A‌‌corporation‌‌may‌‌be‌‌dissolved‌‌by‌‌the‌‌SEC‌‌‌motu‌‌proprio‌‌or‌‌upon‌‌ filing‌ ‌of‌ ‌a‌ ‌verified‌ ‌complaint‌ ‌by‌ ‌any‌ ‌interested‌ ‌party.‌ ‌The‌‌ following‌‌may‌‌be‌g ‌ rounds‌‌for‌‌dissolution‌‌‌of‌‌the‌‌corporation:‌ ‌ ‌ Hearing‌ ‌ Form‌ ‌ of‌‌Petition‌ ‌ 3) Repeatedly‌ ‌and‌ ‌knowingly‌ ‌tolerated‌ ‌the‌‌ commission‌ ‌of‌ ‌graft‌ ‌and‌ ‌corrupt‌ ‌practices‌ ‌or‌ ‌other‌‌ fraudulent‌ ‌or‌ ‌illegal‌ ‌acts‌ ‌by‌ ‌its‌ ‌directors,‌ ‌trustees,‌‌ officers,‌‌or‌‌employees.‌ ‌ Methods‌‌of‌‌Liquidation‌ ‌ By‌‌the‌‌corporation‌‌itself‌ ‌ Every‌‌corporation‌‌shall‌‌nevertheless‌‌remain‌‌as‌‌a‌‌body‌‌corporate‌‌for‌‌ three‌ ‌(3)‌ ‌years‌ ‌after‌ ‌the‌ ‌effective‌ ‌date‌ ‌of‌ ‌dissolution,‌ ‌for‌ ‌the‌‌ purpose‌‌of‌‌ ‌ 1. prosecuting‌ ‌and‌ ‌defending‌ ‌suits‌ ‌by‌ ‌or‌ ‌against‌ ‌it‌ ‌and‌‌ enabling‌‌it‌‌to‌‌settle‌‌and‌‌close‌‌its‌‌affairs,‌ ‌ 2. dispose‌‌of‌‌and‌‌convey‌‌its‌‌property,‌‌and‌‌ ‌ 3. distribute‌‌its‌‌assets,‌‌ ‌ 4. BUT‌ ‌NOT‌ ‌for‌ ‌the‌ ‌purpose‌ ‌of‌ ‌continuing‌ ‌the‌ ‌business‌‌for‌‌ which‌‌it‌‌was‌‌established.‌ ‌ a) Non-use‌‌of‌‌corporate‌‌charter‌‌‌as‌‌provided‌‌under‌‌Section‌‌ Conveyance‌‌to‌‌a‌‌trustee‌‌within‌‌a‌‌three-year‌‌period‌ ‌ 21;‌ ‌ The‌ ‌corporation‌ ‌is‌ ‌authorized‌ ‌and‌‌empowered‌‌to‌‌convey‌‌all‌‌of‌‌its‌‌ property‌ ‌to‌ ‌trustees‌ ‌for‌ ‌the‌ ‌benefit‌ ‌of‌ ‌stockholders,‌ ‌members,‌‌ b) Continuous‌ ‌inoperation‌ ‌of‌ ‌a‌ ‌corporation‌ ‌as‌ ‌provided‌‌ creditors‌‌and‌‌other‌‌persons‌‌in‌‌interest.‌‌After‌‌any‌‌such‌‌conveyance,‌‌ under‌‌Section‌‌21;‌ ‌ all‌‌interest‌‌which‌‌the‌‌corporation‌‌had‌‌in‌‌the‌‌property‌‌‌terminates‌,‌‌ c) Upon‌ ‌receipt‌ ‌of‌ ‌a‌ ‌lawful‌ ‌court‌ ‌order‌ ‌dissolving‌ ‌the‌‌ the‌‌‌legal‌‌interest‌‌‌vests‌‌in‌‌the‌‌trustees,‌‌and‌‌the‌‌‌beneficial‌‌interest‌‌ corporation;‌ ‌ in‌ ‌the‌ ‌stockholders,‌ ‌members,‌ ‌creditors‌ ‌or‌ ‌other‌‌ persons-in-interest.‌ ‌ d) Upon‌ ‌finding‌ ‌by‌ ‌final‌ ‌judgment‌ ‌that‌ ‌the‌ ‌corporation‌‌ procured‌‌its‌‌incorporation‌‌through‌f‌ raud‌;‌ ‌ e) Upon‌‌finding‌‌by‌‌final‌‌judgment‌‌that‌‌the‌‌corporation:‌ ‌ 1) Was‌ ‌created‌ ‌for‌ ‌the‌ ‌purpose‌ ‌of‌ ‌committing,‌‌ concealing‌ ‌or‌ ‌aiding‌ ‌the‌ ‌commission‌ ‌of‌ ‌securities‌‌ violations,‌‌smuggling,‌‌tax‌‌evasion,‌‌money‌‌laundering,‌‌ or‌‌graft‌‌and‌‌corrupt‌‌practices;‌ ‌ 2) Committed‌ ‌or‌ ‌aided‌ ‌in‌ ‌the‌ ‌commission‌ ‌of‌‌ securities‌ ‌violations,‌ ‌smuggling,‌ ‌tax‌ ‌evasion,‌ ‌money‌‌ laundering,‌ ‌or‌ ‌graft‌ ‌and‌ ‌corrupt‌ ‌practices,‌ ‌and‌ ‌its‌‌ stockholders‌‌knew;‌‌‌and‌ ‌ By‌‌management‌‌committee‌‌or‌‌rehabilitation‌‌receiver‌ ‌ Distribution‌‌of‌‌Assets‌ ‌ Upon‌‌the‌‌winding‌‌up‌‌of‌‌corporate‌‌affairs,‌‌any‌‌asset‌‌distributable‌‌to‌‌ any‌‌creditor‌‌or‌‌stockholder‌‌or‌‌member‌‌who‌‌is‌‌‌unknown‌‌‌or‌‌‌cannot‌‌ be‌ ‌found‌ ‌shall‌ ‌be‌ ‌escheated‌ i‌ n‌ ‌favor‌ ‌of‌ ‌the‌ ‌national‌‌ government.‌ ‌ Winding‌‌up‌‌the‌‌affairs‌‌‌of‌‌the‌‌corporation‌‌means‌‌the‌‌collection‌‌of‌‌ all‌ ‌assets,‌ ‌the‌ ‌payment‌ ‌of‌ ‌all‌ ‌its‌ ‌creditors,‌‌and‌‌the‌‌distribution‌‌of‌‌ the‌ ‌remaining‌ ‌assets,‌ ‌if‌ ‌any‌ ‌among‌ ‌the‌ ‌stockholders‌ ‌thereof‌ ‌in‌‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 64‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ accordance‌ ‌with‌ ‌their‌ ‌contracts,‌ ‌or‌‌if‌‌there‌‌be‌‌no‌‌special‌‌contract,‌‌ on‌‌the‌‌basis‌‌of‌‌their‌‌respective‌‌interests.‌‌(R ‌ ich‌‌v.‌‌Paloma‌‌III‌‌2 ‌ 018‌)‌ ‌ Intra-corporate‌‌disputes‌‌remain‌‌ ‌ even‌‌when‌‌the‌‌corporation‌‌is‌‌dissolved.‌ ‌ A‌‌corporation’s‌‌‌board‌‌of‌‌directors‌‌is‌‌not‌‌rendered‌‌functus‌‌officio‌‌by‌‌ its‌‌dissolution.‌‌Thus,‌‌a‌‌cause‌‌of‌‌action‌‌involving‌‌an‌‌intra-corporate‌‌ controversy‌‌remains‌‌and‌‌must‌‌be‌‌filed‌‌as‌‌an‌‌intra-corporate‌‌dispute‌‌ despite‌‌the‌‌subsequent‌‌dissolution‌‌of‌‌the‌‌corporation.‌‌(‌Aguirre‌‌II‌‌v.‌‌ FQB+7,‌‌Inc.‌‌2 ‌ 013‌)‌ ‌ Liquidation‌‌AFTER‌‌three‌‌years‌ ‌ 1) If‌ ‌full‌ ‌liquidation‌ ‌can‌ ‌only‌ ‌be‌ ‌effected‌ ‌after‌ ‌the‌ ‌three-year‌‌ period‌ ‌and‌ ‌there‌‌is‌‌no‌‌trustee,‌‌the‌‌directors‌‌may‌‌be‌‌permitted‌‌ to‌ ‌complete‌ ‌the‌ ‌liquidation‌ ‌by‌‌continuing‌‌as‌‌trustees‌‌‌by‌‌legal‌‌ implication‌.‌ ‌ 2) The‌ ‌trustee‌‌of‌‌a‌‌corporation‌‌may‌‌continue‌‌to‌‌prosecute‌‌a‌‌case‌‌ commenced‌ ‌by‌ ‌the‌ ‌corporation‌ ‌until‌ ‌rendition‌ ‌of‌ ‌the‌ ‌final‌‌ judgment,‌ ‌even‌ ‌if‌ ‌such‌ ‌judgment‌ ‌is‌ ‌rendered‌ ‌beyond‌ ‌the‌‌ three-year‌‌period.‌‌ ‌ However,‌ ‌an‌ ‌already‌ ‌defunct‌ ‌corporation‌ ‌is‌ ‌not‌ ‌allowed‌ ‌to‌‌ initiate‌ ‌a‌ ‌suit‌ ‌after‌ ‌the‌ ‌lapse‌ ‌of‌ ‌the‌ ‌said‌ ‌three-year‌ ‌period.‌‌ (‌Alabang‌ ‌Development‌ ‌Corp.‌ ‌v.‌ ‌Alabang‌ ‌Hills‌ ‌Village‌‌ Association‌‌‌2014‌)‌ ‌ 3) There‌ ‌is‌ ‌a‌ ‌view‌ ‌to‌ ‌the‌ ‌effect‌ ‌that‌ ‌the‌ ‌trustee‌ ‌or‌ ‌receiver‌ ‌CAN‌‌ maintain‌‌an‌‌action‌‌for‌‌the‌‌corporation‌‌even‌‌after‌‌the‌‌three-year‌‌ period.‌‌(‌Reyes‌‌v.‌‌Bancom‌‌Development‌‌‌2018‌)‌ ‌ ‌ Other‌‌Corporations‌ ‌ Close‌‌Corporations‌ ‌ Characteristics‌ ‌ A‌‌close‌‌corporation‌i‌ s‌‌one‌‌whose‌‌AOI‌‌provide‌‌that:‌ ‌ 2) All‌‌of‌‌the‌‌issued‌‌stock‌‌of‌‌all‌‌classes‌‌shall‌‌be‌‌subject‌‌to‌‌one‌‌or‌‌ Issuance‌‌or‌‌Transfer‌‌of‌‌Stock‌‌in‌‌Breach‌‌of‌‌ more‌‌specified‌r‌ estrictions‌‌on‌‌transfer‌;‌‌and‌ ‌ Qualifying‌C ‌ onditions‌ ‌ 3) The‌ ‌corporation‌ ‌shall‌ ‌not‌‌list‌‌in‌‌any‌‌stock‌‌exchange‌‌or‌‌make‌‌ any‌‌public‌‌offering‌‌of‌‌any‌‌of‌‌its‌‌stock‌‌of‌‌any‌‌class.‌‌ ‌ A‌‌corporation‌‌shall‌‌be‌‌deemed‌‌‌NOT‌‌‌a‌‌close‌‌corporation‌‌when‌‌‌at‌‌least‌‌ two-thirds‌ ‌(2/3)‌ ‌of‌ ‌its‌ ‌voting‌ ‌stock‌ ‌or‌ ‌voting‌ ‌rights‌ ‌is‌ ‌owned‌ ‌or‌‌ controlled‌ ‌by‌ ‌another‌ ‌corporation‌ ‌which‌ ‌is‌ ‌not‌ ‌a‌ ‌close‌ ‌corporation.‌‌ (‌San‌‌Juan‌‌Structural‌‌and‌‌Steel‌‌Fabricators,‌‌Inc.‌‌v.‌‌CA‌)‌ ‌ GR‌:‌ EXC‌:‌ i) a‌‌stock‌‌of‌‌a‌‌close‌‌corporation‌‌is‌‌issued‌‌or‌‌transferred‌‌ to‌ ‌any‌ ‌person‌ ‌who‌ ‌is‌ ‌not‌ ‌eligible‌ ‌to‌ ‌be‌ ‌a‌ ‌holder‌‌ thereof‌ ‌ ii) the‌ ‌AOI‌ ‌of‌ ‌a‌ ‌close‌ ‌corporation‌ ‌states‌ ‌the‌ ‌number‌ ‌of‌‌ persons,‌‌not‌‌exceeding‌‌twenty‌‌(20),‌‌who‌‌are‌‌entitled‌‌to‌‌ be‌‌stockholders‌‌of‌‌record‌ ‌ iii) a‌ ‌restriction‌ ‌on‌ ‌transfer‌ ‌of‌ ‌the‌ ‌corporation’s‌ ‌stock‌‌ and‌ ‌the‌ ‌transferee‌ ‌acquires‌ ‌the‌ ‌stock‌ ‌in‌ ‌violation‌ ‌of‌‌ such‌‌restriction.‌ ‌ ANY‌‌corporation‌‌may‌‌be‌‌incorporated‌‌as‌‌a‌‌close‌‌corporation;‌ ‌ ‌ 1) mining‌‌or‌‌oil‌‌companies,‌‌ ‌ 2) stock‌‌exchanges,‌‌ ‌ When‌‌board‌‌meeting‌‌is‌‌unnecessary‌‌or‌‌improperly‌‌held‌ ‌ 3) banks,‌‌ ‌ 4) insurance‌‌companies,‌‌ ‌ 5) public‌‌utilities,‌‌ ‌ 6) educational‌‌institutions‌‌and‌‌ ‌ 7) corporations‌‌declared‌‌to‌‌be‌‌vested‌‌with‌‌‌public‌‌interest‌.‌ ‌ Restrictions‌‌on‌‌Transfer‌‌of‌‌Shares‌ ‌ MUST‌ ‌APPEAR‌ ‌in‌ ‌the‌ ‌AOI,‌ ‌in‌ ‌the‌ ‌bylaws,‌ ‌as‌ ‌well‌ ‌as‌ ‌in‌ ‌the‌‌ certificate‌ ‌of‌ ‌stock;‌‌‌otherwise‌,‌‌the‌‌same‌‌shall‌‌‌not‌‌be‌‌binding‌‌on‌‌ any‌p ‌ urchaser‌‌in‌‌good‌‌faith‌.‌‌ ‌ Said‌ ‌restrictions‌ ‌shall‌ ‌not‌ ‌be‌ ‌more‌ ‌onerous‌ ‌than‌ ‌granting‌ ‌the‌‌ existing‌ ‌stockholders‌ ‌or‌ ‌the‌ ‌corporation‌ ‌the‌ ‌option‌ ‌to‌ ‌purchase‌‌ the‌‌shares.‌‌ ‌ 1. The‌ ‌law‌ ‌only‌ ‌permits‌ ‌restrictions‌ ‌based‌ ‌on‌ ‌qualifications‌‌ and‌‌conditions‌,‌‌and‌‌NOT‌‌on‌‌the‌‌personality‌‌of‌‌shareholders.‌ ‌ 2. The‌ ‌most‌ ‌the‌ ‌restrictions‌ ‌may‌ ‌do‌ ‌is‌ ‌to‌ ‌give‌ ‌the‌ ‌remaining‌‌ stockholders‌ ‌the‌ ‌right‌ ‌of‌ ‌first‌ ‌refusal‌—that‌ ‌is,‌ ‌to‌‌match‌‌the‌‌ offer‌‌of‌‌a‌‌third‌‌party‌‌meeting‌‌the‌‌prescribed‌‌qualifications.‌ ‌ 1) All‌‌of‌‌the‌‌corporation’s‌‌issued‌‌stock‌‌of‌‌all‌‌classes,‌‌exclusive‌‌of‌‌ treasury‌ ‌shares,‌ ‌shall‌ ‌be‌ ‌held‌ ‌of‌ ‌record‌ ‌by‌ ‌not‌ ‌more‌ ‌than‌ ‌a‌‌ specified‌‌number‌‌of‌‌persons,‌‌not‌‌exceeding‌‌twenty‌‌(20)‌;‌ ‌ a) There‌ ‌is‌ ‌conclusive‌ ‌presumption‌ ‌of‌ ‌notice‌ ‌of‌ ‌fact‌ ‌if‌ ‌the‌‌ certificate‌‌of‌ ‌stock‌‌conspicuously‌‌shows‌ ‌ a) Before‌ ‌or‌ ‌after‌ ‌such‌ ‌action‌ ‌is‌ ‌taken,‌ ‌a‌ ‌written‌ ‌consent‌‌ thereto‌‌is‌s‌ igned‌‌by‌‌ALL‌‌the‌‌directors;‌‌or‌ ‌ b) ALL‌‌the‌‌stockholders‌‌have‌‌actual‌‌or‌‌implied‌‌knowledge‌‌ of‌ ‌the‌‌action‌‌and‌‌make‌‌‌no‌‌prompt‌‌objection‌‌in‌‌writing‌;‌‌ or‌ ‌ c) The‌‌directors‌‌are‌‌‌accustomed‌‌‌to‌‌take‌‌informal‌‌action‌‌with‌‌ the‌ ‌express‌ ‌or‌ ‌implied‌ ‌acquiescence‌ ‌of‌ ‌all‌ ‌the‌‌ stockholders;‌‌or‌ ‌ d) All‌‌the‌‌directors‌‌have‌‌express‌‌or‌‌implied‌‌knowledge‌‌of‌‌the‌‌ action‌ ‌in‌ ‌question‌ ‌and‌ ‌none‌ ‌of‌ ‌them‌ ‌makes‌ ‌a‌ ‌prompt‌‌ objection‌‌in‌‌writing.‌ ‌ An‌ ‌action‌ ‌within‌ ‌the‌ ‌corporate‌ ‌powers‌ ‌taken‌ ‌at‌ ‌a‌ ‌meeting‌ ‌held‌‌ without‌‌proper‌‌call‌‌or‌‌notice,‌‌is‌‌‌deemed‌‌ratified‌‌by‌‌a‌‌director‌‌who‌‌ failed‌‌to‌‌attend,‌‌‌unless‌‌‌after‌‌having‌‌knowledge‌‌thereof,‌‌the‌‌director‌‌ promptly‌ ‌files‌ ‌his‌ ‌written‌ ‌objection‌ ‌with‌ ‌the‌ ‌secretary‌ ‌of‌ ‌the‌‌ corporation.‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 65‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ Preemptive‌‌Right‌ ‌ 1. Extends‌‌to‌‌ALL‌‌stock‌‌to‌‌be‌‌issued,‌‌including‌‌reissuance‌‌of‌‌‌treasury‌‌ shares‌,‌ ‌whether‌ ‌for‌ ‌money,‌ ‌property‌ ‌or‌ ‌personal‌ ‌services,‌ ‌or‌ ‌in‌‌ payment‌‌of‌‌corporate‌‌debts,‌u ‌ nless‌t‌ he‌‌AOI‌‌provides‌‌otherwise.‌ ‌ Amendment‌‌of‌‌AOI‌ ‌ 2. Shall‌ ‌require‌ ‌the‌ ‌affirmative‌ ‌vote‌ ‌of‌ ‌at‌‌least‌‌two-thirds‌‌(2/3)‌‌of‌‌ the‌‌OCS,‌‌whether‌‌with‌‌or‌‌without‌‌voting‌‌rights,‌‌or‌of‌‌such‌‌greater‌‌ proportion‌‌of‌‌shares‌‌‌as‌‌may‌‌be‌‌specifically‌‌provided‌‌in‌‌the‌‌AOI.‌ ‌ Withdraw‌ ‌as‌ ‌Stockholder‌‌—‌‌‌To‌‌purchase‌‌shares‌‌held‌‌at‌‌fair‌‌ value,‌ ‌which‌ ‌shall‌ ‌not‌ ‌be‌ ‌less‌ ‌than‌ ‌the‌ ‌par‌ ‌or‌ ‌issued‌ ‌value,‌‌ when‌‌the‌‌corporation‌‌has‌‌sufficient‌‌assets‌‌in‌‌its‌‌books‌‌to‌‌cover‌‌ its‌‌debts‌‌and‌‌liabilities‌‌exclusive‌‌of‌‌capital‌‌stock.‌ ‌ Petition‌ ‌the‌ ‌SEC‌ ‌to‌ ‌compel‌ ‌the‌ ‌dissolution‌ ‌of‌ ‌such‌‌ corporation‌‌whenever‌‌ ‌ a. Deadlocks‌ ‌ The‌ ‌SEC‌,‌ ‌upon‌ ‌written‌ ‌petition‌ ‌by‌ ‌any‌ ‌stockholder,‌ ‌shall‌ ‌have‌‌ the‌‌power‌‌to‌‌a ‌ rbitrate‌‌‌the‌‌dispute.‌‌The‌‌SEC‌‌shall‌‌have‌‌authority‌‌to‌‌ make‌‌appropriate‌‌orders,‌‌such‌‌as:‌‌ ‌ a) cancelling‌ ‌or‌ ‌altering‌ ‌any‌‌provision‌‌contained‌‌in‌‌the‌‌AOI,‌‌ bylaws,‌‌or‌‌any‌‌stockholder’s‌‌agreement;‌‌ ‌ b) cancelling,‌ ‌altering‌ ‌or‌ ‌enjoining‌ ‌a‌ ‌resolution‌ ‌or‌‌act‌‌of‌‌the‌‌ corporation‌ ‌or‌ ‌its‌ ‌board‌ ‌of‌ ‌directors,‌ ‌stockholders,‌ ‌or‌‌ officers;‌‌ ‌ c) directing‌ ‌or‌ ‌prohibiting‌ ‌any‌ ‌act‌ ‌of‌ ‌the‌ ‌corporation‌ ‌or‌ ‌its‌‌ board‌‌of‌‌directors,‌‌stockholders,‌‌officers,‌‌or‌‌other‌‌persons‌‌ party‌‌to‌‌the‌‌action;‌ ‌ b. any‌ ‌of‌ ‌acts‌ ‌of‌ ‌the‌ ‌directors,‌ ‌officers,‌ ‌or‌ ‌those‌ ‌in‌‌ control‌ ‌of‌ ‌the‌ ‌corporation‌ ‌is‌ ‌illegal,‌ ‌fraudulent,‌‌ dishonest,‌ ‌oppressive‌ ‌or‌ ‌unfairly‌ ‌prejudicial‌ ‌to‌ ‌the‌‌ corporation‌‌or‌‌any‌‌stockholder,‌‌or‌‌ ‌ whenever‌ ‌corporate‌ ‌assets‌ ‌are‌ ‌being‌ ‌misapplied‌ ‌or‌‌ wasted.‌ ‌ Bustos‌‌v.‌‌Millians‌‌Shoe,‌‌Inc.‌‌‌2017‌ ‌ WON‌ ‌the‌ ‌CA‌ ‌correctly‌ ‌considered‌ ‌the‌ ‌properties‌ ‌of‌ ‌Spouses‌ ‌Cruz‌‌ answerable‌‌for‌‌the‌‌obligations‌‌of‌‌MSI.‌ ‌ NO‌.‌ ‌Section‌ ‌97‌ ‌of‌ ‌the‌ ‌Corporation‌ ‌Code‌ ‌only‌ ‌specifies‌ ‌that‌ ‌"the‌‌ stockholders‌ ‌of‌ ‌the‌ ‌corporation‌ ‌shall‌ ‌be‌ ‌subject‌ ‌to‌ ‌all‌ ‌liabilities‌‌of‌‌ directors."‌ ‌Nowhere‌ ‌in‌ ‌that‌ ‌provision‌ ‌do‌ ‌we‌‌find‌‌any‌‌inference‌‌that‌‌ stockholders‌ ‌of‌ ‌a‌ ‌close‌ ‌corporation‌ ‌are‌ ‌automatically‌ ‌liable‌ ‌for‌‌ corporate‌‌debts‌‌and‌‌obligations.‌ ‌ Given‌ ‌that‌ ‌the‌ ‌true‌ ‌owner‌ ‌of‌ ‌the‌ ‌subject‌ ‌property‌ ‌is‌ ‌not‌ ‌the‌‌ corporation,‌ ‌petitioner‌ ‌cannot‌ ‌be‌‌considered‌‌a‌‌creditor‌‌of‌‌MSI‌‌but‌‌a‌‌ holder‌‌of‌‌a‌‌claim‌‌against‌‌respondent‌‌spouses.‌ ‌ d) requiring‌ ‌the‌ ‌purchase‌ ‌at‌ ‌their‌ ‌fair‌‌value‌‌of‌‌shares‌‌of‌‌any‌‌ stockholder,‌ ‌either‌ ‌by‌ ‌the‌ ‌corporation‌ ‌regardless‌ ‌of‌ ‌the‌‌ availability‌ ‌of‌ ‌unrestricted‌ ‌retained‌‌earnings‌‌in‌‌its‌‌books,‌‌ Non-stock‌‌Corporations‌ ‌ or‌‌by‌‌the‌‌other‌‌stockholders;‌ ‌ Definition‌ ‌ e) appointing‌‌a‌p ‌ rovisional‌‌director‌;‌ ‌ A‌ ‌nonstock‌ ‌corporation‌ ‌is‌ ‌one‌ ‌where‌ ‌no‌ ‌part‌‌of‌‌its‌‌income‌‌is‌‌ f) dissolving‌t‌ he‌‌corporation;‌‌or‌ distributable‌‌as‌‌dividends‌‌to‌‌its‌‌members,‌‌trustees,‌‌or‌‌officers.‌ ‌ g) granting‌ ‌such‌ ‌other‌ ‌relief‌ ‌as‌ ‌the‌ ‌circumstances‌ ‌may‌‌ Purposes‌ ‌ warrant.‌ ‌ May‌‌be‌‌formed‌‌or‌‌organized‌‌for‌‌ ‌ Additional‌‌Remedies‌‌of‌‌Stockholder‌ ‌ Any‌‌stockholder‌‌of‌‌a‌‌close‌‌corporation‌‌may,‌‌for‌‌any‌‌reason,‌‌compel‌‌the‌‌ corporation‌‌ ‌ 1) charitable,‌‌ ‌ 6) fraternal,‌‌ ‌ or‌‌similar‌‌purposes,‌‌like‌‌ ‌ 2) religious,‌‌ ‌ 7) literary,‌‌ ‌ 11) trade,‌‌ ‌ 3) educational,‌‌ ‌ 8) scientific,‌‌ ‌ 12) industry,‌‌ ‌ 4) professional,‌‌ ‌ 9) social,‌‌ ‌ 13) agricultural‌ ‌and‌ ‌like‌‌ chambers,‌‌ ‌ 5) cultural,‌ ‌ 10) civic‌‌ service,‌ ‌ or‌‌any‌‌combination‌‌thereof.‌ ‌ Treatment‌‌of‌‌Profits‌ ‌ Non-Diversion‌‌Rule‌ ‌ Any‌ ‌profit‌ ‌which‌ ‌a‌ ‌nonstock‌‌corporation‌‌may‌‌obtain‌‌incidental‌‌to‌‌ its‌‌operations‌‌shall,‌‌whenever‌‌necessary‌‌or‌‌proper,‌‌be‌‌‌used‌‌for‌‌the‌‌ furtherance‌ ‌of‌ ‌the‌ ‌purpose‌ ‌or‌ ‌purposes‌ ‌for‌ ‌which‌ ‌the‌‌ corporation‌ ‌was‌ ‌organized.‌ ‌The‌ ‌law‌ ‌strictly‌ ‌implements‌ ‌the‌‌ non-diversion‌‌rule‌‌by:‌‌ ‌ a) Forbidding‌‌distribution‌‌of‌‌profits;‌ ‌ b) Requiring‌ ‌immediate‌ ‌utilization‌ ‌of‌ ‌contributions‌ ‌for‌‌ intended‌‌purposes;‌‌and‌ ‌ c) Limiting‌‌administrative‌‌expenses‌‌of‌‌certain‌‌‌eleemosynary‌‌ corporations.‌‌(of,‌‌relating‌‌to,‌‌or‌‌supported‌‌by‌c‌ harity‌)‌ ‌ Plan‌‌and‌‌Distribution‌‌of‌‌Assets‌‌upon‌‌dissolution‌ ‌ a) All‌ ‌liabilities‌ ‌and‌‌obligations‌‌of‌‌the‌‌corporation‌‌shall‌‌be‌‌paid,‌‌ satisfied‌ ‌and‌ ‌discharged,‌‌or‌‌adequate‌‌provision‌‌shall‌‌be‌‌made‌‌ therefor;‌ ‌ b) Assets‌ ‌held‌ ‌by‌ ‌the‌ ‌corporation‌ ‌upon‌ ‌a‌ ‌condition‌ ‌requiring‌‌ return,‌‌transfer‌‌or‌‌conveyance,‌‌and‌‌which‌‌condition‌‌occurs‌‌by‌‌ reason‌ ‌of‌ ‌the‌ ‌dissolution,‌ ‌shall‌ ‌be‌ ‌returned,‌ ‌transferred‌ ‌or‌‌ conveyed‌‌in‌‌accordance‌‌with‌‌such‌‌requirements;‌ ‌ c) Assets‌ ‌received‌ ‌and‌ ‌held‌ ‌by‌ ‌the‌ ‌corporation‌ ‌subject‌ ‌to‌‌ limitations‌ ‌shall‌ ‌be‌ ‌transferred‌ ‌or‌ ‌conveyed‌ ‌to‌ ‌one‌ ‌(1)‌ ‌or‌‌ more‌ ‌corporations,‌ ‌societies‌ ‌or‌ ‌organizations‌ ‌engaged‌ ‌in‌‌ activities‌‌in‌‌the‌‌Philippines‌‌substantially‌‌similar‌‌to‌‌those‌‌of‌‌ the‌‌dissolving‌‌corporation‌‌according‌‌to‌‌a‌‌plan‌‌of‌‌distribution‌‌ adopted;‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 66‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ d) Assets‌‌other‌‌than‌‌those‌‌mentioned‌‌in‌‌the‌‌preceding‌‌paragraphs,‌‌ Corporation‌‌sole;‌‌nationality‌ ‌ 3) Trust,‌‌ ‌ if‌‌any,‌‌shall‌‌be‌‌distributed‌‌in‌‌accordance‌‌with‌‌the‌‌provisions‌‌of‌‌ 4) Insurance,‌‌ ‌ A‌ ‌corporation‌ ‌sole‌ ‌may‌ ‌be‌ ‌formed‌ ‌by‌ ‌the‌ ‌chief‌ ‌archbishop,‌‌ the‌‌AOI‌‌or‌‌the‌‌bylaws;‌‌and‌ ‌ bishop,‌ ‌priest,‌ ‌minister,‌ ‌rabbi,‌ ‌or‌ ‌other‌ ‌presiding‌ ‌elder‌ ‌of‌ ‌such‌‌ 5) Public‌‌and‌‌publicly-listed‌‌companies,‌‌and‌ e) In‌ ‌any‌ ‌other‌ ‌case,‌ ‌assets‌ ‌may‌ ‌be‌‌distributed‌‌to‌‌such‌‌persons,‌‌ religious‌ ‌denomination,‌ ‌sect,‌ ‌or‌ ‌church,‌ ‌for‌ ‌the‌ ‌purpose‌ ‌of‌‌ 6) Non-chartered‌‌GOCCs‌‌ ‌ societies,‌ ‌organizations‌ ‌or‌ ‌corporations,‌ ‌whether‌ ‌or‌ ‌not‌‌ administering‌ ‌and‌ ‌managing,‌ ‌as‌ ‌trustee‌,‌ ‌the‌ ‌affairs,‌‌property‌‌and‌‌ organized‌ ‌for‌ ‌profit,‌ ‌as‌ ‌may‌ ‌be‌ ‌specified‌ ‌in‌ ‌a‌ ‌plan‌ ‌of‌‌ temporalities‌‌of‌‌such‌‌religious‌‌denomination,‌‌sect‌‌or‌‌church.‌ ‌ may‌‌not‌‌incorporate‌‌as‌‌an‌‌OPC‌ ‌ distribution.‌ ‌ A‌ ‌corporation‌ ‌aggregate‌ ‌formed‌ ‌for‌ ‌the‌ ‌same‌ ‌purpose,‌ ‌on‌ ‌the‌‌ 7) A‌‌natural‌‌person‌‌who‌‌is‌‌licensed‌‌to‌‌exercise‌‌a‌‌profession‌‌may‌‌ A‌ ‌plan‌ ‌providing‌ ‌for‌ ‌the‌ ‌distribution‌ ‌of‌ ‌assets‌ ‌may‌ ‌be‌ ‌adopted‌ ‌by‌ ‌a‌‌ other‌ ‌hand,‌ ‌consists‌ ‌of‌ ‌two‌ ‌or‌‌more‌‌persons.‌‌‌A‌‌corporation‌‌sole‌‌ not‌ ‌organize‌ ‌as‌ ‌an‌ ‌OPC‌ ‌for‌ ‌the‌ ‌purpose‌ ‌of‌ ‌exercising‌ ‌such‌‌ nonstock‌ ‌corporation‌ ‌in‌ ‌the‌ ‌process‌ ‌of‌ ‌dissolution‌ ‌in‌ ‌the‌ ‌following‌‌ may‌ ‌be‌ ‌converted‌ ‌into‌ ‌a‌ ‌corporation‌ ‌aggregate‌ ‌by‌ ‌mere‌‌ profession‌e‌ xcept‌a‌ s‌‌otherwise‌‌provided‌‌under‌‌special‌‌laws.‌ ‌ manner:‌ ‌ amendment‌ ‌of‌‌its‌‌AOI‌.‌‌The‌‌‌one‌‌member,‌‌with‌‌the‌‌concurrence‌‌ of‌‌two-thirds‌‌of‌‌the‌‌membership‌‌of‌‌the‌‌organization‌‌for‌‌whom‌‌he‌‌ Capital‌‌Stock‌‌Requirement‌ ‌ a) The‌ ‌BOT‌ ‌shall,‌ ‌by‌ ‌majority‌ ‌vote,‌ ‌adopt‌ ‌a‌ ‌resolution‌‌ acts‌ ‌as‌ ‌trustee,‌ ‌can‌ ‌self-will‌ ‌the‌ ‌amendment.‌ ‌(‌Iglesia‌ ‌Evangélica‌‌ Shall‌‌n ‌ ot‌‌be‌‌required‌‌‌to‌‌have‌‌a‌‌minimum‌‌ACS‌‌‌except‌‌‌as‌‌otherwise‌‌ recommending‌‌a‌‌plan‌‌of‌‌distribution;‌‌and‌ ‌ Metodista‌‌en‌‌las‌‌Islas‌‌Filipinas‌‌v.‌‌Lazaro‌)‌ ‌ provided‌‌by‌‌special‌‌law.‌ ‌ b) Such‌ ‌plan‌ ‌of‌ ‌distribution‌ ‌shall‌‌be‌‌adopted‌‌upon‌‌approval‌‌of‌‌ Effectivity‌‌—‌‌‌From‌‌and‌‌after‌‌‌filing‌‌‌with‌‌the‌‌SEC‌‌of‌‌the‌‌AOI,‌‌verified‌‌ AOI‌‌and‌‌Bylaws‌ ‌ at‌‌least‌‌two-thirds‌‌(2/3)‌‌of‌‌the‌‌members‌‌having‌‌voting‌‌rights‌‌ by‌ ‌affidavit‌ ‌or‌ ‌affirmation,‌ ‌and‌ ‌accompanied‌ ‌by‌ ‌the‌ ‌required‌‌ present‌‌or‌‌represented‌‌by‌‌proxy‌‌at‌‌such‌‌meeting.‌ ‌ Aside‌‌from‌‌the‌‌requirements‌‌set‌‌forth‌‌in‌‌Sec‌‌14,‌‌the‌‌AOI‌‌of‌‌the‌‌OPC‌‌ documents.‌ ‌ shall‌‌likewise‌‌substantially‌‌contain‌‌the‌‌following:‌ ‌ Educational‌‌Corporations‌ ‌ DOES‌ ‌NOT‌ ‌require‌ ‌approval‌ ‌of‌‌the‌‌SEC‌‌‌in‌‌consonance‌‌with‌‌the‌‌ a) If‌‌the‌‌single‌‌stockholder‌‌is‌‌a‌‌‌trust‌‌‌or‌‌an‌‌‌estate‌,‌‌the‌‌name,‌‌ The‌ ‌number‌ ‌of‌ ‌trustees‌ ‌of‌ ‌educational‌ ‌institutions‌ ‌organized‌ ‌as‌‌ separation‌‌of‌‌church‌‌and‌‌state‌‌doctrine.‌ ‌ nationality,‌ ‌and‌ ‌residence‌ ‌of‌ ‌the‌ ‌trustee,‌ ‌administrator,‌‌ nonstock‌c‌ orporations‌‌shall‌‌be‌b ‌ etween‌‌5‌‌and‌‌15‌.‌ ‌ Religious‌‌Societies‌ ‌ executor,‌‌guardian,‌‌conservator,‌‌custodian,‌‌or‌‌other‌‌‌person‌‌ The‌‌number‌‌of‌‌trustees‌‌shall‌‌be‌‌in‌m ‌ ultiples‌‌of‌‌five‌‌(5).‌ ‌ exercising‌ ‌fiduciary‌ ‌duties‌ ‌together‌ ‌with‌ ‌the‌ ‌proof‌ ‌of‌‌ Any‌ ‌religious‌ ‌society,‌ ‌religious‌ ‌order,‌ ‌diocese,‌ ‌synod,‌ ‌or‌ ‌district‌‌ such‌‌authority‌‌to‌‌act‌‌on‌‌behalf‌‌of‌‌the‌‌trust‌‌or‌‌estate;‌‌and‌ ‌ Unless‌‌otherwise‌‌provided‌‌in‌‌the‌‌AOI‌‌or‌‌bylaws,‌‌the‌‌‌BOT‌‌‌shall,‌‌as‌‌ organization‌ ‌of‌ ‌any‌ ‌religious‌ ‌denomination,‌ ‌sect‌ ‌or‌ ‌church,‌ ‌may,‌‌ soon‌‌as‌‌organized,‌‌so‌‌classify‌‌themselves‌‌that‌‌the‌‌term‌‌of‌‌office‌‌of‌‌ one-fifth‌‌(1/5)‌‌‌of‌‌their‌‌number‌‌shall‌e ‌ xpire‌‌every‌‌year‌.‌‌ ‌ Trustees‌ ‌thereafter‌ ‌elected‌ ‌to‌ ‌fill‌ ‌vacancies,‌ ‌occurring‌ ‌before‌ ‌the‌‌ expiration‌ ‌of‌ ‌a‌ ‌particular‌ ‌term,‌ ‌shall‌ ‌hold‌ ‌office‌ ‌only‌ ‌for‌ ‌the‌‌ unexpired‌ ‌period.‌ ‌Trustees‌ ‌elected‌ ‌thereafter‌ ‌to‌ ‌fill‌ ‌vacancies‌‌ caused‌‌by‌‌expiration‌‌of‌‌term‌‌shall‌‌hold‌‌office‌‌for‌‌‌five‌‌(5)‌‌years‌.‌‌ ‌ A‌ ‌majority‌ ‌of‌ ‌the‌ ‌trustees‌ ‌shall‌ ‌constitute‌ ‌a‌ ‌quorum‌ ‌for‌ ‌the‌‌ transaction‌‌of‌‌business.‌ ‌ Religious‌‌Corporations‌ ‌ Religious‌ ‌corporations‌ ‌may‌ ‌be‌ ‌incorporated‌ ‌by‌ ‌one‌ ‌or‌ ‌more‌‌ persons.‌ ‌Such‌ ‌corporations‌ ‌may‌ ‌be‌ ‌classified‌ ‌into‌ ‌corporations‌‌ sole‌‌‌and‌‌religious‌‌societies‌.‌ ‌ upon‌ ‌written‌ ‌consent‌ ‌and/or‌ ‌by‌‌an‌‌affirmative‌‌vote‌‌at‌‌a‌‌meeting‌‌ b) Name,‌ ‌nationality,‌ ‌residence‌ ‌of‌ ‌the‌ ‌nominee‌ a ‌ nd‌‌ called‌ ‌for‌ ‌the‌ ‌purpose‌ ‌of‌ ‌at‌ ‌least‌ ‌two-thirds‌ ‌(2/3)‌ ‌of‌ ‌its‌‌ alternate‌ ‌nominee‌,‌ ‌and‌ ‌the‌ ‌extent,‌ ‌coverage‌ a‌ nd‌‌ membership,‌‌incorporate‌‌for‌‌the‌‌administration‌‌of‌‌its‌‌temporalities‌‌ limitation‌‌of‌‌the‌‌authority.‌ ‌ or‌‌for‌‌the‌‌management‌‌of‌‌its‌‌affairs,‌‌properties,‌‌and‌‌estate‌‌by‌‌filing‌‌ Bylaws‌‌are‌N ‌ OT‌r‌ equired‌‌to‌‌be‌‌submitted.‌ ‌ with‌ ‌the‌ ‌SEC,‌ ‌AOI‌ ‌verified‌ ‌by‌ ‌the‌ ‌affidavit‌ ‌of‌ ‌the‌ ‌presiding‌ ‌elder,‌‌ secretary,‌‌or‌‌clerk‌‌or‌‌other‌‌member‌‌of‌‌such‌‌religious‌‌society.‌ ‌ Corporate‌‌Name‌ ‌ One‌‌Person‌‌Corporations‌ ‌ A‌ ‌One‌ ‌Person‌ ‌Corporation‌ ‌is‌ ‌a‌ ‌corporation‌ ‌with‌ ‌a‌ ‌single‌‌ stockholder.‌‌Only‌‌a‌‌‌natural‌‌person‌,‌‌‌trust‌,‌‌or‌‌an‌‌‌estate‌‌‌may‌‌form‌‌ an‌‌OPC.‌ ‌ Excepted‌‌Corporations‌ ‌ The‌‌letters‌‌“‌OPC‌”‌‌shall‌‌be‌‌indicated‌‌either‌‌below‌‌or‌‌at‌‌the‌‌end‌‌of‌‌its‌‌ corporate‌‌name.‌ ‌ Corporate‌‌structure‌‌and‌‌officers‌ ‌ The‌‌single‌‌stockholder‌‌shall‌‌be‌‌ ‌ 1) The‌‌sole‌‌director‌a‌ nd‌‌president‌o ‌ f‌‌the‌‌OPC;‌ 1) Banks‌‌and‌‌quasi-banks,‌‌ ‌ 2) May‌‌NOT‌‌be‌‌appointed‌‌as‌‌the‌‌corporate‌s‌ ecretary‌;‌ ‌ 2) Pre-need,‌‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 67‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ 3) May‌‌likewise‌‌be‌‌the‌‌self-appointed‌t‌ reasurer‌.‌ ‌ Here,‌ ‌the‌ ‌single‌ ‌stockholder‌ ‌shall‌ ‌give‌ ‌a‌ ‌bond‌ ‌to‌ ‌the‌ ‌SEC‌ ‌in‌‌ such‌ ‌a‌ ‌sum‌ ‌as‌ ‌may‌ ‌be‌‌required,‌‌to‌‌be‌‌renewed‌‌every‌‌two‌‌(2)‌‌ years‌‌‌or‌‌as‌‌often‌‌as‌‌may‌‌be‌‌required.‌ ‌ Nominee‌ ‌ In‌ ‌the‌ ‌event‌ ‌of‌ ‌the‌ ‌single‌ ‌stockholder’s‌ ‌death‌ ‌or‌ ‌incapacity,‌ ‌the‌‌ nominee‌ ‌shall‌‌take‌‌the‌‌place‌‌of‌‌the‌‌single‌‌stockholder‌‌as‌‌director‌‌ and‌‌shall‌‌manage‌‌the‌‌corporation’s‌‌affairs.‌ ‌ The‌ ‌written‌ ‌consent‌ ‌of‌ ‌the‌ ‌nominee‌‌and‌‌alternate‌‌nominee‌‌shall‌‌ be‌ ‌attached‌ ‌to‌ ‌the‌‌application‌‌for‌‌incorporation‌.‌‌Such‌‌consent‌‌ may‌ ‌be‌ ‌withdrawn‌ ‌in‌ ‌writing‌ ‌any‌ ‌time‌ ‌before‌ ‌the‌ ‌death‌ ‌or‌‌ incapacity‌‌of‌‌the‌‌single‌‌stockholder.‌ ‌ Minutes‌‌and‌‌Records‌ ‌ A‌ ‌minutes‌ ‌book‌ ‌shall‌ ‌be‌ ‌maintained‌ ‌which‌ ‌shall‌ ‌contain‌ ‌all‌‌ actions,‌‌decisions,‌‌and‌‌resolutions‌‌taken‌‌by‌‌the‌‌OPC.‌ ‌ When‌ ‌action‌ ‌is‌ ‌needed‌ ‌on‌ ‌any‌ ‌matter,‌ ‌it‌ ‌shall‌ ‌be‌ ‌sufficient‌ ‌to‌‌ prepare‌ ‌a‌ ‌written‌ ‌resolution‌,‌ ‌signed‌ ‌and‌ ‌dated‌ ‌by‌ ‌the‌ ‌single‌‌ stockholder,‌ ‌and‌ ‌recorded‌ ‌in‌ ‌the‌ ‌minutes‌ ‌book.‌ ‌The‌ ‌date‌ ‌of‌‌ recording‌ ‌in‌ ‌the‌ ‌minutes‌‌book‌‌shall‌‌be‌‌deemed‌‌to‌‌be‌‌the‌‌‌date‌‌of‌‌ the‌‌meeting‌.‌ ‌ c) A‌ ‌disclosure‌ ‌of‌ ‌all‌ ‌self-dealings‌ ‌and‌ ‌related‌ ‌party‌‌ transactions‌ ‌entered‌ ‌into‌ ‌between‌ ‌the‌ ‌OPC‌ ‌and‌‌the‌‌single‌‌ stockholder.‌ ‌ The‌ ‌SEC‌ ‌may‌ ‌place‌ ‌the‌ ‌corporation‌ ‌under‌ ‌delinquent‌ ‌status‌‌ should‌ ‌the‌ ‌corporation‌ ‌fail‌ ‌to‌ ‌submit‌ ‌the‌ ‌reportorial‌‌ requirements‌ ‌three‌ ‌(3)‌ ‌times‌,‌ consecutively‌ ‌or‌ ‌intermittently‌,‌‌ within‌‌a‌‌period‌‌of‌‌five‌‌(5)‌‌years‌.‌ ‌ Liability‌ ‌ A‌ ‌sole‌ ‌shareholder‌ ‌claiming‌ ‌limited‌ ‌liability‌ ‌has‌ ‌the‌ ‌burden‌ ‌of‌‌ affirmatively‌ ‌showing‌ ‌that‌ ‌the‌ ‌corporation‌ ‌was‌ ‌a‌dequately‌‌ financed‌.‌ ‌ The‌ ‌principles‌ ‌of‌ ‌piercing‌ ‌the‌‌corporate‌‌veil‌‌‌applies‌‌with‌‌equal‌‌ force‌‌to‌‌OPCs‌‌as‌‌with‌‌other‌‌corporations.‌ ‌ Conversion‌ ‌ 1. From‌‌Ordinary‌‌to‌‌OPC‌ ‌ When‌ ‌a‌ ‌single‌ ‌stockholder‌ ‌acquires‌ ‌all‌ ‌the‌ ‌stocks‌ ‌of‌ ‌an‌‌ ordinary‌‌stock‌‌corporation,‌‌the‌‌latter‌‌may‌‌apply‌‌for‌‌conversion‌‌ into‌‌an‌‌OPC.‌ ‌ 2. From‌‌OPC‌‌to‌‌Ordinary‌‌Stock‌ ‌ The‌ ‌OPC‌ ‌shall‌‌submit‌‌the‌‌following‌‌within‌‌such‌‌period‌‌as‌‌the‌‌SEC‌‌ may‌‌prescribe:‌ ‌ a) Annual‌ ‌financial‌ ‌statements‌ independent‌‌CPA‌.‌‌ ‌ ‌audited‌ ‌by‌ ‌an‌‌ However,‌ ‌if‌ ‌the‌ ‌total‌ ‌assets‌ ‌or‌ ‌total‌ ‌liabilities‌ ‌of‌ ‌the‌‌ corporation‌ ‌are‌ ‌less‌ ‌than‌ ‌P600K‌,‌ ‌the‌‌financial‌‌statements‌‌ shall‌ ‌be‌ ‌certified‌ ‌under‌ ‌oath‌ ‌by‌ ‌the‌ ‌corporation’s‌‌ treasurer‌‌and‌‌president‌.‌ b) A‌ ‌report‌ ‌containing‌ ‌explanations‌ ‌or‌ ‌comments‌ ‌by‌ ‌the‌‌ president‌ ‌on‌ ‌every‌ ‌qualification,‌ ‌reservation,‌ ‌or‌ ‌adverse‌‌ remark‌ ‌or‌ ‌disclaimer‌ ‌made‌ ‌by‌ ‌the‌ ‌auditor‌ ‌in‌ ‌the‌ ‌latter’s‌‌ report;‌ ‌ A‌ ‌notice‌ ‌shall‌ ‌be‌ ‌filed‌ ‌with‌ ‌the‌ ‌SEC‌ ‌within‌ ‌sixty‌ ‌(60)‌ ‌days‌‌ from‌ ‌the‌ ‌occurrence‌ ‌of‌ ‌the‌ ‌circumstances‌ ‌leading‌ ‌to‌ ‌the‌‌ conversion‌‌into‌‌an‌‌ordinary‌‌stock‌‌corporation..‌ ‌ In‌ ‌case‌ ‌of‌ ‌death‌ ‌of‌ ‌the‌ ‌single‌ ‌stockholder,‌ ‌the‌ ‌nominee‌ ‌or‌‌ alternate‌‌nominee‌‌shall‌‌ ‌ a) transfer‌‌the‌‌shares‌‌to‌‌the‌‌duly‌‌designated‌‌‌legal‌‌heir‌‌‌or‌‌ estate‌‌‌within‌‌‌seven‌‌(7)‌‌days‌‌from‌‌receipt‌‌of‌‌either‌‌an‌‌ affidavit‌‌of‌‌heirship‌‌or‌‌self-adjudication‌‌executed‌‌by‌‌a‌‌ sole‌‌heir,‌‌and‌‌ ‌ b) notify‌‌the‌‌SEC‌‌of‌‌the‌‌transfer.‌‌ ‌ Within‌ ‌sixty‌ ‌(60)‌ ‌days‌ ‌from‌ ‌the‌ ‌transfer‌ ‌of‌ ‌the‌ ‌shares,‌ ‌the‌‌ legal‌‌heirs‌s‌ hall‌‌notify‌‌the‌‌SEC‌‌of‌‌their‌‌decision‌‌to‌‌either‌‌ ‌ b) convert‌‌it‌‌into‌‌an‌‌ordinary‌‌stock‌‌corporation.‌ ‌ Foreign‌‌Corporations‌ ‌ A‌ ‌foreign‌‌corporation‌‌‌is‌‌one‌‌formed,‌‌organized‌‌or‌‌existing‌‌under‌‌ laws‌ ‌other‌ ‌than‌ ‌those‌ ‌of‌ ‌the‌ ‌Philippines’‌ ‌and‌ ‌whose‌ ‌laws‌ ‌allow‌‌ Filipino‌ ‌citizens‌ ‌and‌ ‌corporations‌ ‌to‌ ‌do‌ ‌business‌ ‌in‌ ‌its‌ ‌own‌‌ country‌ ‌or‌ ‌State.‌ ‌It‌ ‌shall‌ ‌have‌ ‌the‌‌right‌‌to‌‌transact‌‌business‌‌in‌‌the‌‌ Philippines‌‌after‌‌obtaining‌‌ ‌ 1. a‌‌license‌f‌ or‌‌that‌‌purpose;‌‌and‌‌ ‌ 2. a‌ ‌certificate‌ ‌of‌ ‌authority‌ ‌from‌ ‌the‌ ‌appropriate‌‌ government‌‌agency.‌ ‌ Doctrine‌‌of‌‌"doing‌‌business"‌ ‌ Mentholatum‌‌v.‌‌Mangaliman‌‌discussed‌‌the‌‌‌two‌‌general‌‌tests‌‌‌to‌‌ determine‌ ‌whether‌ ‌or‌ ‌not‌‌a‌‌foreign‌‌corporation‌‌can‌‌be‌‌considered‌‌ as‌‌“‌doing‌‌business‌”‌‌in‌‌the‌‌Philippines.‌ ‌ First‌,‌ ‌the‌ ‌substance‌ ‌test‌,‌ ‌whether‌ ‌the‌ ‌foreign‌ ‌corporation‌ ‌is‌‌ continuing‌‌the‌‌body‌‌of‌‌the‌‌business‌‌or‌‌enterprise‌‌for‌‌which‌‌it‌‌was‌‌ organized‌‌or‌‌whether‌‌it‌‌has‌‌substantially‌‌retired‌‌from‌‌it‌‌and‌‌turned‌‌ it‌‌over‌‌to‌‌another.‌ ‌ Second‌,‌‌the‌‌‌continuity‌‌test‌,‌‌implies‌‌a‌‌continuity‌‌of‌‌commercial‌‌ dealings‌ ‌and‌ ‌arrangements,‌ ‌and‌ ‌contemplates,‌ ‌to‌ ‌that‌ ‌extent,‌ ‌the‌‌ performance‌ ‌of‌ ‌acts‌ ‌or‌ ‌works‌ ‌or‌ ‌the‌ ‌exercise‌ ‌of‌ ‌some‌ ‌of‌ ‌the‌‌ functions‌ ‌normally‌‌incident‌‌to,‌‌and‌‌in‌‌the‌‌progressive‌‌prosecution‌‌ of,‌‌the‌‌purpose‌‌and‌‌object‌‌of‌‌its‌‌organization.‌ ‌ The‌‌Contract‌‌Test‌‌‌of‌‌doing‌‌business,‌‌on‌‌the‌‌other‌‌hand‌ ‌ a) An‌ ‌essential‌ ‌condition‌ ‌to‌ ‌be‌ ‌considered‌ ‌as‌ ‌doing‌ ‌business‌ ‌in‌‌ the‌ ‌Philippines‌ ‌is‌ ‌actual‌ ‌performance‌ ‌of‌ ‌specific‌‌ commercial‌‌acts‌‌within‌‌the‌‌PH‌‌territory‌‌for‌‌the‌‌plain‌‌reason‌‌ that‌‌the‌‌PH‌‌has‌‌no‌‌jurisdiction‌‌over‌‌commercial‌‌acts‌‌performed‌‌ elsewhere;‌ ‌ b) Activities‌ ‌within‌‌PH‌‌jurisdiction‌‌that‌‌do‌‌not‌‌create‌‌earnings‌‌ or‌ ‌profits‌ ‌to‌ ‌the‌ ‌foreign‌ ‌corporation‌ ‌do‌‌NOT‌‌constitute‌‌‌doing‌‌ business‌‌‌in‌‌PH.‌ ‌ a) wind‌‌up‌‌and‌‌dissolve‌‌the‌‌OPC‌‌or‌‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 68‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ c) A‌ ‌foreign‌ ‌company‌ ‌that‌ ‌merely‌ ‌imports‌ ‌goods‌ ‌from‌ ‌a‌ ‌PH‌‌ exporter‌‌without‌‌opening‌‌an‌‌office‌‌or‌‌appointing‌‌an‌‌agent‌‌in‌‌PH‌‌ is‌‌NOT‌d ‌ oing‌‌business‌‌‌in‌‌PH.‌ ‌ d) A‌ ‌foreign‌ ‌corporation‌ ‌that‌ exports‌ ‌products‌ ‌to‌ ‌PH‌,‌ ‌without‌‌ doing‌‌any‌‌specific‌‌commercial‌‌act‌‌is‌‌NOT‌d ‌ oing‌‌business‌‌‌in‌‌PH.‌ ‌ insurance‌‌corporations,‌‌shall‌‌‌deposit‌‌with‌‌the‌‌SEC‌‌‌for‌‌the‌‌benefit‌‌ of‌ ‌present‌ ‌and‌ ‌future‌ ‌creditors,‌ ‌securities‌‌‌satisfactory‌‌to‌‌the‌‌SEC,‌‌ with‌‌an‌‌‌actual‌‌market‌‌value‌‌‌of‌‌at‌‌least‌‌P500K‌.‌ License‌ ‌ A‌‌foreign‌‌corporation‌‌applying‌‌for‌‌a‌‌‌license‌‌to‌‌transact‌‌business‌‌ in‌ ‌the‌ ‌Philippines‌ ‌shall‌ ‌submit‌ ‌to‌ ‌the‌ ‌SEC‌ ‌a‌ ‌copy‌ ‌of‌ ‌its‌ ‌AOI‌ ‌and‌‌ bylaws,‌‌certified‌‌in‌‌accordance‌‌with‌‌law,‌‌and‌‌their‌‌translation‌‌to‌‌an‌‌ official‌‌language‌‌of‌‌the‌‌Philippines,‌‌if‌‌necessary.‌‌ ‌ The‌ ‌application‌ ‌shall‌ ‌be‌ ‌under‌‌oath‌‌and,‌‌unless‌‌already‌‌stated‌‌in‌ its‌‌AOI.‌ ‌ Requisites‌‌for‌‌Issuance‌ ‌ 1) Name‌‌and‌‌address‌‌of‌‌designated‌r‌ esident‌‌agent‌+ ‌ ‌‌an‌‌SPA;‌ ‌ 2) An‌‌agreement‌‌that‌‌if‌‌it‌‌ceases‌‌to‌‌transact‌‌business‌‌or‌‌if‌‌there‌‌is‌‌ no‌‌more‌‌resident‌‌agent,‌‌summons‌‌shall‌‌then‌‌be‌‌served‌‌through‌‌ the‌‌SEC;‌ ‌ 3) Oath‌ ‌of‌ ‌the‌ ‌president‌ ‌or‌ ‌any‌ ‌authorized‌ ‌officer‌ ‌that‌ ‌the‌‌ corporation‌‌is‌s‌ olvent‌‌‌and‌‌in‌‌sound‌‌financial‌‌condition‌;‌‌and‌ ‌ 2) if‌ ‌a‌ ‌foreign‌ ‌corporation‌ ‌is‌ ‌not‌ ‌doing‌ ‌business‌ ‌in‌ ‌the‌ Philippines,‌ ‌it‌ ‌needs‌ ‌no‌ ‌license‌ ‌to‌ ‌sue‌ ‌before‌ ‌Philippine‌‌ courts‌ ‌on‌ ‌an‌ ‌isolated‌ ‌transaction‌ ‌or‌‌on‌‌a‌‌cause‌‌of‌‌action‌‌ entirely‌‌independent‌‌of‌‌any‌‌business‌‌transaction;‌ ‌ Resident‌‌Agent‌ ‌ A‌‌resident‌‌agent‌m ‌ ay‌‌be‌‌either‌‌ ‌ e) The‌‌‌appointment‌‌of‌‌a‌‌distributor‌‌‌in‌‌the‌‌PH‌‌is‌‌not‌‌sufficient‌‌ to‌‌constitute‌‌“‌doing‌‌business‌”‌‌unless‌‌it‌‌is‌‌under‌‌the‌‌full‌‌control‌‌ of‌‌the‌‌foreign‌‌corporation.‌ On‌ ‌the‌ ‌other‌ ‌hand,‌ ‌if‌ ‌the‌ ‌distributor‌ ‌is‌ ‌an‌ ‌independent‌‌entity‌‌ which‌ ‌buys‌ ‌and‌ ‌distributes‌ ‌products,‌ ‌other‌ ‌than‌ ‌those‌ ‌of‌ ‌the‌‌ foreign‌‌corporation,‌‌for‌‌its‌‌own‌‌name‌‌and‌‌its‌‌own‌‌account,‌‌the‌‌ latter‌ ‌cannot‌ ‌be‌ ‌considered‌ ‌to‌ ‌be‌ ‌doing‌ ‌business‌ ‌in‌ ‌the‌ ‌PH.‌‌ (‌Steel‌‌Case‌‌v.‌‌Design‌‌International‌‌Selections‌‌‌2012‌)‌ ‌ without‌ ‌a‌ ‌license,‌ ‌it‌ ‌cannot‌ ‌sue‌ ‌before‌ ‌the‌ ‌Philippine‌‌ courts;‌ ‌ 1. an‌‌individual‌r‌ esiding‌i‌ n‌‌the‌‌Philippines‌‌or‌‌ ‌ 2. a‌ ‌domestic‌ ‌corporation‌‌lawfully‌‌transacting‌‌business‌‌in‌‌ the‌‌Philippines.‌ ‌ 3) if‌ ‌a‌ ‌foreign‌ ‌corporation‌ ‌does‌ ‌business‌ ‌in‌ ‌the‌ ‌Philippines‌ without‌ ‌a‌‌license,‌‌a‌‌Philippine‌‌citizen‌‌or‌‌entity‌‌which‌‌has‌‌ contracted‌ ‌with‌ ‌said‌ ‌corporation‌ ‌may‌ ‌be‌ ‌estopped‌ ‌from‌‌ challenging‌‌the‌‌foreign‌‌corporation’s‌‌corporate‌‌personality‌‌ in‌‌a‌‌suit‌‌brought‌‌before‌‌Philippine‌‌courts;‌‌and‌‌ ‌ Amendment‌ ‌ License‌‌is‌‌amended‌‌in‌‌the‌‌event‌‌the‌‌foreign‌‌corporation‌‌changes‌‌its‌‌ corporate‌ ‌name,‌ ‌or‌‌desires‌‌to‌‌pursue‌‌other‌‌or‌‌additional‌‌purposes‌‌ in‌‌the‌‌Philippines,‌‌by‌‌submitting‌‌an‌‌application‌‌with‌‌the‌‌SEC.‌ ‌ 4) if‌ ‌a‌ ‌foreign‌ ‌corporation‌ ‌does‌ ‌business‌ ‌in‌ ‌the‌ ‌Philippines‌ with‌ ‌the‌ ‌required‌ ‌license,‌ ‌it‌ ‌can‌ ‌sue‌ ‌before‌ ‌Philippine‌‌ courts‌‌on‌‌any‌‌transaction.‌‌(‌Agilent‌‌Technologies‌‌Singapore‌‌ v.‌‌Integrated‌‌Silicon‌‌Technology‌‌Phil.‌‌Corp‌)‌ ‌ Personality‌‌to‌‌Sue‌ ‌ No‌ ‌foreign‌ ‌corporation‌ ‌transacting‌ ‌business‌ ‌in‌ ‌the‌ ‌Philippines‌‌ Grounds‌‌for‌‌Revocation‌‌of‌‌License‌ ‌ without‌‌a‌‌license‌,‌‌or‌‌its‌‌successors‌‌or‌‌assigns,‌‌shall‌‌be‌‌permitted‌‌ a) Failure‌‌to‌‌file‌‌its‌‌annual‌‌report‌‌or‌‌pay‌‌any‌‌fees;‌ ‌ to‌ ‌maintain‌ ‌or‌ ‌intervene‌ ‌in‌ ‌any‌ ‌action,‌ ‌suit‌ ‌or‌ ‌proceeding‌ ‌in‌ ‌any‌‌ court‌‌or‌‌administrative‌‌agency‌‌of‌‌the‌‌Philippines.‌ ‌ b) Failure‌ ‌to‌ ‌appoint‌ ‌and‌ ‌maintain‌ ‌a‌ ‌resident‌ ‌agent‌ ‌in‌ ‌the‌‌ Philippines;‌ ‌ Llorente‌‌v.‌‌Star‌‌City‌‌Pty‌‌Limited‌‌2 ‌ 020‌ ‌ c) Failure,‌‌after‌‌change‌‌of‌‌its‌‌resident‌‌agent‌‌or‌‌address,‌‌to‌‌submit‌‌ Compliance‌‌with‌‌the‌‌requirement‌‌of‌‌license,‌‌or‌‌the‌‌fact‌‌that‌‌the‌‌suing‌‌ to‌‌the‌‌SEC‌‌a‌‌statement‌‌of‌‌such‌‌change;‌ ‌ corporation‌ ‌is‌ ‌exempt‌ ‌therefrom,‌ ‌as‌ ‌the‌ ‌case‌ ‌may‌ ‌be,‌ ‌cannot‌ ‌be‌‌ inferred‌ ‌from‌ ‌the‌ ‌mere‌ ‌fact‌ ‌that‌ ‌the‌ ‌party‌ ‌suing‌ ‌is‌ ‌a‌ ‌foreign‌‌ corporation.‌ ‌The‌ ‌qualifying‌ ‌circumstance‌ ‌being‌ ‌an‌ ‌essential‌‌part‌‌of‌‌ the‌ ‌plaintiff’s‌ ‌capacity‌ ‌to‌‌sue‌‌must‌‌be‌‌affirmatively‌‌pleaded.‌‌Hence,‌‌ the‌ ‌ultimate‌ ‌fact‌ ‌that‌ ‌a‌ ‌foreign‌‌corporation‌‌is‌‌not‌‌doing‌‌business‌‌in‌‌ the‌‌Philippines‌‌must‌‌first‌‌be‌‌disclosed‌‌for‌‌it‌‌to‌‌be‌‌allowed‌‌to‌‌sue‌‌in‌‌ Philippine‌ ‌courts‌ ‌under‌ ‌the‌ ‌isolated‌ ‌transaction‌ ‌rule.‌ ‌Failing‌ ‌in‌‌his‌‌ requirement,‌ ‌the‌ ‌complaint‌ ‌filed‌ ‌by‌ ‌plaintiff‌ ‌with‌ ‌the‌ ‌trial‌ ‌court,‌ ‌it‌‌ must‌‌be‌‌said,‌‌fails‌‌to‌‌show‌‌its‌‌legal‌‌capacity‌‌to‌‌sue.‌ ‌ Having‌‌pleaded‌‌these‌‌averments‌‌in‌‌the‌‌complaint‌‌sufficiently‌‌clothed‌‌ 4) Oath‌ ‌of‌ ‌Reciprocity‌.‌ ‌Certificate‌ ‌under‌ ‌oath‌ ‌of‌‌the‌‌authorized‌‌ SCPL‌‌the‌‌necessary‌‌legal‌‌capacity‌‌to‌‌sue‌‌before‌‌Philippine‌‌courts.‌ official‌ ‌of‌ ‌the‌ ‌foreign‌ ‌corporation’s‌ ‌country‌ ‌of‌ ‌incorporation‌‌ that‌‌the‌‌laws‌‌of‌‌said‌‌country‌‌allow‌‌Filipinos‌‌to‌‌do‌‌business‌‌in‌‌ Suability‌ ‌ said‌‌country‌‌and‌‌that‌‌the‌‌applicant‌‌is‌‌an‌‌existing‌‌corporation‌‌in‌‌ The‌ ‌principles‌ ‌regarding‌ ‌the‌ ‌right‌ ‌of‌ ‌a‌ ‌foreign‌ ‌corporation‌ ‌to‌‌ good‌‌standing‌‌therein.‌ ‌ bring‌‌suit‌‌‌in‌‌PH‌‌courts‌‌may‌‌be‌‌condensed‌‌in‌‌four‌‌statements:‌‌ ‌ Within‌ ‌sixty‌ ‌(60)‌‌days‌‌after‌‌the‌‌issuance‌‌of‌‌the‌‌license‌‌to‌‌transact‌‌ 1) if‌ ‌a‌ ‌foreign‌ ‌corporation‌ ‌does‌ ‌business‌ ‌in‌ ‌the‌ ‌Philippines‌ business‌‌in‌‌the‌‌Philippines,‌‌the‌‌licensee,‌‌except‌‌foreign‌‌banking‌‌or‌‌ d) Failure‌ ‌to‌ ‌submit‌ ‌to‌ ‌the‌ ‌SEC‌ ‌an‌ ‌authenticated‌ ‌copy‌ ‌of‌ ‌any‌‌ amendment‌‌to‌‌its‌‌AOI‌‌or‌‌bylaws‌‌or‌‌of‌‌any‌‌articles‌‌of‌‌merger‌‌or‌‌ consolidation‌‌within‌‌the‌‌time‌‌prescribed‌‌(w ‌ ithin‌‌60‌‌days‌);‌ ‌ e) A‌ ‌misrepresentation‌ ‌of‌ ‌any‌ ‌material‌ ‌matter‌ ‌in‌ ‌any‌‌ application,‌‌report,‌‌affidavit‌‌or‌‌other‌‌document‌‌submitted;‌ ‌ f) Failure‌ ‌to‌ ‌pay‌ ‌any‌ ‌and‌ ‌all‌ ‌taxes,‌ ‌imposts,‌ ‌assessments‌ ‌or‌‌ penalties,‌‌if‌‌any,‌‌lawfully‌‌due;‌ ‌ g) Transacting‌ ‌business‌ ‌in‌ ‌the‌ ‌Philippines‌ ‌outside‌ ‌of‌ ‌the‌‌ purpose‌‌or‌‌purposes‌‌for‌‌which‌‌such‌‌corporation‌‌is‌‌authorized‌‌ under‌‌its‌‌license;‌ ‌ h) Transacting‌‌business‌‌in‌‌the‌‌Philippines‌‌as‌‌agent‌‌of‌‌or‌‌acting‌‌on‌‌ behalf‌ ‌of‌ ‌any‌ ‌foreign‌ ‌corporation‌‌or‌‌entity‌‌‌not‌‌duly‌‌licensed‌‌ to‌‌do‌‌business‌‌in‌‌the‌‌Philippines;‌‌or‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 69‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ Any‌ ‌other‌ ‌ground‌ ‌as‌ ‌would‌ ‌render‌ ‌it‌ ‌unfit‌ ‌to‌ ‌transact‌‌ Plan‌ ‌ business‌‌in‌‌the‌‌Philippines.‌ ‌ a) The‌ ‌names‌ ‌of‌ ‌the‌ ‌corporations‌ p ‌ roposing‌ ‌to‌ ‌merge‌ ‌or‌‌ consolidate,‌ ‌hereinafter‌ ‌referred‌ ‌to‌ ‌as‌ ‌the‌ ‌constituent‌‌ Merger‌‌and‌‌Consolidation‌ ‌ corporations‌;‌ ‌ i) ‌ Definition‌‌and‌‌Concept‌ ‌ There‌ ‌is‌ ‌merger‌ ‌when‌ ‌two‌ ‌or‌‌more‌‌corporations‌‌are‌‌folded‌‌into‌‌ one‌‌of‌‌the‌‌constituent‌‌c‌ orporations‌‌or‌‌a‌‌“s‌ urviving‌”‌‌corporation.‌‌ ‌ A‌‌+‌‌B‌‌=‌‌A‌‌or‌‌B‌ ‌ There‌ ‌is‌ ‌consolidation‌ ‌when‌ ‌two‌ ‌or‌ ‌more‌ ‌corporations‌ ‌are‌‌ folded‌‌into‌‌a‌n ‌ ew‌c‌ orporation‌‌or‌‌a‌‌“c‌ onsolidated‌”‌‌corporation.‌ ‌ A‌‌+‌‌B‌‌=‌‌C‌ Statutory‌‌Merger‌‌ ‌ This‌‌refers‌‌to‌‌pooling‌‌‌with‌‌automatic‌‌dissolution‌,‌‌which‌‌requires‌‌ ‌ 1. the‌‌execution‌‌of‌‌a‌p ‌ lan‌,‌‌ ‌ 2. the‌‌approval‌o ‌ f‌‌the‌‌concerned‌‌shareholders,‌‌ ‌ 3. the‌‌execution‌‌of‌‌the‌a ‌ rticles‌‌of‌‌merger‌‌or‌‌consolidation,‌‌and‌‌ ‌ 4. the‌‌issuance‌‌of‌‌a‌c‌ ertificate‌o ‌ r‌‌merger‌‌of‌‌consolidation.‌ ‌ De‌‌Facto‌‌Merger‌‌ ‌ Pooling‌‌of‌‌resources‌‌and‌‌business‌‌without‌‌automatic‌‌dissolution‌‌is‌‌ called‌‌de‌‌facto‌‌merger.‌‌It‌‌may‌‌involve‌ ‌ a) transfer‌ ‌of‌ ‌all‌ ‌or‌ ‌substantially‌ ‌all‌ ‌assets‌ ‌of‌‌one‌‌or‌‌more‌‌ corporations‌‌to‌‌the‌‌other‌‌corporation,‌‌OR‌ ‌ b) The‌ ‌terms‌ ‌of‌ ‌the‌ ‌merger‌ ‌or‌ ‌consolidation‌ ‌and‌ ‌the‌ ‌mode‌ ‌of‌‌ carrying‌‌the‌‌same‌‌into‌‌effect;‌ ‌ consolidation:‌ ‌ 1) The‌ ‌board‌‌of‌‌each‌‌corporation‌‌draws‌‌up‌‌a‌‌‌plan‌‌of‌‌merger‌‌or‌‌ consolidation.‌ ‌ 2) Submission‌ ‌of‌ ‌plan‌ ‌to‌ ‌stockholders‌ ‌or‌ ‌members‌ ‌of‌ ‌each‌‌ corporation‌‌for‌‌approval.‌ ‌ Vote‌ ‌of‌ ‌two-thirds‌ ‌of‌ ‌the‌ ‌members‌ ‌or‌ ‌of‌ ‌stockholders‌‌ c) A‌ ‌statement‌ ‌of‌ ‌the‌ ‌changes,‌‌if‌‌any,‌‌in‌‌the‌‌AOI‌‌of‌‌the‌‌surviving‌‌ corporation‌‌in‌‌case‌‌of‌‌merger;‌‌and,‌‌in‌‌case‌‌of‌‌consolidation,‌‌all‌‌ the‌‌statements‌‌required‌‌to‌‌be‌‌set‌‌forth‌‌in‌‌the‌‌AOI;‌‌and‌ ‌ d) Such‌ ‌other‌ ‌provisions‌‌with‌‌respect‌‌to‌‌the‌‌proposed‌‌merger‌‌or‌‌ consolidation‌‌as‌‌are‌‌deemed‌‌necessary‌‌or‌‌desirable.‌ ‌ Articles‌ ‌ Shall‌‌be‌‌executed‌‌by‌‌each‌‌of‌‌the‌‌constituent‌‌corporations,‌‌to‌‌be‌‌‌signed‌‌ by‌ ‌the‌ ‌president‌ ‌or‌ ‌vice‌ ‌president‌ ‌and‌ ‌certified‌ ‌by‌ ‌the‌ ‌secretary‌ ‌or‌‌ assistant‌‌secretary‌‌of‌‌each‌‌corporation‌‌setting‌‌forth:‌ a) The‌‌plan‌‌of‌‌the‌‌merger‌‌or‌‌the‌‌plan‌‌of‌‌consolidation;‌ ‌ b) As‌‌to‌‌stock‌‌corporations,‌‌the‌‌number‌‌of‌‌shares‌‌outstanding‌,‌‌ or‌ ‌in‌ ‌the‌ ‌case‌ ‌of‌ ‌nonstock‌ ‌corporations,‌ ‌the‌ ‌number‌ ‌of‌‌ members‌;‌ ‌ c) As‌ ‌to‌ ‌each‌ ‌corporation,‌ ‌the‌ ‌number‌ ‌of‌ ‌shares‌ ‌or‌ ‌members‌‌ voting‌f‌ or‌‌or‌‌against‌‌such‌‌plan,‌‌respectively;‌ ‌ d) The‌ ‌carrying‌ ‌amounts‌ ‌and‌ ‌fair‌ ‌values‌ ‌of‌ ‌the‌ ‌assets‌ ‌and‌‌ liabilities‌ ‌of‌ ‌the‌ ‌respective‌‌companies‌‌as‌‌of‌‌the‌‌agreed‌‌cut-off‌‌ date;‌ ‌ representing‌ ‌two-thirds‌ ‌of‌ ‌the‌ ‌OCS‌ ‌will‌ ‌be‌‌needed.‌‌‌Appraisal‌‌ rights‌,‌‌when‌‌proper,‌‌must‌‌be‌‌respected.‌ ‌ 3) Execution‌‌of‌‌the‌‌formal‌‌agreement,‌‌referred‌‌to‌‌as‌‌the‌‌‌articles‌‌of‌‌ merger‌ ‌or‌ ‌consolidation‌,‌ ‌by‌ ‌the‌ ‌corporate‌ ‌officers‌ ‌of‌ ‌each‌‌ constituent‌‌corporation.‌‌ ‌ 4) Submission‌ ‌of‌ ‌said‌‌articles‌‌of‌‌merger‌‌or‌‌consolidation‌‌to‌‌the‌‌ SEC‌‌for‌‌approval.‌ ‌ 5) If‌ ‌necessary,‌ ‌the‌ ‌SEC‌ ‌shall‌ ‌set‌ ‌a‌ ‌hearing‌,‌ ‌notifying‌ ‌all‌‌ corporations‌‌concerned‌a ‌ t‌‌least‌‌two‌‌weeks‌‌‌before.‌ ‌ 6) Issuance‌‌of‌‌‌certificate‌‌of‌‌merger‌‌or‌‌consolidation‌.‌‌(‌Bank‌‌of‌‌ Commerce‌‌v.‌‌RPN‌‌‌2014‌)‌ ‌ Effectivity‌ ‌ Upon‌ ‌issuance‌ ‌by‌ ‌the‌ ‌SEC‌ ‌of‌ ‌the‌ ‌certificate‌ ‌of‌ ‌merger‌ ‌or‌‌ consolidation.‌ ‌ Effects‌ ‌ A‌ m ‌ erger‌‌‌of‌‌two‌‌corporations‌‌produces,‌‌among‌‌others,‌‌the‌‌following‌‌ e) The‌ ‌method‌ ‌to‌ ‌be‌ ‌used‌ ‌in‌ ‌the‌ ‌merger‌ ‌or‌ ‌consolidation‌ ‌of‌‌ effects:‌ ‌ b) the‌ ‌management‌ ‌of‌ ‌one‌ ‌or‌ ‌more‌ ‌corporations‌ ‌by‌ ‌the‌‌ accounts‌o ‌ f‌‌the‌‌companies;‌ ‌ other‌‌corporation.‌ ‌ 1. The‌ ‌constituent‌ ‌corporations‌ ‌shall‌ ‌become‌ ‌a‌ ‌single‌‌ f) The‌ ‌provisional‌ ‌or‌ ‌pro‌ ‌forma‌ ‌values‌,‌ ‌as‌ ‌merged‌ ‌or‌‌ corporation;‌ ‌ A‌‌‌de‌‌facto‌‌merger‌‌can‌‌be‌‌pursued‌‌by‌‌one‌‌corporation‌‌acquiring‌‌all‌‌ consolidated,‌‌using‌‌the‌‌accounting‌‌method;‌‌and‌ ‌ or‌ ‌substantially‌ ‌all‌ ‌of‌ ‌the‌ ‌properties‌ ‌of‌ ‌another‌ ‌corporation‌ ‌in‌‌ 2. The‌ ‌separate‌ ‌existence‌ ‌of‌ ‌the‌ ‌constituent‌ ‌corporation‌ ‌shall‌‌ g) Such‌‌other‌‌information‌‌as‌‌may‌‌be‌‌prescribed‌‌by‌‌the‌‌SEC.‌ ‌ exchange‌‌of‌‌shares‌‌of‌‌stock‌‌of‌‌the‌‌acquiring‌‌corporation.‌‌ ‌ cease,‌ ‌except‌ ‌that‌ ‌of‌ ‌the‌ ‌surviving‌ ‌or‌ ‌the‌ ‌consolidated‌‌ corporation;‌ ‌ Procedure‌ ‌ The‌ ‌Corporation‌ ‌Code‌ ‌requires‌ ‌the‌ ‌following‌ ‌steps‌ ‌for‌ ‌merger‌ ‌or‌‌ 3. The‌ ‌surviving‌ ‌or‌ ‌the‌ ‌consolidated‌ ‌corporation‌ ‌shall‌‌ thereupon‌‌and‌‌thereafter‌‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 70‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ 4. corporation‌ ‌absorbed‌ ‌by‌ ‌the‌ ‌surviving‌ ‌corporation.‌ ‌Although‌ ‌the‌‌ absorbed‌ ‌employees‌ ‌are‌ ‌retained‌ ‌as‌ ‌employees‌ ‌of‌ ‌the‌ ‌merged‌‌ corporation,‌ ‌the‌ ‌employer‌ ‌retains‌ ‌the‌ ‌right‌ ‌to‌ ‌terminate‌ ‌their‌‌ employment‌‌for‌‌a‌‌just‌‌or‌‌authorized‌‌cause.‌‌Likewise,‌‌the‌‌employees‌‌ are‌ ‌not‌ ‌precluded‌ ‌from‌ ‌severing‌ ‌their‌ ‌employment‌ ‌through‌‌ resignation‌ ‌or‌ ‌retirement.‌ ‌(‌Philippine‌ ‌Geothermal,‌ ‌Inc.‌ ‌Employees‌‌ Union‌‌v.‌‌Unocal‌‌Philippines‌‌2 ‌ 016‌‌Leonen,‌‌J)‌ ‌ ‌ a. possess‌ ‌all‌ ‌the‌ ‌rights,‌ ‌privileges,‌ ‌immunities‌ ‌and‌‌ franchises‌‌of‌‌each‌‌of‌‌the‌‌constituent‌‌corporations;‌‌and‌‌ ‌ b. all‌ ‌property,‌ ‌real‌ ‌or‌ ‌personal,‌ ‌and‌ ‌all‌ ‌receivables‌ ‌due‌ ‌on‌‌ whatever‌ ‌account,‌ ‌including‌ ‌subscriptions‌ ‌to‌ ‌shares‌ ‌and‌‌ other‌‌choses‌‌in‌‌action,‌‌and‌‌all‌‌and‌‌every‌‌other‌‌interest‌‌of,‌‌ or‌ ‌belonging‌ ‌to,‌ ‌or‌ ‌due‌ ‌to‌ ‌each‌ ‌constituent‌ ‌corporation,‌‌ shall‌ ‌be‌ ‌deemed‌ ‌transferred‌ ‌to‌ ‌and‌ ‌vested‌ ‌in‌ ‌such‌‌ Types‌‌of‌‌Transfers‌ ‌ surviving‌ ‌or‌ ‌consolidated‌ ‌corporation‌ ‌without‌ ‌further‌ act‌‌or‌‌deed‌;‌‌and‌ ‌ Type‌o ‌ f‌‌Acquisition‌‌or‌‌Transfer‌ ‌ The‌‌surviving‌‌or‌‌consolidated‌‌corporation‌‌shall‌‌be‌‌responsible‌‌ and‌‌liable‌‌for‌‌ ‌ a. all‌‌the‌‌liabilities‌‌and‌‌obligations‌‌of‌‌each‌‌of‌‌the‌‌constituent‌‌ corporations‌ ‌in‌ ‌the‌ ‌same‌ ‌manner‌ ‌as‌ ‌if‌ ‌such‌ ‌surviving‌‌or‌‌ consolidated‌ ‌corporation‌ ‌had‌ ‌itself‌ ‌incurred‌ ‌such‌‌ liabilities‌‌or‌‌obligations;‌‌and‌‌ ‌ b. any‌ ‌pending‌ ‌claim,‌ ‌action‌ ‌or‌ ‌proceeding‌ ‌brought‌ ‌by‌ ‌or‌‌ against‌ ‌any‌ ‌of‌ ‌such‌ ‌constituent‌ ‌corporations‌ ‌may‌ ‌be‌‌ prosecuted‌ ‌by‌ ‌or‌ ‌against‌ ‌the‌ ‌surviving‌ ‌or‌ ‌consolidated‌‌ corporation.‌‌ ‌ The‌‌‌rights‌‌of‌‌creditors‌‌or‌‌liens‌‌upon‌‌the‌‌property‌‌‌of‌‌any‌‌of‌‌ such‌‌constituent‌‌corporations‌‌shall‌‌not‌‌be‌‌impaired‌‌‌by‌‌such‌‌ merger‌‌or‌‌consolidation.‌‌(B ‌ PI‌‌v.‌‌Lee‌‌2 ‌ 012‌)‌ ‌ Pending‌ ‌cases.‌ ‌The‌ ‌surviving‌ ‌corporation‌ ‌in‌‌a‌‌merger‌‌effectively‌‌ becomes‌‌a‌‌“‌virtual‌‌party‌”‌‌to‌‌the‌‌civil‌‌case‌‌involving‌‌the‌‌dissolved‌‌ constituent‌ ‌corporations.‌ ‌As‌ ‌such,‌ ‌it‌ ‌became‌ ‌bound‌‌by‌‌the‌‌orders‌‌ and‌ ‌processes‌ ‌issued‌ ‌by‌ ‌the‌ ‌trial‌ ‌court‌ ‌despite‌ ‌not‌ ‌having‌ ‌been‌‌ properly‌‌impleaded‌‌therein.‌‌(i‌ bid.‌)‌ ‌ Surviving‌ ‌entity’s‌ ‌right‌‌to‌‌foreclosure‌.‌‌Pursuant‌‌to‌‌such‌‌merger‌‌ and‌ ‌consolidation,‌ ‌BPI’s‌ ‌right‌ ‌to‌ ‌foreclose‌ ‌the‌ ‌mortgage‌ ‌on‌‌ petitioner's‌ ‌property‌ ‌depends‌‌on‌‌the‌‌status‌‌of‌‌the‌‌contract‌‌and‌‌the‌‌ corresponding‌‌obligations‌‌of‌‌the‌‌parties‌‌originally‌‌involved,‌‌that‌‌is,‌‌ the‌‌agreement‌‌between‌‌its‌‌predecessor‌‌BSA‌‌and‌‌petitioner.‌‌(‌Spouses‌‌ Ong‌‌v.‌‌BPI‌‌Family‌‌Savings‌‌Bank‌‌‌2018‌)‌ ‌ Effects‌ ‌on‌ ‌constituent‌ ‌employees.‌ ‌The‌ ‌merger‌ ‌of‌ ‌a‌ ‌corporation‌‌ with‌ ‌another‌‌‌does‌‌not‌‌operate‌‌to‌‌dismiss‌‌the‌‌employees‌‌‌of‌‌the‌‌ Liability‌‌Rule‌ ‌ Assets-Only‌‌Level‌ ‌ The‌‌transferee‌‌shall‌‌NOT‌‌be‌‌ liable‌‌for‌‌the‌‌liabilities‌‌of‌‌ The‌‌purchaser‌‌is‌‌only‌‌interested‌‌in‌‌the‌‌ the‌‌transferor,‌e‌ xcept‌‌ ‌ “‌raw‌‌assets‌”‌‌and‌‌properties‌‌of‌‌the‌‌ 1. where‌‌the‌‌transferee‌‌ business.‌‌The‌‌purchaser‌‌is‌‌NOT‌‌ expressly‌‌or‌‌impliedly‌‌ interested‌‌in‌‌the‌‌goodwill‌‌or‌‌the‌‌ agrees‌‌to‌‌assume‌‌such‌‌ juridical‌‌entity‌‌of‌‌the‌‌corporate‌‌owner‌‌ debts‌‌or‌‌ ‌ of‌‌the‌‌assets.‌ ‌ 2. when‌‌it‌‌is‌‌effected‌‌in‌‌ fraud‌‌of‌‌creditors.‌ ‌ business;‌‌its‌‌primary‌‌interest‌‌is‌‌‌to‌‌ obtain‌‌the‌‌“earning‌‌capability”‌‌‌of‌‌ the‌‌venture.‌‌The‌‌purchaser‌‌is‌‌also‌‌NOT‌‌ interested‌‌in‌‌obtaining‌‌the‌‌juridical‌‌ entity‌‌that‌‌owns‌‌the‌‌business‌‌ enterprise.‌ ‌ transferee‌‌essentially‌‌ continues‌t‌ he‌‌business‌‌ enterprise‌‌of‌‌the‌‌transferor,‌‌ the‌‌transferee‌‌shall‌‌be‌‌ held‌‌liable‌‌for‌‌the‌‌ liabilities‌‌of‌‌the‌‌transferor‌ arising‌‌from‌‌the‌‌business‌‌ enterprise‌‌transferred.‌ ‌ Free‌‌and‌‌Harmless‌‌Clause‌ In‌ ‌a‌ ‌business-enterprise‌ ‌transfer‌,‌ ‌the‌ ‌transferor‌ ‌and‌ ‌the‌‌ transferee‌ ‌may‌ ‌enter‌ ‌into‌ ‌a‌ ‌contractual‌ ‌stipulation‌‌stating‌‌that‌‌the‌‌ transferee‌ ‌shall‌ ‌not‌ ‌be‌ ‌liable‌ ‌for‌ ‌any‌ ‌or‌ ‌all‌‌debts‌‌arising‌‌from‌‌the‌‌ business‌ ‌which‌‌were‌‌contracted‌‌prior‌‌to‌‌the‌‌time‌‌of‌‌transfer.‌‌‌Such‌‌ stipulations‌ ‌are‌ ‌valid,‌ ‌but‌ ‌only‌ ‌as‌ ‌to‌ ‌the‌ ‌transferor‌ ‌and‌ ‌the‌‌ transferee‌.‌ ‌These‌ ‌stipulations‌ ‌are‌ ‌not‌‌binding‌‌on‌‌the‌‌creditors‌‌of‌‌ the‌‌business‌‌enterprise‌‌who‌‌can‌‌still‌‌go‌‌after‌‌the‌‌transferee‌‌for‌‌the‌‌ enforcement‌‌of‌‌the‌‌liabilities.‌‌(‌Y-I‌‌Leisure‌‌Phils.,‌‌Inc.‌‌v.‌‌Yu‌‌‌2015‌‌‌En‌‌ Banc)‌ ‌ Implementation‌ ‌ 1. Property‌‌for‌‌Share‌‌Exchange‌ ‌ Equity‌‌Level‌ ‌ This‌‌transfer‌‌looks‌‌at‌‌the‌‌entirety‌‌of‌‌ the‌‌business‌‌enterprise‌‌as‌‌it‌‌is‌‌owned‌‌ and‌‌operated‌‌by‌‌the‌‌corporation.‌‌The‌‌ purchaser‌‌takes‌‌control‌‌and‌‌ownership‌‌ of‌‌the‌‌business‌‌by‌‌‌purchasing‌‌the‌‌ controlling‌‌shareholdings‌‌‌of‌‌the‌‌ corporate‌‌owner.‌‌If‌‌the‌‌acquisition‌‌ does‌‌not‌‌have‌‌as‌‌its‌‌primary‌‌ motivation‌‌the‌‌acquisition‌‌of‌‌control,‌‌ then‌‌it‌‌is‌‌not‌‌an‌‌equity‌‌level‌‌ acquisition;‌‌it‌‌is‌‌merely‌‌a‌‌purchase‌‌of‌‌ shares‌‌that‌‌falls‌‌within‌‌the‌‌assets-only‌‌ level‌‌of‌‌acquisition.‌ ‌ The‌‌transferee‌‌shall‌‌NOT‌‌be‌‌ liable‌‌for‌‌the‌‌liabilities‌‌of‌‌ the‌‌transferor,‌‌ ‌ except‌w ‌ here‌‌the‌‌transferee‌‌ expressly‌‌or‌‌impliedly‌‌ agrees‌‌to‌‌assume‌‌such‌‌ debts.‌ ‌ 2. Share‌‌for‌‌Share‌‌Exchange‌ ‌ Here,‌ ‌the‌ ‌transferor‌ ‌is‌ ‌the‌ ‌shareholder‌ ‌of‌ ‌a‌ ‌constituent‌‌ corporation‌‌and‌‌the‌‌transferee‌‌of‌‌shares‌‌and‌‌issuer‌‌of‌‌shares‌‌is‌‌ the‌ ‌surviving‌ ‌corporation.‌ ‌The‌ ‌properties‌ ‌of‌ ‌the‌ ‌constituent‌‌ corporation‌ ‌are‌ ‌eventually‌ ‌transferred‌ ‌to‌ ‌the‌ ‌surviving‌‌ corporation.‌ ‌ 3. Security‌‌for‌‌Share‌‌Exchange‌ ‌ Business-Enterprise‌‌Level‌ ‌ The‌‌purchaser’s‌‌interest‌‌goes‌‌beyond‌‌ the‌‌assets‌‌used‌‌in‌‌the‌‌company’s‌‌ Here,‌ ‌the‌ ‌transferor‌ ‌is‌ ‌the‌ ‌constituent‌ ‌corporation‌ ‌and‌ ‌the‌‌ transferee‌ ‌of‌ ‌property‌ ‌and‌ ‌issuer‌ ‌of‌ ‌shares‌ ‌is‌ ‌the‌ ‌surviving‌‌ corporation.‌‌The‌‌issued‌‌shares‌‌are‌‌eventually‌‌distributed‌‌to‌‌the‌‌ shareholders‌‌of‌‌the‌‌constituent‌‌corporation.‌ ‌ In‌‌a‌‌transfer‌‌of‌‌the‌‌business‌‌ enterprise,‌‌where‌‌the‌‌ Here,‌ ‌the‌ ‌transferor‌ ‌is‌ ‌a‌ ‌security‌ ‌holder‌ ‌of‌ ‌a‌ ‌constituent‌‌ corporation‌ ‌and‌ ‌the‌ ‌transferee‌ ‌of‌ ‌securities‌ ‌and‌ ‌issuer‌ ‌of‌‌ shares‌ ‌is‌ ‌the‌ ‌surviving‌ ‌corporation.‌ ‌The‌ ‌securities‌ ‌of‌ ‌the‌‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 71‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ constituent‌ ‌corporation‌ ‌are‌ ‌eventually‌ ‌transferred‌ ‌to‌ ‌the‌‌ surviving‌‌corporation.‌ ‌ Y-I‌‌Leisure‌‌Phils.,‌‌Inc.‌‌v.‌‌Yu‌‌2 ‌ 015‌ ‌ b) the‌ ‌transferee‌ ‌corporation‌ ‌continues‌ ‌the‌ ‌business‌ ‌of‌ ‌the‌‌ transferor‌‌corporation.‌‌ ‌ WON‌ ‌fraud‌ ‌must‌ ‌exist‌ ‌in‌ ‌the‌ ‌transfer‌ ‌of‌ ‌all‌‌the‌‌corporate‌‌assets‌‌in‌‌ order‌‌for‌‌the‌‌transferee‌‌to‌‌assume‌‌the‌‌liabilities‌‌of‌‌the‌‌transferor.‌ ‌ Both‌‌requisites‌‌are‌‌present‌‌in‌‌this‌‌case.‌ ‌ NO‌.‌‌The‌‌‌Nell‌‌Doctrine‌ ‌pronounced‌‌the‌‌rule‌‌regarding‌‌the‌‌transfer‌‌ of‌‌all‌‌the‌‌assets‌‌of‌‌one‌‌corporation‌‌to‌‌another‌‌as‌‌follows:‌ ‌ GENERALLY‌,‌ ‌where‌ ‌one‌‌corporation‌‌sells‌‌or‌‌otherwise‌‌transfers‌‌all‌‌ of‌ ‌its‌ ‌assets‌ ‌to‌ ‌another‌ ‌corporation,‌ ‌the‌ ‌latter‌ ‌is‌ ‌not‌ ‌liable‌ ‌for‌‌the‌‌ debts‌‌and‌‌liabilities‌‌of‌‌the‌‌transferor,‌E ‌ XCEPT‌:‌ ‌ 1. Where‌ ‌the‌ ‌purchaser‌ ‌expressly‌ ‌or‌ ‌impliedly‌ ‌agrees‌ ‌to‌‌ assume‌‌such‌‌debts‌;‌ ‌ 2. Where‌ ‌the‌ ‌transaction‌ ‌amounts‌ ‌to‌ ‌a‌ ‌consolidation‌ ‌or‌‌ merger‌‌‌of‌‌the‌‌corporations;‌ ‌ 3. 4. Sanctions‌‌for‌‌Violations‌ ‌ Administrative‌‌Sanctions‌ ‌ ‌ Investigations,‌‌Offenses,‌‌and‌‌Penalties‌ ‌ Authority‌‌of‌‌Commissioner‌ ‌ SEC‌ ‌may‌ ‌impose‌ ‌any‌ ‌or‌ ‌all‌‌of‌‌the‌‌following‌‌sanctions,‌‌taking‌‌into‌‌ consideration‌ ‌the‌ ‌extent‌ ‌of‌‌participation,‌‌nature,‌‌effects,‌‌frequency‌‌ and‌‌seriousness‌‌of‌‌the‌‌violation:‌ ‌ 1. Investigation‌‌and‌‌prosecution‌‌of‌‌offenses‌ ‌ a) Imposition‌ ‌of‌ ‌a‌ ‌FINE‌ ‌ranging‌ ‌from‌‌‌P5K‌‌to‌‌P2M‌,‌‌and‌‌not‌‌ more‌‌than‌‌P1K‌‌for‌‌each‌‌day‌‌of‌‌continuing‌‌violation‌‌but‌‌in‌‌ no‌‌case‌‌to‌‌exceed‌‌P2M;‌ ‌ 2. Administration‌‌of‌‌oath‌‌and‌‌issuance‌‌of‌‌subpoena‌ ‌ 3. Cease‌‌and‌‌desist‌‌power‌ ‌ b) Issuance‌‌of‌‌a‌‌permanent‌‌CDO‌;‌ ‌ The‌‌SEC‌‌may‌‌issue‌‌a‌‌‌cease‌‌and‌‌desist‌‌order‌‌‌ex‌‌parte‌‌to‌‌enjoin‌‌ an‌‌act‌‌or‌‌practice‌‌which‌‌is‌‌ ‌ Where‌‌the‌‌purchasing‌‌corporation‌‌is‌‌merely‌‌a‌‌‌continuation‌‌ of‌‌the‌‌selling‌‌corporation;‌‌and‌ ‌ Where‌‌the‌‌transaction‌‌is‌‌entered‌‌into‌‌‌fraudulently‌‌‌in‌‌order‌‌ to‌‌escape‌‌liability‌‌for‌‌such‌‌debts.‌ ‌ Section‌ ‌40‌ ‌suitably‌ ‌reflects‌ ‌the‌ ‌business-enterprise‌ ‌transfer‌‌ under‌‌the‌‌exception‌‌of‌‌the‌‌Nell‌‌Doctrine.‌‌It‌‌‌does‌‌not‌‌apply‌‌ ‌ a. fraudulent‌‌or‌‌ ‌ b. can‌ ‌be‌ ‌reasonably‌ ‌expected‌ ‌to‌ ‌cause‌ ‌significant,‌‌ imminent,‌ ‌and‌ ‌irreparable‌ ‌danger‌ ‌or‌ ‌injury‌ ‌to‌ ‌public‌‌ safety‌‌or‌‌welfare.‌‌ ‌ The‌ ‌ex‌ ‌parte‌ ‌order‌ ‌shall‌ ‌be‌ ‌valid‌ ‌for‌ ‌a‌ ‌maximum‌‌period‌‌of‌‌ twenty‌ ‌(20)‌ ‌days‌,‌ ‌without‌‌prejudice‌‌to‌‌the‌‌order‌‌being‌‌made‌‌ permanent‌‌after‌‌due‌‌notice‌‌and‌‌hearing‌.‌ ‌ 1) if‌ ‌the‌ ‌sale‌ ‌of‌ ‌the‌ ‌entire‌‌property‌‌and‌‌assets‌‌is‌‌necessary‌‌in‌‌ the‌‌usual‌‌and‌‌regular‌‌course‌‌of‌‌business‌‌of‌‌corporation,‌‌or‌‌ ‌ c) Suspension‌ ‌or‌ ‌revocation‌ ‌of‌ ‌the‌ ‌certificate‌ ‌of‌‌ incorporation;‌‌and‌ ‌ d) Dissolution‌‌of‌‌the‌‌corporation‌‌and‌f‌ orfeiture‌o ‌ f‌‌its‌‌assets.‌ ‌ Prohibited‌‌Acts‌‌and‌‌Penalties‌ ‌ 1. Unauthorized‌‌use‌‌of‌‌corporate‌‌name;‌ ‌ 2. Violation‌‌of‌‌disqualification‌‌provision;‌ ‌ 3. Violation‌‌of‌‌duty‌‌to‌‌maintain‌‌records,‌‌to‌‌allow‌‌their‌‌inspection‌‌ or‌‌reproduction;‌ ‌ Thereafter,‌‌the‌‌SEC‌‌may‌‌proceed‌‌ ‌ 2) if‌ ‌the‌ ‌proceeds‌ ‌of‌ ‌the‌ ‌sale‌ ‌or‌ ‌other‌ ‌disposition‌ ‌of‌ ‌such‌‌ property‌ ‌and‌ ‌assets‌‌will‌‌be‌‌appropriated‌‌for‌‌the‌‌conduct‌‌of‌‌ its‌‌remaining‌‌business.‌ ‌ Thus,‌ ‌the‌ ‌litmus‌ ‌test‌ ‌to‌ ‌determine‌ ‌the‌ ‌applicability‌ ‌of‌ ‌Section‌ ‌40‌‌ would‌‌be‌‌the‌‌‌capacity‌‌of‌‌the‌‌corporation‌‌to‌‌continue‌‌its‌‌business‌‌ after‌‌the‌‌sale‌‌of‌‌all‌‌or‌‌substantially‌‌all‌‌its‌‌assets‌.‌ ‌ An‌‌evaluation‌‌of‌‌the‌‌relevant‌‌jurisprudence‌‌reveals‌‌that‌‌‌fraud‌‌is‌‌not‌‌ an‌ ‌essential‌ ‌element‌ ‌for‌ ‌the‌ ‌application‌ ‌of‌ ‌the‌‌ business-enterprise‌‌transfer‌.‌ ‌ When‌ ‌the‌‌refusal‌‌amounts‌‌to‌‌clear‌‌and‌‌open‌‌defiance‌‌of‌‌the‌‌ SEC’s‌‌order,‌‌decision,‌‌or‌‌subpoena,‌‌the‌‌SEC‌‌may‌‌impose‌‌a‌‌‌daily‌‌ fine‌‌of‌‌‌P1K‌‌until‌‌the‌‌order,‌‌decision,‌‌or‌‌subpoena‌‌is‌‌complied‌‌ with.‌ ‌ a) the‌‌transferor‌‌corporation‌‌sells‌‌all‌‌or‌‌substantially‌‌all‌‌of‌‌its‌‌ assets‌‌to‌‌another‌‌entity;‌‌and‌‌ ‌ a. administratively‌ ‌against‌ ‌such‌ ‌person‌ ‌in‌ ‌accordance‌‌ with‌‌Section‌‌158‌‌of‌‌this‌‌Code,‌‌and/or‌‌ ‌ 4. Willful‌ ‌certification‌ ‌of‌ ‌incomplete,‌ ‌inaccurate,‌ ‌false,‌ ‌or‌‌ misleading‌‌statements‌‌or‌‌reports;‌ ‌ b. transmit‌ ‌evidence‌ ‌to‌ ‌the‌ ‌DOJ‌ ‌for‌ ‌preliminary‌‌ investigation‌‌or‌‌criminal‌‌prosecution‌‌and/or‌‌ ‌ 5. Independent‌‌auditor‌‌collusion;‌ ‌ c. initiate‌‌criminal‌‌prosecution‌‌for‌‌any‌‌violation.‌ ‌ 6. Obtaining‌‌corporate‌‌registration‌‌through‌‌fraud;‌ ‌ 7. Fraudulent‌‌conduct‌‌of‌‌business;‌ ‌ 8. Acting‌‌as‌‌intermediaries‌‌for‌‌graft‌‌and‌‌corrupt‌‌practices;‌ ‌ 4. Contempt‌ ‌ WON‌‌petitioners‌‌became‌‌a‌‌continuation‌‌of‌‌MADCI's‌‌business.‌ ‌ YES‌.‌ ‌The‌ ‌business-enterprise‌ ‌transfer‌ ‌rule‌ ‌applies‌ ‌when‌ ‌two‌‌ Any‌ ‌person‌ ‌who,‌ ‌without‌ ‌justifiable‌ ‌cause,‌ ‌fails‌ ‌or‌‌refuses‌‌to‌‌ comply‌‌with‌‌any‌‌lawful‌‌order,‌‌decision,‌‌or‌‌subpoena‌‌issued‌‌by‌‌ the‌ ‌SEC‌ ‌shall,‌ ‌after‌ ‌due‌ ‌notice‌ ‌and‌ ‌hearing‌,‌ ‌be‌ ‌held‌ ‌in‌‌ contempt‌a‌ nd‌‌fined‌‌in‌‌an‌‌amount‌‌not‌‌exceeding‌‌‌P30K‌.‌‌ ‌ When‌ ‌there‌ ‌is‌ ‌a‌ ‌finding‌ ‌that‌ ‌any‌ ‌of‌ ‌its‌ ‌directors,‌ ‌officers,‌‌ employees,‌ ‌agents,‌ ‌or‌ ‌representatives‌ ‌are‌ engaged‌ ‌in‌ ‌graft‌‌ and‌‌corrupt‌‌practices‌,‌‌the‌‌corporation’s‌f‌ ailure‌‌to‌‌install‌:‌‌ ‌ requisites‌‌‌concur:‌‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 72‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ a. b. safeguards‌ ‌for‌ ‌the‌ ‌transparent‌ ‌and‌ ‌lawful‌ ‌delivery‌ ‌of‌‌ services;‌‌and‌ ‌ policies,‌ ‌code‌ ‌of‌ ‌ethics,‌ ‌and‌ ‌procedures‌ ‌against‌ ‌graft‌‌ and‌‌corruption‌‌ ‌ shall‌‌be‌‌prima‌‌facie‌e‌ vidence‌‌of‌‌corporate‌‌liability.‌ ‌ 9. i) 11. Retaliation‌‌against‌‌whistleblowers;‌ ‌ Who‌‌are‌‌liable‌ ‌ Directors,‌‌trustees,‌‌stockholders,‌‌members,‌‌officers,‌‌or‌‌employees‌‌ responsible‌‌for‌‌the‌‌violation‌‌or‌‌indispensable‌‌to‌‌its‌‌commission.‌ ‌ Anyone‌ ‌who‌ ‌shall‌ ‌aid,‌ ‌abet,‌ ‌counsel,‌ ‌command,‌ ‌induce,‌ ‌or‌‌ cause‌‌any‌‌violation‌‌shall‌‌be‌‌punished‌‌with‌‌a‌‌fine‌‌not‌‌exceeding‌‌that‌‌ imposed‌‌on‌‌the‌‌principal‌‌offenders,‌‌at‌‌the‌‌discretion‌‌of‌‌the‌‌court.‌ ‌ Authority‌‌of‌‌the‌‌SEC‌ ‌ The‌‌SEC‌‌shall‌‌have‌‌the‌‌power‌‌and‌‌authority‌‌to:‌ ‌ a) Exercise‌‌supervision‌‌and‌‌jurisdiction‌‌over‌‌all‌‌corporations‌‌and‌‌ persons‌ ‌acting‌ ‌on‌ ‌their‌ ‌behalf,‌ ‌except‌ ‌as‌ ‌otherwise‌ ‌provided‌‌ under‌‌this‌‌Code;‌ ‌ b) Impose‌ ‌sanctions‌ ‌for‌ ‌the‌ ‌violation‌ ‌of‌ ‌this‌ ‌Code,‌ ‌its‌‌ implementing‌‌rules‌‌and‌‌orders‌‌of‌‌the‌‌SEC;‌ ‌ c) Issue‌ ‌opinions‌ ‌to‌ ‌clarify‌ ‌the‌ ‌application‌ ‌of‌ ‌laws,‌ ‌rules,‌ ‌and‌‌ regulations;‌ ‌ d) Issue‌ ‌cease‌ ‌and‌ ‌desist‌ ‌orders‌ ‌ex‌ ‌parte‌‌to‌‌prevent‌‌imminent‌‌ fraud‌‌or‌‌injury‌‌to‌‌the‌‌public;‌ ‌ e) Hold‌‌corporations‌‌in‌‌direct‌‌and‌‌indirect‌c‌ ontempt‌;‌ ‌ Issue‌ ‌subpoena‌ ‌duces‌ ‌tecum‌ ‌and‌ ‌summon‌ ‌witnesses‌ ‌to‌‌ appear‌‌in‌‌proceedings‌‌before‌‌the‌‌SEC;‌ ‌ g) In‌‌appropriate‌‌cases,‌‌order‌‌the‌‌examination,‌‌search‌‌and‌‌seizure‌‌ of‌‌documents,‌‌papers,‌‌files‌‌and‌‌records,‌‌and‌‌books‌‌of‌‌accounts‌‌ of‌ ‌any‌ ‌entity‌ ‌or‌ ‌person‌ ‌under‌ ‌investigation‌ ‌as‌ ‌may‌ ‌be‌‌ necessary‌‌for‌‌the‌‌proper‌‌disposition‌‌of‌‌the‌‌cases;‌ ‌ collected.‌ ‌ In‌ ‌this‌ ‌case,‌ ‌the‌‌amount‌‌appears‌‌exorbitant‌‌and‌‌confiscatory‌‌for‌‌the‌‌ mere‌ ‌filing,‌ ‌"processing,‌ ‌examination,‌ ‌and‌ ‌verification"‌ ‌of‌ ‌a‌ ‌single‌‌ paragraph‌‌of‌‌petitioner's‌‌articles‌‌of‌‌incorporation.‌ ‌ Dissolve‌ ‌or‌ ‌impose‌ ‌sanctions‌ ‌on‌ ‌corporations,‌ ‌upon‌ ‌final‌‌ court‌‌order‌;‌ ‌ j) Engaging‌‌intermediaries‌‌for‌‌graft‌‌and‌‌corrupt‌‌practices;‌ ‌ 10. Tolerating‌‌graft‌‌and‌‌corrupt‌‌practices;‌ ‌ f) h) Suspend‌ ‌or‌ ‌revoke‌ ‌the‌ ‌certificate‌ ‌of‌ ‌incorporation‌ ‌after‌‌ proper‌‌notice‌‌and‌‌hearing;‌ ‌ Issue‌‌‌writs‌‌of‌‌execution‌‌and‌‌attachment‌‌to‌‌enforce‌‌payment‌‌ of‌‌fees,‌‌administrative‌‌fines,‌‌and‌‌other‌‌dues‌‌collectible;‌ ‌ No‌ ‌court‌ ‌below‌ ‌the‌ ‌Court‌ ‌of‌ ‌Appeals‌ ‌shall‌ ‌have‌ ‌jurisdiction‌ ‌to‌‌ issue‌ ‌a‌ ‌restraining‌ ‌order,‌ ‌preliminary‌ ‌injunction,‌ ‌or‌ ‌preliminary‌‌ mandatory‌ ‌injunction‌ ‌in‌ ‌any‌ ‌case,‌ ‌dispute,‌ ‌or‌ ‌controversy‌ ‌that‌‌ directly‌ ‌or‌ ‌indirectly‌ ‌interferes‌ ‌with‌ ‌the‌ ‌exercise‌ ‌of‌ ‌the‌ ‌powers,‌‌ duties‌ ‌and‌ ‌responsibilities‌ ‌of‌ ‌the‌ ‌SEC‌‌that‌‌falls‌‌exclusively‌‌within‌‌ its‌‌jurisdiction.‌ ‌ ‌Ient‌‌v.‌‌Tullett‌‌Prebon‌‌(Philippines),‌‌Inc.‌‌‌2017‌ ‌ The‌ ‌unreasonableness‌ ‌of‌‌the‌‌instant‌‌fee‌‌is‌‌bolstered‌‌by‌‌the‌‌fact‌‌that‌‌ R.A.‌‌11232‌‌or‌‌the‌‌RCC,‌‌which‌‌took‌‌effect‌‌on‌‌February‌‌23,‌‌2019,‌‌now‌‌ grants‌ ‌all‌ ‌corporations‌ ‌perpetual‌ ‌existence,‌ ‌unless‌ ‌its‌ ‌articles‌ ‌of‌‌ incorporation‌‌otherwise‌‌provide.‌‌Evidently,‌‌‌there‌‌is‌‌no‌‌more‌‌basis‌‌to‌‌ impose‌‌a‌‌"license‌‌fee"‌‌for‌‌the‌‌purported‌‌grant‌‌of‌‌a‌‌fresh‌‌period‌‌for‌‌a‌‌ corporation‌‌to‌‌act‌‌as‌‌a‌‌juridical‌‌being‌‌for‌‌another‌‌50‌‌years.‌ ‌ ‌ Securities‌‌Regulation‌‌Code‌ ‌ RA‌‌No‌‌8799‌‌|‌‌The‌‌Securities‌‌Regulations‌‌Code‌ ‌ 2015‌‌SRC‌‌Rules‌,‌‌as‌‌amended‌ WON‌ ‌Section‌ ‌144‌ ‌of‌ ‌the‌ ‌Corporation‌ ‌Code‌‌is‌‌applicable‌‌to‌‌Sections‌‌ 31‌‌and‌‌34‌‌of‌‌the‌‌same‌‌statute‌‌such‌‌that‌‌criminal‌‌liability‌‌attaches‌‌to‌‌ violations‌‌of‌‌Sections‌‌31‌‌and‌‌34.‌ ‌ State‌‌Policy‌ ‌ NO‌.‌ ‌When‌ ‌it‌ ‌is‌ ‌a‌ ‌corporation‌ ‌that‌ ‌commits‌ ‌a‌ ‌violation‌ ‌of‌ ‌the‌‌ Definition‌‌of‌‌Securities‌ ‌ Corporation‌ ‌Code,‌ ‌it‌ ‌may‌ ‌be‌ ‌dissolved‌ ‌in‌ ‌appropriate‌ ‌proceedings‌‌ before‌ ‌the‌‌SEC.‌‌The‌‌involuntary‌‌dissolution‌‌of‌‌an‌‌erring‌‌corporation‌‌ is‌ ‌not‌ ‌imposed‌ ‌as‌ ‌a‌ ‌criminal‌ ‌sanction,‌ ‌but‌ ‌rather‌ ‌it‌ ‌is‌ ‌an‌‌ administrative‌‌penalty.‌ ‌ The‌ ‌Corporation‌ ‌Code‌ ‌was‌ ‌intended‌ ‌as‌ ‌a‌ ‌regulatory‌ ‌measure,‌ ‌not‌‌ primarily‌ ‌as‌ ‌a‌ ‌penal‌ ‌statute.‌ ‌Sections‌ ‌31‌ ‌to‌ ‌34‌ ‌in‌ ‌particular‌ ‌were‌‌ intended‌ ‌to‌ ‌impose‌ ‌exacting‌ ‌standards‌ ‌of‌ ‌fidelity‌ ‌on‌ ‌corporate‌‌ officers‌ ‌and‌ ‌directors‌ ‌but‌ ‌without‌ ‌unduly‌ ‌impeding‌ ‌them‌ ‌in‌ ‌the‌ discharge‌ ‌of‌ ‌their‌ ‌work‌ ‌with‌ ‌concerns‌ ‌of‌‌litigation.‌‌When‌‌Congress‌‌ intends‌ ‌to‌ ‌criminalize‌ ‌certain‌ ‌acts‌ ‌it‌ ‌does‌ ‌so‌ ‌in‌ ‌plain,‌ ‌categorical‌‌ language,‌ ‌otherwise‌ ‌such‌ ‌a‌ ‌statute‌ ‌would‌ ‌be‌ ‌susceptible‌ ‌to‌‌ constitutional‌‌attack.‌ ‌ Kinds‌‌of‌‌Securities‌ ‌ Powers‌‌and‌‌Functions‌‌of‌‌the‌‌SEC‌ ‌ Procedure‌‌for‌‌registration‌‌of‌‌securities‌ ‌ Prohibitions‌‌on‌‌fraud,‌‌manipulation,‌‌and‌‌insider‌‌trading‌ ‌ 1.‌‌Manipulation‌‌of‌‌security‌‌prices‌ ‌ 2.‌‌Short‌‌sales‌ ‌ First‌‌Philippine‌‌Holdings‌‌Corp.‌‌v.‌‌SEC‌‌2 ‌ 020‌ ‌ WON‌‌the‌‌fee‌‌for‌‌the‌‌extension‌‌of‌‌a‌‌corporation's‌‌term‌‌in‌‌the‌‌amount‌‌ of‌‌P24M‌‌is‌‌unreasonable,‌‌patently‌‌oppressive,‌‌and‌‌confiscatory.‌ ‌ 3.‌‌Option‌‌trading‌ ‌ 4.‌‌Fraudulent‌‌transactions‌ ‌ YES‌.‌ ‌A‌ ‌filing‌ ‌fee‌,‌ ‌by‌ ‌legal‌ ‌definition,‌ ‌is‌ ‌that‌ ‌charged‌ ‌by‌ ‌a‌ ‌public‌‌ official‌ ‌to‌ ‌accept‌‌a‌‌document‌‌for‌‌processing.‌‌The‌‌fee‌‌should‌‌be‌‌just,‌‌ fair,‌ ‌and‌ ‌proportionate‌ ‌to‌ ‌the‌ ‌service‌ ‌for‌ ‌which‌ ‌the‌ ‌fee‌ ‌is‌ ‌being‌‌ 5.‌‌Insider‌‌trading‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 73‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ Protection‌‌of‌‌shareholder‌‌interests‌ ‌ 1.‌‌Tender‌‌offer‌‌rule‌ ‌ 2.‌‌Rules‌‌on‌‌proxy‌‌solicitation‌ ‌ 3.‌‌Disclosure‌‌rule‌ ‌ NB:‌ ‌This‌ ‌modifies‌ ‌the‌ ‌Howey‌ ‌Test‌.‌ ‌(‌Power‌ ‌Homes‌‌ Unlimited‌‌v.‌‌SEC‌;‌S‌ EC‌‌v.‌‌Prosperity.com‌‌‌2012‌)‌ ‌ c) Certificates‌‌issued‌‌by‌‌a‌‌‌receiver‌‌‌or‌‌by‌‌a‌‌‌trustee‌‌‌in‌‌bankruptcy‌‌ duly‌‌approved‌‌by‌‌the‌‌proper‌‌adjudicatory‌‌body.‌ ‌ A‌ ‌common‌ ‌enterprise‌ ‌is‌ ‌deemed‌ ‌created‌ ‌when‌ ‌two‌ ‌(2)‌ ‌or‌‌ more‌ ‌investors‌ ‌"pool"‌ ‌their‌ ‌resources,‌ ‌creating‌ ‌a‌ ‌common‌‌ enterprise,‌ ‌even‌ ‌if‌ ‌the‌ ‌promoter‌ ‌receives‌‌nothing‌‌more‌‌than‌‌a‌‌ broker's‌‌commission.‌‌(R ‌ ule‌‌26.3‌)‌ ‌ d) Any‌‌security‌‌or‌‌its‌‌derivatives‌‌the‌‌sale‌‌or‌‌transfer‌‌of‌‌which,‌‌by‌‌ law,‌‌is‌‌under‌‌the‌‌supervision‌‌and‌‌regulation‌‌of‌‌the‌‌Office‌‌of‌‌the‌‌ IC,‌‌HLURB,‌‌or‌‌the‌‌BIR.‌ ‌ c) Fractional‌ ‌undivided‌ ‌interests‌ ‌in‌ ‌oil,‌ ‌gas‌ ‌or‌ ‌other‌ ‌mineral‌‌ rights;‌ ‌ State‌‌Policy‌ d) Derivatives‌l‌ ike‌‌option‌‌and‌‌warrants;‌ ‌ The‌‌State‌‌shall‌‌establish‌‌a‌s‌ ocially‌‌conscious,‌‌free‌‌market‌‌‌that‌‌ ‌ 1. regulates‌‌itself,‌‌ ‌ e) Certificates‌‌of‌‌assignments‌,‌‌certificates‌‌of‌‌participation,‌‌trust‌‌ certificates,‌‌voting‌‌trust‌‌certificates‌‌or‌‌similar‌‌instruments;‌ ‌ 2. encourage‌‌the‌‌widest‌‌participation‌‌of‌‌ownership‌‌in‌‌enterprises,‌‌ ‌ f) 3. enhance‌‌the‌‌democratization‌‌of‌‌wealth,‌‌ ‌ 4. promote‌‌the‌‌development‌‌of‌‌the‌‌capital‌‌market,‌‌ ‌ 5. protect‌‌investors,‌‌ ‌ 6. ensure‌‌full‌‌and‌‌fair‌‌disclosure‌‌about‌‌securities,‌‌ ‌ 7. minimize‌ ‌if‌ ‌not‌ ‌totally‌ ‌eliminate‌ ‌insider‌ ‌trading‌ ‌and‌ ‌other‌‌ fraudulent‌ ‌or‌‌manipulative‌‌devices‌‌and‌‌practices‌‌which‌‌create‌ distortions‌‌in‌‌the‌‌free‌‌market.‌ ‌ ‌ Definition‌‌of‌‌Securities‌ ‌ "‌Securities‌"‌‌includes:‌ ‌ a) Shares‌ ‌of‌ ‌stock‌,‌ ‌bonds,‌ ‌debentures,‌ ‌notes,‌ ‌evidences‌ ‌of‌‌ indebtedness,‌‌asset-backed‌‌securities;‌ ‌ b) Investment‌ ‌contracts‌,‌ ‌certificates‌‌of‌‌interest‌‌or‌‌participation‌‌ in‌‌a‌‌profit‌‌sharing‌‌agreement,‌‌certificates‌‌of‌‌deposit‌‌for‌‌a‌‌future‌‌ subscription.‌‌The‌r‌ equisites‌o ‌ f‌‌an‌‌investment‌‌contract‌‌are:‌ ‌ 1) An‌‌investment‌‌of‌‌money;‌ ‌ Proprietary‌‌or‌‌nonproprietary‌‌membership‌‌certificates‌‌in‌‌ corporations;‌‌ ‌ g) Other‌ ‌instruments‌ ‌as‌ ‌may‌ ‌in‌ ‌the‌ ‌future‌ ‌be‌‌determined‌‌by‌‌the‌‌ SEC.‌ ‌ ‌ Kinds‌‌of‌‌Securities‌ ‌ 1) Equity‌ ‌security.‌ ‌—‌ ‌Shares‌ ‌of‌ ‌stock‌ ‌in‌ ‌corporations.‌ ‌Gain‌ ‌is‌‌ through‌‌dividends‌‌and‌‌asset‌‌appreciation.‌‌ ‌ 2) Debt‌‌security.‌‌‌—‌‌Promissory‌‌notes,‌‌commercial‌‌paper,‌‌bonds.‌‌ Where‌ ‌there‌ ‌is‌ ‌a‌ ‌promise‌ ‌of‌ ‌payment‌ ‌of‌ ‌the‌ ‌principal‌ ‌and‌‌ interest.‌‌Gain‌‌is‌‌through‌‌interest‌‌and‌‌asset‌‌appreciation.‌ ‌ 3) Derivatives.‌ ‌—‌ ‌Options‌ ‌and‌ ‌warrants.‌ ‌Financial‌ ‌instruments‌‌ whose‌‌value‌‌depends‌‌on‌‌an‌‌underlying‌‌security‌‌but‌‌which‌‌does‌‌ not‌ ‌require‌ ‌any‌ ‌investment‌ ‌of‌ ‌principal‌ ‌in‌ ‌the‌ ‌underlying‌‌ security.‌ ‌ 1.‌‌Exempt‌‌securities‌ ‌ The‌ ‌requirement‌ ‌of‌ ‌registration‌ ‌shall‌ ‌not‌‌as‌‌a‌‌general‌‌rule‌‌apply‌‌to‌‌ any‌‌of‌‌the‌‌following‌‌classes‌‌of‌‌securities:‌ ‌ 2) In‌‌a‌‌common‌‌enterprise;‌ ‌ a) Any‌‌security‌‌issued‌‌or‌‌guaranteed‌‌by‌‌the‌G ‌ overnment‌.‌ ‌ 3) With‌‌expectation‌‌of‌‌profits;‌ ‌ b) Any‌ ‌security‌‌issued‌‌or‌‌guaranteed‌‌by‌‌the‌‌government‌‌of‌‌any‌‌ country‌ ‌with‌ ‌which‌ ‌the‌ ‌Philippines‌ ‌maintains‌ ‌diplomatic‌‌ relations‌‌on‌‌the‌‌basis‌‌of‌r‌ eciprocity‌.‌ 4) Primarily‌f‌ rom‌‌the‌‌efforts‌‌of‌‌others.‌‌ ‌ e) Any‌‌security‌‌issued‌‌by‌‌a‌‌bank‌‌‌except‌‌‌its‌‌own‌‌shares‌‌of‌‌stock.‌‌ (‌§9.1‌)‌ ‌ The‌ ‌registration‌ ‌requirements‌ ‌shall‌ ‌not‌ ‌likewise‌ ‌apply‌ ‌to‌ ‌the‌‌ following:‌ ‌ a) Evidence‌ ‌of‌ ‌indebtedness‌ ‌issued‌ ‌to‌ ‌the‌ ‌BSP‌ ‌under‌ ‌its‌ ‌open‌‌ market‌‌and/or‌‌rediscounting‌‌operations;‌ ‌ b) Bills‌ ‌of‌ ‌exchange‌ ‌arising‌ ‌from‌ ‌a‌ ‌bona‌‌fide‌‌sale‌‌of‌‌goods‌‌and‌‌ services‌ ‌that‌ ‌are‌ ‌distributed‌ ‌and/or‌ ‌traded‌ ‌by‌ ‌banks‌ ‌or‌‌ investment‌‌houses;‌ ‌ c) Any‌ ‌security‌ ‌issued‌ ‌or‌ ‌guaranteed‌ ‌by‌ ‌multilateral‌ ‌financial‌‌ entities‌‌(MFEs)‌‌‌established‌‌through‌‌a‌‌treaty.‌ d) Evidence‌‌of‌‌indebtedness‌,‌‌e.g.,‌‌commercial‌‌papers,‌‌that‌‌meet‌‌ the‌‌following‌‌conditions:‌ ‌ i) ii) Issued‌‌to‌n ‌ ot‌‌more‌‌than‌‌19‌n ‌ on-institutional‌‌lenders;‌ ‌ Payable‌‌to‌‌a‌‌specific‌‌person;‌ ‌ iii) Neither‌ ‌negotiable‌ ‌nor‌ ‌assignable‌ ‌and‌ ‌held‌ ‌on‌ ‌to‌‌ maturity;‌‌and‌ ‌ iv) In‌ ‌an‌ ‌amount‌ ‌not‌ ‌exceeding‌ ‌P150M‌ ‌or‌‌such‌‌higher‌‌ amount‌‌as‌‌the‌‌SEC‌‌may‌‌prescribe.‌‌(R ‌ ule‌‌9.1.2‌)‌ ‌ 2.‌‌Exempt‌‌transactions‌ ‌ Automatic‌ ‌Exemptions.‌ ‌—‌ ‌The‌ ‌requirement‌ ‌of‌‌registration‌‌‌shall‌‌not‌‌ apply‌ ‌to‌ ‌the‌ ‌sale‌ ‌of‌ ‌any‌ ‌security‌ ‌in‌ ‌any‌ ‌of‌ ‌the‌ ‌following‌‌ transactions‌:‌ ‌ a) At‌ ‌any‌ ‌judicial‌ ‌sale‌,‌ ‌or‌ ‌sale‌ ‌by‌ ‌an‌ ‌executor,‌ ‌administrator,‌‌ guardian‌‌or‌‌receiver‌‌or‌‌trustee‌‌in‌‌insolvency‌‌or‌‌bankruptcy.‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 74‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ b) By‌ ‌or‌ ‌for‌ ‌the‌ ‌account‌ ‌of‌ ‌a‌ ‌pledge‌‌holder,‌‌or‌‌mortgagee‌‌or‌‌any‌‌ other‌ ‌similar‌ ‌lien‌ ‌holder‌ ‌selling‌ ‌or‌ ‌offering‌ ‌for‌ ‌sale‌ ‌or‌‌ delivery‌i‌ n‌‌the‌‌ordinary‌‌course‌‌of‌‌business‌.‌ ‌ c) An‌ ‌isolated‌ ‌transaction‌ ‌not‌ ‌being‌ ‌made‌ ‌in‌ ‌the‌ ‌course‌ ‌of‌‌ repeated‌‌and‌‌successive‌‌transactions‌.‌ ‌ d) The‌ ‌distribution‌ ‌by‌ ‌a‌ ‌corporation‌,‌ ‌actively‌ ‌engaged‌ ‌in‌ ‌the‌‌ business‌ ‌authorized‌ ‌by‌ ‌its‌ ‌articles‌ ‌of‌ ‌incorporation,‌ ‌of‌‌ securities‌ ‌to‌ ‌its‌ ‌stockholders‌ ‌or‌ ‌other‌ ‌security‌ ‌holders‌ ‌as‌ ‌a‌‌ stock‌‌dividend‌‌or‌‌other‌‌distribution‌‌out‌‌of‌s ‌ urplus‌.‌ ‌ j) The‌ ‌exchange‌ ‌of‌ ‌securities‌ ‌by‌ ‌the‌ ‌issuer‌ ‌with‌ ‌its‌ ‌existing‌‌ 3.‌‌Non-exempt‌‌transactions‌ ‌ security‌ ‌holders‌ ‌exclusively,‌ ‌where‌ ‌no‌ ‌commission‌ ‌or‌ ‌other‌‌ Qualified‌‌Buyers‌ ‌ remuneration‌ ‌is‌ ‌paid‌ ‌or‌ ‌given‌ ‌directly‌ ‌or‌ ‌indirectly‌ ‌for‌‌ soliciting‌‌such‌‌exchange.‌ ‌ A‌‌natural‌‌person‌‌must‌‌possess‌‌the‌‌following‌‌qualifications:‌ ‌ k) Private‌ ‌placement.‌ ‌—‌ ‌The‌ ‌sale‌ ‌of‌‌securities‌‌by‌‌an‌‌issuer‌‌‌to‌‌ fewer‌ ‌than‌ ‌twenty‌ ‌(20)‌ ‌persons‌ ‌in‌ ‌the‌ ‌Philippines‌‌‌during‌‌ any‌‌twelve-month‌‌period‌.‌ ‌ l) 1. Bank;‌ ‌ 2. Registered‌‌investment‌‌house;‌ ‌ 3. Insurance‌‌company;‌ ‌ f) 4. Pension‌ ‌fund‌ ‌or‌ ‌retirement‌ ‌plan‌ ‌maintained‌ ‌by‌ ‌the‌‌ Government;‌ ‌ 5. Investment‌‌company.‌ ‌ g) The‌ ‌issue‌ ‌and‌ ‌delivery‌ ‌of‌ ‌any‌ ‌security‌ ‌in‌ ‌exchange‌ ‌for‌ ‌any‌‌ other‌ ‌security‌ ‌of‌ ‌the‌ ‌same‌ ‌issuer‌ ‌pursuant‌ ‌to‌ ‌a‌ ‌right‌ ‌of‌‌ conversion‌ ‌entitling‌ ‌the‌‌holder‌‌of‌‌the‌‌security‌‌surrendered‌‌in‌‌ exchange‌‌to‌‌make‌‌such‌‌conversion.‌ ‌ h) Broker's‌ ‌transactions‌,‌ ‌executed‌ ‌upon‌ ‌customer's‌ ‌orders,‌ ‌on‌‌ any‌‌registered‌‌Exchange‌‌or‌‌other‌‌trading‌‌market.‌ ‌ i) Exemptive‌‌Relief.‌‌—‌‌‌The‌‌SEC‌‌may‌‌exempt‌‌other‌‌transactions,‌‌if‌‌it‌‌finds‌‌ that‌ ‌the‌ ‌requirements‌ ‌of‌ ‌registration‌ ‌are‌ ‌not‌‌necessary‌‌in‌‌the‌‌public‌‌ interest‌‌‌or‌‌for‌‌the‌‌protection‌‌of‌‌the‌‌investors‌‌such‌‌as‌‌by‌‌reason‌‌of‌‌ ‌ 1. the‌‌small‌‌amount‌‌involved‌‌‌or‌‌ ‌ 2. the‌‌limited‌‌character‌‌of‌‌the‌‌public‌‌offering‌.‌ For‌ ‌a‌‌public‌‌offering‌‌to‌‌be‌‌considered‌‌of‌‌limited‌‌character,‌‌the‌‌ covered‌ ‌securities‌ ‌should‌ ‌be‌ ‌available‌ ‌only‌ ‌to‌ ‌the‌ ‌parties‌ ‌or‌‌ persons‌‌named‌‌in‌‌the‌‌application‌‌for‌‌exemption‌‌for‌‌a‌‌specified‌‌ period.‌ ‌(‌Rule‌ ‌10.2.2‌)‌ ‌An‌ ‌example‌ ‌would‌ ‌be‌ ‌Stock‌ ‌Option‌‌ Plans‌‌‌in‌‌favor‌‌of‌‌employees.‌ ‌ Subscriptions‌f‌ or‌‌shares‌‌of‌‌the‌‌capital‌‌stock‌‌of‌‌a‌‌corporation‌‌ ‌ 1. prior‌ ‌to‌ ‌the‌ ‌incorporation‌ ‌thereof‌ ‌or‌ ‌in‌ ‌pursuance‌ ‌of‌‌ an‌‌increase‌‌in‌‌its‌‌authorized‌‌capital‌‌stock‌,‌‌ ‌ 2. when‌ ‌no‌ ‌expense‌ ‌is‌ ‌incurred,‌ ‌or‌ ‌no‌ ‌commission,‌‌ compensation‌‌or‌‌remuneration‌‌is‌‌paid‌‌or‌‌given,‌‌and‌‌ ‌ 3. only‌ ‌when‌ ‌the‌ ‌purpose‌ ‌for‌ ‌soliciting,‌ ‌giving‌ ‌or‌ ‌taking‌ ‌of‌‌ such‌‌subscriptions‌‌is‌‌‌to‌‌comply‌‌with‌‌the‌‌requirements‌‌ of‌ ‌such‌ ‌law‌ ‌as‌ ‌to‌ ‌the‌ ‌percentage‌‌of‌‌the‌‌capital‌‌stock‌‌of‌‌a‌‌ corporation‌ ‌which‌ ‌should‌ ‌be‌ ‌subscribed‌ ‌before‌ ‌its‌‌ authorized‌‌capital‌‌increased.‌ ‌ Any‌‌person‌a ‌ pplying‌f‌ or‌‌an‌‌exemption,‌‌shall‌‌file‌‌and‌‌pay‌‌with‌‌the‌‌SEC‌‌ ‌ 1. a‌‌notice‌i‌ dentifying‌‌the‌‌exemption‌‌relied‌‌and‌‌ ‌ 2. with‌ ‌such‌ ‌notice,‌ ‌a‌ ‌fee‌ ‌equivalent‌ ‌to‌ ‌0.1%‌ ‌of‌ ‌the‌‌maximum‌‌ aggregate‌‌price‌‌or‌‌issued‌‌value‌‌of‌‌the‌‌securities.‌ ‌ Has‌‌an‌‌‌annual‌‌gross‌‌income‌‌‌of‌‌at‌‌least‌‌‌Php10M‌‌‌at‌‌least‌‌two‌‌ (2)‌‌years‌‌prior‌‌to‌‌registration,‌‌OR‌‌ ‌ a‌‌total‌‌portfolio‌‌investment‌‌in‌‌securities‌‌registered‌‌with‌‌the‌‌ SEC‌‌of‌‌at‌‌least‌‌Php10M‌,‌‌OR‌‌ ‌ The‌‌sale‌‌of‌‌securities‌‌to‌‌any‌‌number‌‌of‌‌the‌‌following‌‌‌qualified‌‌ buyers‌:‌ ‌ e) The‌ ‌sale‌ ‌of‌ ‌capital‌ ‌stock‌ ‌of‌ ‌a‌ ‌corporation‌ ‌to‌ ‌its‌ ‌own‌‌ stockholders‌ ‌exclusively‌,‌ ‌where‌ ‌no‌ ‌commission‌ ‌or‌ ‌other‌‌ remuneration‌ ‌is‌ ‌paid‌ ‌or‌ ‌given‌ ‌directly‌ ‌or‌ ‌indirectly‌ ‌in‌‌ connection‌‌with‌‌the‌‌sale‌‌of‌‌such‌‌capital‌‌stock.‌ ‌ The‌ ‌issuance‌ ‌of‌ ‌bonds‌ ‌or‌ ‌notes‌ ‌secured‌ ‌by‌ ‌mortgage‌ ‌upon‌‌ real‌ ‌estate‌ ‌or‌ ‌tangible‌ ‌personal‌ ‌property,‌ ‌where‌ ‌the‌ ‌entire‌‌ mortgage‌‌together‌‌with‌‌all‌‌the‌‌bonds‌‌or‌‌notes‌‌secured‌‌thereby‌‌ are‌s‌ old‌‌to‌‌a‌‌single‌‌purchaser‌‌at‌‌a‌‌single‌‌sale‌.‌ ‌ 1. a‌‌personal‌‌net‌‌worth‌‌‌of‌‌not‌‌less‌‌than‌‌Php30M‌;‌‌AND‌ ‌ 2. Has‌‌been‌‌engaged‌‌in‌‌securities‌‌trading‌‌personally‌‌or‌‌through‌‌a‌‌ fund‌‌manager‌‌for‌‌a‌‌minimum‌‌period‌‌of‌o ‌ ne‌‌(1)‌‌year‌,‌‌OR‌ ‌ has‌‌held‌‌for‌‌at‌‌least‌‌‌two‌‌(2)‌‌years‌‌a‌‌position‌‌of‌‌responsibility‌‌ in‌‌any‌‌professional‌‌business‌‌entity‌‌that‌‌requires‌‌knowledge‌‌or‌‌ expertise‌‌in‌s‌ ecurities‌‌trading‌.‌ ‌ If‌‌the‌‌buyer‌‌is‌‌a‌‌juridical‌‌person,‌‌it‌‌shall,‌‌at‌‌the‌‌time‌‌of‌‌registration‌‌with‌‌ an‌‌authorized‌‌registrar,‌ ‌ 1. have‌g ‌ ross‌‌assets‌o ‌ f‌‌at‌‌least‌‌Php100M‌O ‌ R‌ ‌ 2. a‌‌‌total‌‌portfolio‌‌investment‌‌in‌‌securities‌‌registered‌‌with‌‌the‌‌ SEC‌‌or‌‌‌financial‌‌instruments‌‌issued‌‌by‌‌the‌‌government‌‌of‌‌ at‌‌least‌P ‌ hp60M‌.‌ ‌ Virata‌‌v.‌‌Ng‌‌Wee‌‌‌2017‌ ‌ Wincorp‌‌was,‌‌in‌‌reality,‌‌selling‌‌to‌‌the‌‌public‌‌securities,‌‌i.e.,‌‌shares‌‌in‌‌ the‌‌Power‌‌Merge‌‌credit‌‌in‌‌the‌‌form‌‌of‌‌investment‌‌contracts.‌ ‌ As‌‌a‌‌general‌‌rule,‌‌securities‌‌are‌‌‌not‌‌to‌‌be‌‌sold‌‌or‌‌offered‌‌for‌‌sale‌‌ or‌ ‌distribution‌ ‌without‌ ‌due‌ ‌registration‌,‌ ‌and‌ ‌provided‌ ‌that‌ information‌‌on‌‌the‌‌securities‌‌shall‌‌be‌‌made‌‌available‌‌to‌‌prospective‌‌ purchasers.‌ ‌Here,‌ ‌all‌ ‌of‌ ‌the‌ ‌elements‌ ‌of‌ ‌the‌‌‌Howey‌‌test‌‌are‌‌present.‌‌ The‌ ‌"sans‌ ‌recourse"‌ ‌transactions‌ ‌are,‌ ‌in‌ ‌actuality,‌ ‌investment‌‌ contracts‌ ‌wherein‌ ‌investors‌ ‌pool‌ ‌their‌ ‌resources‌ ‌to‌ ‌meet‌ ‌the‌‌ financial‌‌needs‌‌of‌‌a‌‌borrowing‌‌company.‌ ‌ Wincorp‌ ‌virtually‌ ‌purchased‌ ‌and‌ ‌resold‌ ‌securities,‌ ‌and‌ ‌not‌ ‌just‌‌ brokered‌‌a‌‌loan.‌‌The‌‌most‌‌telling‌‌circumstance‌‌that‌‌negate‌‌Wincorp's‌‌ claim‌ ‌of‌ ‌mere‌ ‌brokerage‌ ‌is‌ ‌the‌ ‌fact‌ ‌that‌ ‌it‌ ‌paid‌ ‌for‌ ‌the‌ ‌interest‌‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 75‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ payments‌‌due‌‌from‌‌the‌‌corporate‌‌borrowers‌‌that‌‌defaulted‌.‌ ‌ and‌‌61‌‌of‌‌the‌‌SRC‌s‌ hall‌‌be‌‌exclusively‌‌brought‌‌before‌‌the‌‌RTC.‌ ‌ Therefore,‌ ‌civil‌ ‌suits‌ ‌falling‌ ‌under‌ ‌the‌ ‌SRC‌ ‌are‌ ‌under‌ ‌the‌‌ exclusive‌ ‌original‌ ‌jurisdiction‌ ‌of‌ ‌the‌‌RTC‌‌and‌‌hence,‌‌need‌‌not‌‌be‌‌ first‌ ‌filed‌ ‌before‌ ‌the‌ ‌SEC,‌ ‌unlike‌ ‌criminal‌ ‌cases‌ ‌wherein‌ ‌the‌ ‌latter‌‌ body‌‌exercises‌p ‌ rimary‌‌jurisdiction‌.‌ ‌ ‌ Powers‌‌and‌‌Functions‌‌of‌‌the‌‌SEC‌ ‌ a) Have‌ ‌jurisdiction‌ ‌and‌ ‌supervision‌ ‌over‌ ‌all‌ ‌corporations,‌‌ partnerships‌‌or‌‌associations‌‌‌who‌‌are‌‌the‌‌grantees‌‌of‌‌primary‌‌ franchises‌ ‌and/or‌ ‌a‌ ‌license‌ ‌or‌ ‌permit‌ ‌issued‌ ‌by‌ ‌the‌‌ Government;‌ ‌ SEC‌‌v.‌‌Interport‌‌Resources‌‌Corporation,‌‌et.‌‌al.‌ ‌ WON‌‌the‌‌instant‌‌case‌‌has‌‌prescribed.‌ ‌ NO‌.‌ ‌The‌ ‌investigation‌ ‌that‌ ‌was‌ ‌commenced‌ ‌by‌ ‌the‌ ‌SEC‌ ‌in‌ ‌1995,‌‌ xxxx‌ ‌ f) soon‌ ‌after‌ ‌it‌ ‌discovered‌ ‌the‌ ‌questionable‌ ‌acts‌ ‌of‌ ‌the‌ ‌respondents,‌‌ effectively‌ ‌interrupted‌ ‌the‌ ‌prescription‌ ‌period.‌ ‌Given‌ ‌the‌ ‌nature‌‌ and‌ ‌purpose‌ ‌of‌ ‌the‌ ‌investigation‌ ‌conducted‌ ‌by‌ ‌the‌ ‌SEC,‌ ‌which‌ ‌is‌‌ equivalent‌ ‌to‌ ‌the‌‌preliminary‌‌investigation‌‌conducted‌‌by‌‌the‌‌DOJ‌‌in‌‌ criminal‌ ‌cases,‌ ‌such‌ ‌investigation‌ ‌would‌ ‌surely‌ ‌interrupt‌ ‌the‌‌ prescription‌‌period.‌ ‌ Impose‌ ‌sanctions‌ ‌for‌ ‌the‌ ‌violation‌ ‌of‌ ‌laws‌ ‌and‌ ‌the‌ ‌rules,‌‌ regulations‌‌and‌‌orders‌‌issued‌‌pursuant‌‌thereto;‌ ‌ xxxx‌ ‌ i) Issue‌‌‌cease‌‌and‌‌desist‌‌orders‌‌t‌o‌‌prevent‌‌fraud‌‌or‌‌injury‌‌to‌‌the‌‌ investing‌‌public;‌ ‌ j) Punish‌ ‌for‌ ‌contempt‌ ‌of‌ ‌the‌ ‌Commission,‌ ‌both‌ ‌direct‌ ‌and‌‌ indirect,‌ ‌in‌ ‌accordance‌ ‌with‌ ‌the‌ ‌pertinent‌ ‌provisions‌ ‌of‌ ‌and‌‌ penalties‌‌prescribed‌‌by‌‌the‌‌Rules‌‌of‌‌Court;‌ ‌ SEC‌‌v.‌‌Subic‌‌Bay‌‌Golf‌‌and‌‌Country‌‌Club‌‌2 ‌ 015‌‌Leonen,‌‌J‌ ‌ Intra-corporate‌ ‌controversies,‌ ‌previously‌ ‌under‌ ‌the‌ ‌SEC’s‌‌ jurisdiction,‌‌are‌‌now‌‌under‌‌the‌‌jurisdiction‌‌of‌‌RTCs‌‌designated‌‌ as‌ ‌commercial‌ ‌courts.‌ ‌However,‌ ‌the‌ ‌transfer‌ ‌of‌ ‌jurisdiction‌ ‌to‌‌ the‌ ‌trial‌ ‌courts‌ ‌does‌ ‌not‌ ‌oust‌ ‌the‌ ‌SEC‌ ‌of‌ ‌its‌ ‌jurisdiction‌ ‌to‌‌ determine‌ ‌if‌ ‌administrative‌ ‌rules‌ ‌and‌ ‌regulations‌ ‌were‌‌ violated.‌ ‌ xxxx‌ ‌ l) Issue‌‌‌subpoena‌‌duces‌‌tecum‌‌‌and‌‌‌summon‌‌witnesses‌,‌‌order‌‌ the‌ ‌examination,‌ ‌search‌ ‌and‌ ‌seizure‌‌of‌‌all‌‌documents,‌‌papers,‌‌ files‌‌and‌‌records,‌‌tax‌‌returns,‌‌and‌‌books‌‌of‌‌accounts;‌ ‌ Thus,‌ ‌when‌ ‌Villareal‌‌and‌‌Filart‌‌alleged‌‌in‌‌their‌‌letter-complaint‌‌that‌‌ SBGCCI‌‌and‌‌UIGDC‌‌committed‌‌misrepresentations‌‌in‌‌the‌‌sale‌‌of‌‌their‌ shares,‌ ‌nothing‌ ‌prevented‌ ‌the‌ ‌SEC‌ ‌from‌ ‌taking‌ ‌cognizance‌ ‌of‌ ‌it‌ ‌to‌‌ determine‌‌if‌‌SBGCCI‌‌and‌‌UIGDC‌‌committed‌‌administrative‌‌violations‌‌ and‌‌were‌‌liable‌‌under‌‌the‌‌SRC.‌‌ ‌ m) Suspend,‌ ‌or‌ ‌revoke‌,‌ ‌after‌ ‌proper‌ ‌notice‌ ‌and‌ ‌hearing‌ ‌the‌‌ franchise‌ ‌or‌ ‌certificate‌ ‌of‌ ‌registration‌ ‌of‌ ‌corporations,‌‌ partnerships‌‌or‌‌associations,‌‌upon‌‌any‌‌of‌‌the‌‌grounds‌‌provided‌‌ by‌‌law;‌‌and‌ ‌ However‌,‌‌‌its‌‌regulatory‌‌power‌‌does‌‌not‌‌include‌‌the‌‌authority‌‌to‌‌ order‌ ‌the‌ ‌refund‌ ‌of‌‌the‌‌purchase‌‌price‌‌of‌‌Villareal's‌‌and‌‌Filart's‌‌ shares‌ ‌in‌ ‌the‌ ‌golf‌ ‌club.‌ ‌The‌‌issue‌‌of‌‌refund‌‌is‌‌intra-corporate‌‌or‌‌ civil‌ ‌in‌ ‌nature.‌‌Hence,‌‌‌the‌‌issue‌‌of‌‌refund‌‌should‌‌be‌‌litigated‌‌in‌‌ the‌‌appropriate‌‌RTC‌.‌‌This‌‌issue‌‌is‌‌both‌‌intra-corporate‌‌and‌‌civil‌‌in‌‌ nature,‌‌which‌‌is‌‌under‌‌the‌‌jurisdiction‌‌of‌‌the‌‌designated‌‌RTCs.‌ ‌ xxxx‌ ‌ Pua‌‌v.‌‌Citibank,‌‌N.A.‌‌‌2013‌ ‌ WON‌‌the‌‌Puas'‌‌action‌‌falls‌‌within‌‌the‌‌primary‌‌jurisdiction‌‌of‌‌the‌‌SEC.‌ ‌ NO‌.‌ ‌The‌ ‌SRC‌ ‌provisions‌ ‌governing‌ ‌criminal‌ ‌suits‌ ‌are‌ ‌separate‌ ‌and‌‌ distinct‌ ‌from‌ ‌those‌ ‌which‌ ‌pertain‌ ‌to‌ ‌civil‌‌suits.‌‌Cases‌‌falling‌‌under‌‌ Section‌‌57‌‌of‌‌the‌‌SRC,‌‌which‌‌pertain‌‌to‌‌‌civil‌‌liabilities‌‌arising‌‌from‌‌ violations‌ ‌of‌ ‌the‌ ‌requirements‌ ‌for‌ ‌offers‌ ‌to‌ ‌sell‌ ‌or‌ ‌the‌ ‌sale‌ ‌of‌‌ securities,‌‌as‌‌well‌‌as‌‌other‌‌civil‌‌suits‌‌under‌‌Sections‌‌56,‌‌58,‌‌59,‌‌60,‌‌ ‌ Procedure‌‌for‌‌registration‌‌of‌‌securities‌ ‌ Securities‌ ‌shall‌ ‌NOT‌ ‌be‌ ‌sold‌ ‌or‌ ‌offered‌ ‌for‌ ‌sale‌ ‌or‌ ‌distribution‌‌ within‌ ‌the‌ ‌Philippines,‌ ‌without‌‌a‌‌‌registration‌‌statement‌‌‌duly‌‌ filed‌‌with‌‌and‌‌approved‌‌by‌‌the‌‌SEC.‌‌ ‌ Upon‌‌filing‌‌of‌‌the‌‌registration‌‌statement,‌‌the‌‌SEC‌‌may‌‌take‌‌the‌‌following‌‌ actions:‌ ‌ 1) It‌‌may‌‌‌conditionally‌‌approve‌‌the‌‌registration‌‌statement‌‌under‌‌ such‌‌terms‌‌as‌‌it‌‌may‌‌deem‌‌necessary.‌ ‌ 2) It‌‌may‌‌specify‌‌the‌‌terms‌‌and‌‌conditions.‌ ‌ 3) A‌ ‌record‌ ‌of‌ ‌the‌ ‌registration‌ ‌of‌ ‌securities‌ ‌shall‌ ‌be‌ ‌kept‌ ‌in‌ ‌a‌‌ Register‌‌of‌‌Securities‌.‌‌ ‌ 4) It‌ ‌may‌ ‌audit‌ ‌the‌ ‌financial‌ ‌statements,‌ ‌assets‌ ‌and‌ ‌other‌‌ information‌‌of‌‌a‌‌firm‌‌applying‌‌for‌‌registration‌‌of‌‌its‌‌securities.‌ ‌ Public‌ ‌offering‌ is‌ ‌any‌ ‌offering‌ ‌of‌ ‌securities‌ ‌to‌ ‌the‌ ‌public‌ ‌or‌ ‌to‌‌ anyone,‌ ‌whether‌ ‌solicited‌ ‌or‌ ‌unsolicited.‌ ‌Any‌ ‌solicitation‌ ‌or‌‌ presentation‌ ‌of‌ ‌securities‌ ‌for‌ ‌sale‌ ‌through‌‌any‌‌of‌‌the‌‌following‌‌modes‌‌ shall‌‌be‌‌presumed‌t‌ o‌‌be‌‌a‌‌public‌‌offering:‌ ‌ 1) Publication‌ ‌in‌ ‌any‌ ‌newspaper,‌ ‌magazine‌ ‌or‌ ‌printed‌ ‌reading‌‌ material‌‌which‌‌is‌‌distributed‌‌within‌‌the‌‌Philippines;‌ ‌ 2) Presentation‌i‌ n‌‌any‌‌public‌‌or‌‌commercial‌‌place;‌ ‌ 3) Advertisement‌i‌ n‌‌any‌‌form‌‌of‌‌communication;‌‌or‌ ‌ 4) Distribution‌‌and/or‌‌making‌‌available‌‌‌flyers‌,‌‌‌brochures‌.‌‌(‌Rule‌‌ 3.1.17‌)‌ ‌ Rejection‌‌and‌‌Revocation‌‌of‌‌Registration‌‌of‌‌Securities‌ ‌ The‌‌SEC‌‌may‌‌‌reject‌‌‌a‌‌registration‌‌statement‌‌and‌‌‌refuse‌‌‌registration‌‌ of‌‌the‌‌security‌‌thereunder,‌‌or‌‌‌revoke‌‌‌the‌‌effectivity‌‌of‌‌a‌‌registration‌‌ statement‌‌and‌‌the‌‌registration‌‌of‌‌the‌‌security‌‌thereunder‌‌‌after‌‌due‌‌ notice‌‌and‌‌hearing‌‌by‌‌issuing‌‌an‌‌order‌‌to‌‌such‌‌effect,‌‌setting‌‌forth‌‌ its‌‌findings‌‌in‌‌respect‌‌thereto,‌‌if‌‌it‌‌finds‌‌that:‌ ‌ a) The‌‌issuer‌:‌ ‌ i) ii) Has‌‌been‌‌judicially‌‌declared‌i‌ nsolvent‌;‌ ‌ Has‌‌violated‌a‌ ny‌‌of‌‌the‌‌provisions‌‌of‌‌the‌‌SRC‌‌and‌‌IRR;‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 76‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ iii) Has‌ ‌been‌ ‌or‌ ‌is‌ ‌engaged‌ ‌or‌ ‌is‌ ‌about‌ ‌to‌ ‌engage‌ ‌in‌‌ fraudulent‌‌transactions‌;‌ ‌ iv) Has‌ ‌made‌ ‌any‌ ‌false‌ ‌or‌ ‌misleading‌ ‌representation‌‌ of‌ ‌material‌ ‌facts‌ ‌in‌ ‌any‌ ‌prospectus‌ ‌concerning‌ ‌the‌‌ issuer‌‌or‌‌its‌‌securities;‌ ‌ v) Has‌ ‌failed‌ ‌to‌ ‌comply‌ ‌with‌ ‌any‌ ‌requirement‌ ‌that‌ ‌the‌‌ SEC‌‌may‌‌impose;‌‌or‌ ‌ b) The‌ ‌registration‌ ‌statement‌ ‌is‌ ‌on‌ ‌its‌ ‌face‌ ‌incomplete‌ ‌or‌‌ inaccurate‌ ‌in‌ ‌any‌‌material‌‌respect‌‌or‌‌includes‌‌any‌untrue‌ statement‌‌of‌‌a‌‌material‌‌fact‌‌or‌‌omits‌‌to‌‌state‌‌a‌‌material‌‌fact‌‌ required‌ ‌to‌ ‌be‌ ‌stated‌ ‌therein‌ ‌or‌ ‌necessary‌ ‌to‌ ‌make‌ ‌the‌‌ statements‌‌therein‌‌not‌‌misleading;‌‌or‌ ‌ i. ii. iii. b. c) The‌ ‌issuer,‌ ‌any‌ ‌officer,‌ ‌director‌ ‌or‌ ‌controlling‌ ‌person‌ ‌of‌ ‌the‌‌ issuer,‌ ‌or‌ ‌person‌ ‌performing‌ ‌similar‌ ‌functions,‌ ‌or‌ ‌any‌‌ underwriter‌‌ ‌ i) ii) has‌ ‌been‌ ‌convicted‌,‌ ‌by‌ ‌a‌ ‌competent‌ ‌judicial‌ ‌or‌‌ administrative‌‌body,‌‌upon‌‌plea‌‌of‌‌guilty,‌‌or‌‌otherwise,‌‌ of‌ ‌an‌ ‌offense‌ ‌involving‌ ‌moral‌ ‌turpitude‌ ‌and/or‌‌ fraud‌‌‌or‌‌ ‌ is‌ ‌enjoined‌ ‌or‌ ‌restrained‌ ‌by‌ ‌the‌ ‌SEC‌ ‌or‌ ‌other‌‌ competent‌ ‌judicial‌ ‌or‌ ‌administrative‌ ‌body‌ ‌for‌‌ violations‌ ‌of‌ ‌securities,‌ ‌commodities,‌ ‌and‌ ‌other‌‌ related‌‌laws.‌ ‌ i. Raises‌‌their‌‌price‌‌‌to‌‌induce‌‌the‌‌purchase‌‌of‌‌a‌‌security,‌‌or‌ ‌ ii. Depresses‌‌their‌‌price‌‌‌to‌‌induce‌‌the‌‌sale‌‌of‌‌a‌‌security,‌‌or‌ ‌ iii. Creates‌‌active‌‌trading‌‌to‌‌induce‌‌such‌‌a‌‌purchase‌‌or‌‌sale‌‌ through‌ ‌manipulative‌ ‌devices‌ ‌such‌ ‌as‌ ‌marking‌ ‌the‌‌close,‌‌ painting‌ ‌the‌ ‌tape,‌ ‌squeezing‌ ‌the‌ ‌float,‌ ‌hype‌ ‌and‌ ‌dump,‌‌ boiler‌‌room‌‌operations‌‌‌and‌‌such‌‌other‌‌similar‌‌devices.‌ ‌ c. To‌ ‌circulate‌ ‌or‌ ‌disseminate‌ ‌information‌ ‌that‌ ‌the‌ ‌price‌ ‌of‌‌ any‌‌security‌‌listed‌‌in‌‌an‌‌Exchange‌‌will‌‌or‌‌is‌‌likely‌‌to‌‌rise‌‌or‌‌fall‌‌ because‌‌of‌‌manipulative‌‌market‌‌operations.‌ ‌ d. To‌‌‌make‌‌false‌‌or‌‌misleading‌‌statement‌‌with‌‌respect‌‌to‌‌any‌‌ material‌ ‌fact,‌ ‌which‌ ‌he‌ ‌knew‌ ‌or‌ ‌had‌ ‌reasonable‌ ‌ground‌ ‌to‌‌ believe‌‌was‌‌so‌‌false‌‌or‌‌misleading,‌‌for‌‌the‌‌purpose‌‌of‌‌‌inducing‌‌ the‌ ‌purchase‌ ‌or‌ ‌sale‌ ‌of‌ ‌any‌ ‌security‌ ‌listed‌ ‌or‌ ‌traded‌ ‌in‌ ‌an‌‌ Exchange.‌ ‌ ‌ e. 1.‌‌Manipulation‌‌of‌‌security‌‌prices‌ ‌ a. To‌ ‌create‌ ‌a‌ ‌false‌ ‌or‌ ‌misleading‌ ‌appearance‌ ‌of‌ ‌active‌‌ trading‌ ‌in‌ ‌any‌ ‌listed‌ ‌security‌ ‌traded‌ ‌in‌ ‌an‌ ‌Exchange‌ ‌or‌ ‌any‌‌ other‌‌trading‌‌market.‌ ‌ To‌ ‌effect‌,‌ ‌either‌ ‌alone‌ ‌or‌ ‌others,‌ ‌any‌ ‌series‌‌of‌‌transactions‌‌ for‌ ‌the‌ ‌purchase‌ ‌and/or‌ ‌sale‌ ‌of‌ ‌any‌ ‌security‌ ‌traded‌ ‌in‌ ‌an‌‌ Exchange‌‌for‌‌the‌‌purpose‌‌of‌‌‌pegging,‌‌fixing‌‌or‌‌stabilizing‌‌the‌‌ price‌o ‌ f‌‌such‌‌security,‌‌unless‌‌otherwise‌‌allowed.‌ ‌ 2.‌‌Short‌‌sales‌ ‌ 1. 2. Matched‌‌orders‌‌—‌‌‌By‌‌entering‌‌an‌‌order‌‌or‌‌orders‌‌for‌‌the‌‌ purchase‌‌or‌‌sale‌‌of‌‌such‌‌security‌‌with‌‌the‌‌knowledge‌‌that‌‌a‌‌ simultaneous‌ ‌order‌ ‌or‌ ‌orders‌ ‌of‌ ‌substantially‌ ‌the‌ ‌same‌‌ GR‌:‌ size,‌ ‌time‌ ‌and‌ ‌price,‌ ‌for‌ ‌the‌ ‌sale‌‌or‌‌purchase‌‌of‌‌any‌‌such‌‌ security,‌ ‌has‌ ‌or‌ ‌will‌ ‌be‌ ‌entered‌ ‌by‌ ‌or‌ ‌for‌ ‌the‌ ‌same‌ ‌or‌‌ EXC‌:‌ different‌‌parties;‌‌or‌ ‌ 1) Market‌‌rigging‌‌or‌‌jiggling‌‌—‌‌‌By‌‌performing‌‌similar‌‌act‌‌ where‌‌there‌‌is‌‌no‌‌change‌‌in‌‌beneficial‌‌ownership.‌ To‌ ‌effect,‌ ‌alone‌ ‌or‌ ‌with‌ ‌others,‌ ‌a‌ ‌series‌ ‌of‌ ‌transactions‌ ‌in‌‌ securities‌‌that:‌ ‌ The‌‌term‌‌"‌competent‌‌judicial‌‌or‌‌administrative‌‌body‌"‌‌shall‌‌ include‌‌a‌‌foreign‌‌court‌o ‌ f‌‌competent‌‌jurisdiction.‌ ‌ Prohibitions‌‌on‌‌fraud,‌‌manipulation,‌‌ and‌‌insider‌‌trading‌ ‌ Wash‌‌sale‌‌—‌‌‌By‌‌effecting‌‌any‌‌transaction‌‌in‌‌such‌‌security‌‌ which‌ ‌involves‌ ‌no‌ ‌change‌‌in‌‌the‌‌beneficial‌‌ownership‌‌ thereof;‌ ‌ Any‌‌sale‌‌of‌‌a‌‌security‌‌which‌‌the‌‌‌seller‌‌does‌‌not‌‌own‌‌‌or‌‌ ‌ Any‌ ‌sale‌ ‌which‌ ‌is‌ ‌consummated‌ ‌by‌‌the‌‌delivery‌‌of‌‌a‌‌security‌‌ borrowed‌ ‌by,‌ ‌or‌ ‌for‌ ‌the‌ ‌account‌ ‌of‌ ‌the‌ ‌seller‌ ‌with‌ ‌the‌‌ commitment‌ ‌of‌ ‌the‌ ‌seller‌ ‌or‌ ‌securities‌ ‌borrower‌ ‌to‌ ‌return‌‌or‌‌ deliver‌ ‌said‌ ‌securities‌ ‌or‌ ‌their‌ ‌equivalent‌ ‌to‌ ‌the‌ ‌lender‌ ‌on‌ ‌a‌‌ determined‌‌or‌‌determinable‌‌future‌‌date.‌ ‌ ‌There‌‌is‌‌NO‌‌absolute‌‌prohibition‌‌on‌‌short‌‌sale‌ ‌ in‌‌the‌‌following‌‌instances:‌ ‌ No‌ ‌director,‌ ‌officer‌ ‌or‌ ‌principal‌ ‌stockholder‌ ‌of‌ ‌a‌‌ corporation‌ ‌shall‌ ‌make‌ ‌a‌ ‌short‌ ‌sale‌ ‌in‌ ‌securities‌ ‌of‌ ‌said‌‌ corporation.‌ ‌ 2) Whenever‌‌the‌‌SEC‌‌may,‌‌‌motu‌‌proprio‌‌‌or‌‌upon‌‌recommendation‌‌ of‌ ‌the‌ ‌Exchange,‌ ‌prohibit‌ ‌short‌ ‌selling‌ ‌in‌ ‌the‌ ‌Exchange‌‌ indefinitely‌ ‌or‌ ‌for‌ ‌such‌ ‌period‌ ‌as‌ ‌it‌ ‌may‌ ‌deem‌‌proper‌‌for‌‌the‌‌ protection‌‌of‌‌the‌‌investors.‌‌ ‌ The‌‌SEC‌‌may‌‌also‌‌prohibit‌‌short‌‌selling‌‌in‌‌any‌‌Exchange‌‌as‌‌an‌‌ emergency‌ ‌measure‌ ‌or‌ ‌whenever‌ ‌such‌ ‌short‌ ‌selling‌ ‌is‌‌ necessary‌‌or‌‌appropriate‌‌in‌‌the‌‌public‌‌interest‌.‌ ‌ Naked‌ ‌Short‌ ‌Selling‌‌‌—‌‌the‌‌illegal‌‌practice‌‌of‌‌short‌‌selling‌‌‌shares‌‌ that‌ ‌have‌ ‌not‌ ‌been‌ ‌affirmatively‌ ‌determined‌ ‌to‌ ‌exist‌.‌ ‌Ordinarily,‌‌ traders‌‌must‌‌borrow‌‌a‌‌stock,‌‌or‌‌determine‌‌that‌‌it‌‌can‌‌be‌‌borrowed‌‌ before‌‌they‌‌sell‌‌it‌‌short.‌ ‌ Short‌‌Interest‌‌Threshold‌‌—‌‌An‌‌Eligible‌‌Security‌‌must‌‌maintain‌‌a‌‌ ratio‌‌of‌‌short‌‌interest‌‌to‌‌outstanding‌‌shares‌‌(“‌Short‌‌Interest‌‌Ratio‌”)‌‌ at‌ ‌less‌ ‌than‌ ‌or‌ ‌equal‌ ‌to‌ ‌ten‌ ‌percent‌ ‌(10%)‌ ‌(“‌Short‌ ‌Interest‌‌ Threshold‌”)‌‌or‌‌as‌‌may‌‌be‌‌prescribed‌‌by‌‌the‌‌Exchange.‌ ‌ Net‌ ‌Long‌ ‌Position‌ ‌—‌ ‌A‌ ‌person‌ ‌is‌ ‌deemed‌ ‌to‌ ‌have‌ ‌a‌ ‌net‌ ‌long‌‌ position‌ ‌in‌ ‌securities‌ ‌if‌ ‌he‌ ‌buys‌ ‌and‌ ‌sells‌ ‌securities‌ ‌for‌ ‌the‌ ‌long‌ term—interested‌ ‌in‌ ‌owning‌ ‌securities‌ ‌rather‌ ‌than‌ ‌speculating‌ ‌on‌‌ their‌‌decline.‌ ‌ Failure‌‌to‌‌Deliver‌ ‌ No‌‌person‌‌shall,‌‌directly‌‌or‌‌indirectly,‌‌by‌‌the‌‌use‌‌of‌‌any‌‌facility‌‌of‌‌a‌‌ securities‌ ‌exchange,‌ ‌effect‌ ‌a‌ ‌short‌ ‌sale‌ ‌in‌ ‌a‌ ‌security‌ ‌registered‌ ‌or‌‌ listed‌‌on‌‌any‌‌securities‌‌exchange,‌‌where‌‌the‌‌seller‌‌‌does‌‌not‌‌intend‌‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 77‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ or‌ ‌is‌ ‌unable‌ ‌to‌ ‌make‌ ‌delivery‌ ‌of‌ ‌the‌ ‌securities‌ ‌within‌ ‌the‌‌ prescribed‌‌settlement‌‌period.‌‌ ‌ Failure‌‌on‌‌the‌‌part‌‌of‌‌the‌‌seller‌‌to‌‌make‌‌delivery‌‌on‌‌such‌‌date‌‌will‌‌ be‌ ‌construed‌ ‌by‌ ‌the‌ ‌SEC‌ ‌as‌ ‌prima‌ ‌facie‌ ‌evidence‌ ‌of‌ ‌the‌ ‌lack‌ ‌of‌‌ intention‌‌on‌‌his‌‌part‌‌to‌‌make‌‌such‌‌delivery‌.‌ ‌ Buying‌‌Stocks‌ ‌ Expect‌‌shares‌‌to‌‌go‌‌UP‌⬆‌ Expect‌‌shares‌‌to‌‌go‌‌DOWN‌⬇‌ Gains‌‌are‌‌UNLIMITED‌ ‌ Gain‌‌is‌‌limited‌‌to‌‌the‌‌price‌‌ shorted‌‌at‌ ‌ Loss‌‌is‌‌limited‌‌to‌‌the‌‌shares‌‌ purchased‌ ‌ Loss‌‌is‌‌UNLIMITED‌ ‌ Blackout‌ ‌Rule‌ ‌—‌ ‌The‌ ‌"blackout‌ ‌rule"‌ ‌prevents‌ ‌top‌ ‌officials‌ ‌of‌ ‌a‌‌ listed‌ ‌company‌ ‌from‌ ‌trading‌ ‌on‌ ‌their‌ ‌own‌ ‌securities‌ ‌at‌ ‌specific‌‌ periods‌ ‌prior‌ ‌to‌ ‌the‌ ‌public‌ ‌disclosure‌ ‌of‌ ‌any‌ ‌price-sensitive‌‌ information.‌ ‌ 5.‌‌Insider‌‌trading‌ ‌ Insiders‌ ‌are‌ ‌not‌ ‌allowed‌ ‌to‌ ‌deal‌ ‌in‌ ‌their‌ ‌own‌ ‌securities‌ ‌from‌ ‌the‌‌ period‌ ‌when‌ ‌a‌ ‌material‌ ‌non-public‌ ‌information‌ ‌is‌ ‌obtained‌ ‌up‌ ‌to‌‌ two‌ ‌full‌ ‌trading‌ ‌days‌ ‌after‌ ‌the‌ ‌price‌ ‌sensitive‌ ‌information‌ ‌is‌‌ disclosed.‌‌‌Material‌‌fact‌‌or‌‌information‌‌is‌‌any‌‌fact‌‌or‌‌information‌‌ that‌‌ ‌ ⭐‌Insider‌"‌‌means:‌‌ ‌ Shorting‌‌Stocks‌ ‌ ‌ 3) Engage‌ ‌in‌ ‌any‌ ‌act,‌ ‌transaction,‌ ‌practice‌ ‌or‌ ‌course‌‌of‌‌business‌‌ which‌‌operates‌‌or‌‌would‌‌operate‌‌as‌‌a‌‌fraud‌‌or‌‌deceit‌‌upon‌‌any‌‌ person.‌ ‌ ‌ a) the‌‌issuer‌;‌ ‌ b) a‌‌director‌o ‌ r‌‌officer‌o ‌ f,‌‌or‌‌a‌‌person‌‌controlling‌‌the‌‌issuer;‌ ‌ c) a‌ ‌person‌ ‌whose‌ ‌relationship‌ ‌or‌ ‌former‌ ‌relationship‌ ‌to‌ ‌the‌‌ issuer‌ ‌gives‌ ‌or‌‌gave‌‌him‌‌access‌‌to‌‌material‌‌information‌‌about‌ the‌ ‌issuer‌ ‌or‌ ‌the‌ ‌security‌ ‌that‌ ‌is‌ ‌not‌ ‌generally‌ ‌available‌‌to‌‌ the‌‌public‌;‌ ‌ 1. may‌ ‌result‌ ‌in‌ ‌a‌ ‌change‌ ‌in‌‌the‌‌market‌‌price‌‌‌or‌‌value‌‌of‌‌ any‌‌of‌‌the‌‌Issuer's‌‌securities,‌‌or‌‌ ‌ 2. may‌ ‌potentially‌ ‌affect‌ ‌the‌ ‌investment‌ ‌decision‌ ‌of‌ ‌an‌‌ investor.‌‌(R ‌ ule‌‌3.1.12‌)‌ ‌ d) a‌‌‌government‌‌‌employee,‌‌or‌‌director,‌‌or‌‌officer‌‌of‌‌an‌‌exchange,‌‌ Material‌‌Nonpublic‌‌Information‌ ‌ clearing‌ ‌agency‌ ‌and/or‌ ‌self-regulatory‌ ‌organization‌ ‌who‌ ‌has‌‌ access‌‌to‌‌material‌‌information‌‌‌about‌‌an‌‌issuer‌‌or‌‌a‌‌security‌‌ Information‌i‌ s‌‌"m ‌ aterial‌‌nonpublic‌"‌‌if:‌‌ ‌ No‌ ‌member‌ ‌of‌‌an‌‌Exchange‌‌shall,‌‌directly‌‌or‌‌indirectly‌‌endorse‌‌or‌‌ that‌ i ‌ s‌ n ‌ ot‌ g ‌ enerally‌ a ‌ vailable‌ t ‌ o‌ t ‌ he‌ p ‌ ublic;‌ o ‌ r‌ ‌ guarantee‌ ‌the‌ ‌performance‌ ‌of‌ ‌any‌ ‌put‌,‌ ‌call‌,‌ ‌straddle‌,‌ ‌option‌ ‌or‌‌ a) It‌‌has‌‌not‌‌been‌‌generally‌‌disclosed‌‌to‌‌the‌‌public‌;‌‌or‌ ‌ privilege‌ ‌in‌ ‌relation‌ ‌to‌ ‌any‌ ‌security‌ ‌registered‌ ‌on‌ ‌a‌ ‌securities‌‌ e) Tippee.‌ ‌—‌ ‌a‌ ‌person‌ ‌who‌ ‌learns‌ ‌such‌ ‌information‌ ‌by‌ ‌a‌‌ b) would‌ ‌be‌ ‌considered‌ ‌by‌‌a‌‌reasonable‌‌person‌‌important‌‌under‌‌ exchange.‌ ‌ communication‌‌from‌‌any‌‌of‌‌the‌‌foregoing‌‌insiders.‌ ‌ the‌‌circumstances‌‌in‌‌determining‌‌his‌‌course‌‌of‌‌action‌‌whether‌‌ Put‌ ‌is‌ ‌a‌ ‌transferable‌ ‌option‌ ‌or‌ ‌offer‌ ‌to‌‌deliver‌‌a‌‌given‌‌number‌‌of‌‌ It‌‌shall‌‌be‌‌‌unlawful‌‌‌for‌‌an‌‌insider‌‌to‌‌sell‌‌or‌‌buy‌‌a‌‌security‌‌of‌‌the‌‌issuer,‌‌ to‌‌buy,‌‌sell‌‌or‌‌hold‌‌a‌‌security.‌ ‌ shares‌ ‌of‌ ‌stock‌ ‌at‌ ‌a‌ ‌stated‌ ‌price‌ ‌at‌ ‌any‌‌given‌‌time‌‌during‌‌a‌‌stated‌‌ while‌ ‌in‌ ‌possession‌ ‌of‌‌material‌‌information‌‌with‌‌respect‌‌to‌‌the‌‌issuer‌‌ period.‌ ‌ or‌‌the‌‌security‌‌that‌‌is‌‌not‌‌generally‌‌available‌‌to‌‌the‌‌public,‌u ‌ nless‌:‌‌ ‌ Protection‌‌of‌‌shareholder‌‌interests‌ ‌ 3.‌‌Option‌‌trading‌ ‌ ‌ Call‌‌‌is‌‌a‌‌transferable‌‌option‌‌to‌‌buy‌‌a‌‌specified‌‌number‌‌of‌‌shares‌‌at‌‌ a‌‌stated‌‌price.‌ ‌ Straddle‌i‌ s‌‌a‌‌combination‌‌of‌‌put‌‌and‌‌call.‌ ‌ 4.‌‌Fraudulent‌‌transactions‌ ‌ a) The‌ ‌insider‌ ‌proves‌ ‌that‌ ‌the‌ ‌information‌ ‌was‌ ‌not‌ ‌gained‌ ‌from‌‌ such‌‌relationship;‌‌or‌ ‌ b) If‌ ‌the‌ ‌other‌ ‌party‌‌selling‌‌to‌‌or‌‌buying‌‌from‌‌the‌‌insider‌‌(or‌‌his‌‌ agent)‌‌is‌‌identified,‌‌the‌‌insider‌‌proves:‌ ‌ 1) Employ‌‌any‌‌device,‌‌scheme,‌‌or‌‌artifice‌‌to‌‌defraud;‌ ‌ 2) Obtain‌‌money‌‌or‌‌property‌‌by‌‌means‌‌of‌‌any‌‌untrue‌‌statement‌‌of‌‌ a‌ ‌material‌ ‌fact‌ ‌of‌ ‌any‌ ‌omission‌ ‌to‌ ‌state‌ ‌a‌ ‌material‌ ‌fact‌‌ necessary‌‌in‌‌order‌‌to‌‌make‌‌the‌‌statements‌‌made,‌‌in‌‌the‌‌light‌‌of‌‌ the‌ ‌circumstances‌ ‌under‌ ‌which‌ ‌they‌ ‌were‌ ‌made,‌ ‌not‌‌ misleading;‌‌or‌ ‌ i) that‌‌he‌‌disclosed‌‌the‌‌information‌‌to‌‌the‌‌other‌‌party,‌‌or‌‌ ‌ ii) that‌ ‌he‌ ‌had‌ ‌reason‌ ‌to‌ ‌believe‌ ‌that‌ ‌the‌ ‌other‌ ‌party‌‌ otherwise‌‌is‌‌also‌‌in‌‌possession‌‌of‌‌the‌‌information.‌ ‌ A‌‌purchase‌‌or‌‌sale‌‌of‌‌a‌‌security‌‌of‌‌the‌‌issuer‌‌made‌‌by‌‌an‌‌insider,‌‌or‌‌ such‌ ‌insider's‌ ‌spouse‌ ‌or‌ ‌relatives‌ ‌by‌ ‌affinity‌ ‌or‌ ‌consanguinity‌‌ within‌ ‌the‌ ‌second‌ ‌degree‌,‌ ‌legitimate‌ ‌or‌ ‌common-law,‌ ‌shall‌ ‌be‌‌ presumed‌‌‌to‌‌have‌‌been‌‌effected‌‌while‌‌in‌‌possession‌‌of‌‌‌material‌‌ nonpublic‌‌‌information.‌ ‌ 1.‌‌Tender‌‌offer‌‌rule‌ ‌ ⭐"‌Tender‌ ‌offer‌"‌ ‌means‌ ‌a‌ ‌publicly‌ ‌announced‌ ‌intention‌ ‌by‌ ‌a‌‌ person‌ ‌acting‌ ‌alone‌ ‌or‌ ‌in‌ ‌concert‌ ‌with‌ ‌other‌ ‌persons‌ ‌to‌ ‌acquire‌‌ outstanding‌ ‌equity‌ ‌securities‌ ‌of‌ ‌a‌ ‌public‌ ‌company,‌ ‌or‌‌ outstanding‌‌equity‌‌securities‌‌of‌‌an‌‌associate‌‌or‌‌related‌‌company‌‌of‌‌ such‌‌public‌‌company‌w ‌ hich‌‌controls‌‌the‌‌said‌‌public‌‌company‌.‌ ‌ Public‌‌company‌‌‌means‌‌any‌‌corporation‌‌ ‌ 1. with‌‌a‌‌class‌‌of‌‌equity‌‌securities‌‌listed‌o ‌ n‌‌an‌‌Exchange,‌‌OR‌‌ ‌ 2. with‌‌assets‌‌in‌‌excess‌‌of‌‌P50M‌‌‌and‌‌has‌‌‌200‌‌or‌‌more‌‌holders‌‌ each‌ ‌holding‌ ‌at‌ ‌least‌ ‌100‌ ‌shares‌ ‌of‌ ‌a‌ ‌class‌ ‌of‌ ‌its‌ ‌equity‌‌ securities.‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 78‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ Philippine‌‌Veterans‌‌Bank‌‌v.‌‌Callangan‌ ‌ a) disclose‌‌such‌‌intention‌‌and‌‌ ‌ WON‌‌the‌‌Philippine‌‌Veterans‌‌Bank‌‌is‌‌a‌‌public‌‌company‌‌subject‌‌to‌‌the‌‌ reportorial‌‌requirements‌‌under‌‌Section‌‌17.1‌‌of‌‌the‌‌SRC.‌ ‌ The‌‌Bank‌‌has‌‌assets‌‌exceeding‌‌P50M‌‌and‌‌has‌‌395,998‌‌shareholders.‌‌ It‌ ‌is‌ ‌thus‌ ‌considered‌ ‌a‌ ‌public‌ ‌company‌ ‌that‌ ‌must‌ ‌comply‌ ‌with‌‌the‌‌ reportorial‌‌requirements.‌ ‌ Purpose‌ ‌—‌ ‌Tender‌ ‌offer‌ ‌is‌ ‌in‌ ‌place‌ ‌to‌ ‌protect‌ ‌minority‌‌ shareholders‌ ‌against‌ ‌any‌ ‌scheme‌ ‌that‌ ‌dilutes‌ ‌the‌ ‌share‌ ‌value‌ ‌of‌‌ their‌‌investments.‌‌It‌‌gives‌‌the‌‌minority‌‌shareholders‌‌the‌‌chance‌‌to‌‌ exit‌ ‌the‌ ‌company‌ ‌under‌ ‌reasonable‌ ‌terms,‌ ‌giving‌ ‌them‌ ‌the‌‌ opportunity‌ ‌to‌ ‌sell‌ ‌their‌ ‌shares‌ ‌at‌ ‌the‌ ‌same‌ ‌price‌ ‌as‌ ‌those‌ ‌of‌ ‌the‌‌ majority‌‌shareholders.‌ ‌ The‌‌rule‌‌applies‌‌‌even‌‌to‌‌indirect‌‌acquisitions‌,‌‌whereby‌‌an‌‌entity‌‌ acquires‌ ‌ownership‌‌in‌‌the‌‌non-listed‌‌parent‌‌of‌‌the‌‌listed‌‌company.‌‌ In‌ ‌this‌‌case,‌‌the‌‌35%‌‌or‌‌50%‌‌limits‌‌is‌‌decided‌‌by‌‌determining‌‌the‌‌ product‌ ‌of‌ ‌the‌ ‌purchaser’s‌ ‌acquired‌ ‌shareholding‌ ‌in‌ ‌the‌ ‌parent,‌‌ multiplied‌ ‌by‌ ‌the‌ ‌parent’s‌ ‌shareholding‌ ‌in‌ ‌the‌ ‌listed‌ ‌company.‌‌ (‌Cemco‌ ‌Holdings,‌ ‌Inc.‌ ‌v.‌ ‌National‌ ‌Life‌ ‌Insurance‌ ‌Company‌ ‌of‌ ‌the‌‌ Philippines‌)‌ ‌ 3) Any‌‌person‌‌or‌‌group‌‌of‌‌persons‌‌acting‌‌in‌‌concert,‌‌who‌‌intends‌‌ to‌ ‌acquire‌ ‌35%‌ ‌of‌ ‌the‌ ‌outstanding‌ ‌voting‌ ‌shares‌ ‌or‌ ‌such‌‌ outstanding‌ ‌voting‌ ‌shares‌ ‌that‌‌are‌‌sufficient‌‌to‌‌gain‌‌control‌‌of‌‌ the‌ ‌board‌ ‌in‌ ‌a‌ ‌public‌ ‌company‌ ‌directly‌ ‌from‌ ‌one‌ ‌or‌ ‌more‌‌ stockholders‌ ‌shall‌ ‌be‌ ‌required‌ ‌to‌ ‌make‌‌a‌‌tender‌‌offer‌‌for‌‌ all‌‌the‌‌outstanding‌‌voting‌‌shares.‌ ‌ 4) If‌ ‌any‌ ‌acquisition‌ ‌that‌ ‌would‌ ‌result‌ ‌in‌ ‌ownership‌ ‌of‌ ‌over‌ 50%‌ ‌of‌ ‌the‌‌total‌‌outstanding‌‌equity‌‌securities‌‌‌of‌‌a‌‌public‌‌ company,‌ ‌the‌ ‌acquirer‌ ‌shall‌ ‌be‌ ‌required‌ ‌to‌ ‌make‌ ‌a‌ ‌tender‌‌ offer‌ ‌for‌ ‌all‌ ‌the‌ ‌outstanding‌ ‌equity‌ ‌securities‌ ‌to‌ ‌all‌‌ remaining‌ ‌stockholders‌ ‌of‌ ‌the‌ ‌said‌ ‌company‌ at‌ ‌a‌ ‌price‌‌ supported‌‌by‌‌a‌‌fairness‌‌opinion‌‌provided‌‌by‌‌an‌‌independent‌‌ financial‌‌advisor‌‌or‌‌equivalent‌‌third‌‌party.‌‌The‌‌acquirer‌‌in‌‌such‌‌ a‌‌tender‌‌offer‌‌shall‌‌be‌‌required‌‌to‌‌accept‌‌all‌‌securities‌‌tendered.‌‌ ‌ %‌‌Acquired‌ ‌ Manner‌‌of‌‌Acquisition‌ ‌ Tender‌‌Offer‌‌Required‌ ‌ 15%‌‌‌equity‌‌ shares‌ ‌ When‌‌mandatory‌ ‌ 1) Any‌‌person‌‌or‌‌group‌‌of‌‌persons‌‌acting‌‌in‌‌concert,‌‌who‌‌intends‌‌ to‌ ‌acquire‌ ‌15%‌ ‌of‌ ‌equity‌ ‌securities‌‌in‌‌a‌‌public‌‌company‌‌in‌ one‌‌or‌‌more‌‌transactions‌w ‌ ithin‌‌a‌‌period‌‌of‌‌12‌‌months‌;‌ ‌ 2) Any‌‌person‌‌or‌‌group‌‌of‌‌persons‌‌acting‌‌in‌‌concert,‌‌who‌‌intends‌‌ to‌‌acquire‌‌ ‌ 35%‌‌or‌‌any‌‌ amount‌‌ sufficient‌‌to‌‌ gain‌‌control‌‌ of‌‌the‌‌board‌ ‌ a) 35%‌‌of‌‌the‌‌outstanding‌‌voting‌‌shares‌‌‌or‌‌ ‌ b) such‌ ‌outstanding‌ ‌voting‌ ‌shares‌ ‌that‌ ‌are‌ ‌sufficient‌ ‌to‌‌ gain‌‌control‌‌of‌‌the‌‌board‌‌ ‌ in‌ ‌a‌ ‌public‌ ‌company‌ ‌in‌ ‌one‌ ‌or‌ ‌more‌ ‌transactions‌ ‌within‌ ‌a‌‌ period‌‌of‌‌twelve‌‌(12)‌‌months,‌‌‌shall‌‌ ‌ securities‌ ‌ b) contemporaneously‌ ‌make‌ ‌a‌ ‌tender‌ ‌offer‌ ‌for‌ ‌the‌‌ Exemptions‌‌from‌‌the‌‌Mandatory‌‌Tender‌‌Offer‌‌Requirement‌ ‌ percentage‌ ‌sought‌ ‌to‌ ‌all‌ ‌holders‌ ‌of‌ ‌such‌ ‌securities‌‌ 1) Any‌‌purchase‌‌of‌‌securities‌f‌ rom‌‌the‌‌unissued‌‌capital‌‌stock‌;‌‌ ‌ within‌‌the‌‌said‌‌period.‌ ‌ YES‌.‌ ‌A‌ ‌"‌public‌ ‌company‌,"‌ ‌as‌ ‌contemplated‌ ‌by‌ ‌the‌ ‌SRC,‌ ‌is‌ ‌not‌‌ limited‌‌to‌‌a‌‌company‌‌whose‌‌shares‌‌of‌‌stock‌‌are‌‌publicly‌‌listed;‌‌even‌‌ companies‌‌like‌‌the‌‌Bank,‌‌whose‌‌shares‌‌are‌‌offered‌‌only‌‌to‌‌a‌‌specific‌‌ group‌‌of‌‌people,‌‌are‌‌considered‌‌a‌‌public‌‌company.‌ ‌ securities‌ ‌ NONE‌—just‌‌a‌‌ declaration‌ ‌ Provided‌,‌ ‌the‌ ‌acquisition‌ ‌will‌ ‌not‌ ‌result‌ ‌to‌ ‌a‌‌50%‌‌or‌‌more‌‌ ownership‌ ‌of‌ ‌securities‌ ‌by‌ ‌the‌ ‌purchaser‌‌or‌‌such‌‌percentage‌‌ that‌‌is‌‌sufficient‌‌to‌‌gain‌‌control‌‌of‌‌the‌‌board;‌ ‌ 2) Any‌‌purchase‌‌of‌‌securities‌f‌ rom‌‌an‌‌increase‌‌in‌‌ACS‌;‌ ‌ 3) Purchase‌‌in‌‌connection‌‌with‌‌ ‌ a) foreclosure‌‌proceedings‌;‌ ‌ b) a‌‌privatization‌u ‌ ndertaken‌‌by‌‌the‌‌PH‌‌government;‌ ‌ c) corporate‌r‌ ehabilitation‌u ‌ nder‌‌court‌‌supervision;‌ ‌ 4) Purchases‌ ‌in‌ ‌the‌‌‌open‌‌market‌‌at‌‌the‌‌prevailing‌‌market‌‌price;‌‌ and‌ ‌ 5) Merger‌o ‌ r‌‌consolidation‌.‌‌(‌Rule‌‌19.3‌)‌ ‌ 2.‌‌Rules‌‌on‌‌proxy‌‌solicitation‌ ‌ 1. One‌‌time‌‌or‌‌in‌‌a‌‌creeping‌‌ Tender‌‌offer‌‌for‌‌the‌‌ transaction‌ ‌ percentage‌‌sought‌‌to‌‌ALL‌‌ holders‌‌of‌‌outstanding‌‌ voting‌‌shares‌ ‌ Through‌‌the‌e ‌ xchange‌‌ trading‌s‌ ystem‌ NONE‌—even‌‌if‌‌the‌‌ purchaser‌‌acquires‌‌the‌‌ remainder‌‌through‌‌a‌‌ block‌‌sale‌ ‌ through‌‌a‌‌block‌‌sale‌—‌‌ directly‌‌from‌‌one‌‌or‌‌ more‌‌stockholders‌ ‌ tender‌‌offer‌‌for‌A ‌ LL‌‌ holders‌‌of‌‌outstanding‌‌ voting‌‌shares‌ ‌ Over‌‌50%‌o ‌ f‌‌ Any‌‌type‌ ‌ equity‌‌ tender‌‌offer‌‌for‌A ‌ LL‌‌‌the‌‌ remaining‌‌equity‌‌ The‌‌issuer‌‌is‌‌required‌‌to‌‌transmit:‌ ‌ a. An‌‌Information‌‌Statement;‌ ‌ b. Proxy‌‌Form;‌‌and‌ ‌ c. Management‌‌Report‌ ‌ To‌‌every‌‌security‌‌holder‌‌of‌‌the‌‌class‌‌entitled‌‌to‌‌vote‌‌at‌‌least‌‌‌15‌‌ days‌p ‌ rior‌‌to‌‌the‌‌meeting.‌ ‌ 2. No‌ ‌broker‌ ‌or‌ ‌dealer‌ ‌shall‌ ‌give‌ ‌any‌ ‌proxy,‌ ‌consent‌ ‌or‌‌ authorization,‌‌in‌‌respect‌‌of‌‌any‌‌security‌‌carried‌‌for‌‌the‌‌account‌‌ of‌‌a‌‌customer,‌‌to‌‌a‌‌person‌‌other‌‌than‌‌the‌‌customer,‌‌without‌‌the‌‌ express‌‌written‌‌authorization‌‌of‌‌such‌‌customer.‌ ‌ 3. A‌‌broker‌‌or‌‌dealer‌‌who‌‌holds‌‌or‌‌acquires‌‌the‌‌proxy‌‌for‌‌‌at‌‌least‌‌ 10%‌ ‌or‌ ‌such‌ ‌percentage‌ ‌as‌ ‌the‌ ‌SEC‌ ‌may‌ ‌prescribe‌ ‌of‌ ‌the‌‌ outstanding‌ ‌share‌ ‌of‌ ‌the‌ ‌issuer,‌ ‌shall‌ ‌submit‌ ‌a‌ ‌report‌‌ identifying‌‌the‌‌beneficial‌‌owner‌‌within‌‌ten‌‌(10)‌‌days‌‌after‌‌such‌‌ acquisition,‌ ‌for‌ ‌its‌ ‌own‌ ‌account‌ ‌or‌ ‌customer,‌ ‌to‌ ‌the‌‌issuer‌‌of‌‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 79‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ the‌‌security,‌‌to‌‌the‌‌Exchange‌‌where‌‌the‌‌security‌‌is‌‌traded‌‌and‌‌to‌‌ the‌‌SEC.‌ ‌ A‌‌proxy‌‌may‌‌confer‌‌‌discretionary‌‌authority‌‌‌to‌‌vote‌‌with‌‌respect‌‌to‌‌ any‌‌of‌‌the‌‌following:‌ ‌ 1. Matters‌ ‌that‌‌are‌‌to‌‌be‌‌presented‌‌at‌‌the‌‌meeting‌‌but‌‌which,‌‌at‌‌a‌‌ reasonable‌ ‌time‌ ‌before‌ ‌the‌ ‌solicitation,‌ ‌are‌ ‌not‌ ‌known‌ ‌to‌ ‌the‌‌ persons‌‌making‌‌the‌‌solicitation;‌‌ ‌ 2. Approval‌‌of‌‌the‌‌minutes‌‌of‌‌the‌‌prior‌‌meeting;‌ ‌ 3. Election‌ ‌of‌ ‌any‌ ‌person‌ ‌to‌ ‌any‌ ‌office‌ ‌for‌ ‌which‌ ‌a‌ ‌bona‌ ‌fide‌‌ nominee‌ ‌is‌ ‌named‌ ‌in‌ ‌the‌ ‌information‌ ‌statement‌ ‌and‌ ‌such‌‌ nominee‌‌is‌‌unable‌‌to‌‌serve‌‌or‌‌for‌‌good‌‌cause‌‌will‌‌not‌‌be‌‌able‌‌to‌‌ serve.‌ ‌ No‌‌proxy‌‌shall‌‌confer‌‌authority:‌ ‌ 1. 2. 3. To‌ ‌vote‌ ‌for‌ ‌any‌ ‌person‌ ‌to‌ ‌any‌ ‌office‌ ‌for‌ ‌which‌ ‌a‌ ‌bona‌ ‌fide‌‌ nominee‌ ‌is‌ ‌not‌ ‌named‌ ‌in‌ ‌the‌ ‌information‌ ‌statement‌ ‌or‌ ‌any‌‌ material‌‌attached‌‌to‌‌it;‌ ‌ The‌‌validation‌‌of‌‌proxies‌‌in‌‌this‌‌case‌‌relates‌‌to‌‌the‌‌determination‌‌of‌‌ the‌ ‌existence‌ ‌of‌ ‌a‌ ‌quorum.‌ ‌Nonetheless,‌ ‌it‌ ‌is‌ ‌a‌ ‌quorum‌ ‌for‌ ‌the‌‌ election‌‌of‌‌the‌‌directors.‌ ‌ Solicitation‌ ‌ The‌‌terms‌‌solicit‌‌and‌‌solicitation‌s‌ hall‌‌include‌:‌ ‌ 1. Any‌‌request‌‌for‌‌a‌‌proxy‌‌or‌‌authorization;‌ ‌ 2. Any‌ ‌request‌ ‌to‌‌execute‌‌or‌‌not‌‌to‌‌execute,‌‌or‌‌to‌‌revoke,‌‌a‌‌proxy‌‌ or‌‌authorization;‌‌or‌ ‌ 3. The‌ ‌furnishing‌ ‌of‌ ‌a‌ ‌form‌ ‌of‌‌proxy‌‌or‌‌other‌‌communication‌‌to‌‌ security‌‌holders‌‌under‌‌circumstances‌‌reasonably‌‌calculated‌‌to‌‌ result‌‌in‌‌the‌‌procurement,‌‌withholding‌‌or‌‌revocation‌‌of‌‌a‌‌proxy.‌ ‌ The‌‌terms‌s‌ hall‌‌not‌‌apply‌‌‌to:‌ ‌ 1. The‌‌performance‌‌by‌‌any‌‌person‌‌of‌‌‌ministerial‌‌acts‌‌‌on‌‌behalf‌‌ of‌‌a‌‌person‌‌soliciting‌‌a‌‌proxy;‌‌or‌ ‌ information;‌ ‌it‌ ‌is‌ ‌not‌ ‌a‌ ‌commitment‌ ‌to‌ ‌an‌ ‌agreement‌.‌ ‌The‌‌ transaction‌ ‌initiated‌ ‌by‌ ‌Santos‌ ‌with‌‌Sy‌‌and‌‌Lorenzo,‌‌respectively,‌‌is‌‌ an‌ ‌investment‌ ‌contract.‌ ‌The‌ ‌touchstone‌ ‌is‌ ‌the‌ ‌presence‌ ‌of‌ ‌an‌ investment‌ ‌in‌ ‌a‌ ‌common‌ ‌venture‌ ‌premised‌ ‌on‌ ‌a‌ ‌reasonable‌‌ expectation‌‌of‌‌profits‌‌to‌‌be‌‌derived‌‌from‌‌the‌‌entrepreneurial‌‌or‌‌ managerial‌‌efforts‌‌of‌‌others.‌ ‌ 3.‌‌Disclosure‌‌rule‌ ‌ All‌‌companies‌‌listed‌‌or‌‌applying‌‌for‌‌listing‌‌are‌‌required‌‌to‌‌divulge‌‌ truthfully‌‌and‌‌accurately‌‌all‌‌material‌‌information‌‌about‌‌themselves‌‌ and‌‌the‌‌security‌‌they‌‌sell,‌‌for‌‌the‌‌protection‌‌of‌‌the‌‌investing‌‌public,‌‌ under‌‌pain‌‌of‌‌administrative,‌‌civil‌‌and‌‌criminal‌‌sanctions.‌‌A‌‌fact‌‌is‌‌ material‌ ‌if‌ ‌it‌ ‌tends‌ ‌to‌ ‌induce‌ ‌or‌ ‌otherwise‌ ‌effect‌ ‌the‌ ‌sale‌ ‌or‌‌ purchase‌‌of‌‌its‌‌securities.‌‌(P ‌ SE‌‌v.‌‌CA‌)‌ ‌ ⭐‌Gonzales‌‌v.‌‌GJH‌‌Land‌‌2 ‌ 015‌‌En‌‌Banc‌ ‌ The‌‌following‌‌guidelines‌‌shall‌‌be‌‌observed:‌ ‌ 1. 2. Any‌ ‌solicitation‌ ‌made‌ ‌otherwise‌ ‌than‌ ‌on‌ ‌behalf‌ ‌of‌ ‌the‌ ‌Issuer‌‌ To‌ ‌vote‌‌with‌‌respect‌‌to‌‌more‌‌than‌‌one‌‌meeting‌‌(and‌‌any‌‌of‌‌its‌‌ where‌ ‌the‌ ‌total‌ ‌number‌ ‌of‌ ‌persons‌ ‌solicited‌ ‌is‌ ‌NOT‌‌more‌‌ adjournment),‌ ‌unless‌ ‌a‌ ‌specific‌ ‌statement‌ ‌is‌ ‌made‌ ‌in‌ ‌the‌‌ than‌‌nineteen‌‌(19)‌.‌‌(‌Rule‌‌20.2.2‌)‌ ‌ information‌ ‌statement‌ ‌and‌ ‌proxy‌ ‌form‌ ‌that‌ ‌the‌ ‌proxy‌‌is‌‌valid‌‌ SEC‌ ‌v.‌‌Santos‌‌‌2014‌ ‌ for‌‌more‌‌than‌‌one‌‌meeting;‌‌or‌‌ ‌ To‌ ‌consent‌ ‌to‌ ‌or‌ ‌authorize‌ ‌any‌ ‌action‌ ‌other‌ ‌than‌ ‌the‌ ‌action‌‌ proposed‌ ‌to‌ ‌be‌ ‌taken‌ ‌in‌ ‌the‌‌information‌‌statement‌‌or‌‌matters‌‌ referred‌‌to‌‌above.‌ ‌ SEC‌ ‌v.‌‌CA‌‌‌2014‌ ‌ WON‌ ‌the‌ ‌SEC‌ ‌has‌ ‌jurisdiction‌ ‌over‌ ‌controversies‌ ‌arising‌ ‌from‌ ‌the‌ validation‌‌of‌‌proxies‌‌for‌‌the‌‌election‌‌of‌‌the‌‌directors‌‌of‌‌a‌‌corporation.‌ ‌ NO‌.‌ ‌When‌ ‌proxies‌ ‌are‌ ‌solicited‌ ‌in‌ ‌relation‌ ‌to‌ ‌the‌ ‌election‌ ‌of‌‌ WON‌ ‌it‌ ‌was‌ ‌proper‌ ‌for‌ ‌the‌‌DOJ‌‌to‌‌exclude‌‌Santos‌‌from‌‌prosecution‌‌ for‌‌violating‌‌Sec‌‌28‌‌of‌‌the‌‌SRC.‌ ‌ If‌ ‌a‌ ‌commercial‌ ‌case‌ ‌filed‌ ‌before‌ ‌the‌ ‌proper‌ ‌RTC‌ ‌is‌ ‌wrongly‌‌ raffled‌‌to‌‌its‌‌regular‌‌branch,‌‌the‌‌proper‌‌courses‌‌of‌‌action‌‌are‌‌as‌‌ follows:‌ ‌ a. If‌ ‌the‌ ‌RTC‌ ‌has‌ ‌only‌ ‌one‌ ‌branch‌ ‌designated‌ ‌as‌ ‌a‌ ‌Special‌‌ Commercial‌ ‌Court,‌ ‌then‌ ‌the‌ ‌case‌ ‌shall‌ ‌be‌ ‌referred‌ ‌to‌ ‌the‌‌ Executive‌ ‌Judge‌ ‌for‌ ‌re-docketing‌ ‌as‌‌a‌‌commercial‌‌case,‌‌and‌‌ thereafter,‌‌assigned‌‌to‌‌the‌‌sole‌‌special‌‌branch;‌ ‌ b. If‌‌the‌‌RTC‌‌has‌‌‌multiple‌‌branches‌‌designated‌‌as‌‌SCCs,‌‌then‌‌ the‌ ‌case‌ ‌shall‌ ‌be‌ ‌referred‌ ‌to‌ ‌the‌ ‌Executive‌ ‌Judge,‌ ‌and‌‌ thereafter,‌‌raffled‌‌off‌‌among‌‌those‌‌special‌‌branches;‌‌and‌ ‌ c. If‌‌the‌‌RTC‌‌has‌‌‌no‌‌internal‌‌branch‌‌designated‌‌as‌‌a‌‌SCC,‌‌then‌‌ the‌ ‌case‌ ‌shall‌ ‌be‌ ‌referred‌ ‌to‌ ‌the‌ ‌nearest‌ ‌RTC‌ ‌with‌ ‌a‌‌ designated‌‌SCC‌‌branch‌‌within‌‌the‌‌judicial‌‌region.‌‌ ‌ NO‌.‌‌The‌‌Court‌‌finds‌‌that‌‌PIPC‌‌Corporation‌‌and/or‌‌PIPC-BVI‌‌was:‌‌ ‌ 1) an‌‌issuer‌‌of‌‌securities‌‌without‌‌the‌‌necessary‌‌registration‌‌or‌‌ license‌‌from‌‌the‌‌SEC,‌‌and‌ ‌ 2) engaged‌‌in‌‌the‌‌business‌‌of‌‌buying‌‌and‌‌selling‌‌securities.‌ ‌ 2. If‌‌an‌‌ordinary‌‌civil‌‌case‌‌filed‌‌before‌‌the‌‌proper‌‌RTC‌‌is‌‌wrongly‌‌ raffled‌ ‌to‌ ‌its‌ ‌branch‌ ‌designated‌ ‌as‌ ‌a‌‌SCC,‌‌then‌‌the‌‌case‌‌shall‌‌be‌‌ referred‌ ‌to‌ ‌the‌ ‌Executive‌ ‌Judge‌ ‌for‌ ‌re-docketing‌ ‌as‌ ‌an‌ ‌ordinary‌‌ civil‌‌case.‌‌ ‌ 3. All‌ ‌transfer/raffle‌ ‌of‌ ‌cases‌ ‌is‌ ‌subject‌ ‌to‌ ‌the‌ ‌payment‌ ‌of‌ ‌the‌‌ appropriate‌‌docket‌‌fees‌‌in‌‌case‌‌of‌‌any‌‌difference.‌ ‌ 4. Finally,‌‌to‌‌avert‌‌any‌‌future‌‌confusion,‌‌the‌‌Court‌‌requires‌‌that‌‌‌all‌‌ initiatory‌ ‌pleadings‌ ‌state‌ ‌the‌ ‌action's‌ ‌nature‌ ‌both‌ ‌in‌ ‌its‌‌ caption‌‌and‌‌body‌.‌‌Otherwise,‌‌the‌‌initiatory‌‌pleading‌‌may,‌‌upon‌‌ The‌‌elements‌‌for‌‌violation‌‌of‌S ‌ ection‌‌28‌o ‌ f‌‌the‌‌SRC‌‌are:‌‌ ‌ corporate‌ ‌directors‌ ‌should‌ ‌be‌ ‌properly‌ ‌seen‌ ‌as‌ ‌an‌ ‌election‌‌ controversy‌ ‌within‌ ‌the‌ ‌original‌ ‌and‌ ‌exclusive‌ ‌jurisdiction‌ ‌of‌ ‌the‌‌ trial‌‌courts‌b‌ y‌‌virtue‌‌of‌‌Section‌‌5.2‌‌of‌‌the‌‌SRC.‌ ‌ a) engaging‌ ‌in‌ ‌the‌ ‌business‌ ‌of‌ ‌buying‌ ‌or‌ ‌selling‌ ‌securities‌ ‌in‌‌ the‌‌Philippines‌‌as‌‌a‌‌broker‌‌or‌‌dealer;‌‌or‌‌ ‌ The‌ ‌power‌ ‌of‌ ‌the‌ ‌SEC‌ ‌to‌ ‌regulate‌ ‌proxies‌ ‌remains‌ ‌in‌ ‌place‌ ‌in‌‌ instances‌ ‌when‌ ‌stockholders‌ ‌vote‌ ‌on‌ ‌matters‌ ‌other‌ ‌than‌ ‌the‌‌ election‌‌‌of‌‌directors.‌‌‌The‌‌test‌‌is‌‌whether‌‌the‌‌controversy‌‌relates‌‌to‌‌ such‌‌election.‌‌ ‌ c) acting‌ ‌as‌ ‌an‌ ‌associated‌ ‌person‌ ‌of‌ ‌any‌ ‌broker‌ ‌or‌ ‌dealer,‌‌ unless‌‌registered‌‌as‌‌such‌‌with‌‌the‌‌SEC.‌ ‌ b) acting‌‌as‌‌a‌‌salesman;‌‌or‌‌ ‌ Solicitation‌ ‌is‌ ‌the‌ ‌act‌ ‌of‌ ‌seeking‌ ‌or‌ ‌asking‌ ‌for‌ ‌business‌ ‌or‌‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 80‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ e.‌‌Concept‌‌of‌‌bank‌‌resolution‌ ‌ motion‌ ‌or‌ ‌by‌ ‌order‌ ‌of‌ ‌the‌ ‌court‌ ‌motu‌ ‌proprio‌,‌ ‌be‌ ‌dismissed‌‌ without‌‌prejudice‌.‌ ‌ f.‌‌Role‌‌of‌‌PDIC‌‌in‌‌relation‌‌to‌‌banks‌‌in‌‌distress‌ ‌ References:‌‌Miravite,‌‌2019;‌‌and‌‌Sundiang‌‌&‌‌Aquino,‌‌2019‌ ‌ ‌ Banking‌‌Laws‌ ‌ I.‌‌The‌‌New‌‌Central‌‌Bank‌‌Act‌ ‌ Banks‌‌in‌‌Distress‌ ‌ Conservatorship‌ ‌ Closure‌ ‌ Receivership‌ ‌ Liquidation‌ ‌ II.‌‌Law‌‌on‌‌Secrecy‌‌of‌‌Bank‌‌Deposits‌ ‌ III.‌‌General‌‌Banking‌‌Act‌ ‌ a.‌‌Definition‌‌and‌‌classification‌‌of‌‌banks‌ ‌ b.‌‌Distinction‌‌of‌‌banks‌‌from‌‌quasi-banks‌‌and‌‌trust‌‌entities‌ ‌ c.‌‌Bank‌‌powers‌‌and‌‌liabilities‌ ‌ d.‌‌Diligence‌‌required‌‌of‌‌banks‌‌in‌‌view‌‌of‌‌fiduciary‌‌nature‌ ‌ e.‌‌Nature‌‌of‌‌bank‌‌funds‌‌and‌‌bank‌‌deposits‌ ‌ f.‌‌Grant‌‌of‌‌loans‌‌and‌‌security‌‌requirements‌ ‌ g.‌‌Investments‌ ‌ h.‌‌Penalties‌‌for‌‌violations‌ ‌ IV.‌‌Philippine‌‌Deposit‌‌Insurance‌‌Corporation‌‌Act‌ ‌ a.‌‌Basic‌‌policy‌ ‌ b.‌‌Powers‌‌and‌‌functions‌‌of‌‌the‌‌PDIC;‌‌prohibitions‌ ‌ c.‌‌Concept‌‌of‌‌insured‌‌deposits‌ ‌ The‌‌New‌‌Central‌‌Bank‌‌Act‌ ‌ RA‌‌No‌‌7653‌‌|‌‌The‌‌New‌‌Central‌‌Bank‌‌Act‌‌‌aab‌‌‌RA‌‌No‌‌11211‌ The‌‌‌primary‌‌objective‌‌of‌‌the‌‌BSP‌‌is‌‌to‌‌‌maintain‌‌price‌‌stability‌‌ conducive‌ ‌to‌ ‌a‌ ‌balanced‌ ‌and‌ ‌sustainable‌ ‌growth‌ ‌of‌ ‌the‌ ‌economy‌‌ and‌ ‌employment.‌ ‌It‌ ‌shall‌ ‌also‌ ‌promote‌ ‌and‌ ‌maintain‌ ‌monetary‌‌ stability‌‌and‌‌the‌‌convertibility‌‌of‌‌the‌‌peso.‌ ‌ It‌ ‌shall‌ ‌promote‌ ‌financial‌ ‌stability‌.‌ ‌It‌ ‌shall‌ ‌oversee‌ ‌the‌‌ payment‌‌and‌‌settlement‌‌systems‌i‌ n‌‌the‌‌Philippines.‌ ‌ d.‌‌Corporate‌‌Powers‌ ‌ a.‌‌State‌‌Policies‌ ‌ The‌ ‌State‌ ‌shall‌ ‌maintain‌ ‌a‌ ‌central‌ ‌monetary‌ ‌authority‌ ‌that‌ ‌shall‌‌ function‌ ‌and‌ ‌operate‌ ‌as‌ ‌an‌ ‌independent‌‌and‌‌accountable‌‌body‌‌ corporate‌ ‌in‌ ‌the‌ ‌discharge‌ ‌of‌ ‌its‌ ‌mandated‌ ‌responsibilities‌‌ concerning‌‌money,‌‌banking‌‌and‌‌credit‌.‌ ‌ The‌ ‌central‌ ‌monetary‌ ‌authority,‌ ‌while‌ ‌being‌ ‌a‌‌government-owned‌‌ corporation,‌‌shall‌‌enjoy‌f‌ iscal‌‌and‌‌administrative‌‌autonomy‌.‌ ‌ b.‌‌Creation‌‌of‌‌the‌‌BSP‌ ‌ The‌ ‌capital‌ ‌of‌ ‌the‌ ‌BSP‌ ‌shall‌‌be‌‌‌P200B‌,‌‌to‌‌be‌‌fully‌‌subscribed‌‌by‌‌ the‌‌GRP.‌ ‌ 1) Adopt,‌‌alter,‌‌and‌‌use‌‌a‌‌corporate‌‌seal‌‌which‌‌shall‌‌be‌‌‌judicially‌‌ noticed;‌‌ ‌ 2) Enter‌‌into‌‌contracts;‌‌ ‌ 3) Lease‌ ‌or‌ ‌own‌ ‌real‌ ‌and‌ ‌personal‌ ‌property,‌ ‌and‌ ‌to‌ ‌sell‌ ‌or‌‌ otherwise‌‌dispose‌‌of‌‌the‌‌same;‌‌ ‌ 4) Sue‌‌and‌‌be‌‌sued;‌‌and‌‌ ‌ 5) Otherwise‌ ‌to‌ ‌do‌ ‌and‌ ‌perform‌ ‌any‌ ‌and‌ ‌all‌ ‌things‌ ‌that‌ ‌may‌ ‌be‌‌ necessary‌‌or‌‌proper‌‌to‌‌carry‌‌out‌‌the‌‌purposes‌‌of‌‌this‌‌Act.‌ ‌ e.‌‌Operations‌‌of‌‌the‌‌BSP‌ ‌ Provided‌,‌ ‌That‌ ‌the‌ ‌increase‌ ‌in‌ ‌capitalization‌ ‌shall‌ ‌be‌ ‌FUNDED‌‌ Authority‌‌to‌‌Obtain‌‌Data‌‌and‌‌Information‌ ‌ SOLELY‌ ‌from‌ ‌the‌ ‌declared‌‌dividends‌‌of‌‌the‌‌BSP‌‌in‌‌favor‌‌of‌‌the‌‌ The‌‌BSP,‌‌through‌‌the‌‌Governor‌‌or‌‌in‌‌his‌‌absence,‌‌a‌‌duly‌‌authorized‌‌ National‌ ‌Government‌.‌ ‌Such‌ ‌dividends‌ ‌shall‌ ‌be‌ ‌deposited‌ ‌in‌ ‌a‌‌ representative‌ ‌shall‌ ‌have‌ ‌the‌ ‌power‌ ‌to‌ ‌issue‌ ‌a‌‌‌subpoena‌‌‌for‌‌the‌‌ special‌ ‌account‌ ‌in‌ ‌the‌ ‌General‌ ‌Fund‌,‌ ‌and‌ ‌earmarked‌ ‌for‌ ‌the‌‌ production‌ o ‌ f‌ ‌the‌ ‌books‌ ‌and‌ ‌records‌ ‌for‌ ‌the‌ ‌aforesaid‌ ‌purpose.‌‌ payment‌‌of‌‌BSP's‌‌increase‌‌in‌‌capitalization.‌ ‌ Those‌ ‌who‌ ‌refuse‌ ‌the‌ ‌subpoena‌ ‌without‌ ‌justifiable‌ ‌cause,‌‌or‌‌who‌‌ c.‌‌Responsibility‌‌and‌‌primary‌‌objective‌ ‌ refuse‌ ‌to‌ ‌supply‌ ‌the‌ ‌BSP‌ ‌with‌ ‌data‌ ‌required,‌ ‌shall‌ ‌be‌ ‌subject‌ ‌to‌‌ punishment‌‌for‌c‌ ontempt‌.‌ ‌ 1) Shall‌‌provide‌‌policy‌‌directions‌‌in‌‌the‌‌areas‌‌of‌‌money,‌‌banking,‌‌ and‌‌credit.‌‌ ‌ Authority‌‌to‌‌Approve‌‌Transfer‌‌of‌‌Shares‌ ‌ 2) Shall‌ ‌have‌ ‌supervision‌ ‌over‌ ‌the‌ ‌operations‌ ‌of‌ ‌banks‌ ‌and‌‌ exercise‌ ‌such‌ ‌regulatory‌ ‌and‌‌examination‌‌powers‌‌over‌‌the‌‌ quasi-banking‌‌operations‌‌of‌‌non-bank‌‌financial‌‌institutions.‌‌ ‌ Transfers‌ ‌or‌ ‌acquisitions,‌ ‌or‌ ‌a‌ ‌series‌ ‌thereof,‌ ‌of‌ ‌at‌ ‌least‌‌10%‌‌‌of‌‌ the‌ ‌voting‌ ‌shares‌ ‌in‌ ‌banks‌ ‌or‌ ‌quasi-banks‌ ‌shall‌ ‌require‌ ‌the‌‌ prior‌‌approval‌‌of‌‌the‌‌BSP‌.‌‌Regard‌‌shall‌‌be‌‌given‌‌by‌‌the‌‌BSP‌‌to‌‌the‌‌ fitness‌‌of‌‌the‌‌incoming‌‌stockholders‌‌as‌‌may‌‌be‌‌indicated‌‌in‌‌their‌‌ integrity,‌‌reputation‌‌and‌‌financial‌‌capacity.‌ ‌ 3) As‌ ‌may‌ ‌be‌ ‌determined‌ ‌by‌ ‌the‌ ‌Monetary‌ ‌Board‌,‌ ‌it‌ ‌shall‌‌ likewise‌ ‌exercise‌ ‌regulatory‌ ‌and‌ ‌examination‌ ‌powers‌ ‌over‌‌ money‌ ‌service‌ ‌businesses,‌ ‌credit‌ ‌granting‌ ‌businesses,‌ ‌and‌‌ Prohibitions‌ ‌ payment‌‌system‌‌operators.‌ ‌ Personnel‌‌of‌‌the‌‌BSP‌‌are‌‌prohibited‌‌from:‌ ‌ d.‌‌Liability‌‌to‌‌depositors‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 81‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ a) being‌‌an‌‌officer,‌‌director,‌‌lawyer‌‌or‌‌agent,‌‌employee,‌‌consultant‌‌ or‌‌stockholder,‌‌‌directly‌‌or‌‌indirectly‌,‌‌of‌‌any‌‌institution‌‌subject‌‌ to‌‌supervision‌‌or‌‌examination‌‌by‌‌the‌‌BSP‌‌ ‌ except‌ ‌non-stock‌ ‌savings‌ ‌and‌ ‌loan‌ ‌associations‌ ‌and‌‌ provident‌‌funds‌‌‌organized‌‌exclusively‌‌for‌‌employees‌‌of‌‌BSP;‌ ‌ b) directly‌ ‌or‌ ‌indirectly‌ ‌requesting‌ ‌or‌ ‌receiving‌ ‌any‌ ‌gift‌,‌‌ present‌‌or‌‌pecuniary‌‌or‌‌material‌‌benefit‌‌for‌‌himself‌‌or‌‌another,‌‌ from‌ ‌any‌ ‌institution‌ ‌subject‌‌to‌‌supervision‌‌or‌‌examination‌‌by‌‌ the‌‌BSP;‌ ‌ c) revealing‌ ‌in‌ ‌any‌ ‌manner‌ ‌information‌ ‌relating‌ ‌to‌ ‌the‌‌ condition‌‌or‌‌business‌o ‌ f‌‌any‌‌such‌‌institution.‌‌ ‌ This‌ ‌prohibition‌ ‌shall‌ ‌not‌ ‌be‌ ‌held‌ ‌to‌ ‌apply‌ ‌to‌ ‌the‌ ‌giving‌‌of‌‌ information‌‌to‌‌the‌‌Monetary‌‌Board‌‌or‌‌the‌‌Governor‌‌of‌‌the‌‌BSP,‌‌ or‌ ‌to‌ ‌any‌ ‌person‌ ‌authorized‌ ‌by‌ ‌either‌ ‌of‌ ‌them,‌ ‌in‌ ‌writing,‌ ‌to‌‌ receive‌‌such‌‌information;‌‌and‌ ‌ d) borrowing‌ ‌from‌ ‌any‌ ‌institution‌ ‌subject‌ ‌to‌ ‌supervision‌ ‌or‌‌ examination‌‌by‌‌the‌‌BSP‌‌ ‌ unless‌s‌ aid‌‌borrowing‌‌is‌‌ ‌ 1. transacted‌‌on‌‌an‌a ‌ rm's‌‌length‌‌basis‌,‌‌ ‌ 2. fully‌‌disclosed‌t‌ o‌‌the‌‌Monetary‌‌Board,‌‌and‌‌ ‌ 3. shall‌‌be‌‌subject‌‌to‌‌rules‌‌and‌‌regulations.‌ ‌ f.‌‌Monetary‌‌Board‌ ‌ The‌‌powers‌‌and‌‌functions‌‌of‌‌the‌‌BSP‌‌shall‌‌be‌‌exercised‌‌by‌‌the‌‌BSP‌‌ Monetary‌‌Board‌‌composed‌‌of‌‌‌seven‌‌(7)‌‌members‌‌appointed‌‌by‌‌ the‌‌President‌‌for‌‌a‌‌term‌‌of‌s‌ ix‌‌(6)‌‌years‌.‌ ‌ a) The‌ ‌Governor‌ ‌of‌ ‌the‌ ‌BSP‌,‌ ‌who‌ ‌shall‌‌be‌‌the‌‌Chairman‌‌of‌‌ the‌ ‌Monetary‌ ‌Board.‌ ‌His‌ ‌appointment‌ ‌shall‌ ‌be‌ ‌subject‌ ‌to‌‌ confirmation‌‌by‌‌the‌‌Commission‌‌on‌‌Appointments.‌ ‌ b) Member‌‌of‌‌the‌‌Cabinet‌‌‌to‌‌be‌‌designated‌‌by‌‌the‌‌President.‌ ‌ c) five‌‌(5)‌‌members‌‌who‌‌shall‌‌come‌‌from‌‌the‌‌‌private‌‌sector‌,‌‌ all‌‌of‌‌whom‌‌shall‌‌serve‌‌full-time.‌ ‌ No‌‌member‌‌of‌‌the‌‌Monetary‌‌Board‌‌may‌‌be‌‌reappointed‌‌more‌‌than‌‌ once‌.‌ ‌ g.‌‌Banks‌‌in‌‌Distress‌ ‌ 2. Closure‌ ‌ 1. Conservatorship‌ ‌ Conservatorship‌is‌‌a‌‌tool‌‌in‌‌‌restoring‌‌the‌‌viability‌‌of‌‌banks‌‌and‌‌ quasi-banks.‌ ‌ The‌ ‌Monetary‌ ‌Board‌ ‌may‌ ‌appoint‌ ‌a‌ ‌conservator‌ ‌who‌ ‌shall‌ ‌have‌‌ the‌ ‌power‌ ‌to‌ ‌overrule‌ ‌or‌ ‌revoke‌ ‌the‌ ‌actions‌ ‌of‌ ‌the‌ ‌previous‌‌ management‌‌and‌‌board‌‌of‌‌directors‌‌of‌‌the‌‌bank‌‌or‌‌quasi-bank.‌‌The‌‌ conservatorship‌‌shall‌‌NOT‌‌exceed‌o ‌ ne‌‌(1)‌‌year‌.‌ ‌ The‌‌Monetary‌‌Board‌‌shall‌t‌ erminate‌t‌ he‌‌conservatorship‌‌ ‌ 1. A‌‌conservator‌‌may‌‌be‌‌appointed‌‌without‌‌the‌‌need‌‌of‌‌first‌‌declaring‌‌ the‌‌bank‌‌insolvent.‌‌Nonetheless,‌‌‌the‌‌designation‌‌of‌‌a‌‌conservator‌‌is‌‌ NOT‌‌a‌‌precondition‌‌to‌‌the‌‌designation‌‌of‌‌a‌‌receiver‌.‌ ‌ when‌ ‌it‌ ‌is‌ ‌satisfied‌ ‌that‌ ‌the‌ ‌institution‌ ‌can‌ ‌continue‌ ‌to‌‌ operate‌ ‌on‌ ‌its‌ ‌own‌ ‌and‌ ‌the‌‌conservatorship‌‌is‌‌‌no‌‌longer‌‌ necessary‌.‌‌ ‌ Under‌ ‌the‌ ‌law,‌ ‌the‌ ‌sanction‌ ‌of‌ ‌closure‌ ‌could‌ ‌be‌ ‌imposed‌ ‌upon‌ ‌a‌‌ bank‌‌by‌‌the‌‌BSP‌e ‌ ven‌‌without‌‌notice‌‌and‌‌hearing‌.‌ ‌ Judicial‌ ‌review‌ ‌enters‌ ‌the‌ ‌picture‌ ‌only‌ ‌after‌ ‌the‌ ‌MB‌ ‌has‌ ‌taken‌‌ action;‌ ‌it‌ ‌cannot‌ ‌prevent‌ ‌such‌ ‌action‌ ‌by‌ ‌the‌‌MB.‌‌The‌‌threat‌‌of‌‌the‌‌ imposition‌‌of‌‌sanctions,‌‌even‌‌that‌‌of‌‌closure,‌‌does‌‌not‌‌violate‌‌their‌‌ right‌ ‌to‌ ‌due‌ ‌process,‌ ‌and‌ ‌cannot‌ ‌be‌ ‌the‌ ‌basis‌ ‌for‌ ‌a‌ ‌WPI.‌ ‌(‌BSP‌ ‌v.‌‌ Antonio-Valenzuela‌)‌ ‌ The‌ ‌actions‌ ‌of‌ ‌the‌ ‌Monetary‌ ‌Board‌ ‌shall‌ ‌be‌ ‌final‌‌and‌‌executory‌‌ and‌ ‌may‌ ‌not‌ ‌be‌ ‌restrained‌ ‌or‌ ‌set‌ ‌aside‌ ‌by‌ ‌the‌ ‌court‌ ‌except‌ ‌on‌‌ petition‌‌for‌c‌ ertiorari‌.‌‌(‌Apex‌‌v.‌‌BSP‌‌‌2017‌)‌ ‌ Under‌ ‌Section‌ ‌30‌ ‌of‌ ‌the‌ ‌NCBA,‌ ‌the‌ ‌following‌ ‌are‌ ‌the‌ ‌mandatory‌‌ if‌ ‌it‌ ‌determines‌ ‌that‌ ‌the‌ ‌continuance‌ ‌in‌ ‌business‌ ‌of‌ ‌the‌‌ requirements‌ ‌to‌ ‌be‌ ‌complied‌ ‌with‌ ‌before‌ ‌a‌ ‌bank‌ ‌found‌ ‌to‌ ‌be‌‌ institution‌ ‌would‌ ‌involve‌ ‌probable‌ ‌loss‌ ‌to‌ ‌its‌ ‌depositors‌‌ insolvent‌ ‌is‌ ‌ordered‌ ‌closed‌ ‌and‌ ‌forbidden‌ ‌to‌ ‌do‌ ‌business‌ ‌in‌ ‌the‌‌ or‌ ‌creditors,‌ ‌in‌ ‌which‌ ‌case‌ ‌receivership‌ ‌or‌ ‌liquidation‌‌ Philippines:‌‌ ‌ shall‌‌apply.‌ ‌ 1. Firstly‌,‌‌an‌‌‌examination‌‌‌shall‌‌be‌‌conducted‌‌by‌‌the‌‌head‌‌of‌‌the‌‌ There‌ ‌are‌ ‌three‌ r ‌ equisites‌ ‌in‌ ‌placing‌ ‌an‌ ‌institution‌ ‌under‌‌ appropriate‌‌supervising‌‌or‌‌examining‌‌department;‌‌ ‌ conservatorship:‌ ‌ 2. Secondly‌,‌‌it‌‌shall‌‌be‌‌disclosed‌‌in‌‌the‌‌examination‌‌ ‌ 1. There‌ ‌must‌ ‌be‌ ‌a‌ ‌report‌ ‌submitted‌ ‌by‌ ‌the‌ ‌appropriate‌‌ a. that‌‌the‌‌condition‌‌of‌‌the‌‌bank‌‌is‌‌one‌‌of‌‌insolvency‌,‌‌OR‌‌ supervising‌‌or‌‌examining‌‌department‌‌of‌‌the‌‌BSP;‌ ‌ b. that‌ ‌its‌ ‌continuance‌ ‌in‌ ‌business‌ ‌would‌ ‌involve‌‌ 2. A‌‌finding‌‌by‌‌the‌‌Monetary‌‌Board‌‌that‌‌a‌‌bank‌‌or‌‌quasi-bank‌‌ probable‌‌loss‌‌‌to‌‌its‌‌depositors‌‌or‌‌creditors;‌‌ ‌ is‌‌in‌‌a‌‌‌state‌‌of‌‌continuing‌‌inability‌‌or‌‌unwillingness‌‌to‌‌ 3. Thirdly‌,‌ ‌the‌ ‌department‌ ‌head‌ ‌concerned‌ ‌shall‌ ‌inform‌ ‌the‌‌ maintain‌ ‌a‌ ‌condition‌ ‌of‌ ‌liquidity‌ ‌deemed‌ ‌adequate‌ ‌to‌‌ Monetary‌‌Board‌‌in‌‌writing,‌‌of‌‌the‌‌facts;‌‌and‌‌ ‌ protect‌‌the‌‌interest‌‌of‌‌depositors‌‌and‌‌creditors;‌‌and‌ ‌ 2. 3. The‌ ‌BOD‌ ‌must‌ ‌be‌ ‌informed‌ ‌in‌‌writing‌‌of‌‌the‌‌order‌‌of‌‌the‌‌ Monetary‌‌Board‌‌directing‌‌conservatorship.‌ ‌ The‌ ‌conservator‌ ‌merely‌ ‌takes‌‌the‌‌place‌‌of‌‌the‌‌BOD.‌‌What‌‌the‌‌said‌‌ board‌‌cannot‌‌do,‌‌the‌‌conservator‌‌cannot‌‌do‌‌either.‌‌His‌‌power‌‌is‌‌not‌‌ unilateral‌ ‌and‌ ‌he‌ ‌cannot‌ ‌simply‌ ‌repudiate‌ ‌valid‌‌obligations‌‌of‌‌the‌‌ bank.‌‌(‌First‌‌Philippine‌‌International‌‌Bank‌‌v.‌‌CA‌)‌ ‌ 4. Lastly‌,‌ ‌the‌ ‌Monetary‌ ‌Board‌ ‌shall‌ ‌find‌ ‌the‌ ‌statements‌ ‌of‌ ‌the‌‌ department‌‌head‌‌to‌‌be‌‌true.‌‌ ‌ The‌ ‌test‌ ‌of‌ ‌insolvency‌ ‌is‌ ‌measured‌ ‌by‌ ‌determining‌ ‌whether‌ ‌the‌‌ realizable‌‌assets‌o ‌ f‌‌a‌‌bank‌‌are‌‌less‌‌than‌‌its‌‌liabilities.‌ ‌ Hence,‌ ‌a‌ ‌bank‌ ‌is‌ ‌solvent‌ ‌if‌ ‌the‌ ‌fair‌ ‌cash‌ ‌value‌ ‌of‌ ‌all‌ ‌its‌ ‌assets,‌‌ realizable‌‌within‌‌a‌‌reasonable‌‌time‌‌by‌‌a‌‌reasonably‌‌prudent‌‌person,‌‌ would‌ ‌equal‌ ‌or‌ ‌exceed‌ ‌its‌ ‌total‌ ‌liabilities‌ ‌exclusive‌ ‌of‌ ‌stock‌‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 82‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ liability;‌‌but‌‌if‌‌such‌‌fair‌‌cash‌‌value‌‌so‌‌realizable‌‌is‌‌not‌‌sufficient‌‌to‌‌ pay‌‌such‌‌liabilities‌‌within‌‌a‌‌reasonable‌‌time,‌‌the‌‌bank‌‌is‌‌‌insolvent‌.‌‌ (‌Banco‌‌Filipino‌‌v.‌‌Monetary‌‌Board‌)‌ ‌ The‌‌obligation‌‌to‌‌pay‌‌interest‌‌on‌‌a‌‌deposit‌‌‌ceases‌‌‌from‌‌the‌‌moment‌‌ the‌ ‌operation‌ ‌of‌ ‌the‌ ‌bank‌ ‌is‌ ‌completely‌ ‌suspended‌ ‌by‌‌the‌‌Central‌‌ Bank.‌‌(‌General‌‌Bank‌‌and‌‌Trust‌‌v.‌‌Central‌‌Bank‌)‌ ‌ A‌ ‌deposit‌ ‌in‌ ‌a‌ ‌distressed‌‌bank‌‌already‌‌forbidden‌‌by‌‌the‌‌BSP‌‌to‌‌do‌‌ business‌ ‌does‌ ‌NOT‌ ‌become‌ ‌a‌ ‌preferred‌ ‌credit‌ ‌simply‌‌because‌‌ judgments‌ ‌were‌ ‌secured‌ ‌against‌ ‌the‌ ‌bank.‌ ‌(‌Central‌‌Bank‌‌v.‌‌Morfe‌,‌‌ Vda‌‌de‌‌Ballesteros‌‌v.‌‌Rural‌‌Bank‌‌of‌‌Canaman‌‌‌2010‌)‌ ‌ 3. Receivership‌ ‌ The‌‌appointment‌‌of‌‌a‌‌receiver‌‌operates‌‌to‌‌suspend‌‌the‌‌authority‌‌of‌‌ the‌‌bank‌‌over‌‌its‌‌property‌‌and‌‌effects,‌‌such‌‌authority‌‌being‌‌reposed‌‌ in‌‌the‌‌receiver,‌‌and‌‌in‌‌this‌‌respect,‌‌the‌‌receivership‌‌is‌‌equivalent‌‌to‌‌ an‌‌injunction‌‌to‌‌restrain‌‌the‌‌bank‌‌officers‌‌from‌‌intermeddling‌‌with‌‌ the‌ ‌property‌ ‌of‌ ‌the‌ ‌bank‌ ‌in‌ ‌any‌ ‌way.‌ ‌(‌Abacus‌ ‌Real‌ ‌Estate‌‌ Development‌‌v.‌‌Manila‌‌Banking‌)‌ ‌ However,‌ ‌the‌ ‌receiver‌ ‌of‌ ‌the‌ ‌bank‌ ‌is‌ ‌in‌ ‌fact‌ ‌obliged‌ ‌to‌ ‌collect‌‌ debts‌ ‌owing‌ ‌to‌ ‌the‌ ‌bank‌,‌ ‌which‌ ‌debts‌‌form‌‌part‌‌of‌‌the‌‌assets‌‌of‌‌ the‌‌bank.‌‌(‌Sps‌‌Aguilar‌‌v.‌‌Manila‌‌Banking‌)‌ ‌ The‌ ‌period‌ ‌during‌ ‌which‌ ‌the‌ ‌bank‌ ‌cannot‌ ‌do‌ ‌business‌ ‌due‌ ‌to‌‌ insolvency‌‌is‌‌‌NOT‌‌a‌‌fortuitous‌‌event‌,‌‌‌unless‌‌‌it‌‌is‌‌shown‌‌that‌‌the‌‌ government's‌ ‌action‌ ‌to‌ ‌place‌ ‌a‌ ‌bank‌ ‌under‌ ‌receivership‌ ‌or‌‌ liquidation‌ ‌proceedings‌ ‌is‌ ‌tainted‌ ‌with‌ ‌arbitrariness‌,‌ ‌or‌ ‌that‌ ‌the‌‌ regulatory‌‌body‌‌has‌acted‌‌without‌‌jurisdiction‌.‌‌(‌Sps‌‌Poon‌‌v.‌‌Prime‌‌ Savings‌‌Bank‌‌‌2016‌)‌ ‌ Only‌ ‌stockholders‌ ‌representing‌ ‌the‌ ‌majority‌‌of‌‌capital‌‌stock‌‌of‌‌a‌‌ bank‌‌have‌‌the‌‌‌personality‌‌to‌‌file‌‌action‌‌for‌‌annulment‌‌of‌‌the‌‌MB‌‌ resolution‌ ‌placing‌ ‌the‌ ‌bank‌ ‌under‌ ‌receivership.‌ ‌The‌ ‌closed‌ ‌bank‌‌ may‌‌sue‌‌and‌‌be‌‌sued‌‌only‌‌through‌‌its‌‌receiver.‌‌The‌‌receiver‌‌does‌‌so‌‌ as‌ ‌a‌ ‌representative‌ ‌party‌.‌ ‌Any‌ ‌action‌ ‌filed‌ ‌by‌ ‌the‌ ‌closed‌ ‌bank‌‌ without‌ ‌its‌ ‌receiver‌ ‌may‌ ‌be‌ ‌dismissed‌.‌ ‌(‌Banco‌ ‌Filipino‌ ‌v.‌ ‌BSP‌‌ 2018‌‌Leonen,‌‌J)‌ ‌ ‌ The‌ ‌execution‌ ‌and‌‌enforcement‌‌of‌‌a‌‌final‌‌decision‌‌of‌‌a‌‌court‌‌other‌‌ than‌ ‌the‌‌liquidation‌‌court‌‌against‌‌the‌‌assets‌‌of‌‌a‌‌closed‌‌bank‌‌shall‌‌ be‌ ‌stayed.‌ ‌The‌ ‌prevailing‌ ‌party‌ ‌shall‌ ‌file‌‌the‌‌final‌‌decision‌‌‌as‌‌a‌‌ CLAIM‌ ‌with‌ ‌the‌ ‌liquidation‌ ‌court‌ ‌and‌ ‌settled‌ ‌in‌ ‌accordance‌‌ with‌‌the‌‌Rules‌‌on‌‌Concurrence‌‌and‌‌Preference‌‌of‌‌Credits‌‌under‌‌ the‌ ‌Civil‌ ‌Code‌ ‌or‌ ‌other‌‌laws.‌‌(‌Cu‌‌v.‌‌Small‌‌Business‌‌Guarantee‌‌and‌‌ Finance‌‌‌2017‌)‌ ‌ The‌ ‌prescriptive‌ ‌period‌ ‌to‌ ‌institute‌ ‌foreclosure‌ ‌proceeding‌ ‌was‌‌ legally‌ ‌interrupted‌ ‌when‌ ‌the‌ ‌mortgagee-bank‌ ‌was‌ ‌placed‌ ‌under‌‌ receivership‌ ‌with‌‌express‌‌prohibition‌‌from‌‌transacting‌‌business,‌‌a‌‌ circumstance‌ ‌considered‌ ‌as‌ ‌force‌ ‌majeure‌.‌ ‌(‌Provident‌ ‌Savings‌ ‌v.‌‌ CA‌)‌ ‌ The‌ ‌dissolution‌ ‌of‌ ‌a‌ ‌corporation‌ ‌by‌ ‌the‌ ‌SEC‌ ‌is‌ ‌a‌ ‌totally‌ ‌different‌‌ proceeding‌ ‌from‌ ‌the‌ ‌receivership‌ ‌and‌‌liquidation‌‌of‌‌a‌‌bank‌‌by‌‌the‌‌ BSP.‌‌(P ‌ DIC‌‌v.‌‌BIR‌)‌ ‌ the‌ ‌judicial‌ ‌court.‌ ‌(‌Cudiamat‌ ‌v.‌ ‌Batangas‌ ‌Savings‌ ‌and‌‌Loan‌‌Bank‌‌ 2010‌)‌ ‌ Section‌‌52(C)‌‌of‌‌the‌‌NIRC‌‌is‌‌‌NOT‌‌applicable‌‌to‌‌banks‌‌ordered‌‌placed‌‌ under‌‌liquidation‌‌by‌‌the‌‌Monetary‌‌Board,‌‌and‌‌a‌‌tax‌‌clearance‌‌is‌‌NOT‌‌a‌‌ prerequisite‌ ‌to‌ ‌the‌ ‌approval‌ ‌of‌ ‌the‌ ‌project‌ ‌of‌ ‌distribution‌ ‌of‌ ‌the‌‌ assets‌‌of‌‌a‌‌bank‌‌under‌‌liquidation‌‌by‌‌the‌‌PDIC.‌‌(P ‌ DIC‌‌v.‌‌BIR‌‌‌2013‌)‌ ‌ h.‌‌Administrative‌‌sanctions‌‌on‌‌supervised‌‌entities‌ ‌ a) fines‌ ‌in‌ ‌amounts‌ ‌in‌ ‌no‌ ‌case‌ ‌to‌ ‌exceed‌ ‌P1M‌ ‌for‌ ‌each‌‌ transactional‌ ‌violation‌ ‌or‌ ‌P100K‌ ‌per‌ ‌calendar‌ ‌day‌ ‌for‌‌ violations‌‌of‌‌a‌‌continuing‌‌nature:‌‌ ‌ Provided‌,‌‌That‌‌in‌‌case‌‌‌profit‌‌is‌‌gained‌‌or‌‌loss‌‌is‌‌avoided‌‌as‌‌a‌‌ result‌‌of‌‌the‌‌violation‌,‌‌a‌‌fine‌‌‌no‌‌more‌‌than‌‌three‌‌(3)‌‌times‌‌ the‌‌profit‌‌gained‌‌or‌‌loss‌‌avoided‌m ‌ ay‌‌also‌‌‌be‌‌imposed;‌ ‌ 4. Liquidation‌‌ ‌ A‌ ‌liquidation‌ ‌proceeding‌ ‌is‌ ‌a‌‌special‌‌proceeding‌‌‌involving‌‌the‌‌ administration‌ ‌and‌ ‌disposition,‌ ‌with‌ ‌judicial‌ ‌intervention,‌ ‌of‌ ‌an‌‌ insolvent's‌‌assets‌‌for‌‌the‌‌benefit‌‌of‌‌its‌‌creditors.‌‌This‌‌proceeding‌‌is‌‌ cognizable‌‌by‌‌the‌R ‌ TC‌.‌‌(‌Consolidated‌‌Bank‌‌v.‌‌CA‌‌2 ‌ 015‌)‌ ‌ It‌‌is‌‌basically‌‌a‌t‌ wo-phased‌‌proceeding‌.‌‌ ‌ The‌‌‌first‌‌phase‌‌‌is‌‌concerned‌‌with‌‌the‌‌‌approval‌‌and‌‌disapproval‌‌ of‌ ‌claims‌.‌ ‌The‌ ‌claim‌‌shall‌‌be‌‌classified‌‌whether‌‌it‌‌is‌‌‌ordinary‌‌‌or‌‌ preferred‌,‌ ‌and‌ ‌thereafter‌ ‌included‌ ‌liquidated.‌ ‌In‌ ‌either‌ ‌case,‌ ‌the‌‌ order‌ ‌allowing‌ ‌or‌ ‌disallowing‌ ‌a‌ ‌particular‌ ‌claim‌ ‌is‌‌a‌‌‌final‌‌order‌,‌‌ and‌‌may‌‌be‌‌appealed‌b ‌ y‌‌the‌‌party‌‌aggrieved‌‌thereby.‌ ‌ The‌ ‌second‌ ‌phase‌ ‌involves‌ ‌the‌ ‌approval‌ ‌by‌ ‌the‌ ‌Court‌ ‌of‌ ‌the‌‌ distribution‌‌plan‌‌prepared‌‌by‌‌the‌‌duly‌‌appointed‌‌liquidator.‌‌(‌Vda‌‌ de‌‌Ballesteros‌‌v.‌‌Rural‌‌Bank‌‌of‌‌Canaman‌‌‌2010‌)‌ ‌ The‌ ‌insolvent‌ ‌bank's‌ ‌legal‌ ‌personality‌ ‌is‌ ‌not‌ ‌dissolved‌.‌ ‌A‌ ‌bank‌‌ retains‌ ‌its‌ ‌juridical‌ ‌personality.‌ ‌(‌Balayan‌ ‌Bay‌ ‌Rural‌ ‌Bank‌ ‌v.‌‌ National‌‌Livelihood‌‌Development‌‌‌2015‌)‌ ‌ As‌ ‌a‌‌‌general‌‌rule‌,‌‌if‌‌there‌‌is‌‌a‌‌judicial‌‌liquidation‌‌of‌‌an‌‌insolvent‌‌ bank,‌‌all‌‌claims‌‌against‌‌the‌‌bank‌‌should‌‌be‌‌filed‌‌in‌‌the‌‌liquidation‌‌ proceeding.‌ ‌This,‌ ‌however,‌ ‌should‌ ‌NOT‌ ‌be‌ ‌applied‌ ‌if‌ ‌it‌ ‌would‌ ‌be‌‌ "‌an‌‌exercise‌‌in‌‌futility‌."‌ ‌In‌‌one‌‌case,‌‌the‌‌claimants‌‌were‌‌poor‌‌and‌ the‌‌disputed‌‌parcel‌‌of‌‌land‌‌was‌‌their‌‌only‌‌property,‌‌and‌‌the‌‌parties'‌‌ claims‌‌and‌‌defenses‌‌were‌‌properly‌‌ventilated‌‌in‌‌and‌‌considered‌‌by‌‌ b) suspension‌ ‌of‌ ‌rediscounting‌ ‌privileges‌ ‌or‌ ‌access‌ ‌to‌ ‌BSP‌‌ credit‌‌facilities;‌ ‌ c) suspension‌ ‌of‌ ‌lending‌ ‌or‌ ‌foreign‌ ‌exchange‌ ‌operations‌ ‌or‌‌ authority‌‌to‌‌accept‌‌new‌‌deposits‌‌or‌‌make‌‌new‌‌investments;‌ ‌ d) suspension‌‌of‌‌‌interbank‌‌clearing‌p ‌ rivileges;‌‌and/or‌ ‌ e) suspension‌ ‌or‌ ‌revocation‌ ‌of‌ ‌quasi-banking‌ ‌or‌ ‌other‌ ‌special‌ licenses‌.‌ ‌ i.‌‌Rules‌‌on‌‌bank‌‌deposits‌‌and‌‌investments‌‌by‌‌DOSRI‌ ‌ ⭐‌Directors,‌‌Officers,‌‌Stockholders‌‌and‌‌Related‌‌Interests‌ ‌ No‌‌director‌‌or‌‌officer‌‌of‌‌any‌‌bank‌‌ ‌ 1. shall,‌‌directly‌‌or‌‌indirectly,‌‌for‌‌himself‌‌or‌‌as‌‌the‌‌representative‌‌ or‌‌agent‌‌of‌‌others,‌‌borrow‌‌from‌‌such‌‌bank‌‌nor‌‌ ‌ 2. shall‌‌he‌‌become‌‌a‌‌guarantor,‌‌indorser‌‌or‌‌surety‌‌for‌‌loans‌‌from‌‌ such‌‌bank‌‌to‌‌others,‌‌or‌‌ ‌ 3. in‌ ‌any‌ ‌manner‌ ‌be‌‌an‌‌obligor‌‌or‌‌incur‌‌any‌‌contractual‌‌liability‌‌ to‌‌the‌‌bank‌‌ ‌ except‌ ‌with‌ ‌the‌‌‌written‌‌approval‌‌of‌‌the‌‌majority‌‌of‌‌all‌‌the‌‌ directors‌o ‌ f‌‌the‌‌bank,‌‌excluding‌t‌ he‌‌director‌‌concerned.‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 83‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ Dealings‌‌of‌‌a‌‌bank‌‌with‌‌any‌‌of‌‌its‌‌DOSRI‌‌shall‌‌be‌‌upon‌‌terms‌‌not‌‌less‌‌ favorable‌‌to‌‌the‌‌bank‌‌than‌‌those‌‌offered‌‌to‌‌others‌.‌ ‌ 3) There‌ ‌is‌ ‌a‌ ‌written‌ ‌approval‌ ‌of‌ ‌the‌ ‌majority‌ ‌of‌ ‌ALL‌ ‌the‌‌ directors‌‌of‌‌the‌‌bank,‌e‌ xcluding‌t‌ he‌‌director‌‌concerned;‌‌ ‌ 1. there‌ ‌is‌ ‌convincing‌ ‌proof‌‌that‌‌the‌‌action‌‌of‌‌the‌‌BSP‌‌is‌‌‌plainly‌‌ arbitrary‌‌and‌‌made‌‌in‌‌bad‌‌faith‌a‌ nd‌‌ ‌ This‌‌is‌‌NOT‌‌required‌‌where‌‌a‌‌‌fringe‌‌benefit‌‌plan‌‌is‌‌granted‌‌to‌‌ officers‌‌as‌‌approved‌‌by‌‌the‌‌BSP.‌ ‌ 2. the‌ ‌petitioner‌ ‌or‌‌plaintiff‌‌files‌‌a‌‌‌bond‌‌‌executed‌‌in‌‌favor‌‌of‌‌the‌‌ BSP,‌‌in‌‌an‌‌amount‌‌to‌‌be‌‌fixed‌‌by‌‌the‌‌court.‌ ‌ Related‌‌interests‌s‌ hall‌‌refer‌‌to‌‌any‌‌of‌‌the‌‌following:‌‌ ‌ 1) Spouse‌ ‌or‌ ‌relative‌ ‌within‌ ‌the‌ ‌first‌ ‌degree‌,‌ ‌or‌ ‌relative‌ ‌by‌‌ legal‌‌adoption,‌‌of‌‌a‌‌director,‌‌officer‌‌or‌‌stockholder‌‌of‌‌the‌‌BSFI;‌‌ ‌ 4) The‌‌required‌‌approval‌‌ ‌ 2) Partnership‌o ‌ f‌‌which‌‌a‌‌DOS‌‌is‌‌a‌‌general‌‌partner;‌‌ ‌ a) shall‌‌be‌‌entered‌‌upon‌‌the‌‌record‌‌of‌‌the‌‌bank‌‌and‌‌ ‌ 3) Co-owner‌ ‌with‌ ‌the‌ ‌DOS,‌ ‌of‌ ‌the‌ ‌property‌ ‌or‌ ‌interest‌ ‌or‌ ‌right‌‌ mortgaged,‌ ‌pledged‌ ‌or‌ ‌assigned‌ ‌to‌ ‌secure‌ ‌the‌ ‌loans‌ ‌or‌ ‌other‌‌ credit‌‌accommodations;‌ ‌ b) a‌‌copy‌‌of‌‌such‌‌entry‌‌shall‌‌be‌‌transmitted‌‌forthwith‌‌to‌‌ the‌‌appropriate‌‌supervising‌‌and‌‌examining‌‌department‌‌ of‌‌the‌‌BSP;‌‌and‌ ‌ Regulation‌ ‌ Margin‌ ‌Requirements‌ ‌Against‌ ‌Letters‌ ‌of‌ ‌Credit.‌ ‌—‌ ‌Minimum‌‌ cash‌‌margins‌‌for‌‌the‌‌opening‌‌of‌‌letters‌‌of‌‌credit,‌‌and‌‌may‌‌relate‌‌the‌‌ size‌ ‌of‌ ‌the‌ ‌required‌ ‌margin‌ ‌to‌ ‌the‌ ‌nature‌ ‌of‌ ‌the‌ ‌transaction‌ ‌to‌ ‌be‌‌ financed.‌ ‌ Required‌ ‌Security‌ ‌Against‌ ‌Bank‌ ‌Loans.‌ ‌—‌ ‌In‌ ‌order‌‌to‌‌promote‌‌ liquidity‌ ‌and‌ ‌solvency‌ ‌of‌ ‌the‌ ‌banking‌ ‌system,‌ ‌maximum‌‌ permissible‌ ‌maturities‌ ‌of‌ ‌the‌ ‌loans‌ ‌and‌ ‌investments‌ ‌which‌ ‌the‌‌ banks‌ ‌may‌ ‌make,‌ ‌and‌ ‌the‌ ‌kind‌ ‌and‌ ‌amount‌ ‌of‌ ‌security‌ ‌to‌ ‌be‌‌ required‌‌against‌‌the‌‌various‌‌types‌‌of‌‌credit‌‌operations‌‌of‌‌the‌‌banks‌‌ may‌‌be‌‌regulated.‌ ‌ 5) Limited‌ ‌to‌ ‌an‌ ‌amount‌ ‌equivalent‌ ‌to‌ ‌the‌ ‌DOSRI‌ ‌borrower’s‌‌ 4) Corporation,‌ ‌association‌ ‌or‌‌firm‌‌of‌‌which‌‌any‌‌or‌‌a‌‌group‌‌of‌‌ unencumbered‌‌‌deposits‌‌and‌‌book‌‌value‌‌of‌‌his‌‌paid-in‌‌capital‌‌ DOS‌‌of‌‌the‌‌BSFI‌‌hold‌‌or‌‌own‌‌at‌‌least‌‌twenty‌‌percent‌‌(20%)‌‌ contribution‌‌in‌‌the‌‌bank.‌ ‌ of‌ ‌the‌ ‌subscribed‌ ‌capital‌‌of‌‌such‌‌corporation,‌‌or‌‌of‌‌the‌‌equity‌‌ of‌‌such‌‌association‌‌or‌‌firm;‌‌ ‌ In‌ ‌other‌ ‌words,‌ ‌three‌ ‌restrictions‌ ‌are‌ ‌imposed‌ ‌by‌ ‌law‌ ‌on‌ ‌DOSRI‌‌ 5) Corporation,‌ ‌association‌ ‌or‌‌firm‌‌wholly‌‌or‌‌majority-owned‌‌or‌‌ transactions,‌‌to‌‌wit:‌ ‌ controlled‌ ‌by‌ ‌any‌ ‌related‌ ‌entity‌ ‌or‌ ‌a‌ ‌group‌ ‌of‌ ‌related‌‌entities‌‌ mentioned‌‌in‌‌Items‌‌“(2)”‌‌and‌‌“(4)”‌‌above;‌‌ ‌ 6) Corporation,‌ ‌association‌ ‌or‌ ‌firm‌ ‌which‌ ‌owns‌ ‌or‌ ‌controls‌‌ directly‌ ‌or‌ ‌indirectly‌ ‌whether‌ ‌singly‌ ‌or‌ ‌as‌ ‌part‌ ‌of‌ ‌a‌ ‌group‌ ‌of‌‌ related‌ ‌interest‌ ‌at‌ ‌least‌ ‌twenty‌ ‌percent‌ ‌(20%)‌ ‌of‌ ‌the‌‌ subscribed‌ ‌capital‌ ‌of‌ ‌a‌ ‌substantial‌ ‌stockholder‌ ‌of‌‌the‌‌BSFI‌‌or‌‌ which‌ ‌controls‌ ‌majority‌ ‌interest‌ ‌of‌ ‌the‌ ‌BSFI‌‌pursuant‌‌to‌‌Item‌‌ “g”‌‌of‌‌Sec.‌‌362;‌ ‌ 1. Approval‌R ‌ equirements;‌ ‌ 2. Reportorial‌R ‌ equirements;‌‌and‌ ‌ 3. Ceiling‌R ‌ equirements.‌‌(§ ‌ 36‌‌RA‌‌8791‌)‌ ‌ Portfolio‌ ‌Ceilings.‌ ‌—‌ ‌To‌ ‌prevent‌ ‌or‌ ‌check‌ ‌an‌ ‌expansion‌ ‌of‌ ‌bank‌‌ credit,‌ ‌an‌ ‌upper‌ ‌limit‌ ‌may‌ ‌be‌ ‌placed‌ ‌on‌ ‌the‌ ‌amount‌ ‌of‌ ‌loans‌‌and‌‌ investments‌‌which‌‌the‌‌banks‌‌may‌‌hold,‌‌or‌‌on‌‌the‌‌rate‌‌of‌‌increase‌‌of‌‌ such‌‌assets‌‌within‌‌specified‌‌periods‌‌of‌‌time.‌‌ ‌ Except‌ ‌with‌‌the‌‌prior‌‌approval‌‌of‌‌the‌‌MB‌‌the‌‌total‌‌outstanding‌‌ loans,‌ ‌other‌ ‌credit‌ ‌accommodations‌ ‌and‌ ‌guarantees‌ ‌to‌‌DOSRI‌‌ shall‌ ‌not‌ ‌exceed‌ ‌fifteen‌ ‌percent‌ ‌(15%)‌ ‌of‌ ‌the‌ ‌total‌ ‌loan‌‌ portfolio‌‌of‌‌the‌‌bank‌‌or‌‌100%‌‌of‌‌net‌‌worth‌‌whichever‌‌is‌l‌ ower‌:‌‌ ‌ Minimum‌ ‌Capital‌ ‌Ratios.‌ ‌—‌ ‌minimum‌ ‌risk-based‌ ‌capital‌‌ adequacy‌‌ratios‌‌based‌‌on‌‌internationally‌‌accepted‌‌standards.‌‌Banks‌‌ may‌‌be‌‌required‌‌to‌‌hold‌‌capital‌‌beyond‌‌the‌‌minimum‌‌requirements‌‌ commensurate‌‌to‌‌their‌‌risk‌‌profile.‌ ‌ 7) Corporation,‌ ‌association‌ ‌or‌ ‌firm‌ ‌which‌ ‌has‌ ‌an‌ ‌existing‌‌ management‌ ‌contract‌ ‌or‌ ‌any‌ ‌similar‌ ‌arrangement‌ ‌with‌ ‌the‌‌ parent‌‌of‌‌the‌‌BSFI;‌‌and‌ ‌ 8) NGOs/foundations‌ ‌that‌ ‌are‌ ‌engaged‌ ‌in‌ ‌retail‌ ‌microfinance‌‌ operations‌ ‌which‌ ‌are‌ ‌incorporated‌‌by‌‌any‌‌of‌‌the‌‌stockholders‌‌ and/or‌ ‌directors‌ ‌and/or‌ ‌officers‌ ‌or‌ ‌related‌ ‌BSFIs.‌ ‌(‌MORB,‌‌ 2018‌)‌‌ ‌ Requirements‌‌for‌‌Valid‌‌Insider‌‌Lending‌ ‌ 1) In‌‌the‌‌regular‌‌course‌‌of‌‌business‌;‌‌ ‌ 2) Upon‌‌terms‌‌not‌‌less‌‌favorable‌‌to‌‌the‌‌bank‌‌than‌‌those‌‌offered‌‌ to‌‌third‌‌parties;‌‌ ‌ Provided‌,‌ ‌That‌ ‌in‌ ‌no‌ ‌case‌ ‌shall‌ ‌the‌ ‌total‌ ‌unsecured‌ ‌loans‌‌to‌‌ k.‌‌Rate‌‌of‌‌Exchange‌ ‌ said‌‌DOSRI‌‌exceed‌‌thirty‌‌percent‌‌(‌30%‌)‌‌of‌‌the‌‌aggregate‌‌ceiling‌‌ The‌ ‌Monetary‌ ‌Board‌ ‌shall‌ ‌determine‌ ‌the‌ ‌exchange‌‌rate‌‌policy‌‌of‌‌ or‌‌the‌‌outstanding‌‌loans,‌‌whichever‌‌is‌l‌ ower‌.‌‌(§X331,‌‌MORB)‌ ‌ the‌‌country.‌ ‌ j.‌‌Supervision‌‌and‌‌regulation‌‌of‌‌bank‌‌operations‌ ‌ The‌ ‌Monetary‌ ‌Board‌ ‌shall‌ ‌similarly‌ ‌determine‌ ‌the‌ ‌rates‌ ‌for‌‌other‌‌ types‌ ‌of‌ ‌foreign‌ ‌exchange‌ ‌transactions‌ ‌by‌ ‌the‌ ‌BSP,‌ ‌including‌‌ purchases‌ ‌and‌ ‌sales‌ ‌of‌ ‌foreign‌ ‌notes‌ ‌and‌ ‌coins,‌ ‌but‌ ‌the‌ ‌margins‌‌ between‌‌the‌‌effective‌‌exchange‌‌rates‌‌and‌‌the‌‌rates‌‌thus‌‌established‌‌ may‌ ‌not‌ ‌exceed‌ ‌the‌ ‌corresponding‌ ‌margins‌ ‌for‌ ‌spot‌ ‌exchange‌‌ transactions‌ ‌by‌ ‌more‌ ‌than‌ ‌the‌ ‌additional‌ ‌costs‌ ‌or‌ ‌expenses‌‌ involved‌‌in‌‌each‌‌type‌‌of‌‌transactions.‌‌(§74)‌ ‌ Supervision‌‌and‌‌Examination‌ ‌ The‌‌BSP‌‌shall‌‌have‌‌supervision‌‌over,‌‌and‌‌conduct‌‌regular‌‌or‌‌special‌‌ examinations‌ ‌of‌ ‌banking‌ ‌institutions‌ ‌and‌ ‌quasi-banks,‌ ‌including‌‌ their‌s‌ ubsidiaries‌a ‌ nd‌a ‌ ffiliates‌‌‌engaged‌‌in‌‌allied‌‌activities.‌ ‌ No‌‌restraining‌‌order‌‌or‌‌injunction‌‌shall‌‌be‌‌issued‌‌enjoining‌‌the‌‌BSP‌‌ from‌‌examining‌‌an‌‌institution,‌u ‌ nless‌‌ ‌ ‌ Law‌‌on‌‌Secrecy‌‌of‌‌Bank‌‌Deposits‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 84‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ RA‌‌No‌‌1405‌‌|‌‌Secrecy‌‌of‌‌Bank‌‌Deposits‌‌Act‌ RA‌‌No‌‌6426‌‌|‌‌Foreign‌‌Currency‌‌Deposit‌‌Act‌ a.‌‌Purpose‌‌ ‌ To‌ ‌give‌ ‌encouragement‌ ‌to‌ ‌the‌ ‌people‌ ‌to‌ ‌deposit‌ ‌their‌ ‌money‌ ‌in‌‌ banking‌‌institutions‌‌and‌‌to‌‌discourage‌‌private‌‌hoarding‌‌so‌‌that‌‌the‌‌ same‌ ‌may‌ ‌be‌ ‌properly‌ ‌utilized‌ ‌by‌ ‌banks‌ ‌in‌ ‌authorized‌ ‌loans‌ ‌to‌‌ assist‌‌in‌‌the‌‌economic‌‌development‌‌of‌‌the‌‌country.‌ ‌ b.‌‌Prohibited‌‌Acts‌‌ ‌ 1) Bank‌‌deposits‌‌may‌‌not‌‌be‌‌examined,‌‌inquired‌‌or‌‌looked‌‌into‌‌by‌‌ any‌‌person,‌‌government‌‌official,‌‌bureau‌‌or‌‌office;‌ ‌ c) upon‌ ‌order‌ ‌of‌ ‌a‌ ‌competent‌ ‌court‌ ‌in‌ ‌the‌ ‌case‌ ‌of‌ ‌bribery‌ ‌or‌‌ dereliction‌‌of‌‌duty‌‌of‌‌public‌‌officials‌‌or,‌ ‌ d) when‌ ‌the‌ ‌money‌ ‌deposited‌‌or‌‌invested‌‌is‌‌the‌‌‌subject‌‌matter‌‌ of‌‌the‌‌litigation‌;‌ ‌ e) In‌ ‌cases‌ ‌involving‌ ‌unexplained‌ ‌wealth‌,‌ ‌even‌ ‌if‌ ‌placed‌ ‌in‌‌ another‌‌person’s‌‌name;‌ ‌ f) g) Upon‌‌the‌‌order‌‌of‌‌a‌‌competent‌‌court,‌‌by‌‌the‌‌AMLC‌‌where‌‌there‌‌ is‌‌probable‌‌cause‌‌of‌‌money‌‌laundering‌;‌ ‌ A‌‌court‌‌order‌‌is‌‌NOT‌‌necessary‌‌in‌‌the‌‌following‌‌cases:‌ ‌ 2) Any‌ ‌official‌ ‌or‌ ‌employee‌ ‌of‌ ‌a‌ ‌bank‌ ‌may‌ ‌not‌ ‌disclose‌ ‌any‌‌ information‌‌concerning‌‌said‌‌deposits‌‌to‌‌any‌‌person‌‌other‌‌than‌‌ those‌‌mentioned‌‌in‌‌Section‌‌Two‌‌hereof,‌‌or‌‌ ‌ 3) For‌ ‌an‌ ‌independent‌ ‌auditor‌ ‌hired‌ ‌by‌ ‌a‌ ‌bank‌ ‌to‌ ‌conduct‌ ‌its‌‌ regular‌ ‌audit‌ ‌to‌ ‌disclose‌ ‌to‌ ‌any‌ ‌person‌ ‌other‌ ‌than‌ ‌a‌ ‌bank‌‌ director,‌ ‌official‌ ‌or‌ ‌employee‌ ‌authorized‌ ‌by‌ ‌the‌ ‌bank‌ ‌any‌‌ information‌‌concerning‌‌said‌‌deposits.‌ ‌ c.‌‌Deposits‌‌covered‌‌ All‌‌deposits‌‌of‌‌whatever‌‌nature‌‌with‌‌banks‌‌or‌‌banking‌‌institutions‌‌ IN‌ ‌the‌ ‌Philippines‌‌‌including‌‌investments‌‌in‌‌bonds‌‌issued‌‌by‌‌the‌‌ Government,‌‌are‌‌considered‌‌as‌‌of‌‌an‌‌absolutely‌‌confidential‌‌nature‌‌ and‌ ‌may‌ ‌not‌ ‌be‌ ‌examined,‌ ‌inquired‌‌or‌‌looked‌‌into‌‌by‌‌any‌‌person,‌‌ government‌‌official,‌‌bureau‌‌or‌‌office.‌ ‌ Trust‌ ‌accounts‌ ‌are‌ ‌covered‌ ‌by‌‌the‌‌term‌‌‘deposits’.‌‌The‌‌use‌‌of‌‌the‌‌ term‌‌‘deposits’‌‌is‌‌to‌‌be‌‌understood‌‌broadly‌‌and‌‌not‌‌limited‌‌only‌‌to‌‌ accounts‌ ‌which‌ ‌give‌ ‌rise‌ ‌to‌ ‌creditor-debtor‌ ‌relationship‌ ‌between‌‌ the‌‌depositor‌‌and‌‌the‌‌bank.‌‌(E ‌ jercito‌‌v.‌‌SB‌)‌ ‌ d.‌‌Exceptions‌‌ ‌ A‌‌PESO‌‌bank‌‌deposit‌‌‌may‌‌be‌‌inquired‌‌into‌‌in‌‌the‌‌following‌‌cases:‌ ‌ a) upon‌‌‌written‌‌permission‌‌‌of‌‌the‌‌depositor,‌ ‌ b) in‌‌cases‌‌of‌‌impeachment‌,‌ ‌ Upon‌ ‌inquiry‌ ‌of‌ ‌the‌ ‌CIR‌ ‌to‌ ‌determine‌ ‌the‌ ‌net‌ ‌estate‌ ‌of‌ ‌a‌‌ deceased‌‌depositor;‌ ‌ i) ii) iii) Kidnapping‌‌for‌‌ransom;‌ ‌ RA‌‌9165;‌ ‌ Hijacking;‌‌destructive‌‌arson‌‌and‌‌murder.‌ ‌ h) Examination‌ ‌by‌ ‌the‌ ‌AMLC‌‌even‌‌without‌‌court‌‌order‌‌under‌‌Sec‌‌ 11‌‌of‌‌AMLA;‌ ‌ i) Disclosure‌ ‌to‌ ‌the‌ ‌Treasurer‌ ‌of‌ ‌the‌ ‌Philippines‌ ‌for‌ ‌dormant‌‌ deposits‌ ‌for‌ ‌at‌ ‌least‌ ‌10‌ ‌years‌ ‌under‌ ‌the‌‌Unclaimed‌‌Balances‌‌ Act;‌ ‌ j) Report‌ ‌of‌ ‌banks‌ ‌to‌ ‌AMLC‌ ‌of‌ covered‌ ‌and/or‌ ‌suspicious‌‌ transactions‌;‌ ‌ k) Upon‌‌order‌‌of‌‌the‌‌CA,‌‌examination‌‌by‌‌law‌‌enforcement‌‌officers‌‌ in‌‌terrorism‌‌cases‌‌‌under‌‌the‌‌Human‌‌Security‌‌Act;‌ ‌ l) Investigation‌ ‌where‌ ‌AMLC‌ ‌is‌ ‌authorized‌ ‌to‌ ‌examine‌ ‌deposits‌‌ and‌ ‌investments‌ ‌with‌ ‌any‌ ‌banking‌ ‌or‌ ‌NBFI‌ ‌and‌ ‌their‌‌ subsidiaries‌‌and‌‌affiliates‌‌without‌‌a‌‌court‌‌order;‌ ‌ m) Inquiry‌‌and‌‌examination‌‌by‌‌the‌‌PDIC‌‌in‌‌case‌‌there‌‌is‌‌a‌‌finding‌‌ of‌‌‌unsafe‌‌or‌‌unsound‌‌banking‌‌practice‌;‌ ‌ n) Examination‌ ‌and‌ ‌inquiry‌ ‌into‌ ‌deposit‌ ‌records‌ ‌by‌ ‌the‌ ‌PDIC‌‌ when‌‌there‌‌is‌‌failure‌‌of‌‌prompt‌‌corrective‌‌action‌‌as‌‌declared‌‌by‌‌ the‌‌Monetary‌‌Board‌‌due‌‌to‌‌capital‌‌deficiency;‌‌ ‌ o) When‌‌there‌‌is‌‌a‌‌waiver‌‌in‌‌case‌‌of‌D ‌ OSRI‌‌loans‌;‌ ‌ p) Disclosure‌ ‌to‌ ‌the‌ ‌BSP‌‌in‌‌the‌‌course‌‌of‌‌examination‌‌to‌‌‌ensure‌‌ compliance‌ ‌with‌ ‌the‌ ‌AMLA‌ ‌and‌ ‌testing‌ ‌of‌ ‌numbered‌‌ accounts;‌ ‌ q) Plunder‌‌(‌Ejercito‌‌v.‌‌SB‌)‌ ‌ For‌‌‌FOREIGN‌‌currency‌‌deposits‌,‌‌the‌‌following‌‌are‌‌the‌‌exceptions:‌ ‌ a) When‌‌there‌‌is‌w ‌ ritten‌‌consent‌o ‌ f‌‌the‌‌depositor;‌ ‌ b) Under‌‌Sec‌‌11‌‌of‌‌AMLA;‌ ‌ c) Upon‌‌order‌‌of‌‌the‌‌CA,‌‌examination‌‌by‌‌law‌‌enforcement‌‌officers‌‌ in‌‌terrorism‌‌cases‌‌‌under‌‌the‌‌Human‌‌Security‌‌Act;‌ ‌ d) Investigation‌ ‌where‌ ‌AMLC‌ ‌is‌ ‌authorized‌ ‌to‌ ‌examine‌ ‌deposits‌‌ and‌ ‌investments‌ ‌with‌ ‌any‌ ‌banking‌ ‌or‌ ‌NBFI‌ ‌and‌ ‌their‌‌ subsidiaries‌‌and‌‌affiliates‌‌without‌‌a‌‌court‌‌order;‌ ‌ e) ⭐Examination‌ ‌and‌ ‌disclosure‌ ‌to‌ ‌the‌ ‌CIR‌ ‌under‌ ‌Sec‌ ‌6(F)‌ ‌of‌‌ the‌‌NIRC‌;‌ ‌ f) Disclosure‌ ‌to‌ ‌the‌ ‌BSP‌‌in‌‌the‌‌course‌‌of‌‌examination‌‌to‌‌‌ensure‌‌ compliance‌ ‌with‌ ‌the‌ ‌AMLA‌ ‌and‌ ‌testing‌ ‌of‌ ‌numbered‌‌ accounts;‌‌and‌ ‌ g) Inquiry‌‌and‌‌examination‌‌by‌‌the‌‌PDIC‌‌in‌‌case‌‌there‌‌is‌‌a‌‌finding‌‌ of‌‌‌unsafe‌‌or‌‌unsound‌‌banking‌‌practice‌;‌ ‌ e.‌‌Garnishment‌‌of‌‌deposits‌‌ ‌ There‌‌is‌‌NO‌‌VIOLATION‌‌if‌‌the‌‌accounts‌‌are‌‌garnished.‌‌The‌‌amount‌‌ of‌ ‌deposit‌ ‌is‌ ‌not‌ ‌disclosed‌ ‌and‌ ‌the‌ ‌legislature‌ ‌did‌ ‌not‌ ‌intend‌ ‌to‌‌ cover‌‌garnishment.‌ ‌ However‌,‌ ‌foreign‌ ‌currency‌ ‌deposits‌ ‌are‌ ‌exempt‌ ‌from‌‌ attachment,‌ ‌garnishment,‌ ‌or‌ ‌any‌ ‌other‌ ‌order‌ ‌or‌ ‌process‌ ‌of‌ ‌any‌‌ court,‌ ‌legislative‌ ‌body,‌ ‌government‌ ‌agency‌ ‌or‌ ‌any‌ ‌administrative‌‌ body‌ ‌whatsoever.‌ ‌(‌RA‌ ‌6426‌)‌ ‌See‌ ‌the‌ ‌case‌ ‌of‌ ‌Salvacion‌ ‌v.‌ ‌Central‌‌ Bank‌,‌ ‌where‌ ‌the‌ ‌Court‌ ‌made‌ ‌an‌ ‌exception‌ ‌against‌ ‌a‌ ‌transient‌‌ foreigner‌‌charged‌‌with‌‌raping‌‌a‌‌minor.‌ ‌ f.‌‌Penalties‌‌for‌‌violation‌‌ 1) Under‌‌RA‌‌1405‌,‌‌imprisonment‌‌of‌‌‌not‌‌more‌‌than‌‌5‌‌years‌‌or‌‌a‌ fine‌‌of‌‌not‌‌more‌‌than‌‌P20K‌‌‌or‌‌both;‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 85‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ 2) Under‌ ‌RA‌ ‌6426‌,‌ ‌an‌ ‌imprisonment‌ ‌of‌ ‌1-5‌ ‌years‌ ‌or‌ ‌a‌ ‌fine‌ ‌of‌‌ P5K‌‌-‌‌P25K‌‌‌,‌‌or‌‌both.‌ Banks‌ ‌that‌ ‌primarily‌ ‌provide‌ ‌financial,‌ ‌banking‌ ‌and‌ ‌credit‌‌ services‌‌to‌‌cooperative‌‌organizations‌‌and‌‌their‌‌members.‌ ‌ ‌ General‌‌Banking‌‌Act‌ ‌ RA‌‌No‌‌8791‌‌|‌‌The‌‌General‌‌Banking‌‌Law‌‌of‌‌2000‌ a.‌‌Definition‌‌and‌‌classification‌‌of‌‌banks‌ ‌ "‌Banks‌"‌‌shall‌‌refer‌‌to‌‌entities‌‌engaged‌‌in‌‌the‌‌lending‌‌of‌‌funds‌‌obtained‌‌ in‌‌the‌‌form‌‌of‌‌deposits.‌‌They‌‌shall‌‌be‌‌classified‌‌into:‌ ‌ f) Organization‌ The‌ ‌Monetary‌ ‌Board‌ ‌may‌ ‌authorize‌ ‌the‌ ‌organization‌ ‌of‌ ‌a‌ ‌bank‌ ‌or‌‌ quasi-bank‌‌subject‌‌to‌‌the‌‌following‌‌conditions:‌ ‌ 1. That‌‌the‌‌entity‌‌is‌‌a‌‌stock‌c‌ orporation;‌ ‌ 2. That‌ ‌its‌ ‌funds‌ ‌are‌ ‌obtained‌ ‌from‌ ‌the‌ ‌public‌,‌ ‌which‌ ‌shall‌‌ mean‌‌twenty‌‌(20)‌‌or‌‌more‌‌persons‌‌(2-Da);‌‌and‌ ‌ 3. That‌ ‌the‌ ‌minimum‌ ‌capital‌ ‌requirements‌ ‌for‌ ‌each‌‌category‌‌ of‌‌banks‌‌are‌‌satisfied.‌ ‌ a) Universal‌‌banks‌(‌ ‌expanded‌‌commercial‌‌banks‌)‌ ‌ Banks‌‌that‌‌have‌‌authority‌‌to‌‌exercise,‌‌in‌‌addition‌‌to‌‌the‌‌powers‌‌ and‌‌functions‌‌of‌‌commercial‌‌banks,‌‌powers‌‌of‌‌an‌‌investment‌‌ house‌ ‌and‌ ‌the‌ ‌power‌ ‌to‌ ‌invest‌ ‌in‌ ‌non-allied‌ ‌enterprises‌.‌‌ (§23)‌ ‌ An‌ ‌investment‌ ‌house‌ ‌is‌ ‌any‌ ‌enterprise‌ ‌which‌‌engages‌‌in‌‌the‌‌ underwriting‌‌of‌‌securities‌‌of‌‌other‌‌corporations.‌‌(§2‌‌PD‌‌129)‌ ‌ b) Commercial‌‌banks‌ ‌ Banks‌ ‌that‌ ‌have,‌ ‌in‌ ‌addition‌‌to‌‌the‌‌general‌‌powers‌‌incident‌‌to‌‌ corporations,‌‌all‌‌such‌‌powers‌‌as‌‌may‌‌be‌‌necessary‌‌to‌‌carry‌‌on‌‌ the‌‌business‌‌of‌‌commercial‌‌banking.‌‌(§29)‌ ‌ c) Thrift‌‌banks‌,‌‌composed‌‌of:‌‌ ‌ i) ii) iii) Savings‌‌and‌‌mortgage‌‌banks,‌ ‌ Stock‌‌savings‌‌and‌‌loan‌‌associations,‌‌and‌ ‌ Private‌‌development‌‌banks,‌‌ ‌ as‌‌defined‌‌in‌‌"T ‌ hrift‌‌Banks‌‌Act‌";‌ ‌ d) Rural‌‌banks‌,‌‌as‌‌defined‌‌in‌‌"‌Rural‌‌Banks‌‌Act‌"‌ ‌ Islamic‌ ‌banks‌ ‌as‌ ‌defined‌ ‌in‌ ‌the‌ ‌"‌Charter‌ ‌of‌ ‌Al‌ ‌Amanah‌‌ Islamic‌‌Investment‌‌Bank‌‌of‌‌the‌‌Philippines‌."‌ ‌ The‌ ‌SEC‌ ‌shall‌ ‌not‌ ‌register‌ ‌the‌ ‌articles‌ ‌of‌ ‌incorporation‌ ‌of‌ ‌any‌‌ bank,‌ ‌or‌ ‌any‌ ‌amendment‌ ‌thereto,‌ ‌unless‌ ‌accompanied‌ ‌by‌ ‌a‌‌ certificate‌‌of‌‌authority‌‌‌issued‌‌by‌‌the‌‌Monetary‌‌Board‌.‌‌ ‌ The‌ ‌SEC‌ ‌shall‌ ‌not‌ ‌register‌ ‌the‌ ‌by-laws‌ ‌of‌ ‌any‌ ‌bank,‌ ‌or‌ ‌any‌‌ amendment‌ ‌thereto,‌ ‌unless‌ ‌accompanied‌ ‌by‌ ‌a‌ ‌certificate‌ ‌of‌‌ authority‌‌from‌‌the‌‌BSP‌.‌ ‌ 2. by‌ ‌investing‌ ‌in‌ ‌up‌ ‌to‌ ‌100%‌ ‌of‌ ‌the‌ ‌voting‌ ‌stock‌ ‌of‌ ‌a‌ ‌new‌‌ banking‌ ‌subsidiary‌ ‌incorporated‌ ‌under‌ ‌the‌ ‌laws‌ ‌of‌ ‌the‌‌ Philippines;‌‌or‌‌ ‌ 3. by‌‌establishing‌b ‌ ranches‌w ‌ ith‌‌full‌‌banking‌‌authority.‌ ‌ Head‌ ‌Office‌ ‌Guarantee‌.‌ ‌—‌ ‌the‌ ‌head‌ ‌office‌ ‌of‌ ‌such‌ ‌branches‌‌ shall‌ ‌fully‌ ‌guarantee‌ ‌the‌ ‌prompt‌ ‌payment‌ ‌of‌ ‌all‌‌liabilities‌‌of‌‌its‌‌ PH‌‌branch.‌‌(§75)‌ ‌ Residents‌‌and‌‌citizens‌‌of‌‌PH‌‌who‌‌are‌‌creditors‌‌of‌‌a‌‌branch‌‌in‌‌PH‌‌of‌‌ a‌‌foreign‌‌bank‌‌shall‌‌have‌‌‌preferential‌‌rights‌‌to‌‌the‌‌assets‌‌of‌‌such‌‌ branch‌‌in‌‌accordance‌‌with‌‌existing‌‌laws.‌ ‌ Bank‌‌Branches‌ ‌ Cross-Selling.‌ ‌A‌ ‌bank‌ ‌may,‌ ‌subject‌ ‌to‌ ‌prior‌ ‌approval‌ ‌of‌ ‌the‌‌ Monetary‌ ‌Board,‌ ‌use‌ ‌any‌ ‌or‌ ‌all‌ ‌of‌ ‌its‌ ‌branches‌ ‌as‌ ‌outlets‌ ‌for‌ ‌the‌‌ presentation‌ ‌and/or‌ ‌sale‌ ‌of‌ ‌the‌ ‌financial‌ ‌products‌ ‌of‌ ‌its‌ ‌allied‌‌ undertaking‌‌or‌‌of‌‌its‌‌investment‌‌house‌‌units.‌ ‌ A‌ ‌bank‌ ‌authorized‌ ‌to‌ ‌establish‌ ‌branches‌ ‌or‌ ‌other‌ ‌offices‌ ‌shall‌ ‌be‌‌ responsible‌‌for‌‌all‌‌business‌‌conducted‌‌in‌‌such‌‌branches‌‌and‌‌offices‌‌ to‌‌the‌‌same‌‌extent‌‌and‌‌in‌‌the‌‌same‌‌manner‌‌as‌‌though‌‌such‌‌business‌‌ had‌ ‌all‌ ‌been‌ ‌conducted‌ ‌in‌ ‌the‌ ‌head‌ ‌office.‌ ‌A‌ ‌bank‌ ‌and‌ ‌its‌‌ branches‌‌and‌‌offices‌‌shall‌‌be‌‌treated‌‌as‌O ‌ NE‌‌UNIT‌.‌ ‌ No‌ ‌person‌ ‌or‌ ‌entity‌ ‌shall‌ ‌engage‌ ‌in‌ ‌banking‌ ‌operations‌ ‌or‌‌ quasi-banking‌ ‌functions‌ ‌without‌ ‌authority‌ ‌from‌ ‌the‌ ‌BSP‌.‌ ‌An‌‌ Full‌‌disclosure‌‌‌in‌‌all‌‌transactions‌‌with‌‌the‌‌bank‌‌is‌r‌ equired‌:‌ ‌ entity‌‌authorized‌‌by‌‌the‌‌BSP‌‌to‌‌perform‌‌‌universal‌‌or‌‌commercial‌‌ 1. Stockholdings‌ ‌of‌ ‌individuals‌ ‌related‌ ‌to‌ ‌each‌ ‌other‌ ‌within‌ ‌the‌‌ banking‌ ‌functions‌ ‌shall‌ ‌likewise‌ ‌have‌ ‌the‌ ‌authority‌ ‌to‌ ‌engage‌ ‌in‌‌ fourth‌ ‌degree‌ ‌of‌ ‌consanguinity‌ ‌or‌ ‌affinity,‌ ‌legitimate‌ ‌or‌‌ quasi-banking‌‌‌functions.‌ ‌ common-law,‌ ‌considered‌ ‌family‌ ‌groups‌ ‌or‌ ‌related‌ ‌interests;‌‌ Shareholdings‌ ‌ (§12)‌ ‌ 1. Foreign‌— ‌ ‌‌up‌‌to‌‌40%‌‌of‌‌voting‌‌stock‌‌(Aggregate);‌ ‌ 2. Two‌ ‌or‌ ‌more‌ ‌corporations‌ ‌owned‌ ‌or‌ ‌controlled‌ ‌by‌ ‌the‌‌same‌‌ 2. Filipino‌‌—‌‌up‌‌to‌‌40%‌‌of‌‌voting‌‌stock‌‌(Single);‌ family‌ ‌group‌ ‌or‌ ‌same‌ ‌group‌ ‌of‌ ‌persons‌ ‌considered‌ ‌related‌‌ interests.‌‌(§13)‌ ‌ 3. Non-Voting‌‌—‌‌NO‌‌limit;‌ ‌ 4. Par‌‌value.‌ ‌ Banks‌ ‌that‌ ‌are‌ ‌created‌ ‌to‌ ‌make‌ ‌needed‌ ‌credit‌ ‌available‌ ‌and‌‌ readily‌ ‌accessible‌ ‌in‌ ‌the‌ ‌rural‌ ‌areas‌ ‌for‌ ‌the‌ ‌purpose‌ ‌of‌‌ Entry‌‌of‌‌Foreign‌‌Banks‌ ‌ promoting‌‌comprehensive‌‌rural‌‌development.‌ ‌ 1. by‌‌acquiring,‌‌purchasing‌‌or‌‌owning‌‌‌up‌‌to‌‌100%‌‌of‌‌the‌‌voting‌‌ e) Cooperative‌‌banks‌,‌‌as‌‌defined‌‌in‌‌"‌Cooperative‌‌Code‌"‌ ‌ stock‌‌of‌‌an‌‌existing‌‌bank;‌ ‌ b.‌‌Distinction‌‌of‌‌banks‌‌from‌‌quasi-banks‌‌and‌‌trust‌‌entities‌‌ ‌ Banks‌ ‌are‌ ‌required‌ ‌to‌‌be‌‌‌stock‌‌‌corporations‌‌and‌‌that‌‌their‌‌‌funds‌‌ are‌ ‌obtained‌ ‌from‌ ‌the‌ ‌public,‌‌which‌‌shall‌‌mean‌‌twenty‌‌(20)‌‌or‌‌ more‌‌persons.‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 86‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ “‌Deposit‌ ‌substitutes‌"‌ ‌is‌ ‌an‌ ‌alternative‌ ‌form‌ ‌of‌ ‌obtaining‌ ‌funds‌‌ from‌ ‌the‌ ‌public,‌ ‌other‌ ‌than‌ ‌deposits,‌ ‌through‌ ‌the‌ ‌issuance,‌‌ endorsement,‌‌or‌‌acceptance‌‌of‌‌‌debt‌‌instruments‌‌for‌‌the‌‌borrower's‌‌ own‌ ‌account.‌ ‌The‌ ‌source‌ ‌of‌ ‌funds‌ ‌are‌ ‌borrowings‌ ‌rather‌ ‌than‌‌ deposits.‌ ‌ Elements‌‌of‌‌Quasi-Banking‌ ‌ 1) Borrow‌‌funds‌‌for‌‌own‌‌use;‌ ‌ 2) From‌‌the‌‌public;‌ ‌ 3) Through‌‌deposit‌‌substitutes;‌ ‌ 4) With‌‌recourse;‌ ‌ 5) For‌‌the‌‌purpose‌‌of‌‌relending‌‌or‌‌purchasing‌‌receivables‌‌or‌‌other‌‌ obligations.‌ ‌ A‌‌“‌trust‌‌entity‌”‌‌is‌‌a‌‌stock‌‌corporation‌‌or‌‌a‌‌person‌‌duly‌‌authorized‌‌by‌‌ the‌‌Monetary‌‌Board‌‌that‌‌has‌‌the‌‌power‌‌to:‌ ‌ investment‌ ‌house,‌ ‌however,‌ ‌is‌ ‌the‌ ‌authority‌ ‌to‌ ‌perform‌‌ quasi-banking‌‌functions.‌‌Wincorp‌‌engaged‌‌in‌‌practices‌‌that‌‌rendered‌‌ the‌ ‌transactions‌ ‌to‌ ‌be‌‌"with‌‌recourse"‌‌and,‌‌consequently,‌‌within‌‌the‌‌ ambit‌‌of‌‌‌quasi-banking‌‌rules.‌ ‌ c.‌‌Bank‌‌powers‌‌and‌‌liabilities‌ ‌ A‌‌bank‌‌has‌‌two‌‌basic‌‌functions:‌ ‌ 1) Deposit‌‌function;‌ ‌ 2) Loan‌‌function.‌ ‌ The‌‌following‌‌acts‌‌are‌p ‌ rohibited‌:‌ ‌ 1. Engaging‌‌in‌i‌ nsurance‌b ‌ usiness;‌ ‌ 2. Outsourcing‌i‌ nherent‌‌banking‌‌functions:‌‌Deposit‌‌and‌‌Loan.‌ ‌ Prohibition‌‌on‌‌Dividend‌‌Declaration‌ ‌ No‌‌bank‌‌or‌‌quasi-bank‌‌shall‌‌declare‌‌dividends‌‌ ‌ 1. Act‌ ‌as‌ ‌trustee‌ ‌on‌ ‌any‌ ‌mortgage‌ ‌or‌ ‌bond‌ ‌issued‌ ‌by‌ ‌any‌‌ municipality,‌‌corporation,‌‌or‌‌any‌‌body‌‌politic;‌ ‌ 1. If‌ ‌such‌‌is‌‌‌greater‌‌than‌‌its‌‌accumulated‌‌net‌‌profits‌‌then‌‌on‌‌ hand,‌‌deducting‌‌therefrom‌‌its‌‌losses‌‌and‌‌bad‌‌debts;‌ ‌ 2. Act‌‌under‌‌the‌‌order‌‌or‌‌appointment‌‌of‌‌any‌‌court‌‌as‌‌‌guardian,‌‌ receiver,‌‌trustee,‌‌or‌‌depositary‌‌of‌‌the‌‌estate‌‌of‌‌any‌‌minor‌‌or‌‌ other‌‌incompetent‌‌person;‌ ‌ 2. Its‌‌clearing‌‌account‌‌with‌‌the‌‌BSP‌‌is‌‌overdrawn‌;‌ ‌ 3. It‌‌is‌‌‌deficient‌‌in‌‌the‌‌required‌‌liquidity‌‌floor‌‌for‌‌government‌‌ deposits‌‌for‌f‌ ive‌‌(5)‌‌or‌‌more‌‌consecutive‌‌days‌;‌ ‌ 4. It‌ ‌does‌ ‌not‌ ‌comply‌ ‌with‌ ‌the‌ ‌liquidity‌ ‌standards/ratios‌‌ prescribed‌ ‌by‌ ‌the‌ ‌BSP‌ ‌for‌ ‌purposes‌ ‌of‌ ‌determining‌ ‌funds‌‌ available‌‌for‌‌dividend‌‌declaration;‌‌or‌ ‌ 5. It‌ ‌has‌‌committed‌‌a‌‌‌major‌‌violation‌‌as‌‌may‌‌be‌‌determined‌‌by‌‌ the‌‌BSP.‌ ‌ 3. Act‌‌as‌‌the‌e‌ xecutor‌o ‌ f‌‌any‌‌will;‌ ‌ 4. Act‌‌as‌a ‌ dministrator‌o ‌ f‌‌the‌‌estate‌‌of‌‌any‌‌deceased‌‌person;‌ ‌ 5. Accept‌‌and‌‌execute‌‌any‌‌trust‌‌for‌‌the‌‌holding,‌‌management,‌‌and‌‌ administration‌ ‌of‌ ‌any‌ ‌estate,‌ ‌real‌ ‌or‌ ‌personal,‌ ‌and‌ ‌the‌ ‌rents,‌‌ issues‌‌and‌‌profits‌‌thereof;‌‌and‌ ‌ 6. Establish‌‌and‌‌manage‌c‌ ommon‌‌trust‌‌funds‌.‌ ‌ Virata‌‌v.‌‌Ng‌‌Wee‌‌‌2017‌ ‌ An‌ ‌investment‌ ‌house‌ ‌is‌ ‌an‌ ‌enterprise‌ ‌that‌ ‌engages‌ ‌in‌ ‌the‌‌ underwriting‌ ‌of‌ ‌securities‌ ‌of‌ ‌other‌ ‌corporations.‌ ‌Securities‌‌ underwriting‌,‌ ‌in‌ ‌turn,‌ ‌refers‌‌to‌‌the‌‌process‌‌by‌‌which‌‌underwriters‌‌ raise‌ ‌capital‌ ‌investments‌ ‌on‌ ‌behalf‌ ‌of‌ ‌the‌ ‌corporation‌ ‌issuing‌ ‌the‌‌ securities.‌‌ ‌ Conspicuously‌ ‌absent‌ ‌in‌ ‌the‌ ‌enumerated‌ ‌additional‌ ‌powers‌ ‌of‌ ‌an‌‌ d.‌‌Diligence‌‌required‌‌of‌‌banks‌‌in‌‌view‌‌of‌‌fiduciary‌‌nature‌ ‌ The‌ ‌General‌ ‌Banking‌ ‌Act‌ ‌of‌ ‌2000‌ ‌demands‌ ‌of‌ ‌banks‌ ‌the‌ ‌highest‌‌ standards‌‌of‌‌integrity‌‌and‌‌performance‌.‌‌As‌‌such,‌‌the‌‌banks‌‌are‌‌ under‌ ‌obligation‌ ‌to‌ ‌treat‌ ‌the‌ ‌accounts‌ ‌of‌ ‌their‌ ‌depositors‌ ‌with‌‌ meticulous‌‌care.‌‌(S‌ ps‌‌Carbonell‌‌v.‌‌MBTC‌‌‌2017‌)‌ ‌ Banks‌ ‌are‌ ‌also‌ ‌expected‌ ‌to‌ ‌exercise‌ ‌the‌ ‌highest‌ ‌degree‌ ‌of‌‌ diligence‌ ‌in‌ ‌the‌ ‌selection‌ ‌and‌‌supervision‌‌of‌‌their‌‌employees‌.‌‌ (‌PNB‌‌v.‌‌Raymundo‌‌‌2016‌)‌ ‌ The‌‌bank‌‌is‌‌expected‌‌to‌‌ensure‌‌that‌‌the‌‌depositor's‌‌funds‌‌shall‌‌only‌‌ be‌ ‌given‌ ‌to‌ ‌him‌ ‌or‌‌his‌‌authorized‌‌representative.‌‌Indeed,‌‌the‌‌bank‌‌ should‌ ‌be‌ ‌solidarily‌ ‌liable‌ ‌with‌ ‌its‌ ‌employee‌ ‌for‌ ‌the‌ ‌damages‌‌ committed‌‌to‌‌its‌‌depositor.‌‌(O ‌ liver‌‌v.‌‌Philippine‌‌Savings‌‌‌2016‌)‌ ‌ A‌ ‌bank‌ ‌that‌ ‌wrongly‌ ‌advertises‌ ‌the‌ ‌area‌ ‌of‌ ‌a‌ ‌property‌ ‌acquired‌‌ through‌ ‌foreclosure‌ ‌because‌ ‌it‌ ‌failed‌ ‌to‌ ‌dutifully‌ ‌ascertain‌ ‌the‌‌ property's‌ ‌specifications‌ ‌is‌ ‌grossly‌‌negligent‌‌as‌‌to‌‌practically‌‌be‌‌ in‌‌bad‌‌faith‌‌in‌‌offering‌‌that‌‌property‌‌to‌‌prospective‌‌buyers.‌‌‌Any‌‌sale‌‌ made‌ ‌on‌ ‌this‌ ‌account‌ ‌is‌‌voidable‌‌for‌‌causal‌‌fraud‌.‌‌‌As-is-where-is‌‌ stipulations‌ ‌can‌ ‌only‌‌encompass‌‌physical‌‌features‌‌that‌‌are‌‌readily‌‌ perceptible‌‌by‌‌an‌‌ordinary‌‌person‌‌possessing‌‌no‌‌specialized‌‌skills.‌‌ (‌Poole-Blunden‌‌v.‌‌Union‌‌Bank‌‌2 ‌ 017‌‌L ‌ eonen,‌‌J)‌ ‌ ‌ In‌ ‌loan‌ ‌transactions,‌ ‌banks‌ ‌have‌ ‌the‌ ‌particular‌ ‌obligation‌ ‌of‌‌ ensuring‌ ‌that‌ ‌clients‌ ‌comply‌ ‌with‌ ‌all‌ ‌the‌ ‌documentary‌‌ requirements‌ ‌pertaining‌ ‌to‌ ‌the‌ ‌approval‌ ‌of‌ ‌their‌‌loan‌‌applications‌‌ and‌ ‌the‌ ‌subsequent‌ ‌release‌ ‌of‌ ‌their‌ ‌proceeds.‌ ‌(‌Prudential‌‌Bank‌‌v.‌‌ Rapanot‌‌‌2017‌)‌ ‌ BPI‌‌and‌‌Gonzales‌‌v.‌‌Sps‌‌Quiaoit‌‌2 ‌ 019‌ ‌ WON‌ ‌BPI‌ ‌failed‌ ‌to‌ ‌exercise‌ ‌due‌ ‌diligence‌ ‌in‌ ‌the‌ ‌transaction‌ ‌and‌ ‌is‌‌ therefore‌‌liable‌‌for‌‌damages‌‌to‌‌Sps‌‌Quiaoit.‌ ‌ YES‌.‌‌BPI‌‌had‌‌ample‌‌opportunity‌‌to‌‌prepare‌‌the‌‌dollar‌‌bills.‌‌BPI‌‌could‌‌ have‌‌listed‌‌down‌‌the‌‌serial‌‌numbers‌‌of‌‌the‌‌dollar‌‌bills‌‌and‌‌erased‌‌any‌‌ doubt‌ ‌as‌ ‌to‌ ‌whether‌ ‌the‌ ‌counterfeit‌ ‌bills‌ ‌came‌ ‌from‌ ‌it.‌ ‌Banks‌ ‌are‌‌ required‌ ‌to‌‌exercise‌‌the‌‌‌highest‌‌degree‌‌of‌‌diligence‌‌in‌‌its‌‌banking‌‌ transactions.‌ ‌In‌ ‌releasing‌ ‌the‌ ‌dollar‌‌bills‌‌without‌‌listing‌‌down‌‌their‌‌ serial‌ ‌numbers,‌ ‌BPI‌ ‌failed‌‌to‌‌exercise‌‌the‌‌highest‌‌degree‌‌of‌‌care‌‌and‌‌ diligence‌‌required‌‌of‌‌it.‌‌ ‌ e.‌‌Nature‌‌of‌‌bank‌‌funds‌‌and‌‌bank‌‌deposits‌ ‌ Bank‌‌deposits‌‌‌are‌‌in‌‌the‌‌nature‌‌of‌‌‌irregular‌‌‌deposits‌‌(‌Serrano‌‌v.‌‌ Central‌ ‌Bank‌).‌ ‌They‌ ‌are‌ ‌not‌ ‌true‌ ‌deposits‌ ‌but‌ ‌are‌ ‌simple‌ ‌loans.‌‌ Banks‌ ‌where‌ ‌monies‌ ‌are‌ ‌deposited‌ ‌are‌ ‌considered‌ ‌the‌ ‌owners‌‌ (‌People‌‌v.‌‌Puig‌).‌‌Hence,‌‌the‌‌relationship‌‌between‌‌a‌‌depositor‌‌and‌‌a‌‌ bank‌‌is‌‌that‌‌of‌‌creditor‌‌and‌‌debtor.‌‌Thus:‌ ‌ 1. The‌‌bank‌‌can‌‌make‌‌use‌‌as‌‌its‌‌own‌‌‌the‌‌money‌‌deposited.‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 87‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ 2. 3. 4. 5. Third‌ ‌persons‌ ‌who‌ ‌may‌ ‌have‌ ‌a‌ ‌right‌ ‌to‌ ‌the‌ ‌money‌‌ deposited‌‌cannot‌‌hold‌‌the‌‌bank‌‌responsible‌‌unless‌‌there‌‌is‌‌ a‌‌court‌‌order‌‌or‌g ‌ arnishment‌.‌ ‌ Bank‌ ‌officers‌ ‌cannot‌ ‌be‌ ‌held‌ ‌liable‌ ‌for‌ ‌estafa‌ ‌if‌ ‌they‌‌ authorized‌ ‌the‌ ‌use‌ ‌of‌ ‌the‌ ‌money‌ ‌deposited‌ ‌by‌ ‌the‌‌ depositor.‌ ‌ The‌‌bank‌‌has‌‌the‌‌‌right‌‌of‌‌compensation‌.‌‌It‌‌can‌‌set‌‌off‌‌the‌‌ deposits‌ ‌with‌ ‌the‌ ‌indebtedness‌ ‌of‌ ‌the‌ ‌depositor‌ ‌that‌ ‌are‌‌ due‌‌and‌‌demandable.‌ ‌ Deposits‌ ‌are‌ ‌common‌ ‌preferred‌ ‌credits‌ ‌under‌ ‌Art‌‌ 2244(9)‌‌of‌‌the‌‌NCC.‌ ‌ A‌‌bank‌‌is‌‌statutorily‌‌required‌‌to‌‌conduct‌‌a‌‌credit‌‌check‌‌on‌‌all‌‌of‌‌its‌‌ borrowers,‌ ‌even‌ ‌though‌ ‌it‌ ‌be‌ ‌made‌ ‌under‌ ‌a‌ ‌loan‌ ‌accommodation‌‌ scheme.‌‌RA‌‌8791‌‌only‌‌intended‌‌to‌‌cover‌‌loans‌‌by‌‌third‌‌persons‌‌and‌‌ those‌‌extended‌‌to‌‌DOSRI‌‌and‌‌does‌‌not‌‌automatically‌‌apply‌‌to‌‌loans‌‌ to‌‌bank‌‌employees.‌‌(H ‌ BILU‌‌v.‌‌HSBC‌‌‌2018‌)‌ ‌ Kinds‌‌of‌‌Deposits‌ The‌‌deposit‌‌operations‌‌‌of‌‌a‌‌bank‌‌consist‌‌of‌‌the‌‌following:‌ ‌ 1. Demand‌ ‌Deposits‌ ‌—‌ ‌are‌ ‌deposits,‌ ‌subject‌ ‌to‌ ‌withdrawal‌‌ either‌ ‌by‌ ‌check‌ ‌or‌‌thru‌‌the‌‌ATMs‌‌which‌‌are‌‌otherwise‌‌known‌‌ as‌‌current‌‌or‌‌checking‌‌accounts.‌‌ ‌ 2. Savings‌‌Deposits‌— ‌ ‌‌are‌‌‌interest-bearing‌‌‌deposits.‌ ‌ 3. Negotiable‌ ‌Order‌ ‌of‌ ‌Withdrawal‌ ‌Accounts‌ ‌—‌ ‌are‌ ‌interest-‌‌ bearing‌ ‌savings‌ ‌deposit‌ ‌which‌ ‌are‌ ‌withdrawable‌ ‌by‌‌means‌‌of‌‌ Negotiable‌‌Orders‌‌of‌‌Withdrawal.‌‌Savings‌‌+‌‌Checking.‌ ‌ 4. Time‌ ‌Deposits‌ ‌—‌ ‌are‌ ‌interest-bearing‌ ‌deposits‌ ‌with‌ ‌specific‌‌ maturity‌ ‌dates‌ ‌and‌ ‌evidenced‌ ‌by‌ ‌certificates‌ ‌issued‌ ‌by‌ ‌the‌‌ bank.‌ ‌ ‌ Interest‌‌ rate‌ ‌ Period‌ ‌ Savings‌‌ Account‌ ‌ Regular‌‌ savings‌‌ interest‌ ‌ ✘‌ ‌ Time‌‌ ‌ Deposit‌ ‌ Pre-‌‌ termination‌ ✘‌ ‌ Holding‌‌ Period‌ ‌ ✘‌ ‌ With‌‌penalty‌ ‌ With‌‌penalty‌ ‌ ✓‌ ‌ ✓‌ ‌ Allowed‌p ‌ rovided‌t‌ he‌ minimum‌‌amount‌‌to‌‌earn‌‌ Withdrawal‌‌ the‌‌higher‌‌interest‌‌rate‌‌is‌‌ Withdrawal‌ Allowed‌ ‌ amounts‌‌to‌‌ maintained,‌‌otherwise,‌‌the‌‌ pre-termination‌ regular‌‌savings‌‌interest‌‌ rate‌‌will‌‌apply.‌ ‌ ‌ A‌ ‌document‌ ‌to‌ ‌be‌ ‌deemed‌ ‌a‌ ‌certificate‌ ‌of‌ ‌deposit‌ ‌requires‌ ‌no‌‌ specific‌ ‌form‌ ‌as‌ ‌long‌ ‌as‌ ‌there‌ ‌is‌ ‌some‌ ‌written‌‌memorandum‌‌that‌‌ the‌ ‌bank‌ ‌accepted‌ ‌a‌ ‌deposit‌ ‌of‌ ‌a‌ ‌sum‌ ‌of‌‌money‌‌from‌‌a‌‌depositor.‌‌ (‌Philippine‌‌Banking‌‌v.‌‌CIR‌)‌ ‌ 3. Single-Borrower‌ ‌Limit‌ ‌—‌ ‌The‌ ‌total‌ ‌amount‌‌of‌‌‌loans‌,‌‌‌credit‌‌ accommodations‌ ‌and‌‌‌guarantees‌that‌‌may‌‌be‌‌extended‌‌by‌‌a‌‌ bank‌ ‌to‌ ‌any‌ ‌person,‌ ‌partnership,‌ ‌association,‌ ‌corporation‌ ‌or‌‌ other‌‌entity‌‌‌shall‌‌at‌‌no‌‌time‌‌exceed‌‌20%‌‌of‌‌the‌‌net‌‌worth‌‌of‌‌ such‌‌bank‌.‌‌ ‌ The‌ ‌basis‌ ‌for‌ ‌determining‌ ‌compliance‌ ‌with‌ ‌the‌‌ single-borrower‌‌limit‌‌‌is‌‌the‌‌‌total‌‌credit‌‌commitment‌‌of‌‌the‌‌ bank‌‌to‌‌the‌‌borrower.‌‌MORB‌‌increased‌‌the‌‌limit‌‌to‌2 ‌ 5%‌.‌ ‌ This‌‌may‌‌be‌‌increased‌‌by‌‌an‌‌‌additional‌‌10%‌‌of‌‌the‌‌net‌‌worth‌‌of‌‌ such‌ ‌bank‌ ‌provided‌ ‌the‌ ‌additional‌ ‌liabilities‌ ‌of‌ ‌any‌‌borrower‌‌ are‌‌adequately‌‌secured.‌ ‌ The‌‌25%‌‌ceiling‌‌shall‌e‌ xclude‌:‌‌ ‌ a) loans‌ ‌and‌ ‌other‌ ‌credit‌ ‌accommodations‌ ‌secured‌ ‌by‌‌ obligations‌‌of‌‌the‌‌BSP‌‌or‌‌of‌‌the‌‌PH‌‌GOV;‌ ‌ Third‌‌parties‌‌with‌‌unverified‌‌claims‌‌against‌‌the‌‌deposit‌‌of‌‌another‌‌ do‌ ‌not‌ ‌have‌ ‌a‌‌better‌‌right‌‌over‌‌the‌‌deposit.‌‌The‌‌bank’s‌‌contractual‌‌ relations‌‌are‌‌with‌‌its‌‌depositor,‌‌not‌‌with‌‌the‌‌third‌‌party.‌‌(‌Sps‌‌Serfino‌‌ v.‌‌FEBTC‌‌‌2012‌)‌ ‌ b) loans‌ ‌and‌ ‌other‌ ‌credit‌ ‌accommodations‌ ‌fully‌‌ guaranteed‌ ‌by‌ ‌the‌ ‌government‌ ‌as‌ ‌to‌ ‌the‌ ‌payment‌ ‌of‌‌ principal‌‌and‌‌interest;‌ ‌ c) loans‌ ‌and‌ ‌other‌ ‌credit‌ ‌accommodations‌ ‌covered‌ ‌by‌‌ assignment‌‌of‌‌deposits‌‌maintained‌‌in‌‌the‌‌lending‌‌bank‌‌ and‌‌held‌‌in‌‌PH;‌‌ ‌ f.‌‌Grant‌‌of‌‌loans‌‌and‌‌security‌‌requirements‌ ‌ Loan‌‌Function‌ ‌ 1. d) loans,‌ ‌credit‌ ‌accommodations‌ ‌and‌‌acceptances‌‌under‌‌ letters‌ ‌of‌ ‌credit‌ ‌to‌ ‌the‌ ‌extent‌ ‌covered‌ ‌by‌ ‌margin‌‌ deposits;‌‌and‌ ‌ Amortization‌ ‌—‌ ‌The‌‌‌amortization‌‌schedule‌‌of‌‌bank‌‌loans‌‌ and‌‌other‌‌credit‌‌accommodations‌‌shall‌‌be‌‌adapted‌‌to‌‌the‌‌nature‌‌ of‌‌the‌‌operations‌‌to‌‌be‌‌financed.‌ ‌ e) other‌ ‌loans‌ ‌or‌ ‌credit‌ ‌accommodations‌ ‌which‌‌the‌‌MB‌‌ In‌ ‌case‌ ‌of‌ ‌loans‌ ‌and‌ ‌other‌ ‌credit‌ ‌accommodations‌ ‌with‌‌ may‌‌from‌‌time‌‌to‌‌time‌‌specify‌‌as‌n ‌ on-risk‌‌‌items.‌ ‌ maturities‌ ‌of‌ ‌more‌‌than‌‌five‌‌(5)‌‌years‌,‌‌provisions‌‌must‌‌be‌‌ made‌ ‌for‌ ‌periodic‌ ‌amortization‌ ‌payments‌,‌ ‌but‌ ‌such‌‌ Collaterals‌ ‌ payments‌‌must‌‌be‌‌made‌‌‌at‌‌least‌‌annually.‌ ‌ 1. Loans‌s‌ hall‌‌not‌‌exceed‌‌ ‌ SSDA‌ ‌ 2. Higher‌‌interest‌‌ Higher‌‌interest‌‌rate‌ ‌ rate‌ ‌ Fixed‌‌Term‌ ‌ agreed‌‌upon‌‌between‌‌the‌‌bank‌‌and‌‌its‌‌borrower,‌‌‌a.k.a.‌‌‌Balloon‌ Payment.‌‌‌This‌‌may‌‌entail‌p ‌ enalty‌‌on‌‌the‌‌part‌‌of‌‌the‌‌borrower.‌ ‌ Evidenced‌‌ Certificate‌‌of‌‌ Passbook‌ ‌ Passbook‌ ‌ by‌ ‌ Time‌‌Deposit‌ ‌ Balloon‌‌Payment‌‌‌—‌‌A‌‌borrower‌‌may‌‌at‌‌any‌‌time‌‌prior‌‌to‌‌the‌‌ agreed‌ ‌maturity‌ ‌date‌ ‌prepay‌,‌ ‌in‌ ‌whole‌ ‌or‌ ‌in‌ ‌part,‌‌the‌‌unpaid‌‌ balance‌ ‌of‌ ‌any‌ ‌bank‌ ‌loan‌ ‌and‌ ‌other‌ ‌credit‌ ‌accommodation,‌‌ subject‌ ‌to‌ ‌such‌ ‌reasonable‌ ‌terms‌ ‌and‌ ‌conditions‌ ‌as‌ ‌may‌ ‌be‌‌ Fixed‌‌Term‌ ‌ a. 75%‌‌of‌‌the‌‌appraised‌‌value‌‌of‌‌the‌‌real‌‌estate‌‌security,‌‌plus‌‌ 60%‌ ‌of‌ ‌the‌ ‌appraised‌ ‌value‌ ‌of‌ ‌the‌ ‌insured‌‌ improvements‌,‌‌or‌‌ ‌ b. of‌‌75%‌‌of‌‌the‌‌appraised‌‌value‌‌of‌‌the‌‌chattel.‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 88‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ 2. Under‌ ‌the‌ ‌MORB,‌ ‌however,‌ ‌the‌ ‌75%‌ ‌cap‌ ‌has‌ ‌been‌ ‌reduced‌‌to‌‌ 60%‌ ‌for‌ ‌real‌ ‌estate‌,‌ ‌while‌ ‌the‌ ‌cap‌ ‌on‌ ‌chattels‌ ‌has‌ ‌been‌‌ removed‌.‌ ‌ 3. Dragnet‌ ‌Clause‌ ‌and‌ ‌Reliance‌ ‌on‌ ‌Security‌ ‌Test‌ ‌—‌ ‌A‌ ‌real‌‌ property‌ ‌may‌ ‌be‌ ‌used‌ ‌to‌ ‌secure‌ ‌future‌ ‌loans.‌ ‌It‌ ‌is‌ ‌an‌‌ accommodation‌‌for‌‌the‌‌benefit‌‌of‌‌the‌‌borrower.‌ ‌ 5. g.‌‌Investments‌ ‌ The‌ ‌total‌ ‌investment‌ ‌in‌ ‌real‌ ‌estate‌ ‌and‌ ‌improvements‌ ‌thereof,‌‌ including‌‌bank‌‌equipment,‌‌‌shall‌‌NOT‌‌exceed‌‌fifty‌‌percent‌‌(50%)‌‌ of‌‌combined‌‌capital‌‌accounts‌.‌‌ ‌ The‌ ‌Reliance‌ ‌on‌ ‌Security‌ ‌Test‌ ‌is‌ ‌applied‌ ‌when‌ ‌subsequent‌‌ loans‌ ‌are‌ ‌covered‌ ‌by‌ ‌another‌ ‌security.‌ ‌If‌ ‌the‌ ‌bank‌ ‌required‌‌ another‌‌security‌‌for‌‌a‌‌subsequent‌‌loan,‌‌such‌‌security‌‌must‌‌first‌‌ be‌‌exhausted‌‌before‌‌resorting‌‌to‌‌the‌‌mortgaged‌‌property‌‌under‌‌ a‌‌dragnet‌‌clause.‌ ‌ 4. Foreclosure‌ ‌ a. ‌ Bank‌‌Creditor‌ ‌ Judicial‌‌ ‌ Equity‌‌of‌‌ Redemption:‌9 ‌ 0‌‌ days‌‌‌from‌‌order‌‌of‌‌ closure‌ ‌ Right‌‌of‌‌Redemption:‌ ‌ 1‌‌year‌a‌ fter‌‌sale‌ ‌ ‌ Extra-‌‌ Right‌‌of‌‌ judicial‌‌ ‌ Redemption:‌ ‌ 1‌‌year‌‌‌from‌ registration.‌ ‌ ‌ Natural‌‌Person‌:‌‌Right‌‌of‌‌ Redemption‌‌is‌1 ‌ ‌‌year‌‌‌after‌‌the‌‌ sale‌.‌‌ ‌ b. c. d. The‌ ‌equity‌ ‌investment‌ ‌of‌‌a‌‌bank‌‌in‌‌another‌‌corporation‌‌engaged‌‌ primarily‌ ‌in‌ ‌real‌ ‌estate‌ ‌shall‌ ‌be‌ ‌considered‌ ‌as‌ ‌part‌ ‌of‌ ‌the‌ ‌bank's‌‌ total‌ ‌investment‌ ‌in‌ ‌real‌ ‌estate,‌ ‌unless‌ ‌otherwise‌ ‌provided‌ ‌by‌ ‌the‌‌ Monetary‌‌Board.‌‌(§51)‌ ‌ Under‌ ‌Section‌ ‌52‌,‌ ‌however,‌ ‌a‌ ‌bank‌ ‌may‌ ‌acquire,‌ ‌hold‌ ‌or‌ ‌convey‌‌real‌‌ property‌‌under‌‌the‌‌following‌‌circumstances:‌ ‌ Redemption‌‌Period‌ ‌ Non-Bank‌‌Creditor‌ ‌ Juridical‌‌Person‌:‌‌Until‌‌ registration‌‌in‌‌RD‌‌but‌‌not‌‌more‌‌ than‌‌3‌‌months‌f‌ rom‌‌the‌‌time‌‌of‌‌ foreclosure,‌‌whichever‌‌is‌‌earlier.‌ ‌ Redemption‌‌Price‌‌—‌‌the‌‌amount‌‌due‌‌under‌‌the‌‌mortgage‌‌ deed‌‌+‌‌interest‌‌+‌‌costs.‌ ‌ Possession‌ ‌—‌ ‌the‌ ‌purchaser‌ ‌shall‌ ‌have‌‌the‌‌right‌‌to‌‌enter‌‌ upon‌ ‌and‌ ‌take‌‌possession‌‌of‌‌such‌‌property‌‌‌immediately‌‌ after‌ ‌the‌ ‌date‌ ‌of‌‌the‌‌‌confirmation‌‌‌of‌‌the‌‌auction‌‌sale‌‌and‌‌ administer‌‌the‌‌same.‌ ‌ Injunction‌‌and‌‌Bond‌.‌ ‌ No‌ ‌bank‌ ‌shall‌ ‌purchase‌ ‌or‌ ‌acquire‌ ‌shares‌ ‌of‌ ‌its‌ ‌own‌ ‌capital‌‌ stock‌‌or‌‌accept‌‌its‌‌own‌‌shares‌‌as‌‌a‌‌security‌‌for‌‌a‌‌loan,‌‌‌except‌‌ when‌‌authorized‌‌‌by‌‌the‌‌Monetary‌‌Board.‌‌(§10)‌ ‌ 1. Such‌ ‌as‌ ‌shall‌ ‌be‌ ‌mortgaged‌ ‌to‌ ‌it‌ ‌in‌ ‌good‌ ‌faith‌ ‌by‌ ‌way‌ ‌of‌‌ security‌‌for‌‌debts;‌ ‌ 2. Such‌ ‌as‌ ‌shall‌ ‌be‌ ‌conveyed‌ ‌to‌ ‌it‌ ‌in‌ ‌satisfaction‌ ‌of‌ ‌debts‌‌ previously‌‌contracted‌‌in‌‌the‌‌course‌‌of‌‌its‌‌dealings;‌‌or‌ ‌ 3. Such‌‌as‌‌it‌‌shall‌‌purchase‌‌at‌‌‌sales‌‌under‌‌judgments,‌‌decrees,‌‌ mortgages,‌ ‌or‌ ‌trust‌ ‌deeds‌ ‌held‌ ‌by‌ ‌it‌ ‌and‌ ‌such‌ ‌as‌ ‌it‌ ‌shall‌‌ purchase‌‌to‌‌secure‌‌debts‌‌due‌‌it.‌ ‌ Any‌‌real‌‌property‌‌acquired‌‌or‌‌held‌‌herein‌‌‌shall‌‌be‌‌disposed‌‌of‌‌by‌‌ the‌ ‌bank‌ ‌within‌ ‌a‌ ‌period‌ ‌of‌ ‌five‌ ‌(5)‌ ‌years‌ ‌or‌ ‌as‌ ‌may‌ ‌be‌‌ prescribed‌‌by‌‌the‌‌Monetary‌‌Board.‌ IOW‌:‌‌ Banks‌ ‌may‌ ‌acquire‌ ‌real‌ ‌property‌ ‌under‌ ‌the‌ ‌circumstances‌ ‌in‌‌ Section‌‌52‌‌without‌‌being‌‌subjected‌‌to‌‌the‌‌limitation‌‌in‌‌Section‌‌ 51,‌ ‌but‌ ‌only‌ ‌for‌‌a‌‌period‌‌of‌‌5‌‌years.‌‌After‌‌said‌‌period,‌‌Section‌‌ 51‌‌takes‌‌effect.‌ ‌ Limitations‌ ‌ ‌ UB‌ ‌ KB‌ ‌ Up‌‌to‌2 ‌ 5%‌‌‌of‌‌net‌‌worth‌‌of‌‌Bank‌ ‌ Investee‌‌Limitations‌ ‌ 100%‌‌‌of‌‌the‌‌equity‌ ‌ Investment‌‌in‌‌ Financial‌‌Allied‌‌ Enterprises‌‌(FAE)‌ ‌ 49%‌‌‌minority‌‌ interest‌‌for‌‌ non-publicly‌‌listed‌‌ UB/KB‌ ‌ 100%‌‌of‌‌the‌‌equity‌‌ for‌‌TB,‌‌RB‌‌and‌‌ publicly-listed‌ UB/KB‌ ‌ 49%‌‌‌minority‌‌ interest‌‌for‌‌ non-publicly‌‌listed‌‌ UB/KB‌‌and‌‌other‌‌ FAEs‌ ‌ Non-Financial‌‌Allied‌‌ 100%‌‌‌of‌‌equity‌ ‌ Enterprises‌‌(NFAE)‌ ‌ Up‌‌to‌3 ‌ 5%‌‌‌of‌‌total‌ equity,‌‌AND‌3 ‌ 5%‌o ‌ f‌‌ voting‌‌stock.‌ ‌ Investment‌‌in‌‌ Non-Allied‌‌ Enterprises‌‌(NAE)‌ ‌ ✘‌ ‌ h.‌‌Penalties‌‌for‌‌violations‌‌ ‌ The‌‌violation‌‌of‌‌any‌‌of‌‌the‌‌provisions‌‌of‌‌this‌‌Act‌‌shall‌‌be‌‌subject‌‌to‌‌ Sections‌‌34,‌‌35,‌‌36‌‌and‌‌37‌‌of‌‌the‌‌New‌‌Central‌‌Bank‌‌Act.‌‌ ‌ If‌‌the‌‌offender‌‌is‌‌a‌‌‌director‌‌or‌‌officer‌‌of‌‌a‌‌bank,‌‌quasi-bank‌‌or‌‌trust‌‌ entity,‌ ‌the‌ ‌Monetary‌ ‌Board‌ ‌may‌ ‌also‌ ‌suspend‌ ‌or‌ ‌remove‌ ‌such‌‌ director‌‌or‌‌officer.‌‌ ‌ If‌ ‌the‌ ‌violation‌ ‌is‌ ‌committed‌ ‌by‌ ‌a‌ ‌corporation‌,‌‌such‌‌corporation‌‌ may‌‌be‌‌‌dissolved‌‌‌by‌‌‌quo‌‌warranto‌‌‌proceedings‌‌instituted‌‌by‌‌the‌‌ Solicitor‌‌General‌.‌ ‌ Philippine‌‌Deposit‌‌Insurance‌‌Corporation‌‌Act‌ ‌ RA‌‌No‌‌3591‌‌|‌‌PDIC‌‌Charter‌ Investor‌‌Limitations‌ ‌ Aggregate‌‌ Investment‌ ‌ Single‌‌Enterprise‌‌ Investment‌ ‌ As‌‌amended‌‌by‌R ‌ A‌‌No‌‌6037‌,‌R ‌ A‌‌No‌‌7400‌,‌R ‌ A‌‌No‌‌9302‌,‌R ‌ A‌‌No‌‌9576‌,‌R ‌ A‌‌No‌‌10846‌ ‌ Up‌‌to‌5 ‌ 0%‌‌‌of‌‌net‌‌ worth‌‌of‌‌UB‌ ‌ Up‌‌to‌3 ‌ 5%‌‌‌of‌‌net‌‌ worth‌‌of‌‌KB‌ ‌ see‌A ‌ mended‌‌Charter‌‌here‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 89‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ a.‌‌Basic‌‌policy‌ ‌ The‌ ‌PDIC‌ ‌shall‌ ‌promote‌ ‌and‌ ‌safeguard‌ ‌the‌ ‌interests‌ ‌of‌ ‌the‌‌ depositing‌ ‌public‌ ‌by‌ ‌providing‌ ‌insurance‌ ‌coverage‌ ‌on‌ ‌all‌ ‌insured‌‌ deposits‌ ‌and‌ ‌helping‌ ‌maintain‌ ‌a‌ ‌sound‌ ‌and‌ ‌stable‌ ‌banking‌‌ system‌.‌ ‌ It‌‌is‌‌the‌‌policy‌‌of‌‌the‌‌State‌‌to‌‌‌strengthen‌‌the‌‌mandatory‌‌deposit‌‌ insurance‌ ‌coverage‌ ‌system‌ ‌to‌ ‌generate,‌ ‌preserve,‌‌maintain‌‌faith‌‌ and‌‌confidence‌‌in‌‌the‌‌country’s‌‌banking‌‌system,‌‌and‌‌protect‌‌it‌‌from‌‌ illegal‌‌schemes‌‌and‌‌machinations.‌ ‌ As‌ ‌with‌ ‌the‌ ‌BSP,‌ ‌the‌ ‌PDIC‌ ‌enjoys‌ ‌fiscal‌ ‌and‌ ‌administrative‌‌ autonomy‌.‌ ‌ b.‌‌Powers‌‌and‌‌functions‌‌of‌‌the‌‌PDIC;‌‌prohibitions‌ ‌ The‌‌primary‌‌functions‌‌‌of‌‌the‌‌PDIC‌‌is‌‌to‌‌act‌‌as‌ ‌ 1) Deposit‌‌insurer‌ ‌ 2) Co-regulator‌‌‌of‌‌banks‌ ‌ 3) Receiver‌‌and‌‌liquidator‌‌‌of‌‌closed‌‌banks.‌ ‌ Prohibitions‌ ‌ 1) The‌ ‌members‌ ‌of‌ ‌the‌ ‌Board‌ ‌of‌ ‌Directors‌ ‌and‌ ‌the‌ ‌officers‌ ‌and‌‌ employees‌ ‌of‌ ‌the‌ ‌PDIC‌ ‌are‌ ‌prohibited‌ ‌from‌ ‌revealing‌ ‌any‌‌ information‌ ‌relating‌ ‌to‌ ‌the‌ ‌condition‌ ‌or‌ ‌business‌ ‌of‌ ‌any‌‌ insured‌ ‌bank‌‌and‌‌that‌‌they‌‌shall‌‌be‌‌held‌‌liable‌‌for‌‌any‌‌loss‌‌or‌‌ injury‌‌suffered‌‌by‌‌the‌‌PDIC.‌ ‌ 2) Except‌ ‌with‌ ‌the‌ ‌written‌ ‌consent‌ ‌of‌ ‌the‌ ‌PDIC,‌ ‌no‌ ‌person‌ ‌shall‌‌ serve‌‌as‌‌a‌‌director,‌‌officer‌‌or‌‌employee‌‌of‌‌an‌‌insured‌‌bank‌‌who‌‌ has‌ ‌been‌ ‌convicted,‌ ‌or‌ ‌who‌ ‌is‌ ‌hereafter‌ ‌convicted,‌ ‌of‌ ‌any‌‌ criminal‌‌offense‌‌involving‌‌dishonesty‌‌or‌‌a‌‌breach‌‌of‌‌trust.‌‌ ‌ Prohibitions‌‌and‌‌Regulations‌‌on‌‌Borrowing‌ ‌ 1) Borrowing‌‌from‌‌any‌‌bank‌‌or‌‌banking‌‌institution‌‌by‌‌‌examiners‌‌ and‌ ‌other‌ ‌personnel‌‌of‌‌the‌‌‌examination‌‌departments‌‌of‌‌the‌‌ PDIC‌ ‌shall‌ ‌be‌ ‌prohibited‌ ‌only‌ ‌with‌ ‌respect‌ ‌to‌ ‌the‌ ‌particular‌‌ institution‌ ‌in‌ ‌which‌ ‌they‌ ‌are‌ ‌assigned,‌ ‌or‌ ‌are‌ ‌conducting‌ ‌an‌‌ examination.‌‌ ‌ 2) Personnel‌‌of‌‌‌other‌‌departments‌,‌‌offices‌‌or‌‌units‌‌of‌‌the‌‌PDIC‌‌ shall‌‌likewise‌‌be‌‌prohibited‌‌from‌‌borrowing‌‌from‌‌any‌‌bank‌‌or‌‌ banking‌‌institution‌‌during‌‌the‌‌‌period‌‌of‌‌time‌‌that‌‌a‌‌transaction‌‌ of‌ ‌such‌ ‌institution‌ ‌with‌ ‌the‌ ‌corporation‌ ‌is‌ ‌being‌ ‌evaluated‌,‌‌ processed‌o ‌ r‌‌‌acted‌‌upon‌‌‌by‌‌such‌‌personnel.‌ ‌ 3) Borrowing‌ ‌by‌ ‌all‌ ‌full-time‌ ‌personnel‌ ‌of‌ ‌the‌ ‌PDIC‌ ‌from‌ ‌any‌‌ bank‌‌or‌‌banking‌‌institution‌‌shall‌‌be‌‌secured‌‌and‌‌disclosed‌‌to‌‌ the‌‌Board.‌ ‌ c.‌‌Concept‌‌of‌‌insured‌‌deposits‌ ‌ Insured‌ ‌deposit‌ ‌means‌ ‌the‌ ‌amount‌ ‌due‌ ‌to‌ ‌any‌ ‌bonafide‌‌ depositor‌ ‌for‌ ‌legitimate‌‌deposits‌‌in‌‌an‌‌insured‌‌bank‌‌as‌‌of‌‌the‌‌date‌‌ of‌‌closure‌‌but‌n ‌ ot‌‌to‌‌exceed‌P ‌ 500K‌.‌ ‌ ‌ In‌ ‌case‌ ‌of‌ ‌a‌ ‌condition‌ ‌that‌ ‌threatens‌ ‌the‌ ‌monetary‌ ‌and‌‌ financial‌ ‌stability‌ ‌of‌ ‌the‌ ‌banking‌ ‌system‌ ‌that‌ ‌may‌ ‌have‌‌ systemic‌‌consequences‌,‌‌as‌‌defined‌‌in‌‌Section‌‌22,‌‌as‌‌determined‌‌by‌‌ the‌ ‌Monetary‌ ‌Board,‌ ‌the‌ ‌maximum‌ ‌deposit‌ ‌insurance‌ ‌cover‌‌ may‌ ‌be‌ ‌adjusted‌ ‌in‌ ‌such‌ ‌amount,‌ ‌for‌ ‌such‌ ‌a‌ ‌period,‌ ‌and/or‌ ‌for‌‌ such‌ ‌deposit‌ ‌products,‌ ‌as‌ ‌may‌ ‌be‌ ‌determined‌ ‌by‌ ‌a‌ ‌unanimous‌‌ vote‌‌of‌‌the‌‌Board‌‌of‌‌Directors‌‌in‌‌a‌‌meeting‌‌called‌‌for‌‌the‌‌purpose‌‌ and‌‌chaired‌‌by‌‌the‌‌Secretary‌‌of‌‌Finance,‌‌subject‌‌to‌‌the‌‌approval‌‌of‌‌ the‌‌President‌.‌ ‌ Unclaimed‌‌Balances‌ ‌ Deposits‌ ‌that‌ ‌have‌‌become‌‌dormant‌‌for‌‌a‌‌period‌‌of‌‌10‌‌years‌‌‌may‌‌ be‌‌escheated‌i‌ n‌‌favor‌‌of‌‌the‌‌government.‌ ‌ 3. for‌ ‌which‌ ‌it‌ ‌has‌ ‌given‌ ‌or‌ ‌is‌ ‌obliged‌ ‌to‌ ‌give‌ ‌credit‌ ‌to‌ ‌a‌‌ commercial,‌‌checking,‌‌savings,‌‌time‌‌or‌‌thrift‌‌account,‌‌ ‌ 4. evidenced‌ ‌by‌ ‌a‌ ‌passbook,‌ ‌certificate‌ ‌of‌ ‌deposit,‌ ‌or‌ ‌other‌‌ evidence‌‌of‌‌deposit‌‌issued,‌‌ ‌ 5. together‌ ‌with‌ ‌such‌ ‌other‌ ‌obligations‌ ‌of‌ ‌a‌ ‌bank,‌ ‌which,‌‌ consistent‌ ‌with‌ ‌banking‌ ‌usage‌ ‌and‌ ‌practices,‌ ‌the‌ ‌Board‌ ‌of‌‌ Directors‌ ‌shall‌ ‌determine‌ ‌and‌ ‌prescribe‌ ‌by‌ ‌regulations‌ ‌to‌ ‌be‌‌ deposit‌‌liabilities‌‌of‌‌the‌‌bank.‌ ‌ Commencement‌‌of‌‌liability‌ ‌ PDIC‌‌shall‌‌commence‌‌the‌‌determination‌‌of‌‌insured‌‌deposits‌‌due‌‌the‌‌ depositors‌ ‌of‌ ‌a‌ ‌closed‌ ‌bank‌ ‌upon‌ ‌its‌ ‌actual‌ ‌take-over‌ ‌of‌ ‌the‌‌ closed‌‌bank.‌ ‌ Deposit‌‌accounts‌‌‌NOT‌‌ENTITLED‌‌to‌‌payment.‌‌—‌‌‌The‌‌PDIC‌‌shall‌‌not‌‌ pay‌‌deposit‌‌insurance‌‌‌for‌‌the‌‌following‌‌accounts‌‌or‌‌transactions:‌ ‌ 1) Investment‌ ‌products‌ ‌such‌ ‌as‌ ‌bonds‌ ‌and‌ ‌securities,‌ ‌trust‌‌ accounts,‌‌and‌‌other‌‌similar‌‌instruments;‌ ‌ 2) Deposit‌ ‌accounts‌ ‌or‌ ‌transactions‌ ‌which‌ ‌are‌ ‌fictitious‌ ‌or‌‌ fraudulent‌;‌ ‌ 3) Deposit‌ ‌accounts‌ ‌or‌ ‌transactions‌ ‌constituting,‌ ‌and/or‌‌ emanating‌‌from,‌u ‌ nsafe‌‌and‌‌unsound‌‌banking‌‌practice/s‌;‌‌ ‌ 4) Deposits‌ ‌that‌ ‌are‌ ‌determined‌ ‌to‌ ‌be‌ ‌the‌ ‌proceeds‌ ‌of‌ ‌an‌‌ unlawful‌‌activity‌a‌ s‌‌defined‌‌under‌‌AMLA;‌ ‌ 5) The‌‌amount‌‌‌in‌‌excess‌‌‌of‌‌insured‌‌deposit‌‌of‌‌P500K;‌ ‌ d.‌‌Liability‌‌to‌‌depositors‌ ‌ 6) Deposit‌‌that‌‌is‌‌payable‌‌in‌‌a‌‌place‌‌outside‌‌PH‌;‌ ‌ Payment‌ ‌ 7) Deposit‌‌accounts‌‌that‌‌resulted‌‌from‌s‌ plitting‌‌of‌‌deposit‌;‌ ‌ Within‌‌six‌‌(6)‌‌months‌‌‌from‌‌the‌‌date‌‌of‌‌filing‌‌of‌‌claim‌‌for‌‌insured‌‌ deposit.‌ ‌ Deposit‌ ‌ 8) Money‌ ‌placements‌ ‌by‌ ‌the‌ ‌head‌ ‌office‌ ‌of‌ ‌a‌ ‌foreign‌‌bank‌‌in‌‌its‌‌ branch‌‌in‌‌PH,‌‌because‌‌there‌‌is‌‌only‌‌one‌‌entity.‌ ‌ Extent‌‌of‌‌liability‌ ‌ 1. unpaid‌‌balance‌‌of‌‌money‌‌or‌‌its‌‌equivalent‌‌ ‌ 2. received‌‌by‌‌a‌‌bank‌‌in‌‌the‌‌usual‌‌course‌‌of‌‌business‌‌and‌‌ ‌ PDIC‌ ‌covers‌ ‌only‌ ‌the‌ ‌risk‌ ‌of‌ ‌a‌ ‌bank‌ ‌closure‌ ‌ordered‌ ‌by‌ ‌the‌‌ Monetary‌ ‌Board.‌ ‌Thus,‌ ‌bank‌ ‌losses‌ ‌due‌ ‌to‌ ‌theft,‌‌fire,‌‌closure‌‌by‌‌ reason‌ ‌of‌ ‌strike‌‌or‌‌existence‌‌of‌‌public‌‌disorder,‌‌revolution‌‌or‌‌civil‌‌ war,‌‌are‌‌NOT‌‌covered‌‌by‌‌PDIC.‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 90‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ Determination‌‌of‌‌insured‌‌deposits‌ ‌ No‌ ‌owner/holder‌ ‌of‌ ‌any‌ ‌passbook,‌ ‌certificate‌ ‌of‌‌deposit,‌‌or‌‌other‌‌ evidence‌ ‌of‌ ‌deposit‌ ‌shall‌ ‌be‌ ‌recognized‌ ‌as‌ ‌a‌ ‌depositor‌‌entitled‌‌to‌ the‌ ‌rights‌ ‌provided‌ ‌herein‌ ‌unless‌ ‌the‌ ‌passbook,‌ ‌certificate‌ ‌of‌‌ deposit,‌ ‌or‌‌other‌‌evidence‌‌of‌‌deposit‌‌is‌‌determined‌‌by‌‌the‌‌PDIC‌‌to‌‌ be‌‌an‌‌authentic‌‌document‌‌or‌‌record‌‌of‌‌the‌‌issuing‌‌bank.‌ ‌ Calculation‌‌of‌‌liability‌ ‌ 1. Per‌‌depositor,‌‌per‌‌capacity‌‌rule‌ ‌—‌‌there‌‌shall‌‌be‌‌added‌‌together‌‌ all‌‌deposits‌‌in‌‌the‌‌bank‌‌maintained‌‌in‌‌the‌‌same‌‌right‌‌and‌‌capacity‌‌ for‌‌his‌‌or‌‌her‌‌benefit‌‌either‌‌in‌‌his‌‌or‌‌her‌‌own‌‌name‌‌or‌‌in‌‌the‌‌name‌‌ of‌‌others.‌‌ ‌ 2. Joint‌ ‌accounts‌ ‌—‌ ‌shall‌ ‌be‌ ‌insured‌ ‌separately‌ ‌from‌ ‌any‌‌ individually-owned‌‌deposit‌‌account‌:‌‌Provided,‌‌That‌‌ ‌ 5. Payment‌‌of‌‌insured‌‌deposits‌‌as‌‌preferred‌‌credit‌ ‌ All‌ ‌payments‌ ‌by‌ ‌the‌ ‌PDIC‌ ‌of‌ ‌insured‌ ‌deposits‌ ‌in‌ ‌closed‌ ‌banks‌‌ partake‌ ‌of‌ ‌the‌ ‌nature‌ ‌of‌ ‌public‌ ‌funds‌,‌ ‌and‌ ‌as‌ ‌such,‌ ‌must‌ ‌be‌‌ considered‌‌a‌‌‌preferred‌‌credit‌‌‌in‌‌the‌‌order‌‌of‌‌preference‌‌under‌‌Art‌‌ 2244‌‌(9)‌‌of‌‌the‌‌Civil‌‌Code.‌ ‌ 6. Failure‌‌to‌‌settle‌‌claim‌‌of‌‌insured‌‌depositor‌ ‌ Failure‌‌to‌‌settle‌‌the‌‌claim,‌‌‌within‌‌six‌‌(6)‌‌months‌‌from‌‌the‌‌date‌‌of‌‌ filing‌ ‌of‌ ‌claim‌ ‌for‌ ‌insured‌ ‌deposit,‌ ‌where‌ ‌such‌ ‌failure‌‌was‌‌due‌‌to‌‌ grave‌ ‌abuse‌ ‌of‌ ‌discretion,‌ ‌gross‌ ‌negligence,‌ ‌bad‌ ‌faith,‌ ‌or‌‌ malice‌,‌ ‌shall,‌ ‌upon‌ ‌conviction,‌ ‌subject‌ ‌the‌ ‌directors,‌ ‌officers‌ ‌or‌‌ employees‌‌of‌‌the‌‌PDIC‌‌responsible‌‌for‌‌the‌‌delay,‌‌to‌‌‌imprisonment‌‌ from‌‌six‌‌(6)‌‌months‌‌to‌‌one‌‌(1)‌‌year‌.‌ ‌ Prohibition‌ ‌against‌ ‌splitting‌ ‌of‌ ‌deposits‌ ‌—‌ ‌occurs‌ ‌whenever‌ ‌a‌‌ deposit‌‌account‌‌ ‌ 1. with‌ ‌an‌ ‌outstanding‌ ‌balance‌ ‌of‌ ‌more‌ ‌than‌ ‌the‌ ‌statutory‌‌ maximum‌‌amount‌‌of‌‌insured‌‌deposit;‌ ‌ 2. maintained‌‌under‌‌the‌‌name‌‌of‌‌natural‌‌or‌‌juridical‌‌persons;‌ ‌ 3. is‌‌broken‌‌down‌‌and‌‌transferred‌‌into‌‌two‌‌(2)‌‌or‌‌more‌‌accounts;‌‌ ‌ 4. in‌ ‌the‌ ‌name/s‌ ‌of‌ ‌natural‌ ‌or‌ ‌juridical‌ ‌persons‌ ‌or‌ ‌entities‌‌‌who‌‌ have‌‌no‌‌beneficial‌‌ownership‌‌on‌‌transferred‌‌deposits‌‌in‌‌their‌ names;‌ ‌ 5. within‌‌one‌‌hundred‌‌twenty‌‌‌(120)‌‌days‌‌‌immediately‌‌preceding‌‌ or‌ ‌during‌ ‌a‌ ‌bank-declared‌ ‌bank‌ ‌holiday,‌ ‌or‌ ‌immediately‌‌ preceding‌‌a‌‌closure‌‌order‌‌issued‌‌by‌‌the‌‌Monetary‌‌Board;‌ ‌ 7. Failure‌‌of‌‌depositor‌‌to‌‌claim‌‌insured‌‌deposits‌‌—‌‌within‌‌‌two‌‌(2)‌‌ 6. for‌ ‌the‌‌purpose‌‌of‌‌availing‌‌of‌‌the‌‌maximum‌‌deposit‌‌insurance‌‌ years‌ ‌from‌ ‌actual‌ ‌take-over‌ ‌of‌ ‌the‌‌closed‌‌bank‌‌by‌‌the‌‌receiver,‌‌or‌‌ a. if‌‌the‌‌account‌‌is‌‌held‌‌jointly‌‌by‌‌two‌‌or‌‌more‌‌natural‌‌persons,‌‌or‌‌ coverage.‌ ‌ does‌‌not‌‌enforce‌‌his‌‌claim‌‌filed‌‌with‌‌the‌‌corporation‌‌within‌‌two‌‌(2)‌‌ by‌ ‌two‌ ‌or‌ ‌more‌ ‌juridical‌ ‌persons‌ ‌or‌ ‌entities,‌ ‌the‌ ‌maximum‌‌ years‌‌after‌‌the‌‌two-year‌‌period‌‌to‌‌file‌‌a‌‌claim,‌‌ ‌ insured‌ ‌deposit‌ ‌shall‌ ‌be‌ ‌divided‌ ‌into‌ ‌as‌ ‌many‌ ‌equal‌‌ The‌‌‌ELEMENTS‌‌of‌‌Deposit‌‌Splitting‌‌‌are‌‌as‌‌follows:‌ ‌ shares‌ ‌as‌ ‌there‌ ‌are‌ ‌individuals,‌ ‌juridical‌ ‌persons‌ ‌or‌‌ a) all‌‌rights‌‌of‌‌the‌‌depositor‌‌against‌‌the‌‌PDIC‌‌with‌‌respect‌‌to‌‌ a. Existence‌ ‌of‌ ‌source‌ ‌account/s‌ ‌in‌ ‌a‌ ‌bank‌ ‌with‌ ‌a‌ ‌balance‌ ‌or‌‌ entities‌,‌ ‌unless‌ ‌a‌ ‌different‌ ‌sharing‌ ‌is‌ ‌stipulated‌ ‌in‌ ‌the‌‌ the‌‌insured‌‌deposit‌‌shall‌‌be‌‌barred;‌‌ ‌ aggregate‌‌balance‌‌of‌‌more‌‌than‌‌the‌‌MDIC;‌ ‌ document‌‌of‌‌deposit,‌‌and‌‌ ‌ b. There‌ ‌is‌ ‌a‌‌break‌‌up‌‌and‌‌transfer‌‌of‌‌said‌‌account/s‌‌into‌‌two‌‌or‌‌ b) however,‌‌all‌‌rights‌‌of‌‌the‌‌depositor‌‌against‌‌the‌‌closed‌‌bank‌‌ b. if‌‌the‌‌account‌‌is‌‌held‌‌by‌‌a‌‌juridical‌‌person‌‌or‌‌entity‌‌jointly‌‌with‌‌ and‌‌its‌‌shareholders‌‌or‌‌the‌‌receivership‌‌estate‌‌to‌‌which‌‌the‌‌ more‌‌existing‌‌or‌‌new‌‌accounts‌‌in‌‌the‌‌name‌‌of‌‌another‌‌person/s‌‌ one‌ ‌or‌ ‌more‌ ‌natural‌ ‌persons,‌ ‌the‌ ‌maximum‌ ‌insured‌ ‌deposit‌‌ PDIC‌‌may‌‌have‌‌become‌‌subrogated,‌‌shall‌‌thereupon‌‌revert‌‌ or‌‌entity/entities;‌ ‌ shall‌ ‌be‌ ‌presumed‌ ‌to‌ ‌belong‌ ‌entirely‌ ‌to‌ ‌such‌ ‌juridical‌‌ to‌‌the‌‌depositor.‌‌ ‌ c. The‌ ‌transferee/s‌ ‌have‌ ‌no‌ ‌Beneficial‌ ‌Ownership‌ ‌over‌ ‌the‌ person‌‌‌or‌‌entity.‌ ‌ transferred‌‌funds;‌‌and‌ c) Thereafter,‌‌the‌‌PDIC‌‌shall‌‌be‌‌discharged‌‌from‌‌any‌‌liability‌‌ 3. Mode‌‌of‌‌payment‌ ‌ on‌‌the‌‌insured‌‌deposit.‌‌(§‌ 18‌‌RA‌‌9302‌)‌ ‌ d. Transfer‌‌occurred‌‌‌within‌‌120‌‌days‌‌immediately‌‌preceding‌‌or‌‌ 1) by‌c‌ ash‌‌or‌‌ ‌ during‌ ‌a‌ ‌bank-declared‌ ‌bank‌ ‌holiday‌,‌ ‌or‌ ‌immediately‌‌ Examination‌‌of‌‌banks‌‌and‌‌deposit‌‌accounts‌ ‌ preceding‌‌‌bank‌‌closure‌.‌‌ ‌ 2) by‌ ‌making‌ ‌available‌ ‌to‌ ‌each‌ ‌depositor‌ ‌a‌ ‌transferred‌‌ a. Examination‌ ‌involves‌‌an‌‌evaluation‌‌of‌‌the‌‌current‌‌status‌‌of‌‌a‌‌ deposit‌ ‌in‌ ‌another‌ ‌insured‌ ‌bank‌ ‌in‌ ‌an‌ ‌amount‌ ‌equal‌ ‌to‌‌ The‌ ‌approval‌ ‌by‌ ‌a‌ ‌bank‌ ‌officer‌ ‌or‌ ‌employee‌ ‌of‌ ‌a‌ ‌transaction‌‌ bank‌‌and‌‌determines‌‌its‌‌compliance.‌ ‌ insured‌‌deposit‌‌of‌‌such‌‌depositor.‌ ‌ resulting‌ ‌to‌ ‌Deposit‌ ‌Splitting‌ ‌shall‌ ‌be‌ ‌prima‌ ‌facie‌ ‌evidence‌ ‌of‌‌ b. Investigation‌ ‌is‌ ‌conducted‌ ‌based‌ ‌on‌ ‌specific‌ ‌findings‌ ‌of‌‌ participation‌ ‌in‌ ‌Deposit‌ ‌Splitting‌ ‌activities.‌ ‌(‌Linsangan‌ ‌v.‌ ‌PDIC‌‌ The‌ ‌PDIC‌ ‌may‌ ‌require‌ ‌final‌ ‌determination‌ ‌of‌ ‌a‌ ‌court‌ ‌of‌‌ certain‌ ‌acts‌ ‌or‌ ‌omissions‌ ‌which‌‌are‌‌subject‌‌of‌‌complaint‌‌or‌‌a‌‌ 2019‌)‌ ‌ competent‌‌jurisdiction‌‌before‌‌paying‌‌such‌‌claim.‌ ‌ Final‌‌Report‌‌of‌‌Examination‌‌made‌‌by‌‌the‌‌PDIC.‌‌It‌‌zeroes‌‌in‌‌on‌‌ Linsangan‌‌v.‌‌PDIC‌‌2 ‌ 019‌ ‌ specific‌‌acts‌‌and‌‌omissions.‌ ‌ 4. Effect‌‌of‌‌payment‌‌of‌‌insured‌‌deposits‌ ‌ The‌‌PDIC,‌‌upon‌‌payment‌‌of‌‌any‌‌depositor‌‌‌shall‌‌be‌‌subrogated‌‌‌to‌‌ all‌ ‌rights‌ ‌of‌ ‌the‌ ‌depositor‌ ‌against‌ ‌the‌ ‌closed‌‌bank‌‌to‌‌the‌‌extent‌‌of‌‌ such‌‌payment.‌ ‌ An‌‌‌examination‌‌requires‌‌prior‌‌consent‌‌‌from‌‌the‌‌MB,‌‌whereas‌‌an‌‌ investigation‌‌does‌‌NOT‌‌require‌‌‌one.‌ ‌ WON‌‌petitioner‌‌can‌‌validly‌‌claim‌‌from‌‌his‌‌SISA‌‌account.‌ ‌ NO‌.‌ ‌Even‌‌if‌‌the‌‌transfer‌‌into‌‌different‌‌accounts‌‌was‌‌not‌‌made‌‌within‌‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 91‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ five‌‌(5)‌‌members‌‌of‌‌the‌‌PDIC‌‌Board,‌‌shall‌‌determine‌‌whether‌‌ the‌‌bank‌‌may‌‌be‌‌resolved‌‌through‌‌the‌‌ ‌ 120‌ ‌days‌ ‌immediately‌ ‌preceding‌ ‌bank‌ ‌closure,‌ ‌the‌ ‌grant‌ ‌of‌‌deposit‌‌ insurance‌ ‌to‌ ‌an‌ ‌account‌ ‌found‌ ‌to‌ ‌have‌ ‌originated‌ ‌from‌ ‌another‌‌ deposit‌ ‌is‌ ‌not‌ ‌automatic‌ ‌because‌ ‌the‌ ‌transferee‌ ‌still‌ ‌has‌ ‌to‌ ‌prove‌‌ that‌ ‌the‌ ‌transfer‌ ‌was‌ ‌for‌ ‌a‌ ‌valid‌ ‌consideration‌ ‌through‌ ‌documents‌‌ kept‌‌in‌‌the‌‌custody‌‌of‌‌the‌‌bank.‌ ‌ Moreover,‌ ‌petitioner‌ ‌could‌ ‌not‌ ‌be‌‌considered‌‌the‌‌‌beneficial‌‌owner‌‌ of‌‌the‌‌resulting‌‌deposit‌‌account‌‌because‌‌he‌‌is‌‌not‌‌a‌‌qualified‌‌relative‌‌ of‌ ‌the‌ ‌transferor.‌ ‌Being‌ ‌the‌ ‌son‌ ‌of‌ ‌Cornelio's‌ ‌cousin,‌ ‌petitioner‌ ‌is‌‌ already‌ ‌a‌ ‌fifth‌ ‌degree‌ ‌relative‌ ‌of‌ ‌the‌ ‌transferor,‌ ‌far‌ ‌from‌ ‌the‌‌ requirement‌‌that‌‌the‌‌transferee‌‌must‌‌be‌‌a‌‌relative‌‌within‌‌the‌‌‌second‌‌ degree‌‌‌of‌‌consanguinity‌‌or‌‌affinity.‌ ‌ Prohibition‌‌against‌‌issuances‌‌of‌‌temporary‌‌restraining‌‌orders‌ ‌ The‌‌actions‌‌of‌‌the‌‌PDIC‌‌taken‌‌under‌‌Section‌‌5(g)‌‌shall‌‌be‌‌final‌‌and‌‌ executory,‌‌and‌‌may‌‌only‌‌be‌‌restrained‌‌or‌‌set‌‌aside‌‌by‌‌the‌‌‌Court‌‌of‌‌ Appeals‌,‌‌upon‌‌appropriate‌‌petition‌‌for‌‌certiorari‌.‌‌The‌‌petition‌‌for‌‌ certiorari‌‌may‌‌only‌‌be‌‌filed‌‌within‌‌‌thirty‌‌(30)‌‌days‌‌‌from‌‌notice‌‌of‌‌ denial‌‌of‌‌claim‌‌for‌‌deposit‌‌insurance.‌ ‌ e.‌‌Concept‌‌of‌‌bank‌‌resolution‌ ‌ 1. Failure‌ ‌of‌ ‌prompt‌ ‌corrective‌ ‌action‌ ‌as‌ ‌declared‌ ‌by‌‌ the‌‌Monetary‌‌Board;‌‌OR‌ ‌ b. Request‌b ‌ y‌‌a‌‌bank‌‌to‌‌be‌‌placed‌‌under‌‌resolution.‌ ‌ The‌ ‌PDIC‌ ‌shall‌‌inform‌‌the‌‌bank‌‌of‌‌its‌‌eligibility‌‌for‌‌entry‌‌into‌‌ resolution.‌ ‌ 2. The‌ ‌BSP‌ ‌shall‌ ‌inform‌ ‌the‌ ‌PDIC‌ ‌of‌ ‌the‌ ‌initiation‌ ‌of‌ ‌prompt‌‌ corrective‌‌action‌‌on‌‌any‌‌bank;‌ ‌ 3. When‌ ‌there‌ ‌is‌ ‌a‌ ‌failure‌ ‌of‌ ‌prompt‌ ‌corrective‌ ‌action‌ ‌as‌‌ declared‌‌by‌‌the‌‌Monetary‌‌Board‌‌‌due‌‌to‌‌capital‌‌deficiency‌,‌‌the‌‌ PDIC‌ ‌may‌ ‌examine,‌ ‌inquire‌ ‌or‌ ‌look‌ ‌into‌ ‌the‌ ‌deposit‌‌ records‌‌‌of‌‌a‌‌bank.‌ ‌ 4. purchase‌ ‌of‌ ‌all‌ ‌its‌ ‌assets‌ ‌and‌ ‌assumption‌ ‌of‌ ‌all‌ ‌its‌‌ liabilities,‌‌or‌‌ ‌ b. merger‌ ‌or‌ ‌consolidation‌ ‌with,‌‌or‌‌its‌‌acquisition,‌‌by‌‌a‌‌ qualified‌‌investor.‌ ‌ 5. Contractual‌‌obligations‌ ‌ The‌ ‌receiver‌ ‌may‌ ‌cancel,‌ ‌terminate,‌ ‌rescind‌ ‌or‌ ‌repudiate‌ ‌any‌‌ contract‌‌of‌‌the‌‌closed‌‌bank‌‌that‌‌ ‌ a. is‌ ‌not‌ ‌necessary‌ ‌for‌ ‌the‌ ‌orderly‌ ‌liquidation‌ ‌of‌ ‌the‌‌ bank,‌‌or‌‌ ‌ b. is‌‌grossly‌‌disadvantageous‌‌to‌‌the‌‌closed‌‌bank,‌‌or‌‌ ‌ c. for‌‌any‌‌ground‌‌provided‌‌by‌‌law.‌ ‌ f.‌‌Role‌‌of‌‌PDIC‌‌in‌‌relation‌‌to‌‌banks‌‌in‌‌distress‌ ‌ The‌ ‌placement‌ ‌of‌ ‌a‌ ‌bank‌ ‌under‌ ‌liquidation‌ ‌shall‌ ‌have‌ ‌the‌‌ following‌‌effects:‌ ‌ 1. On‌‌the‌‌corporate‌‌franchise‌‌or‌‌existence‌ ‌ The‌ ‌receiver‌ ‌shall‌ ‌represent‌ ‌the‌ ‌closed‌ ‌bank‌‌in‌‌all‌‌cases‌‌ by‌ ‌or‌ ‌against‌ ‌the‌ ‌closed‌ ‌bank‌ ‌and‌‌prosecute‌‌and‌‌defend‌‌suits‌‌ by‌ ‌or‌ ‌against‌ ‌it.‌ ‌In‌ ‌no‌ ‌case‌ ‌shall‌ ‌the‌ ‌bank‌ ‌be‌ ‌reopened‌ ‌and‌‌ permitted‌‌to‌‌resume‌‌banking‌‌business‌‌after‌‌being‌‌placed‌‌under‌‌ liquidation.‌ ‌ 2. On‌ ‌the‌ ‌powers‌ ‌and‌ ‌functions‌‌of‌‌its‌‌directors,‌‌officers‌‌and‌‌ stockholders‌ ‌ The‌ ‌PDIC,‌ ‌in‌ ‌coordination‌ ‌with‌ ‌the‌ ‌BSP,‌ ‌may‌ ‌commence‌ ‌the‌‌ resolution‌o‌ f‌‌a‌‌bank‌‌upon:‌ ‌ a. a. assets‌‌of‌‌the‌‌bank‌‌in‌‌accordance‌‌with‌‌the‌‌Rules‌‌on‌‌Concurrence‌‌ and‌‌Preference‌‌of‌‌Credits.‌ ‌ The‌‌powers,‌‌voting‌‌rights,‌‌functions‌‌and‌‌duties,‌‌as‌‌well‌‌as‌‌the‌‌ allowances,‌ ‌remuneration‌ ‌and‌ ‌perquisites‌ ‌of‌ ‌the‌ ‌directors,‌‌ officers,‌ ‌and‌ ‌stockholders‌‌of‌‌such‌‌bank‌‌are‌‌‌terminated‌‌‌upon‌‌ its‌ ‌closure.‌ ‌Accordingly,‌ ‌the‌ ‌directors,‌ ‌officers,‌ ‌and‌‌ stockholders‌ ‌shall‌ ‌be‌‌barred‌‌from‌‌interfering‌‌in‌‌any‌‌way‌‌with‌ the‌‌assets,‌‌records,‌‌and‌‌affairs‌‌of‌‌the‌‌bank.‌ ‌ 3. On‌‌the‌‌assets‌ ‌ Shall‌ ‌be‌ ‌deemed‌ ‌in‌‌custodia‌‌legis‌‌in‌‌the‌‌hands‌‌of‌‌the‌‌receiver,‌‌ and‌‌as‌‌such,‌‌these‌‌assets‌‌‌may‌‌not‌‌be‌‌subject‌‌to‌‌attachment,‌‌ garnishment,‌ ‌execution,‌ ‌levy‌ ‌or‌ ‌any‌ ‌other‌ ‌court‌‌ processes‌.‌‌ ‌ 4. On‌‌labor‌‌relations‌ ‌ Within‌ ‌a‌ ‌period‌ ‌of‌ ‌180‌ ‌days‌ ‌from‌ ‌a‌ ‌bank’s‌ ‌entry‌ ‌into‌‌ resolution‌,‌ ‌the‌ ‌PDIC,‌ ‌through‌ ‌the‌ ‌affirmative‌‌vote‌‌of‌‌‌at‌‌least‌‌ The‌ ‌ER-EE‌ ‌relationship‌ ‌between‌ ‌the‌ ‌closed‌ ‌bank‌ ‌and‌ ‌its‌‌ employees‌ ‌shall‌ ‌be‌ ‌deemed‌ ‌terminated‌ ‌upon‌‌service‌‌of‌‌the‌‌ notice‌ ‌of‌ ‌closure‌‌of‌‌the‌‌bank‌.‌‌‌Payment‌‌of‌‌separation‌‌pay‌‌or‌‌ benefits‌ ‌provided‌ ‌for‌ ‌by‌ ‌law‌ ‌shall‌ ‌be‌ ‌made‌ ‌from‌ ‌available‌‌ 6. On‌‌interest‌‌payments‌ ‌ The‌‌liability‌‌of‌‌a‌‌bank‌‌to‌‌pay‌‌interest‌‌on‌‌deposits‌‌and‌‌all‌‌other‌‌ obligations‌ ‌as‌ ‌of‌ ‌closure‌ ‌shall‌ ‌cease‌ ‌upon‌ ‌its‌ ‌closure‌ ‌by‌‌the‌‌ Monetary‌‌Board.‌ ‌ 7. Liability‌ ‌for‌ ‌penalties‌ ‌and‌ ‌surcharges‌ ‌for‌ ‌late‌ ‌payment‌‌ and‌‌nonpayment‌‌of‌‌taxes‌ ‌ From‌‌the‌‌time‌‌of‌‌closure,‌‌the‌‌closed‌‌bank‌‌‌shall‌‌not‌‌be‌‌liable‌‌ for‌ ‌the‌ ‌payment‌ ‌of‌ ‌penalties‌ ‌and‌ ‌surcharges‌ ‌arising‌ ‌from‌ ‌the‌‌ late‌‌payment‌‌or‌‌nonpayment‌‌of‌‌real‌‌property‌‌tax,‌‌capital‌‌gains‌‌ tax,‌‌transfer‌‌tax‌‌and‌‌similar‌‌charges.‌ ‌ 8. Actions‌‌pending‌‌for‌‌or‌‌against‌‌the‌‌closed‌‌bank‌ ‌ Except‌‌‌for‌‌actions‌‌pending‌‌before‌‌the‌‌Supreme‌‌Court‌,‌‌actions‌‌ pending‌ ‌for‌ ‌or‌ ‌against‌ ‌the‌ ‌closed‌ ‌bank‌ ‌in‌ ‌any‌ ‌court‌ ‌or‌‌ quasi-judicial‌ ‌body‌ ‌shall,‌ ‌upon‌ ‌motion‌ ‌of‌ ‌the‌ ‌receiver,‌ ‌be‌‌ suspended‌ ‌for‌ ‌a‌ ‌period‌ ‌not‌ ‌exceeding‌ ‌180‌ ‌days‌ ‌and‌‌ referred‌ ‌to‌ ‌mandatory‌ ‌mediation.‌ ‌Upon‌ ‌termination‌ ‌of‌ ‌the‌‌ mediation,‌ ‌the‌ ‌case‌ ‌shall‌ ‌be‌ ‌referred‌ ‌back‌ ‌to‌ ‌the‌ ‌court‌ ‌or‌‌ quasi-judicial‌‌body‌‌for‌‌further‌‌proceedings.‌ ‌ 9. Final‌‌decisions‌‌against‌‌the‌‌closed‌‌bank‌ ‌ The‌ ‌execution‌ ‌and‌ ‌enforcement‌ ‌of‌ ‌a‌ ‌final‌ ‌decision‌ ‌of‌ ‌a‌ ‌court‌‌ other‌ ‌than‌ ‌the‌‌liquidation‌‌court‌‌against‌‌the‌‌assets‌‌of‌‌a‌‌closed‌‌ bank‌‌‌shall‌‌be‌‌stayed‌.‌‌The‌‌prevailing‌‌party‌‌shall‌‌file‌‌the‌‌final‌‌ decision‌‌as‌‌a‌‌claim‌‌with‌‌the‌‌liquidation‌‌court‌..‌ ‌ 10. Docket‌‌and‌‌other‌‌court‌‌fees‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 92‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ Any‌‌such‌‌fees‌‌shall‌‌constitute‌‌as‌‌a‌‌first‌‌lien‌‌on‌‌any‌‌judgment‌‌in‌‌ favor‌ ‌of‌ ‌the‌ ‌closed‌ ‌bank‌ ‌or‌ ‌in‌ ‌case‌ ‌of‌ ‌unfavorable‌ ‌judgment,‌‌ such‌ ‌fees‌ ‌shall‌ ‌be‌ ‌paid‌ ‌as‌ ‌liquidation‌ ‌costs‌ ‌and‌ ‌expenses‌‌ during‌‌the‌‌distribution‌‌of‌‌the‌‌assets‌‌of‌‌the‌‌closed‌‌bank.‌ ‌ Relevant‌‌Banking‌‌Law‌‌Jurisprudence‌ ‌ Goyanko,‌‌Jr‌‌v.‌‌UCPB‌‌2 ‌ 013‌ ‌ UCPB‌‌did‌‌not‌‌become‌‌a‌‌trustee‌‌by‌‌the‌‌mere‌‌opening‌‌of‌‌the‌‌ACCOUNT.‌ ‌ While‌‌this‌‌may‌‌seem‌‌to‌‌be‌‌the‌‌case,‌‌by‌‌reason‌‌of‌‌the‌‌fiduciary‌‌nature‌‌ of‌ ‌the‌ ‌bank’s‌ ‌relationship‌ ‌with‌ ‌its‌ ‌depositors,‌ ‌this‌ ‌fiduciary‌‌ relationship‌‌does‌‌not‌‌“convert‌‌the‌‌contract‌‌between‌‌the‌‌bank‌‌and‌‌its‌‌ depositors‌‌from‌‌a‌‌simple‌‌loan‌‌to‌‌a‌‌trust‌‌agreement,‌‌whether‌‌express‌‌ or‌‌implied.”‌‌It‌‌simply‌‌means‌‌that‌‌the‌‌bank‌‌is‌‌obliged‌‌to‌‌observe‌‌“high‌‌ standards‌ ‌of‌ ‌integrity‌ ‌and‌ ‌performance”‌ ‌in‌ ‌complying‌ ‌with‌ ‌its‌‌ obligations‌‌under‌‌the‌‌contract‌‌of‌‌simple‌‌loan.‌ ‌Per‌‌Article‌‌1980‌‌of‌‌the‌‌ Civil‌ ‌Code,‌‌a‌‌‌creditor-debtor‌‌relationship‌‌exists‌‌between‌‌the‌‌bank‌‌ and‌‌its‌‌depositor.‌‌The‌‌savings‌‌deposit‌‌agreement‌‌is‌‌between‌‌the‌‌bank‌‌ and‌‌the‌‌depositor;‌‌by‌‌receiving‌‌the‌‌deposit,‌‌the‌‌bank‌‌impliedly‌‌agrees‌‌ to‌‌pay‌‌upon‌‌demand‌‌and‌‌only‌‌upon‌‌the‌‌depositor’s‌‌order.‌ ‌ Tan‌‌v.‌‌Rodriguez‌‌2 ‌ 018‌ ‌ Here,‌ ‌there‌ ‌exists‌ ‌no‌ ‌survivorship‌ ‌agreement‌ ‌between‌ ‌Anita‌ ‌and‌‌ Reynaldo.‌ ‌Hence,‌ ‌it‌ ‌is‌ ‌rightful‌ ‌to‌ ‌determine‌ ‌their‌ ‌respective‌ ‌shares‌‌ based‌‌on‌‌evidence‌‌presented‌‌during‌‌trial.‌ ‌ Apique‌‌v.‌‌Fahnenstich‌‌2 ‌ 015‌ ‌ The‌ ‌common‌ ‌banking‌ ‌practice‌ ‌is‌ ‌that‌ ‌regardless‌ ‌of‌ ‌who‌ ‌puts‌ ‌the‌‌ money‌‌into‌‌the‌‌account,‌‌each‌‌of‌‌the‌‌named‌‌account‌‌holder‌‌has‌‌an‌‌ undivided‌ ‌right‌ ‌to‌ ‌the‌ ‌entire‌ ‌balance‌,‌ ‌and‌ ‌any‌ ‌of‌ ‌them‌ ‌may‌‌ deposit‌ ‌and/or‌ ‌withdraw,‌ ‌partially‌‌or‌‌wholly,‌‌the‌‌funds‌‌‌without‌‌the‌‌ need‌ ‌or‌ ‌consent‌ ‌of‌ ‌the‌ ‌other,‌ ‌during‌ ‌their‌ ‌lifetime.‌ ‌Here,‌ ‌while‌‌ Dominador‌‌is‌‌a‌‌co-owner‌‌of‌‌the‌‌subject‌‌account‌‌as‌‌far‌‌as‌‌the‌‌bank‌‌is‌‌ concerned,‌ ‌Evangeline‌ ‌—‌ ‌as‌ ‌between‌ ‌him‌ ‌and‌ ‌Evangeline,‌ ‌his‌‌ authority‌ ‌to‌ ‌withdraw,‌ ‌as‌ ‌well‌ ‌as‌ ‌the‌ ‌amount‌ ‌to‌ ‌be‌ ‌withdrawn,‌ ‌is‌‌ circumscribed‌‌by‌‌the‌‌purpose‌‌for‌‌which‌‌the‌‌subject‌‌account‌‌was‌‌ opened‌.‌ ‌ Vasquez‌‌v.‌‌PNB‌‌2 ‌ 019‌ ‌ Such‌ ‌method‌ ‌of‌ ‌fixing‌ ‌interest‌ ‌rates‌ ‌based‌ ‌on‌ ‌the‌ ‌"prime‌ ‌rate‌ ‌plus‌‌ applicable‌ ‌spread‌ ‌in‌ ‌effect"‌ ‌is‌ ‌based‌ ‌on‌ ‌a‌ ‌"‌one-sided,‌‌ indeterminate,‌ ‌and‌ ‌subjective‌ ‌criteria‌ ‌such‌‌as‌‌profitability,‌‌cost‌‌ of‌ ‌money,‌ ‌bank‌ ‌costs,‌ ‌etc.,‌ ‌that‌ ‌is‌ ‌arbitrary‌ ‌for‌ ‌there‌ ‌is‌ ‌no‌ ‌fixed‌‌ standard‌‌or‌‌margin‌‌above‌‌or‌‌below‌‌these‌‌considerations."‌ ‌ Imposing‌‌the‌‌"‌prevailing‌‌lending‌‌rate‌"‌‌is‌‌not‌‌synonymous‌‌with‌‌the‌‌ usual‌ ‌banking‌ ‌practice‌ ‌of‌ ‌imposing‌ ‌the‌ ‌"‌prevailing‌ ‌market‌ ‌rate‌."‌ The‌ ‌Court‌ ‌explained‌ ‌that‌ ‌the‌ ‌latter‌ ‌is‌ ‌valid.‌ ‌However,‌ ‌when‌ ‌banks‌‌ impose‌ ‌"‌prevailing‌ ‌lending‌ ‌rates‌,"‌ ‌such‌ ‌imposition‌‌is‌‌considered‌‌ one-sided,‌‌arbitrary,‌‌and‌‌potestative‌‌as‌‌the‌‌bank‌‌is‌‌"still‌‌the‌‌one‌‌who‌‌ determines‌‌its‌‌own‌‌prevailing‌‌lending‌‌rate."‌ ‌ There‌‌may‌‌be‌‌instances‌‌wherein‌‌an‌‌interest‌‌rate‌‌scheme‌‌which‌‌does‌‌ not‌ ‌specifically‌ ‌indicate‌ ‌a‌ ‌particular‌ ‌interest‌ ‌rate‌ ‌may‌ ‌be‌ ‌validly‌‌ imposed.‌‌Such‌‌interest‌‌rate‌‌scheme‌‌refers‌‌to‌‌what‌‌is‌‌typically‌‌called‌‌a‌‌ floating‌‌interest‌‌rate‌‌system.‌ ‌ Escalation‌ ‌clauses‌ ‌are‌‌stipulations‌‌which‌‌allow‌‌for‌‌the‌‌increase‌‌of‌‌ the‌‌original‌‌fixed‌‌interest‌‌rate.‌‌In‌‌contrast,‌‌a‌‌‌floating‌‌rate‌‌of‌‌interest‌‌ pertains‌‌to‌‌the‌‌interest‌‌rate‌‌itself‌‌that‌‌is‌‌not‌‌fixed‌‌as‌‌it‌‌is‌‌dependent‌‌on‌‌ a‌ ‌market-based‌ ‌reference‌ ‌that‌ ‌was‌ ‌agreed‌ ‌upon‌ ‌by‌ ‌the‌ ‌parties.‌ ‌In‌‌ order‌ ‌for‌ ‌the‌ ‌concept‌ ‌of‌ ‌a‌ ‌floating‌ ‌rate‌ ‌of‌ ‌interest‌ ‌to‌ ‌apply,‌ ‌it‌‌ presupposes‌ ‌that‌ ‌a‌ ‌market-based‌ ‌reference‌ ‌rate‌ ‌is‌ ‌indicated‌ ‌in‌‌ writing‌‌and‌‌agreed‌‌upon‌‌by‌‌the‌‌parties‌.‌ ‌ Villa‌‌Crista‌‌Monte‌‌Realty‌‌v.‌‌Equitable‌‌PCI‌‌Bank‌‌2 ‌ 018‌ ‌ An‌ ‌escalation‌ ‌clause‌ ‌without‌ ‌a‌‌concomitant‌‌‌de-escalation‌‌clause‌‌ is‌ ‌void‌ ‌and‌ ‌ineffectual‌‌for‌‌violating‌‌"The‌‌Usury‌‌Law,"‌‌as‌‌well‌‌as‌‌the‌‌ principle‌ ‌of‌ ‌mutuality‌ ‌of‌ ‌contracts‌ ‌unless‌ ‌the‌ ‌established‌‌facts‌‌and‌‌ circumstances,‌‌as‌‌well‌‌as‌‌the‌‌admissions‌‌of‌‌the‌‌parties,‌‌indicate‌‌that‌‌ the‌‌lender‌‌at‌‌times‌‌lowered‌‌the‌‌interest‌‌rates,‌‌or,‌‌at‌‌least,‌‌allowed‌‌the‌‌ borrower‌‌the‌‌discretion‌‌to‌‌continue‌‌with‌‌the‌‌repriced‌‌rates.‌ ‌ Verily,‌ ‌the‌ ‌escalation‌ ‌clause,‌ ‌to‌ ‌be‌ ‌VALID‌,‌ ‌should‌ ‌specifically‌‌ provide:‌‌ ‌ 1) that‌ ‌there‌ ‌can‌ ‌be‌ ‌an‌ ‌increase‌‌in‌‌interest‌‌rates‌‌if‌‌allowed‌‌by‌‌ law‌‌or‌‌by‌‌the‌‌Monetary‌‌Board;‌‌and‌ ‌ maximum‌ ‌rates‌ ‌of‌ ‌interest‌ ‌are‌ ‌reduced‌ ‌by‌ ‌law‌ ‌or‌ ‌by‌ ‌the‌‌ Monetary‌‌Board.‌ ‌ Vitug‌‌v.‌‌Abuda‌‌2 ‌ 016‌‌Leonen,‌‌J‌ ‌ Voluntariness‌ ‌of‌ ‌stipulations‌ ‌on‌ ‌interest‌ ‌rates‌ ‌is‌ ‌not‌ ‌sufficient‌ ‌to‌‌ make‌‌the‌‌interest‌‌rates‌‌valid.‌‌ ‌ An‌ ‌interest‌ ‌rate‌ ‌is‌ ‌not‌ ‌inherently‌ ‌conscionable‌ ‌or‌‌ unconscionable‌.‌ ‌Interest‌ ‌rates‌ ‌become‌ ‌unconscionable‌ ‌in‌ ‌light‌ ‌of‌‌ the‌‌context‌‌in‌‌which‌‌they‌‌were‌‌imposed‌‌or‌‌applied.‌ ‌ Cabanting‌‌v.‌‌BPI‌‌Family‌‌Savings‌‌Bank‌‌2 ‌ 016‌ ‌ Here,‌ ‌there‌ ‌is‌ ‌no‌ ‌proof‌ ‌that‌ ‌petitioners‌ ‌were‌ ‌disadvantaged,‌‌ uneducated‌ ‌or‌ ‌utterly‌ ‌inexperienced‌ ‌in‌ ‌dealing‌ ‌with‌ ‌financial‌‌ institutions;‌ ‌thus,‌ ‌there‌ ‌is‌ ‌no‌ ‌reason‌ ‌for‌ ‌the‌ ‌court‌ ‌to‌ ‌step‌ ‌in‌ ‌and‌‌ protect‌ ‌the‌ ‌interest‌‌of‌‌the‌‌supposed‌‌weaker‌‌party.‌‌Verily,‌‌petitioners‌‌ are‌‌bound‌‌by‌‌the‌‌aforementioned‌‌stipulation‌‌in‌‌the‌‌Promissory‌‌Note‌‌ with‌‌Chattel‌‌Mortgage‌‌waiving‌‌the‌‌necessity‌‌of‌‌notice‌‌and‌‌demand‌‌to‌‌ make‌‌the‌‌obligation‌‌due‌‌and‌‌payable.‌ ‌ Sps‌‌Yulo‌‌v.‌‌BPI‌‌2 ‌ 019‌‌Leonen,‌‌J‌ ‌ When‌ ‌issuing‌ ‌a‌ ‌pre-screened‌ ‌or‌ ‌pre-approved‌ ‌credit‌ ‌card‌,‌ ‌the‌‌ credit‌‌card‌‌provider‌‌must‌‌prove‌‌that‌‌its‌‌client‌‌read‌‌and‌‌consented‌‌to‌‌ the‌ ‌terms‌ ‌and‌ ‌conditions‌ ‌governing‌ ‌the‌ ‌credit‌‌card's‌‌use.‌‌Failure‌‌to‌‌ prove‌ ‌consent‌ ‌means‌ ‌that‌ ‌the‌ ‌client‌ ‌cannot‌ ‌be‌ ‌bound‌ ‌by‌ ‌the‌‌ provisions‌ ‌of‌ ‌the‌ ‌terms‌ ‌and‌‌conditions,‌‌despite‌‌admitted‌‌use‌‌of‌‌the‌‌ credit‌‌card.‌ ‌ BPI‌‌v.‌‌Sps‌‌Sarda‌‌2 ‌ 019‌ ‌ In‌ ‌a‌ ‌situation‌ ‌where‌ ‌a‌ ‌pre-approved‌‌client‌‌was‌‌issued‌‌a‌‌credit‌‌card,‌‌ we‌ ‌have‌ ‌held‌ ‌that‌ ‌such‌ ‌client‌ ‌accepted‌ ‌the‌ ‌credit‌ ‌card‌ ‌by‌‌signing‌‌a‌‌ receipt‌ ‌and‌ ‌using‌ ‌the‌ ‌card‌ ‌to‌ ‌purchase‌ ‌goods‌ ‌and‌ ‌services.‌ ‌A‌‌ contractual‌‌relationship‌‌was‌‌thereby‌‌created‌‌between‌‌the‌‌cardholder‌‌ and‌ ‌the‌ ‌credit‌ ‌card‌ ‌issuer,‌ ‌governed‌ ‌by‌ ‌the‌ ‌terms‌ ‌and‌ ‌conditions‌‌ found‌‌in‌‌the‌‌card‌‌membership‌‌agreement.‌ ‌ 2) that‌ ‌there‌ ‌must‌ ‌be‌ ‌a‌ ‌stipulation‌ ‌for‌ ‌the‌ ‌reduction‌‌‌of‌‌the‌‌ stipulated‌ ‌interest‌ ‌rates‌ ‌in‌ ‌the‌ ‌event‌ ‌that‌ ‌the‌ ‌applicable‌‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 93‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ The‌ ‌submission‌ ‌of‌ ‌statements‌ ‌of‌ ‌account‌ ‌is‌ ‌not‌ ‌enough‌ ‌to‌‌ establish‌‌that‌‌the‌‌cardholder‌‌incurred‌‌the‌‌obligation‌‌to‌‌pay‌‌the‌‌ purchases‌‌appearing‌‌therein.‌‌ ‌ Fil-Agro‌‌Rural‌‌Bank‌‌v.‌‌Villaseñor,‌‌Jr‌‌2 ‌ 020‌ ‌ Disputed‌ ‌claims‌ ‌covers‌ ‌all‌ ‌claims‌ ‌whether‌ ‌they‌ ‌be‌ ‌against‌ ‌the‌‌ assets‌ ‌of‌ ‌the‌ ‌insolvent‌ ‌bank,‌ ‌for‌ ‌specific‌ ‌performance,‌ ‌breach‌ ‌of‌‌ contract,‌ ‌damages‌ ‌or‌ ‌whatever.‌ ‌The‌ ‌term‌ ‌is‌ ‌defined‌ ‌in‌ ‌an‌‌ all-encompassing‌ ‌and‌ ‌broad‌ ‌manner‌ ‌so‌ ‌as‌ ‌to‌ ‌include‌ ‌any‌ ‌cause‌ ‌of‌ action‌ ‌against‌ ‌the‌ ‌insolvent‌ ‌bank,‌ ‌regardless‌ ‌of‌ ‌its‌ ‌nature‌ ‌or‌‌ character,‌ ‌irrespective‌ ‌of‌ ‌whether‌ ‌the‌ ‌relief‌ ‌sought‌ ‌would‌ ‌directly‌‌ affect‌ ‌the‌ ‌property‌ ‌of‌ ‌the‌ ‌bank‌ ‌under‌ ‌liquidation.‌ ‌In‌ ‌fact,‌ ‌Section‌‌ 30(2)‌ ‌of‌ ‌R.A.‌ ‌7653‌ ‌authorizes‌ ‌the‌ ‌receiver‌ ‌to‌ ‌defend‌ ‌any‌ ‌action‌‌ against‌‌the‌‌insolvent‌‌bank.‌ ‌ Here,‌ ‌when‌ ‌Antonio‌ ‌filed‌ ‌the‌ ‌complaint‌ ‌for‌ ‌annulment‌ ‌of‌ ‌the‌‌ mortgages,‌‌he‌‌is‌‌essentially‌‌assailing‌‌Fil-Agro's‌‌right‌‌to‌‌foreclose‌‌the‌‌ mortgages‌ ‌constituted‌ ‌to‌ ‌secure‌ ‌the‌ ‌principal‌ ‌obligation,‌ ‌including‌‌ the‌‌closed‌‌bank's‌‌right‌‌to‌‌sell‌‌the‌‌property‌‌and‌‌apply‌‌the‌‌proceeds‌‌of‌‌ the‌‌sale‌‌to‌‌the‌‌satisfaction‌‌of‌‌the‌‌unpaid‌‌loan.‌‌Indubitably,‌‌the‌‌claim‌‌ lodged‌‌by‌‌Antonio‌‌is‌‌a‌‌disputed‌‌claim‌‌over‌‌which‌‌the‌‌RTC‌‌of‌‌Malolos‌‌ City‌‌sitting‌‌as‌‌liquidation‌‌court‌‌has‌‌jurisdiction.‌ ‌ 1.‌‌Patentable‌‌invention‌ ‌ 2.‌‌Copyrightable‌‌works‌ ‌ 2.‌‌Non-patentable‌‌invention‌ ‌ 3.‌‌Non-copyrightable‌‌works‌ ‌ 3.‌‌Ownership‌‌of‌‌a‌‌patent‌ ‌ 4.‌‌Rights‌‌of‌‌copyright‌‌owner‌ ‌ 4.‌‌Grounds‌‌for‌‌cancellation‌‌of‌‌a‌‌patent‌ ‌ 5.‌‌Rules‌‌on‌‌ownership‌‌of‌‌copyright‌ ‌ 5.‌‌Remedy‌‌of‌‌the‌‌true‌‌and‌‌actual‌‌inventor‌ ‌ 6.‌‌Limitations‌‌on‌‌copyright‌ ‌ 6.‌‌Rights‌‌conferred‌‌by‌‌a‌‌patent‌ ‌ 7.‌‌Copyright‌‌infringement‌ ‌ 7.‌‌Limitations‌‌of‌‌patent‌‌rights‌ ‌ 8.‌‌Patent‌‌infringement‌ ‌ 9.‌‌Licensing‌ ‌ Intellectual‌‌property‌‌rights‌ ‌ The‌‌term‌‌"intellectual‌‌property‌‌rights"‌‌consists‌‌of:‌ ‌ a) Copyright‌‌and‌‌Related‌‌Rights;‌ ‌ 10.‌‌Assignment‌‌and‌‌transmission‌‌of‌‌rights‌ ‌ b) Trademarks‌‌and‌‌Service‌‌Marks;‌ ‌ Law‌‌on‌‌Trademark‌ ‌ Servo‌‌v.‌‌PDIC‌‌2 ‌ 019‌ ‌ c) Geographic‌‌Indications;‌ ‌ 1.‌‌Definitions‌‌of‌‌marks,‌‌collective‌‌marks,‌‌and‌‌trade‌‌names‌ ‌ d) Industrial‌‌Designs;‌ ‌ 2.‌‌Acquisition‌‌of‌‌ownership‌‌of‌‌mark‌ ‌ e) Patents;‌ ‌ 3.‌‌Acquisition‌‌of‌‌ownership‌‌of‌‌trade‌‌name‌ ‌ f) 4.‌‌Non-registrable‌‌marks‌ g) Protection‌‌of‌‌Undisclosed‌‌Information‌ ‌ 5.‌‌Prior‌‌use‌‌of‌‌mark‌‌as‌‌a‌‌requirement‌ ‌ Section‌‌5(g)‌‌of‌‌RA‌‌3591,‌‌as‌‌amended‌‌by‌‌RA‌‌10846,‌‌provides‌‌that‌‌the‌‌ actions‌ ‌of‌ ‌PDIC‌ ‌on‌ ‌matters‌ ‌relating‌‌to‌‌insured‌‌deposits‌‌and‌‌deposit‌ ‌ liabilities‌ ‌may‌ ‌only‌ ‌be‌ ‌assailed‌ ‌before‌ ‌the‌ ‌Court‌ ‌of‌ ‌Appeals‌ ‌via‌ ‌a‌‌ Petition‌‌for‌‌Certiorari‌‌under‌R ‌ ule‌‌65‌.‌ ‌ 6.‌‌Tests‌‌to‌‌determine‌‌confusing‌‌similarity‌‌between‌‌marks‌ ‌ Intellectual‌‌Property‌‌Law‌ ‌ 9.‌‌Use‌‌by‌‌third‌‌parties‌‌of‌‌names,‌‌etc.‌‌similar‌‌to‌‌registered‌‌mark‌ ‌ Layout-Designs‌‌(Topographies)‌‌of‌‌Integrated‌‌Circuits;‌‌and‌ ‌ ‌ 7.‌‌Well-known‌‌marks‌ ‌ 8.‌‌Rights‌‌conferred‌‌by‌‌registration‌ ‌ ‌ 10.‌‌Infringement‌‌and‌‌remedies‌ ‌ RA‌‌No‌‌8293‌‌|‌‌Intellectual‌‌Property‌‌Code‌‌of‌‌the‌‌Philippines‌ As‌‌amended‌‌by‌‌RA‌‌No‌‌9150,‌‌9502,‌‌10372‌ ‌ 11.‌‌Unfair‌‌competition‌ ‌ 12.‌‌Registration‌‌of‌‌marks‌‌under‌‌the‌‌Madrid‌‌Protocol‌ ‌ 2020‌‌Revised‌‌Rules‌‌of‌‌Procedure‌‌for‌‌IP‌‌Rights‌‌Cases‌ ‌ ‌ Intellectual‌‌property‌‌rights‌ ‌ Scope‌ ‌ Copyright‌ ‌ Literary‌‌and‌‌ artistic‌‌works‌‌ which‌‌are‌‌ original‌‌ intellectual‌‌ creations‌‌in‌‌the‌‌ literary‌‌and‌‌ artistic‌‌domains‌‌ protected‌‌from‌‌ the‌‌moment‌‌of‌‌ their‌‌creation.‌ ‌ Optional;‌‌ Where‌‌to‌‌ National‌‌Library‌‌ register‌ ‌ or‌‌IPO‌ ‌ Law‌‌on‌‌Copyright‌ ‌ Law‌‌on‌‌Patents‌ ‌ ‌ 1.‌‌Basic‌‌principles‌ ‌ Patent‌ ‌ Any‌‌‌technical‌‌ solution‌‌‌of‌‌a‌‌ problem‌‌in‌‌any‌‌ field‌‌of‌‌human‌‌ activity‌‌which‌‌is‌‌ new,‌‌involves‌‌an‌‌ inventive‌‌step,‌‌ and‌‌is‌‌ industrially‌‌ applicable.‌ ‌ IPO‌ ‌ Trademark‌ ‌ Any‌v‌ isible‌‌sign‌‌ capable‌‌of‌‌ distinguishing‌‌ the‌‌goods‌‌or‌‌ services‌‌of‌‌an‌‌ enterprise‌‌and‌‌ shall‌‌include‌‌a‌‌ stamped‌‌or‌‌ marked‌‌container‌‌ of‌‌goods.‌ ‌ IPO‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 94‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ Generally‌‌up‌‌to‌‌ 50‌‌years‌a‌ fter‌‌ Duration‌ ‌ the‌‌death‌‌of‌‌the‌‌ author.‌ ‌ Exclusive‌‌ No,‌‌‌National‌‌ Right‌‌to‌‌ Exhaustion‌ ‌ Import‌ ‌ 20‌‌years‌‌‌from‌ filing‌‌or‌‌priority‌‌ date‌ ‌ Meanwhile,‌ ‌the‌ ‌scope‌ ‌of‌ ‌a‌ ‌copyright‌ ‌is‌ ‌confined‌ ‌to‌ ‌literary‌ ‌and‌‌ artistic‌‌works‌‌which‌‌are‌‌original‌‌intellectual‌‌creations‌‌in‌‌the‌‌literary‌‌ and‌‌artistic‌‌domain‌‌protected‌‌from‌‌the‌‌moment‌‌of‌‌their‌‌creation.‌ ‌ ‌ 10‌‌years‌ ‌ Patentable‌ ‌inventions‌,‌ ‌on‌ ‌the‌‌other‌‌hand,‌‌refer‌‌to‌‌any‌‌technical‌‌ Yes,‌‌‌International‌‌ No,‌‌‌National‌‌ Exhaustion‌ ‌ Exhaustion‌ ‌ Ching‌‌v.‌‌Salinas,‌‌et.‌‌al.‌ ‌ WON‌ ‌the‌ ‌Utility‌ ‌Model,‌ ‌described‌ ‌as‌ ‌“Leaf‌ ‌Spring‌ ‌Eye‌ ‌Bushing‌ ‌for‌‌ Automobile”‌ ‌is‌c‌ opyrightable‌.‌ ‌ solution‌ ‌of‌ ‌a‌ ‌problem‌ ‌in‌ ‌any‌ ‌field‌ ‌of‌ ‌human‌‌activity‌‌which‌‌is‌‌new,‌‌ involves‌‌an‌‌inventive‌‌step‌‌and‌‌is‌‌industrially‌‌applicable.‌ ‌ ‌ Law‌‌on‌‌Patents‌ ‌ Basic‌‌Patent‌‌Principles‌ ‌ 1. originality‌ ‌and‌ ‌copyrightability‌.‌ ‌A‌ ‌“‌work‌ ‌of‌ ‌applied‌ ‌art‌”‌ ‌is‌ ‌an‌‌ artistic‌ ‌creation‌‌with‌‌utilitarian‌‌functions‌‌or‌‌incorporated‌‌in‌‌a‌‌ useful‌ ‌article‌,‌ ‌whether‌‌made‌‌by‌‌hand‌‌or‌‌produced‌‌on‌‌an‌‌industrial‌‌ scale.‌ ‌ Territoriality‌‌‌—‌‌patents‌‌are‌‌only‌‌valid‌‌in‌‌the‌‌country‌‌or‌‌region‌‌ in‌‌which‌‌they‌‌have‌‌been‌‌granted;‌ ‌ 2. First-to-File‌— ‌ ‌‌applicant‌‌who‌‌files‌‌first‌‌gets‌‌the‌‌patent;‌ ‌ 3. Disclosure‌ ‌—‌ ‌applicant‌ ‌shall‌ ‌disclose‌ ‌the‌ ‌invention‌ ‌in‌ ‌a‌‌ manner‌‌sufficiently‌‌clear‌‌and‌‌complete;‌ ‌ Quid‌‌pro‌‌quo‌‌‌–‌‌protection‌‌in‌‌exchange‌‌for‌‌disclosure;‌ ‌ 4. Conditional‌‌—‌‌patents‌‌are‌‌granted‌‌only‌‌upon‌‌compliance‌‌with‌‌ the‌‌criteria‌‌of‌‌patentability;‌ ‌ 5. Limited‌‌Rights‌.‌ ‌ The‌ ‌disclosure‌ ‌of‌ ‌information‌ ‌contained‌ ‌in‌‌the‌‌application‌‌during‌‌ the‌ ‌twelve‌ ‌(12)‌ ‌months‌ ‌preceding‌ ‌the‌ ‌filing‌ ‌date‌ ‌or‌ ‌the‌‌ priority‌‌date‌‌‌of‌‌the‌‌application‌‌shall‌‌NOT‌‌prejudice‌‌‌the‌‌applicant‌‌ on‌‌the‌‌ground‌‌of‌‌lack‌‌of‌‌novelty‌‌‌if‌‌such‌‌disclosure‌‌was‌‌made‌‌by:‌ ‌ a) The‌‌inventor‌;‌ ‌ also‌ ‌means‌ ‌any‌ ‌person‌ ‌who,‌ ‌at‌ ‌the‌ ‌filing‌ ‌date‌ ‌of‌ ‌application,‌‌ had‌‌the‌‌right‌‌to‌‌the‌‌patent.‌ ‌ b) A‌‌‌patent‌‌office‌a‌ nd‌‌the‌‌information‌‌was‌‌contained‌‌ ‌ i) ii) Elements‌‌of‌‌Patentability‌ ‌ 1) Novelty‌— ‌ ‌‌it‌‌must‌‌NOT‌‌form‌‌part‌‌of‌‌a‌‌prior‌‌art‌;‌ ‌ In‌‌this‌‌case,‌‌the‌‌petitioner’s‌‌models‌‌are‌‌not‌‌works‌‌of‌‌applied‌‌art,‌‌nor‌‌ artistic‌ ‌works‌.‌ ‌They‌‌are‌‌‌utility‌‌models‌,‌‌useful‌‌articles,‌‌albeit‌‌with‌‌ no‌‌artistic‌‌design‌‌or‌‌value.‌ ‌ 2) Inventive‌ ‌Step‌ ‌—‌ ‌if,‌ ‌having‌ ‌regard‌ ‌to‌ ‌prior‌ ‌art,‌ ‌it‌ ‌is‌ ‌not‌‌ obvious‌ ‌to‌ ‌a‌ ‌person‌ ‌skilled‌ ‌in‌ ‌the‌ ‌art‌‌at‌‌the‌‌time‌‌of‌‌the‌‌filing‌‌ date‌‌or‌‌priority‌‌date‌‌of‌‌the‌‌application‌‌claiming‌‌the‌‌invention.‌ ‌ Trademark,‌ ‌copyright‌ ‌and‌ ‌patents‌ ‌are‌ ‌different‌ ‌intellectual‌‌ property‌‌rights‌‌that‌c‌ annot‌‌be‌‌interchanged‌w ‌ ith‌‌one‌‌another.‌ ‌ ‌ Someone‌‌who‌‌is‌‌aware‌‌or‌‌presumed‌‌to‌‌have‌‌knowledge‌‌in‌‌the‌‌ specific‌ ‌industry‌ ‌where‌ ‌the‌ ‌invention‌ ‌is‌ ‌engaged‌ ‌in.‌ ‌Not‌‌ necessarily‌‌an‌‌expert.‌ ‌ A‌ ‌trademark‌ ‌is‌ ‌any‌ ‌visible‌ ‌sign‌ ‌capable‌ ‌of‌ ‌distinguishing‌ ‌the‌‌ goods‌ ‌(trademark)‌ ‌or‌ ‌services‌ ‌(service‌ ‌mark)‌ ‌of‌ ‌an‌ ‌enterprise‌ ‌and‌‌ shall‌ ‌include‌ ‌a‌ ‌stamped‌ ‌or‌ ‌marked‌ ‌container‌ ‌of‌ ‌goods.‌ ‌In‌‌relation‌‌ thereto,‌ ‌a‌ ‌trade‌ ‌name‌ ‌means‌ ‌the‌‌name‌‌or‌‌designation‌‌identifying‌‌or‌‌ distinguishing‌‌an‌‌enterprise.‌ ‌ ‌ 2) The‌ ‌whole‌ ‌contents‌ ‌of‌ ‌an‌ ‌application‌ ‌for‌ ‌a‌ ‌patent,‌ ‌utility‌‌ model,‌ ‌or‌ ‌industrial‌ ‌design‌ ‌registration,‌ ‌published‌ ‌in‌‌ accordance‌ ‌with‌ ‌this‌ ‌Act,‌ ‌filed‌ ‌or‌ ‌effective‌‌in‌‌the‌‌Philippines,‌‌ with‌ ‌a‌ ‌filing‌ ‌or‌ ‌priority‌ ‌date‌ ‌that‌ ‌is‌ ‌earlier‌ ‌than‌ ‌the‌ ‌filing‌ ‌or‌‌ priority‌‌date‌‌of‌‌the‌‌application.‌ ‌ Non-Prejudicial‌‌Disclosure‌ ‌ NO‌.‌ ‌Ownership‌ ‌of‌ ‌copyrighted‌ ‌material‌ ‌is‌ ‌shown‌ ‌by‌ ‌proof‌ ‌of‌‌ It‌‌bears‌‌stressing‌‌that‌‌the‌‌focus‌‌of‌‌copyright‌‌is‌‌the‌‌‌usefulness‌‌of‌‌the‌‌ artistic‌ ‌design‌,‌ ‌and‌ ‌not‌ ‌its‌ ‌marketability.‌ ‌The‌ ‌central‌ ‌inquiry‌ ‌is‌‌ whether‌ ‌the‌ ‌article‌ ‌is‌ ‌a‌ ‌work‌ ‌of‌ ‌art‌.‌ ‌Indeed,‌ ‌while‌ ‌works‌ ‌of‌‌ applied‌ ‌art,‌ ‌original‌ ‌intellectual,‌ ‌literary‌ ‌and‌ ‌artistic‌ ‌works‌ ‌are‌‌ copyrightable,‌‌‌useful‌‌articles‌‌and‌‌works‌‌of‌‌industrial‌‌design‌‌are‌‌ not‌.‌‌‌A‌‌useful‌‌article‌‌may‌‌be‌‌copyrightable‌‌only‌‌if‌‌and‌‌only‌‌to‌‌the‌‌ extent‌ ‌that‌ ‌such‌ ‌design‌ ‌incorporates‌ ‌pictorial,‌ ‌graphic,‌ ‌or‌‌ sculptural‌‌features‌‌that‌‌‌can‌‌be‌‌identified‌‌separately‌‌from,‌‌and‌‌ are‌‌capable‌‌of‌‌existing‌‌independently‌‌of‌‌the‌‌utilitarian‌‌aspects‌‌ of‌‌the‌‌article‌.‌ ‌ 1) Everything‌ ‌which‌ ‌has‌ ‌been‌ ‌made‌ ‌available‌ ‌to‌ ‌the‌ ‌public‌‌ anywhere‌ ‌in‌ ‌the‌ ‌world,‌ ‌before‌ ‌the‌ ‌filing‌ ‌date‌ ‌or‌ ‌the‌ ‌priority‌‌ date‌o ‌ f‌‌the‌‌application‌‌claiming‌‌the‌‌invention;‌‌and‌ ‌ 3) Industrial‌ ‌Applicability‌ ‌—‌ ‌can‌ ‌be‌ ‌produced‌ ‌and‌ ‌used‌ ‌in‌‌ any‌‌industry.‌ ‌ Prior‌‌Art‌ ‌ in‌‌another‌‌application‌‌filed‌‌by‌‌the‌‌inventor,‌‌or‌‌ ‌ in‌ ‌an‌ ‌application‌ ‌filed‌ ‌without‌ ‌the‌ ‌knowledge‌ ‌or‌‌ consent‌ ‌of‌ ‌the‌ ‌inventor‌ ‌by‌ ‌a‌ ‌third‌ ‌party‌ ‌which‌‌ obtained‌ ‌the‌ ‌information‌ ‌directly‌ ‌or‌ ‌indirectly‌ ‌from‌‌ the‌‌inventor;‌‌or‌ ‌ c) A‌ ‌third‌ ‌party‌ ‌which‌ ‌obtained‌ ‌the‌ ‌information‌ ‌directly‌ ‌or‌‌ indirectly‌‌from‌‌the‌‌inventor.‌ ‌ Filing‌‌Date‌ ‌ The‌ ‌filing‌‌date‌‌of‌‌a‌‌patent‌‌application‌‌shall‌‌be‌‌the‌‌‌date‌‌of‌‌receipt‌‌ by‌‌the‌‌Office‌‌of‌‌at‌‌least‌‌the‌‌following‌‌elements:‌ ‌ a) An‌‌express‌‌or‌‌implicit‌‌indication‌‌that‌‌a‌‌Philippine‌‌patent‌‌is‌‌ sought;‌ ‌ b) Information‌‌identifying‌‌the‌‌applicant;‌‌and‌ ‌ c) Description‌‌of‌‌the‌‌invention‌‌and‌‌one‌‌(1)‌‌or‌‌more‌‌claims‌‌in‌‌ Filipino‌‌or‌‌English.‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 95‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ If‌ ‌any‌ ‌of‌ ‌these‌ ‌elements‌‌is‌‌not‌‌submitted‌‌within‌‌the‌‌period‌‌set‌‌by‌ the‌‌Regulations,‌‌the‌‌application‌‌shall‌‌be‌c‌ onsidered‌‌withdrawn‌.‌‌ ‌ 1.‌‌Patentable‌‌invention‌ ‌ Patent‌‌‌refers‌‌to‌‌the‌‌right‌‌granted‌‌by‌‌statute‌‌in‌‌favor‌‌of‌‌the‌‌inventor‌‌ 3. 4. of‌ ‌a‌ ‌product‌ ‌or‌ ‌process‌ ‌referring‌ ‌to‌ ‌any‌ ‌technical‌ ‌solution‌ ‌of‌ ‌a‌‌ problem‌‌in‌‌any‌‌field‌‌of‌‌human‌‌activity‌‌which‌ ‌ 1. Is‌‌new‌,‌‌ ‌ 2. involves‌‌an‌i‌ nventive‌‌step‌‌‌and‌‌ ‌ 3. is‌‌industrially‌‌applicable‌.‌ ‌ A‌ ‌patentable‌ ‌invention‌ ‌may‌ ‌be,‌ ‌or‌ ‌may‌ ‌relate‌ ‌to,‌ ‌a‌ ‌product,‌ ‌or‌‌ process,‌‌or‌‌an‌‌improvement‌‌of‌‌any‌‌of‌‌the‌‌foregoing.‌‌(§ ‌ 21‌)‌ ‌ The‌‌patent‌‌law‌‌has‌‌a‌t‌ hree-fold‌‌purpose‌:‌‌ ‌ 1. first‌,‌‌it‌‌seeks‌‌to‌‌‌foster‌‌and‌‌reward‌‌invention‌;‌‌ ‌ 2. second‌,‌‌it‌‌promotes‌‌disclosures‌o ‌ f‌‌inventions;‌‌ ‌ 3. third‌,‌ ‌seeks‌ ‌to‌ ‌ensure‌ ‌that‌ ‌ideas‌ ‌in‌ ‌the‌ ‌public‌‌domain‌‌ remain‌‌therefor‌‌the‌‌free‌‌use‌‌of‌‌the‌‌public‌.‌ 1. Discoveries,‌ ‌scientific‌ methods‌,‌‌and‌‌ ‌ ‌theories‌ ‌and‌ ‌mathematical‌‌ In‌‌the‌‌case‌‌of‌‌drugs‌‌and‌‌medicines‌,‌‌ ‌ a. 2. the‌ ‌mere‌ ‌discovery‌ ‌of‌ ‌a‌‌‌new‌‌form‌‌or‌‌new‌‌property‌‌ of‌ ‌a‌ ‌known‌ ‌substance‌ ‌which‌ ‌does‌ ‌not‌ ‌result‌ ‌in‌ ‌the‌‌ enhancement‌‌of‌‌the‌‌known‌‌efficacy‌‌‌of‌‌that‌‌substance,‌‌ or‌‌ ‌ b. the‌‌mere‌‌discovery‌‌of‌‌any‌‌new‌‌property‌‌or‌‌new‌‌use‌‌ for‌‌a‌‌known‌‌substance,‌‌or‌‌ ‌ c. the‌‌mere‌‌use‌‌of‌‌a‌‌known‌‌process‌‌unless‌‌such‌‌known‌‌ process‌‌results‌‌in‌‌a‌‌new‌‌product‌‌that‌‌employs‌‌at‌‌least‌‌ one‌‌new‌‌reactant.‌ ‌ Plant‌ ‌varieties‌ ‌or‌ ‌animal‌ ‌breeds‌ ‌or‌ ‌essentially‌ ‌biological‌‌ process‌‌for‌‌the‌‌production‌‌of‌‌plants‌‌or‌‌animals.‌‌ ‌ This‌ ‌provision‌ ‌shall‌ ‌not‌ ‌apply‌ ‌to‌ ‌micro-organisms‌ ‌and‌‌ non-biological‌‌and‌‌microbiological‌‌‌processes.‌ ‌ 5. Aesthetic‌c‌ reations;‌‌and‌ ‌ 6. Anything‌‌which‌‌is‌c‌ ontrary‌‌to‌‌public‌‌order‌‌or‌‌morality‌.‌ ‌ 3.‌‌Ownership‌‌of‌‌a‌‌patent‌ ‌ a.‌‌Right‌‌to‌‌a‌‌patent‌ ‌ The‌‌right‌‌to‌‌a‌‌patent‌‌belongs‌‌to‌‌ ‌ 1. The‌‌inventor,‌‌his‌‌heirs,‌‌or‌‌assigns;‌ ‌ 2. When‌‌two‌‌(2)‌‌or‌‌more‌‌persons‌‌have‌‌‌jointly‌‌‌made‌‌an‌‌invention,‌‌ the‌‌right‌‌to‌‌a‌‌patent‌‌shall‌‌belong‌‌to‌‌them‌‌jointly.‌ ‌ 3. If‌‌two‌‌(2)‌‌or‌‌more‌‌persons‌‌have‌‌made‌‌the‌‌invention‌‌separately‌‌ and‌ ‌independently‌ ‌of‌ ‌each‌ ‌other,‌ ‌the‌ ‌right‌ ‌to‌ ‌the‌ ‌patent‌ ‌shall‌‌ belong‌ ‌to‌ ‌the‌ ‌person‌ ‌who‌ ‌filed‌ ‌an‌ ‌application‌ ‌for‌ ‌such‌‌ invention;‌ ‌ 2.‌‌Non-patentable‌‌invention‌ ‌ The‌‌following‌‌shall‌‌be‌e ‌ xcluded‌f‌ rom‌‌patent‌‌protection:‌ ‌ Methods‌ ‌for‌ ‌treatment‌ ‌of‌ ‌the‌ ‌human‌ ‌or‌ ‌animal‌ ‌body‌ ‌by‌‌ surgery‌ ‌or‌ ‌therapy‌ ‌and‌ ‌diagnostic‌ ‌methods‌ ‌practiced‌ ‌on‌ ‌the‌‌ human‌‌or‌‌animal‌‌body.‌‌ ‌ 4. Where‌ ‌two‌ ‌or‌ ‌more‌ ‌applications‌ ‌are‌ ‌filed‌ ‌for‌ ‌the‌ ‌same‌‌ invention,‌‌to‌‌the‌‌applicant‌‌who‌‌has‌‌the‌‌‌earliest‌‌filing‌‌date‌‌or,‌‌ the‌‌earliest‌‌priority‌‌date‌.‌‌(‌§28-29‌)‌ ‌ b.‌‌F irst-to-file‌‌rule‌ ‌ c.‌‌Invention‌‌created‌‌pursuant‌‌to‌‌a‌‌commission‌ ‌ The‌ ‌person‌ ‌who‌ ‌commissions‌ ‌the‌ ‌work‌ ‌shall‌ ‌own‌ ‌the‌ ‌patent,‌ ‌unless‌‌ otherwise‌‌provided‌‌in‌‌the‌‌contract.‌ ‌ In‌ ‌case‌ ‌the‌ ‌employee‌ ‌made‌ ‌the‌ ‌invention‌ ‌in‌ ‌the‌ ‌course‌ ‌of‌ ‌his‌‌ employment‌‌contract,‌‌the‌‌patent‌‌shall‌‌belong‌‌to:‌ ‌ a) The‌ ‌employee‌,‌ ‌if‌ ‌the‌ ‌inventive‌ ‌activity‌ ‌is‌ ‌NOT‌ ‌a‌ ‌part‌ ‌of‌ ‌his‌‌ regular‌‌duties‌‌even‌‌if‌‌the‌‌employee‌‌uses‌‌the‌‌time,‌‌facilities‌‌and‌‌ materials‌‌of‌‌the‌‌employer.‌ ‌ b) The‌‌‌employer‌,‌‌if‌‌the‌‌invention‌‌is‌‌the‌‌result‌‌of‌‌the‌‌performance‌‌ of‌ ‌his‌ ‌regularly-assigned‌ ‌duties,‌‌unless‌‌there‌‌is‌‌an‌‌agreement,‌‌ express‌‌or‌‌implied,‌‌to‌‌the‌‌contrary.‌‌(§ ‌ 30‌)‌ ‌ d.‌‌Right‌‌of‌‌priority‌ ‌ An‌ ‌application‌ ‌for‌ ‌patent‌ ‌filed‌ ‌by‌ ‌any‌ ‌person‌ ‌who‌ ‌has‌ ‌previously‌‌ applied‌ ‌for‌ ‌the‌ ‌same‌ ‌invention‌ ‌in‌ ‌another‌ ‌country‌ ‌which‌ ‌by‌ ‌treaty,‌‌ convention,‌ ‌or‌ ‌law‌ ‌affords‌‌similar‌‌privileges‌‌to‌‌Filipino‌‌citizens,‌‌shall‌‌ be‌ ‌considered‌ ‌as‌ ‌filed‌ ‌as‌ ‌of‌ ‌the‌ ‌date‌ ‌of‌ ‌filing‌ ‌the‌ ‌foreign‌‌ application‌:‌‌Provided,‌‌That:‌‌ ‌ a) the‌‌local‌‌application‌‌expressly‌‌claims‌‌priority;‌ ‌ b) it‌ ‌is‌ ‌filed‌ ‌within‌ ‌twelve‌ ‌(12)‌ ‌months‌ ‌from‌ ‌the‌ ‌date‌ ‌the‌‌ earliest‌‌foreign‌‌application‌‌was‌‌filed;‌‌and‌ ‌ c) a‌ ‌certified‌ ‌copy‌ ‌of‌ ‌the‌ ‌foreign‌ ‌application‌ ‌together‌ ‌with‌ ‌an‌‌ English‌ ‌translation‌ ‌is‌ ‌filed‌ ‌within‌ ‌six‌ ‌(6)‌ ‌months‌ ‌from‌ ‌the‌‌ date‌‌of‌‌filing‌‌in‌‌the‌‌Philippines.‌‌(§ ‌ 31‌)‌ ‌ E.I.‌‌Dupont‌‌de‌‌Nemours‌‌and‌‌Co.‌‌v.‌‌Francisco‌‌‌2016‌‌Leonen,‌‌J‌‌ ‌ If‌ ‌two‌ ‌(2)‌ ‌or‌ ‌more‌ ‌persons‌ ‌have‌ ‌made‌ ‌the‌ ‌invention‌ ‌separately‌ ‌and‌‌ independently‌‌of‌‌each‌‌other,‌‌the‌‌right‌‌to‌‌the‌‌patent‌‌shall‌‌belong‌‌to‌‌ ‌ 1. the‌‌person‌‌who‌‌filed‌‌an‌‌application‌‌for‌‌such‌‌invention,‌‌OR‌‌ ‌ 2. where‌ ‌two‌ ‌or‌ ‌more‌ ‌applications‌ ‌are‌ ‌filed‌ ‌for‌ ‌the‌ ‌same‌‌ invention,‌‌ ‌ a. to‌‌the‌‌applicant‌‌who‌‌has‌‌the‌‌earliest‌‌filing‌‌date‌‌OR,‌‌ ‌ b. the‌‌‌earliest‌‌priority‌‌date‌.‌‌(‌§29‌)‌ ‌ Schemes,‌ ‌rules‌ ‌and‌ ‌methods‌ ‌of‌ ‌performing‌ ‌mental‌ ‌acts,‌‌ playing‌‌games‌‌or‌‌doing‌‌business,‌‌and‌‌programs‌‌for‌‌computers;‌ ‌ WON‌ ‌the‌ ‌CA‌ ‌erred‌ ‌in‌ ‌allowing‌ ‌the‌ ‌intervention‌ ‌of‌ ‌respondent‌‌ Therapharma,‌‌Inc.‌‌in‌‌petitioner's‌‌appeal.‌ NO‌.‌‌The‌‌mandatory‌‌disclosure‌‌requirement‌‌in‌‌the‌‌TRIPS‌‌Agreement‌‌ precipitated‌ ‌the‌ ‌shift‌ ‌from‌ ‌a‌ ‌first-to-invent‌ ‌system‌ ‌to‌ ‌a‌‌ first-to-file‌ ‌system‌ ‌in‌ ‌the‌ ‌new‌ ‌IPC.‌ ‌The‌ ‌patent‌ ‌application‌ ‌is‌‌ only‌‌confidential‌B ‌ EFORE‌i‌ ts‌‌publication.‌ ‌ WON‌‌the‌‌abandoned‌‌patent‌‌application‌‌of‌‌petitioner‌‌may‌‌be‌‌revived‌‌ after‌‌13‌‌years.‌ ‌ NO‌.‌‌The‌‌IPC‌‌provides‌‌for‌‌a‌‌shorter‌‌period‌‌of‌‌‌three‌‌(3)‌‌months‌‌‌from‌‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 96‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ abandonment‌‌within‌‌which‌‌to‌‌file‌‌for‌r‌ evival‌.‌‌ ‌ Petitioner's‌ ‌patent‌ ‌application,‌ ‌therefore,‌ ‌should‌ ‌NOT‌ ‌be‌‌ revived‌‌since‌‌it‌‌was‌‌filed‌‌beyond‌‌the‌‌allowable‌‌period.‌ ‌ 3. award‌ ‌actual‌ ‌and‌ ‌other‌ ‌damages‌ ‌in‌ ‌his‌‌favor‌‌if‌‌warranted‌‌by‌‌ the‌‌circumstances.‌‌(§ ‌ 68‌)‌ ‌ 6.‌‌Rights‌‌conferred‌‌by‌‌a‌‌patent‌ ‌ WON‌ ‌filing‌ ‌of‌ ‌a‌ ‌patent‌ ‌application‌ ‌vests‌ ‌petitioner‌ ‌the‌ ‌right‌ ‌to‌ ‌be‌‌ protected‌ ‌from‌ ‌becoming‌ ‌part‌ ‌of‌ ‌the‌ ‌public‌ ‌domain‌ ‌because‌ ‌of‌‌ convention‌‌priority‌‌under‌‌the‌‌Paris‌‌Convention‌‌for‌‌the‌‌Protection‌‌of‌‌ Industrial‌‌Property.‌ a) Where‌‌the‌‌subject‌‌matter‌‌of‌‌a‌‌patent‌‌is‌‌a‌‌‌product‌,‌‌to‌‌‌restrain‌,‌‌ prohibit‌‌‌and‌‌‌prevent‌‌‌any‌‌unauthorized‌‌person‌‌or‌‌entity‌‌from‌‌ making,‌ ‌using,‌ ‌offering‌ ‌for‌ ‌sale,‌ ‌selling‌‌or‌‌importing‌‌‌that‌‌ product;‌ ‌ NO‌.‌ ‌The‌ ‌right‌ ‌of‌ ‌priority‌ ‌given‌ ‌to‌ ‌a‌ ‌patent‌ ‌applicant‌ ‌is‌ ‌only‌‌ b) Where‌‌the‌‌subject‌‌matter‌‌of‌‌a‌‌patent‌‌is‌‌a‌‌‌process‌,‌‌to‌‌‌restrain‌,‌‌ prevent‌ ‌or‌ ‌prohibit‌ ‌any‌ ‌unauthorized‌ ‌person‌ ‌or‌‌entity‌‌from‌‌ using‌ ‌the‌ ‌process,‌ ‌and‌ ‌from‌ ‌manufacturing,‌ ‌dealing‌ ‌in,‌‌using,‌‌ selling‌ ‌or‌ ‌offering‌‌for‌‌sale,‌‌or‌‌importing‌‌any‌‌product‌‌obtained‌‌ directly‌‌or‌‌indirectly‌‌‌from‌‌such‌‌process.‌ ‌ relevant‌‌when‌‌there‌‌are‌‌two‌‌or‌‌more‌‌conflicting‌‌patent‌‌applications‌‌ on‌ ‌the‌ ‌same‌ ‌invention‌.‌ ‌Because‌ ‌a‌ ‌right‌ ‌of‌ ‌priority‌ ‌does‌ ‌not‌‌ automatically‌ ‌grant‌ ‌letters‌ ‌patent‌ ‌to‌ ‌an‌ ‌applicant,‌ ‌possession‌ ‌of‌ ‌a‌‌ right‌ ‌of‌ ‌priority‌ ‌does‌ ‌not‌ ‌confer‌ ‌any‌ ‌property‌ ‌rights‌ ‌on‌ ‌the‌‌ applicant‌‌in‌‌the‌‌absence‌‌of‌‌an‌‌actual‌‌patent.‌ ‌ A‌‌right‌‌of‌‌priority‌‌is‌‌not‌‌equivalent‌‌to‌‌a‌‌patent.‌‌After‌‌the‌‌lapse‌‌of‌‌ 20‌‌years,‌‌the‌‌invention‌‌becomes‌‌part‌‌of‌‌the‌‌public‌‌domain‌‌and‌‌is‌‌free‌‌ for‌ ‌the‌ ‌public‌ ‌to‌ ‌use.‌ ‌In‌ ‌addition,‌ ‌a‌ ‌patent‌ ‌holder‌ ‌of‌ ‌inventions‌‌ relating‌‌to‌‌food‌‌or‌‌medicine‌‌does‌‌not‌‌enjoy‌‌absolute‌‌monopoly‌‌over‌‌ the‌ ‌patent.‌ ‌Both‌ ‌RA‌ ‌No.‌ ‌165‌ ‌and‌ ‌the‌ ‌IPC‌‌provide‌‌for‌‌‌compulsory‌‌ licensing‌.‌‌The‌‌patent‌‌holder's‌‌proprietary‌‌right‌‌over‌‌the‌‌patent‌‌only‌‌ lasts‌‌for‌‌‌three‌‌(3)‌‌years‌‌‌from‌‌the‌‌grant‌‌of‌‌the‌‌patent,‌‌after‌‌which‌‌any‌‌ person‌ ‌may‌ ‌be‌ ‌allowed‌ ‌to‌ ‌manufacture,‌ ‌use,‌ ‌or‌ ‌sell‌ ‌the‌ ‌invention‌‌ subject‌‌to‌‌the‌‌payment‌‌of‌‌royalties‌.‌ ‌ 4.‌‌Grounds‌‌for‌‌cancellation‌‌of‌‌a‌‌patent‌ ‌ a) That‌ ‌what‌ ‌is‌ ‌claimed‌ ‌as‌ ‌the‌ ‌invention‌ ‌is‌ ‌not‌ ‌new‌ ‌or‌‌ patentable‌;‌ ‌ b) That‌ ‌the‌ ‌patent‌ ‌does‌ ‌not‌ ‌disclose‌ ‌the‌ ‌invention‌ ‌in‌‌a‌‌manner‌‌ sufficiently‌ ‌clear‌ ‌and‌ ‌complete‌ ‌for‌ ‌it‌ ‌to‌‌be‌‌carried‌‌out‌‌by‌‌any‌‌ person‌‌skilled‌‌in‌‌the‌‌art;‌‌or‌ ‌ c) That‌ ‌the‌ ‌patent‌ ‌is‌ ‌contrary‌ ‌to‌ ‌public‌ ‌order‌ ‌or‌ ‌morality‌.‌‌ (‌§61‌)‌ ‌ 5.‌‌Remedy‌‌of‌‌the‌‌true‌‌and‌‌actual‌‌inventor‌ ‌ Patent‌‌owners‌‌shall‌‌also‌‌have‌‌the‌‌right‌‌ ‌ c) to‌a ‌ ssign‌,‌‌or‌‌transfer‌b ‌ y‌‌succession‌‌the‌‌patent,‌‌and‌‌ ‌ d) to‌‌conclude‌‌‌licensing‌‌contracts‌‌‌for‌‌the‌‌same.‌‌(§ ‌ 71‌)‌ ‌ 7.‌‌Limitations‌‌of‌‌patent‌‌rights‌ ‌ The‌ ‌owner‌ ‌of‌ ‌a‌ ‌patent‌ ‌has‌ ‌no‌ ‌right‌ ‌to‌ ‌prevent‌ ‌third‌ ‌parties‌ ‌from‌‌ performing,‌‌without‌‌his‌‌authorization,‌‌the‌‌acts‌‌referred‌‌to‌‌in‌‌Section‌‌71‌‌ hereof‌‌in‌‌the‌‌following‌‌circumstances:‌ ‌ 1. 2. 3. 4. The‌‌court‌‌shall‌ ‌ 1. order‌‌for‌‌his‌s ‌ ubstitution‌a‌ s‌‌patentee,‌‌or‌‌ ‌ 2. at‌‌the‌‌option‌‌of‌‌the‌‌true‌‌inventor,‌c‌ ancel‌t‌ he‌‌patent,‌‌and‌‌ ‌ Using‌‌a‌‌patented‌‌product‌‌which‌‌has‌‌been‌‌put‌‌on‌‌the‌‌market‌‌in‌‌ the‌‌Philippines‌‌by‌‌the‌‌owner,‌‌or‌‌with‌‌his‌‌express‌‌consent.‌ ‌ Where‌ ‌the‌ ‌act‌ ‌is‌ ‌done‌ ‌privately‌ ‌and‌ ‌on‌ ‌a‌ ‌non-commercial‌‌ scale‌ ‌or‌ ‌for‌ ‌a‌ ‌non-commercial‌ ‌purpose:‌ ‌Provided‌,‌ ‌That‌ ‌it‌‌ does‌ ‌not‌ ‌significantly‌ ‌prejudice‌ ‌the‌‌economic‌‌interests‌‌of‌‌ the‌‌owner‌‌of‌‌the‌‌patent;‌ ‌ Where‌ ‌the‌ ‌act‌ ‌consists‌ ‌of‌ ‌making‌ ‌or‌ ‌using‌ ‌exclusively‌ ‌for‌‌ experimental‌‌use‌‌‌of‌‌the‌‌invention‌‌for‌‌‌scientific‌‌purposes‌‌or‌‌ educational‌‌purposes‌;‌ ‌ In‌ ‌the‌ ‌case‌ ‌of‌ ‌drugs‌ ‌and‌‌medicines‌,‌‌where‌‌the‌‌act‌‌includes‌‌ testing,‌ ‌using,‌ ‌making‌ ‌or‌ ‌selling‌ ‌the‌ ‌invention‌ ‌solely‌ ‌for‌‌ purposes‌ ‌reasonably‌ ‌related‌ ‌to‌ ‌the‌ ‌development‌ ‌and‌‌ submission‌ ‌of‌ ‌information‌ ‌and‌ ‌issuance‌ ‌of‌ ‌approvals‌ ‌by‌‌ government‌‌regulatory‌‌agencies.‌ ‌ 5. Where‌ ‌the‌ ‌act‌ ‌consists‌ ‌of‌ ‌the‌ ‌preparation‌ ‌for‌ ‌individual‌‌ cases‌,‌‌in‌‌a‌‌pharmacy‌‌or‌‌by‌‌a‌‌medical‌‌professional;‌‌and‌ ‌ 6. Where‌‌the‌‌invention‌‌is‌‌used‌‌in‌‌any‌‌‌ship,‌‌vessel,‌‌aircraft,‌‌or‌‌land‌‌ vehicle‌ ‌of‌ ‌any‌ ‌other‌ ‌country‌ ‌entering‌ ‌the‌ ‌territory‌ ‌of‌ ‌the‌‌ Philippines‌‌‌temporarily‌‌or‌‌accidentally‌.‌‌(‌§72‌)‌ ‌ a.‌‌Prior‌‌user‌ ‌ Any‌‌prior‌‌user,‌‌who,‌‌‌in‌‌good‌‌faith‌‌was‌‌using‌‌the‌‌invention‌‌or‌‌has‌‌ undertaken‌ ‌serious‌ ‌preparations‌ ‌to‌ ‌use‌ ‌the‌ ‌invention‌ ‌in‌ ‌his‌‌ enterprise‌‌or‌‌business,‌‌‌before‌‌the‌‌filing‌‌date‌‌or‌‌priority‌‌date‌‌‌of‌‌ the‌‌application‌‌on‌‌which‌‌a‌‌patent‌‌is‌‌granted,‌‌shall‌‌have‌‌the‌‌right‌‌to‌‌ continue‌ ‌the‌ ‌use‌ ‌thereof‌ ‌as‌‌envisaged‌‌in‌‌such‌‌preparations‌‌within‌‌ the‌‌territory‌‌where‌‌the‌‌patent‌‌produces‌‌its‌‌effect.‌ ‌ ⭐‌The‌ ‌right‌ ‌of‌ ‌the‌ ‌prior‌ ‌user‌ ‌may‌ ‌only‌ ‌be‌ ‌transferred‌ ‌or‌‌ assigned‌‌together‌‌ ‌ 1. with‌‌his‌‌enterprise‌‌or‌‌business,‌‌or‌‌ ‌ 2. with‌ ‌that‌ ‌part‌ ‌of‌ ‌his‌ ‌enterprise‌ ‌or‌ ‌business‌ ‌in‌ ‌which‌ ‌the‌‌ use‌‌or‌‌preparations‌‌for‌‌use‌‌have‌‌been‌‌made.‌‌(§ ‌ 73‌)‌ ‌ b.‌‌Use‌‌by‌‌the‌‌government‌ ‌ A‌ ‌Government‌ ‌agency‌ ‌or‌ ‌third‌ ‌person‌ ‌authorized‌ ‌by‌ ‌the‌ ‌Government‌‌ may‌ ‌exploit‌ ‌the‌ ‌invention‌‌even‌‌without‌‌agreement‌‌of‌‌the‌‌patent‌‌owner‌‌ where:‌ ‌ a) The‌‌‌public‌‌interest‌,‌‌in‌‌particular,‌‌national‌‌security,‌‌nutrition,‌‌ health‌‌or‌‌the‌‌development‌‌of‌‌other‌‌sectors‌‌so‌‌requires;‌‌or‌ ‌ b) A‌ ‌judicial‌ ‌or‌ ‌administrative‌ ‌body‌ ‌has‌ ‌determined‌ ‌that‌ ‌the‌‌ manner‌ ‌or‌ ‌exploitation,‌ ‌by‌ ‌the‌ ‌owner‌ ‌of‌ ‌the‌ ‌patent‌ ‌or‌ ‌his‌‌ licensee,‌‌is‌‌anti-competitive‌;‌‌or‌ ‌ In‌‌the‌‌case‌‌of‌‌drugs‌‌and‌‌medicines,‌‌ ‌ c) there‌ ‌is‌ ‌a‌ ‌national‌ ‌emergency‌ ‌or‌ ‌other‌ ‌circumstance‌ ‌of‌‌ extreme‌‌urgency‌r‌ equiring‌‌the‌‌use‌‌of‌‌the‌‌invention;‌‌or‌ ‌ d) there‌ ‌is‌ ‌public‌ ‌non-commercial‌ ‌use‌ ‌of‌ ‌the‌ ‌patent‌ ‌without‌‌ satisfactory‌‌reason;‌‌or‌ ‌ e) the‌ ‌demand‌ ‌for‌ ‌the‌ ‌patented‌ ‌article‌ ‌in‌ ‌the‌ ‌Philippines‌ ‌is‌ ‌not‌‌ being‌ ‌met‌ ‌to‌ ‌an‌ ‌adequate‌ ‌extent‌ ‌and‌ ‌on‌ ‌reasonable‌ ‌terms,‌ ‌as‌‌ determined‌‌by‌‌the‌‌Secretary‌‌of‌‌the‌‌DOH.‌‌(§ ‌ 74‌)‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 97‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ 8.‌‌Patent‌‌infringement‌ ‌ a.‌‌Tests‌‌in‌‌patent‌‌infringement‌ ‌ Godines‌‌v.‌‌CA‌ ‌ Did‌ ‌petitioner's‌ ‌product‌ ‌infringe‌ ‌upon‌ ‌the‌ ‌patent‌ ‌of‌ ‌private‌‌ respondent?‌ ‌ YES‌.‌‌In‌‌using‌ ‌literal‌‌infringement‌‌‌as‌‌a‌‌test,‌‌resort‌‌must‌‌be‌‌had,‌‌ in‌ ‌the‌ ‌first‌ ‌instance,‌ ‌to‌ ‌the‌ ‌words‌ ‌of‌ ‌the‌ ‌claim.‌ ‌The‌ ‌Court‌ ‌must‌‌ juxtapose‌ ‌the‌ ‌claims‌ ‌of‌ ‌the‌ ‌patent‌ ‌and‌ ‌the‌‌accused‌‌product‌‌within‌‌ the‌ ‌overall‌ ‌context‌ ‌of‌ ‌the‌ ‌claims‌ ‌and‌ ‌specifications,‌ ‌to‌ ‌determine‌‌ whether‌‌there‌‌is‌‌exact‌‌identity‌‌of‌‌all‌‌material‌‌elements.‌ ‌ The‌ ‌trial‌ ‌court‌ ‌found‌ ‌that‌ ‌in‌ ‌appearance‌ ‌and‌ ‌form‌,‌ ‌both‌ ‌the‌‌ floating‌ ‌power‌‌tiller‌s‌‌of‌‌the‌‌defendant‌‌and‌‌the‌‌‌turtle‌‌power‌‌tiller‌‌ of‌ ‌the‌ ‌plaintiff‌ ‌are‌ ‌virtually‌ ‌the‌ ‌same.‌ ‌The‌ ‌parts‌ ‌or‌ ‌components‌‌ thereof‌‌are‌‌virtually‌‌the‌‌same.‌‌In‌‌‌operation‌,‌‌the‌‌floating‌‌power‌‌tiller‌‌ of‌‌the‌‌defendant‌‌operates‌‌also‌‌in‌‌similar‌‌manner‌‌as‌‌the‌‌turtle‌‌power‌‌ tiller‌‌of‌‌plaintiff.‌ ‌ Next,‌ ‌courts‌ ‌have‌ ‌adopted‌ ‌the‌ ‌doctrine‌ ‌of‌ ‌equivalents‌ ‌which‌‌ recognizes‌ ‌that‌ ‌minor‌ ‌modifications‌ ‌in‌ ‌a‌ ‌patented‌ ‌invention‌ ‌are‌‌ sufficient‌‌to‌‌put‌‌the‌‌item‌‌beyond‌‌the‌‌scope‌‌of‌‌literal‌‌infringement.‌ ‌ According‌ ‌to‌ ‌this‌ ‌doctrine,‌ ‌an‌ ‌infringement‌ ‌also‌ ‌occurs‌ ‌when‌ ‌a‌‌ device‌ ‌appropriates‌ ‌a‌ ‌prior‌ ‌invention‌ ‌by‌ ‌incorporating‌ ‌its‌‌ innovative‌ ‌concept‌ ‌and,‌ ‌albeit‌ ‌with‌ ‌some‌ ‌modification‌ ‌and‌‌ change‌,‌ ‌performs‌ ‌substantially‌ ‌the‌ ‌same‌ ‌function‌ ‌in‌‌ substantially‌ ‌the‌ ‌same‌ ‌way‌ ‌to‌ ‌achieve‌ ‌substantially‌ ‌the‌ ‌same‌‌ result‌.‌ ‌ Smith‌‌Kline‌‌Beckman‌‌v.‌‌CA‌ ‌ patent‌‌may‌‌not‌‌be‌‌issued‌‌for‌‌them.‌‌The‌‌applicant‌‌thus‌‌is‌‌required‌‌"to‌‌ divide,"‌ ‌that‌ ‌is,‌ ‌to‌ ‌limit‌ ‌the‌ ‌claims‌ ‌to‌ ‌whichever‌ ‌invention‌ ‌he‌ ‌may‌‌ elect,‌‌whereas‌‌those‌‌inventions‌‌not‌‌elected‌‌may‌‌be‌‌made‌‌the‌‌subject‌‌ of‌ ‌separate‌ ‌applications‌ ‌which‌ ‌are‌ ‌called‌ ‌"divisional‌ ‌applications."‌‌ What‌ ‌this‌ ‌only‌ ‌means‌ ‌is‌ ‌that‌ ‌petitioner's‌ ‌methyl‌ ‌5‌‌ propylthio-2-benzimidazole‌ ‌carbamate‌ ‌is‌‌an‌‌invention‌‌distinct‌‌from‌‌ the‌ ‌other‌‌inventions‌‌claimed‌‌in‌‌the‌‌original‌‌application‌‌divided‌‌out,‌‌ Albendazole‌ ‌being‌‌one‌‌of‌‌those‌‌other‌‌inventions.‌‌Otherwise,‌‌methyl‌‌ 5‌ ‌propylthio-2-‌ ‌benzimidazole‌ ‌carbamate‌ ‌would‌ ‌not‌ ‌have‌ ‌been‌ ‌the‌‌ subject‌‌of‌‌a‌‌divisional‌‌application‌‌if‌‌a‌‌single‌‌patent‌‌could‌‌have‌‌been‌‌ issued‌‌for‌‌it‌‌as‌‌well‌‌as‌‌Albendazole.‌ ‌ b.‌‌Civil‌‌and‌‌criminal‌‌action‌ ‌ 1. 2. the‌ ‌other‌ ‌portions‌‌thereof,‌‌‌no‌‌mention‌‌is‌‌made‌‌of‌‌the‌‌compound‌‌ Albendazole.‌ ‌ As‌ ‌for‌ ‌the‌ ‌concept‌ ‌of‌ ‌divisional‌ ‌applications‌ ‌proffered‌ ‌by‌‌ petitioner,‌ ‌it‌ ‌comes‌ ‌into‌ ‌play‌ ‌when‌ ‌two‌ ‌or‌ ‌more‌ ‌inventions‌ ‌are‌‌ claimed‌ ‌in‌‌a‌‌single‌‌application‌‌but‌‌are‌‌of‌‌such‌‌a‌‌nature‌‌that‌‌a‌‌single‌ Any‌ ‌patentee‌ ‌whose‌ ‌rights‌ ‌have‌ ‌been‌ ‌infringed,‌ ‌may‌ ‌bring‌ ‌a‌‌ civil‌‌action‌‌‌before‌‌a‌‌court‌‌of‌‌competent‌‌jurisdiction,‌‌ ‌ a. to‌‌recover‌‌from‌‌the‌‌infringer‌d ‌ amages‌‌sustained,‌‌ ‌ b. plus‌‌‌attorney's‌‌fees‌‌‌and‌‌other‌‌expenses,‌‌and‌‌ ‌ c. to‌‌secure‌‌an‌i‌ njunction‌.‌ ‌ 3. If‌‌the‌‌damages‌‌are‌‌inadequate‌‌or‌‌cannot‌‌be‌‌readily‌‌ascertained‌‌ with‌ ‌reasonable‌ ‌certainty,‌ ‌the‌ ‌court‌ ‌may‌ ‌award‌ ‌by‌ ‌way‌ ‌of‌‌ damages‌‌a‌‌sum‌‌‌equivalent‌‌to‌‌reasonable‌‌royalty‌.‌ ‌ 4. The‌ ‌court‌ ‌may‌ ‌award‌ ‌damages‌ ‌in‌ ‌a‌ ‌sum‌ ‌above‌ ‌the‌ ‌amount‌‌ found‌ ‌as‌ ‌actual‌ ‌damages‌ ‌sustained:‌ ‌Provided‌,‌ ‌That‌ ‌the‌ ‌award‌‌ does‌ ‌not‌ ‌exceed‌ ‌three‌ ‌(3)‌ ‌times‌‌‌the‌‌amount‌‌of‌‌such‌‌actual‌‌ damages.‌ ‌ WON‌ ‌Tryco‌ ‌committed‌ ‌patent‌ ‌infringement‌ ‌to‌ ‌the‌ ‌prejudice‌ ‌of‌‌ Smith‌‌Kline.‌ ‌ NO‌.‌‌From‌‌a‌‌reading‌‌of‌‌the‌‌9‌‌claims‌‌of‌‌the‌‌Letters‌‌Patent‌‌in‌‌relation‌‌to‌‌ The‌‌‌making,‌‌using,‌‌offering‌‌for‌‌sale,‌‌selling,‌‌or‌‌importing‌‌a‌‌ patented‌ ‌product‌ ‌or‌ ‌a‌ ‌product‌ ‌obtained‌ ‌directly‌ ‌or‌ ‌indirectly‌‌ from‌ ‌a‌ ‌patented‌ ‌process,‌ ‌or‌ ‌the‌ ‌use‌ ‌of‌ ‌a‌ ‌patented‌ ‌process‌‌ without‌ ‌the‌ ‌authorization‌ ‌of‌ ‌the‌ ‌patentee‌ ‌constitutes‌ ‌patent‌‌ infringement.‌ ‌ 5. The‌‌court‌‌may,‌‌in‌‌its‌‌discretion,‌‌order‌‌that‌‌the‌‌infringing‌‌goods‌‌ be‌ ‌disposed‌ ‌of‌ ‌outside‌ ‌the‌ ‌channels‌ ‌of‌ ‌commerce‌ ‌or‌‌ destroyed‌,‌‌without‌‌compensation‌.‌ ‌ 6. Anyone‌ ‌who‌ ‌actively‌ ‌induces‌‌the‌‌infringement‌‌of‌‌a‌‌patent‌‌or‌‌ provides‌‌the‌‌infringer‌‌with‌‌a‌‌component‌‌of‌‌a‌‌patented‌‌product‌‌ shall‌‌be‌‌liable‌‌as‌‌a‌‌‌contributory‌‌infringer‌‌‌and‌‌shall‌‌be‌‌‌jointly‌‌ and‌‌severally‌‌liable‌‌‌with‌‌the‌‌infringer.‌‌(§ ‌ 76‌)‌‌ ‌ If‌ ‌infringement‌ ‌is‌ ‌repeated‌ ‌after‌ ‌finality‌ ‌of‌ ‌the‌ ‌judgment‌ ‌of‌ ‌the‌‌ court‌‌against‌‌the‌‌infringer,‌‌the‌‌offenders‌‌shall‌‌be‌c‌ riminally‌‌liable‌.‌ ‌ Phil.‌‌Pharmawealth,‌‌Inc.‌‌v.‌‌Pfizer,‌‌Inc.‌‌‌2010‌‌ ‌ Can‌ ‌an‌ ‌injunctive‌ ‌relief‌ ‌be‌ ‌issued‌ ‌based‌ ‌on‌ ‌an‌ ‌action‌ ‌of‌ ‌patent‌‌ infringement‌ ‌when‌ ‌the‌ ‌patent‌ ‌allegedly‌ ‌infringed‌ ‌has‌ ‌already‌ lapsed?‌ ‌ NO‌.‌‌Pfizer‌‌no‌‌longer‌‌possess‌‌any‌‌right‌‌of‌‌monopoly‌‌after‌‌the‌‌patent‌‌ expired‌ ‌on‌ ‌July‌ ‌2004‌ ‌and,‌ ‌as‌ ‌such,‌ ‌there‌ ‌is‌ ‌no‌ ‌more‌ ‌basis‌ ‌for‌ ‌the‌‌ issuance‌‌of‌‌a‌‌restraining‌‌order‌‌or‌‌injunction‌‌against‌‌petitioner‌‌insofar‌‌ as‌‌the‌‌disputed‌‌patent‌‌is‌‌concerned.‌ ‌ What‌‌tribunal‌‌has‌‌jurisdiction‌‌to‌‌review‌‌the‌‌decisions‌‌of‌‌the‌‌Director‌‌ of‌‌Legal‌‌Affairs‌‌of‌‌the‌‌Intellectual‌‌Property‌‌Office?‌ ‌ In‌ ‌this‌‌case,‌‌the‌‌‌CA‌.‌‌It‌‌is‌‌true‌‌that‌‌under‌‌Section‌‌7(b)‌‌of‌ ‌RA‌‌8293,‌‌ the‌ ‌Director‌ ‌General‌ ‌of‌ ‌the‌ ‌IPO‌ ‌exercises‌ ‌exclusive‌ ‌appellate‌‌ jurisdiction‌ ‌over‌ ‌all‌ ‌decisions‌ ‌rendered‌ ‌by‌ ‌the‌ ‌Director‌ ‌of‌ ‌the‌‌ BLA-IPO.‌ ‌However,‌ ‌what‌ ‌is‌ ‌being‌‌questioned‌‌before‌‌the‌‌CA‌ ‌is‌‌not‌‌a‌‌ decision,‌ ‌but‌ ‌an‌ ‌interlocutory‌ ‌order‌ ‌of‌ ‌the‌ ‌BLA-IPO‌ ‌denying‌‌ respondents'‌ ‌motion‌ ‌to‌ ‌extend‌‌the‌‌life‌‌of‌‌the‌‌preliminary‌‌injunction‌‌ issued‌‌in‌‌their‌‌favor.‌ ‌ c.‌‌Prescriptive‌‌period‌ No‌ ‌damages‌ ‌can‌ ‌be‌ ‌recovered‌ ‌for‌ ‌acts‌ ‌of‌‌infringement‌‌committed‌‌ more‌ ‌than‌ ‌four‌‌(4)‌‌years‌‌‌before‌‌the‌‌institution‌‌of‌‌the‌‌action‌‌for‌‌ infringement.‌‌(§ ‌ 79‌)‌‌ ‌ The‌ ‌criminal‌ ‌action‌ ‌herein‌ ‌provided‌ ‌shall‌ prescribe‌ ‌in‌ ‌three‌‌ (3)‌‌years‌‌‌from‌‌date‌‌of‌‌the‌‌commission‌‌of‌‌the‌‌crime.‌‌(§‌ 84‌)‌ ‌ d.‌‌Defenses‌‌in‌‌action‌‌for‌‌infringement‌ ‌ In‌ ‌an‌ ‌action‌ ‌for‌ ‌infringement,‌ ‌the‌ ‌defendant,‌ ‌in‌ ‌addition‌ ‌to‌ ‌other‌‌ defenses‌‌available‌‌to‌‌him,‌‌may‌‌show‌‌the‌‌‌invalidity‌‌of‌‌the‌‌patent,‌‌ or‌ ‌any‌ ‌claim‌‌thereof,‌‌on‌‌any‌‌of‌‌the‌‌grounds‌‌on‌‌which‌‌a‌‌petition‌‌of‌‌ cancellation‌‌can‌‌be‌‌brought.‌‌(§ ‌ 82‌)‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 98‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ 9.‌‌Licensing‌ ‌ a.‌‌Voluntary‌ ‌ Technology‌ ‌transfer‌ ‌arrangements‌ ‌—‌ ‌Refer‌ ‌to‌ ‌contracts‌ ‌or‌‌ agreements‌‌involving‌‌ ‌ a) the‌ ‌transfer‌ ‌of‌ ‌systematic‌ ‌knowledge‌‌for‌‌the‌‌manufacture‌‌of‌‌a‌‌ product,‌‌the‌‌application‌‌of‌‌a‌‌process,‌‌or‌‌rendering‌‌of‌‌a‌‌service‌‌ including‌‌management‌‌contracts;‌‌and‌‌ ‌ b) the‌‌transfer,‌‌assignment‌‌or‌‌licensing‌‌of‌‌all‌‌forms‌‌of‌‌intellectual‌‌ property‌ ‌rights,‌ ‌including‌ ‌licensing‌ ‌of‌ ‌computer‌ ‌software‌‌ except‌c‌ omputer‌‌software‌‌developed‌‌for‌‌mass‌‌market.‌ ‌ The‌ ‌Requirement‌ ‌for‌ ‌Registration.‌ ‌—‌ ‌Technology‌ ‌transfer‌‌ arrangements‌‌that‌‌ ‌ b.‌‌Compulsory‌ ‌ §93‌.‌ ‌Grounds‌ ‌for‌ ‌Compulsory‌ ‌Licensing‌.‌ ‌—‌ ‌The‌ ‌Director‌‌ General‌ ‌of‌ ‌the‌ ‌IPO‌ ‌may‌ ‌grant‌ ‌a‌ ‌license‌ ‌to‌ ‌exploit‌ ‌a‌ ‌patented‌‌ invention,‌‌‌even‌‌without‌‌the‌‌agreement‌‌of‌‌the‌‌patent‌‌owner‌,‌‌in‌‌ favor‌ ‌of‌ ‌any‌ ‌person‌ ‌who‌ ‌has‌ ‌shown‌ ‌his‌ ‌capability‌ ‌to‌ ‌exploit‌ ‌the‌‌ invention,‌‌under‌‌any‌‌of‌‌the‌‌following‌‌circumstances:‌ ‌ 1. Urgency‌.‌ ‌National‌ ‌emergency‌ ‌or‌ ‌other‌ ‌circumstances‌ ‌of‌‌ extreme‌‌urgency;‌ ‌ 2. Vital‌‌Sector.‌‌‌Where‌‌the‌‌‌public‌‌interest‌,‌‌in‌‌particular,‌‌national‌‌ security,‌ ‌nutrition,‌ ‌health‌ ‌or‌ ‌the‌ ‌development‌ ‌of‌ ‌other‌ ‌vital‌‌ sectors‌ ‌of‌ ‌the‌ ‌national‌ ‌economy‌ ‌as‌ ‌determined‌ ‌by‌ ‌the‌‌ appropriate‌‌agency‌‌of‌‌the‌‌Government,‌s‌ o‌‌requires‌;‌‌or‌ ‌ 3. a) Conform‌‌with‌‌the‌‌provisions‌‌of‌‌Sec‌‌87‌‌on‌‌‌Prohibited‌‌Clauses‌‌ and‌‌Sec‌‌88‌‌on‌‌‌Mandatory‌‌Provisions‌‌‌need‌‌not‌‌be‌‌registered‌‌ with‌‌the‌‌Documentation,‌‌Information‌‌and‌‌Technology‌‌Transfer‌‌ Bureau.‌‌ ‌ b) Non-conformance‌ ‌with‌ ‌any‌ ‌of‌ ‌the‌ ‌provisions‌ ‌of‌ ‌Sections‌ ‌87‌‌ and‌ ‌88,‌ ‌however,‌ ‌shall‌ ‌automatically‌ ‌render‌ ‌the‌ ‌technology‌‌ transfer‌ ‌arrangement‌ ‌unenforceable‌,‌ ‌unless‌ ‌said‌ ‌technology‌‌ transfer‌ ‌arrangement‌ ‌is‌ ‌approved‌ ‌and‌ ‌registered‌ ‌under‌ ‌the‌‌ provisions‌‌of‌‌Section‌‌91‌‌on‌E ‌ xceptional‌‌Cases‌.‌ ‌ 4. 5. Prohibited‌ ‌Clauses‌ ‌are‌‌those‌‌deemed‌‌‌prima‌‌facie‌‌to‌‌have‌‌an‌‌‌adverse‌‌ effect‌‌on‌‌competition‌‌and‌‌trade‌.‌ ‌ Exceptional‌‌or‌‌meritorious‌‌cases‌‌are‌‌those‌‌where‌‌substantial‌‌benefits‌‌ will‌‌accrue‌‌to‌‌the‌‌economy,‌‌such‌‌as‌‌ ‌ a) high‌‌technology‌‌content,‌‌ ‌ b) increase‌‌in‌‌foreign‌‌exchange‌‌earnings,‌‌ ‌ c) employment‌‌generation,‌‌ ‌ d) regional‌‌dispersal‌‌of‌‌industries‌‌and/or‌‌substitution‌‌with‌‌or‌‌use‌‌ of‌‌local‌‌raw‌‌materials,‌‌or‌ ‌ e) in‌‌the‌‌case‌‌of‌‌Board‌‌of‌‌Investments,‌‌registered‌‌companies‌‌with‌‌ pioneer‌‌status.‌ ‌ 6. become‌ ‌joint‌ ‌owners‌ ‌thereof.‌ ‌An‌‌assignment‌‌may‌‌be‌‌limited‌‌to‌‌a‌‌ specified‌‌territory.‌‌(§ ‌ 104‌)‌ ‌ The‌‌assignment‌‌must‌‌be‌‌ ‌ 1. in‌‌writing,‌‌ ‌ 2. acknowledged‌ ‌before‌ ‌a‌ ‌notary‌ ‌public‌ ‌or‌ ‌other‌ ‌officer‌‌ authorized‌‌to‌‌administer‌‌oath‌‌or‌‌perform‌‌notarial‌‌acts,‌‌and‌‌ ‌ 3. certified‌ ‌under‌ ‌the‌ ‌hand‌ ‌and‌ ‌official‌ ‌seal‌‌of‌‌the‌‌notary‌‌or‌‌ such‌‌other‌‌officer.‌‌(§ ‌ 105‌)‌ ‌ Law‌‌on‌‌Trademark‌ ‌ Trademark‌‌Regulations‌‌of‌‌2017‌ ‌ Anti-Competitive‌ ‌Exploitation.‌ ‌Where‌ ‌a‌ ‌judicial‌ ‌or‌‌ 1.‌‌Definitions‌‌of‌‌marks,‌‌collective‌‌marks,‌‌and‌‌trade‌‌names‌ ‌ administrative‌ ‌body‌ ‌has‌ ‌determined‌ ‌that‌ ‌the‌ ‌manner‌ ‌of‌‌ "‌Mark‌"‌ ‌is‌ ‌any‌ ‌visible‌ ‌sign‌ ‌capable‌ ‌of‌ ‌distinguishing‌ ‌the‌ ‌goods‌‌ exploitation‌ ‌by‌ ‌the‌ ‌owner‌ ‌of‌ ‌the‌ ‌patent‌ ‌or‌ ‌his‌‌licensee‌‌is‌‌ (trademark)‌‌or‌‌services‌‌(service‌‌mark)‌‌of‌‌an‌‌enterprise.‌ ‌ anti-competitive‌;‌‌or‌ ‌ "‌Collective‌ ‌Mark‌"‌ ‌is‌ ‌any‌ ‌visible‌ ‌sign‌ ‌designated‌‌as‌‌such‌‌in‌‌the‌‌ Public‌ ‌Non-Commercial‌ ‌Use.‌ ‌In‌ ‌case‌ ‌of‌ ‌public‌‌ application‌‌for‌‌registration‌‌and‌‌capable‌‌of‌‌distinguishing‌‌the‌‌origin‌‌ non-commercial‌ ‌use‌ ‌of‌ ‌the‌ ‌patent‌‌by‌‌the‌‌patentee,‌‌without‌‌ or‌‌any‌‌other‌‌common‌‌characteristic,‌‌including‌‌the‌‌quality‌‌of‌‌goods‌‌ satisfactory‌‌reason;‌ ‌ or‌‌services‌‌of‌‌different‌‌enterprises.‌ ‌ Non-Commercial‌ ‌Use.‌ ‌If‌ ‌the‌ ‌patented‌‌invention‌‌is‌‌‌not‌‌being‌‌ Trademark‌‌‌is‌‌any‌‌distinctive‌‌word,‌‌name,‌‌symbol,‌‌emblem,‌‌sign,‌‌ worked‌‌in‌‌the‌‌Philippines‌‌on‌‌a‌‌commercial‌‌scale‌,‌‌although‌‌ capable‌‌of‌‌being‌‌worked,‌‌without‌‌satisfactory‌‌reason:‌‌ ‌ or‌ ‌device,‌ ‌or‌ ‌any‌ ‌combination‌ ‌thereof,‌ ‌adopted‌ ‌and‌ ‌used‌ ‌by‌ ‌a‌‌ manufacturer‌‌or‌‌merchant‌‌on‌‌his‌‌goods‌‌to‌‌identify‌‌and‌‌distinguish‌‌ Provided‌,‌ ‌That‌ ‌the‌ ‌importation‌ ‌of‌ ‌the‌ ‌patented‌ ‌article‌ ‌shall‌‌ them‌‌from‌‌those‌‌manufactured,‌‌sold,‌‌or‌‌dealt‌‌by‌‌others.‌ ‌ constitute‌‌working‌‌or‌‌using‌‌the‌‌patent;‌‌and‌ ‌ Trade‌ ‌Name‌ ‌means‌ ‌the‌ ‌name‌ ‌or‌ ‌designation‌ ‌identifying‌ ‌or‌‌ Unmet‌ ‌Demand.‌ ‌Where‌ ‌the‌ ‌demand‌ ‌for‌ ‌patented‌ ‌drugs‌‌ distinguishing‌‌an‌‌enterprise‌.‌ ‌ and‌‌medicines‌‌is‌‌not‌‌being‌‌met‌‌‌to‌‌an‌‌adequate‌‌extent‌‌and‌‌on‌‌ reasonable‌‌terms,‌‌as‌‌determined‌‌by‌‌the‌‌Secretary‌‌of‌‌the‌‌DOH.‌ ‌ 10.‌‌Assignment‌‌and‌‌transmission‌‌of‌‌rights‌ ‌ Inventions‌ ‌and‌ ‌any‌ ‌right,‌ ‌title‌ ‌or‌ ‌interest‌ ‌in‌ ‌and‌ ‌to‌ ‌patents‌ ‌and‌‌ inventions‌ ‌covered‌ ‌thereby,‌ ‌may‌ ‌be‌ ‌assigned‌ ‌or‌ ‌transmitted‌ ‌by‌‌ inheritance‌ ‌or‌ ‌bequest‌ ‌or‌ ‌may‌ ‌be‌ ‌the‌ ‌subject‌ ‌of‌ ‌a‌ ‌license‌‌ contract.‌(‌ ‌§103‌)‌ ‌ In‌‌Philippine‌‌jurisprudence,‌‌the‌‌function‌‌of‌‌a‌‌trademark‌‌is‌‌ ‌ 1) to‌‌point‌‌out‌‌distinctly‌‌the‌o ‌ rigin‌‌or‌‌ownership‌o ‌ f‌‌the‌‌goods;‌‌ ‌ 2) to‌‌secure‌‌to‌‌him‌‌the‌f‌ ruit‌‌of‌‌his‌‌industry‌‌and‌‌skill;‌‌ ‌ 3) to‌‌assure‌‌the‌‌public‌‌that‌‌they‌‌are‌‌procuring‌‌the‌g ‌ enuine‌‌article;‌‌ 4) to‌‌‌protect‌‌‌the‌‌manufacturer‌‌against‌‌substitution‌‌and‌‌sale‌‌of‌‌an‌‌ inferior‌‌and‌‌different‌‌article‌‌as‌‌his‌‌product.‌‌(M ‌ irpuri‌‌v.‌‌CA‌)‌ ‌ An‌‌assignment‌‌may‌‌be‌‌of‌‌the‌‌entire‌‌right,‌‌title‌‌or‌‌interest‌‌in‌‌and‌‌to‌‌ Trademarks‌‌perform‌‌three‌‌(3)‌‌distinct‌‌functions:‌‌ ‌ the‌ ‌patent‌ ‌and‌ ‌the‌ ‌invention‌ ‌covered‌ ‌thereby,‌ ‌or‌ ‌of‌ ‌an‌ ‌undivided‌‌ 1) they‌ ‌indicate‌ ‌origin‌ ‌or‌ ‌ownership‌ ‌of‌ ‌the‌ ‌articles‌ ‌to‌ ‌which‌‌ share‌‌of‌‌the‌‌entire‌‌patent‌‌and‌‌invention,‌‌in‌‌which‌‌event‌‌the‌‌parties‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 99‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ they‌‌are‌‌attached;‌‌ ‌ 2) they‌ ‌guarantee‌ ‌that‌ ‌those‌ ‌articles‌ ‌come‌ ‌up‌ ‌to‌ ‌a‌ ‌certain‌‌ standard‌‌of‌‌quality‌;‌‌and‌‌ ‌ 3) they‌ ‌advertise‌ ‌the‌‌articles‌‌they‌‌symbolize.‌‌(‌W‌‌Land‌‌Holding,‌‌ Inc.‌‌v.‌‌Starwood‌‌Hotels‌‌and‌‌Resorts‌‌Worldwide,‌‌Inc.‌‌2 ‌ 017‌)‌ which‌‌the‌‌claim‌‌of‌‌distinctiveness‌‌is‌‌made.‌‌(‌Shang‌‌Properties‌‌ Realty‌‌v.‌‌St.‌‌Francis‌‌Development‌‌‌2014‌)‌ ‌ IOW,‌‌for‌‌a‌‌mark‌‌to‌‌be‌d ‌ enied‌‌registration‌,‌‌it‌‌must‌‌both‌‌be:‌ ‌ 1. Geographically-descriptive;‌‌AND‌ ‌ 2. That‌ ‌the‌ ‌public‌ ‌would‌ ‌make‌ ‌a‌ ‌goods/place‌ ‌association,‌‌ believing‌‌that‌‌the‌‌goods‌‌originate‌‌in‌‌that‌‌place.‌ ‌ There‌ ‌is‌ ‌also‌ ‌an‌ ‌underlying‌ ‌economic‌ ‌justification‌ ‌for‌ ‌the‌‌ protection‌ ‌of‌ ‌trademarks:‌ ‌an‌ ‌effective‌ ‌trademark‌‌system‌‌helps‌‌ bridge‌ ‌the‌ ‌information‌ ‌gap‌ ‌between‌ ‌producers‌ ‌and‌‌ 2.‌‌Acquisition‌‌of‌‌ownership‌‌of‌‌mark‌ ‌ consumers‌,‌ ‌and‌ ‌thus,‌ ‌lowers‌ ‌the‌‌costs‌‌incurred‌‌by‌‌consumers‌‌in‌‌ The‌‌rights‌‌in‌‌a‌‌mark‌‌shall‌‌be‌‌acquired‌‌through‌r ‌ egistration‌.‌ ‌ searching‌ ‌for‌ ‌and‌ ‌deciding‌ ‌what‌ ‌products‌ ‌to‌‌purchase.‌‌(‌Citigroup,‌‌ Zuneca‌‌Pharmaceutical‌‌v.‌‌Natrapharm‌‌‌2020‌‌En‌‌Banc‌ ‌ Inc.‌‌v.‌‌Citystate‌‌Savings‌‌Bank,‌‌Inc.‌‌‌2018‌‌Leonen,‌‌J)‌ ‌ ‌ GENERIC‌ ‌TERMS‌ ‌are‌‌commonly‌‌used‌‌as‌‌the‌‌name‌‌or‌‌description‌‌of‌‌a‌‌ kind‌‌of‌‌goods.‌ ‌ What‌ ‌is‌ ‌prohibited‌ ‌is‌ ‌not‌ ‌having‌ ‌a‌ ‌generic‌ ‌mark,‌‌but‌‌having‌‌such‌‌ generic‌ ‌mark‌ ‌being‌ ‌identifiable‌ ‌to‌ ‌the‌ ‌good‌ ‌or‌ ‌service.‌‌‌(K ‌ ensonic,‌‌ Inc.‌‌v.‌‌Uni-Line‌‌Multi-Resources,‌‌Inc.‌‌‌2018‌)‌ ‌ DESCRIPTIVE‌ ‌TERMS‌ ‌convey‌ ‌the‌ ‌characteristics,‌‌functions,‌‌qualities‌‌ or‌‌ingredients‌‌of‌‌a‌‌product‌‌to‌‌one‌‌who‌‌has‌‌never‌‌seen‌‌or‌‌does‌‌not‌‌know‌‌ that‌‌it‌‌exists.‌ ‌ SUGGESTIVE‌ ‌TERMS‌ ‌are‌ ‌those‌ ‌which‌ ‌require‌ ‌“imagination,‌ ‌thought‌‌ and‌‌perception‌‌to‌‌reach‌‌a‌‌conclusion‌‌as‌‌to‌‌the‌‌nature‌‌of‌‌the‌‌goods"‌‌and‌‌ are‌‌eligible‌‌for‌‌protection‌i‌ n‌‌the‌‌absence‌‌of‌‌secondary‌‌meaning‌.‌ ‌ SECONDARY‌ ‌MEANING‌ ‌is‌ ‌established‌ ‌when‌ ‌a‌ ‌descriptive‌ ‌mark‌ ‌no‌‌ longer‌‌causes‌‌the‌‌public‌‌to‌‌associate‌‌the‌‌goods‌‌with‌‌a‌‌particular‌‌place,‌‌ but‌‌to‌‌associate‌‌the‌‌goods‌‌with‌‌a‌‌particular‌‌source.‌ ‌ What‌‌are‌‌the‌‌requirements‌‌to‌‌conclude‌‌that‌‌a‌‌ geographically-descriptive‌‌mark‌‌has‌‌acquired‌‌secondary‌‌ meaning‌?‌ ‌ a) the‌ ‌secondary‌ ‌meaning‌ ‌must‌ ‌have‌ ‌arisen‌ ‌as‌ ‌a‌ ‌result‌ ‌of‌‌ substantial‌‌commercial‌‌use‌‌‌of‌‌a‌‌mark‌‌in‌‌the‌‌Philippines;‌ ‌ b) such‌ ‌use‌ ‌must‌ ‌result‌ ‌in‌ ‌the‌ ‌distinctiveness‌ ‌of‌ ‌the‌ ‌mark‌‌ insofar‌‌as‌‌the‌‌goods‌‌or‌‌the‌‌products‌‌are‌‌concerned;‌‌and‌ ‌ c) proof‌ ‌of‌ ‌substantially‌ ‌exclusive‌ ‌and‌ ‌continuous‌ ‌commercial‌‌ use‌ ‌in‌ ‌the‌ ‌Philippines‌ ‌for‌ ‌five‌ ‌(5)‌ ‌years‌ ‌before‌ ‌the‌ ‌date‌ ‌on‌‌ How‌‌is‌‌ownership‌‌over‌‌a‌‌trademark‌‌acquired?‌‌ ‌ REGISTRATION‌.‌ ‌Under‌ ‌the‌ ‌IP‌ ‌Code,‌ ‌ownership‌ ‌of‌ ‌a‌ ‌mark‌ ‌is‌‌ acquired‌‌through‌‌registration.‌‌The‌‌prima‌‌facie‌‌nature‌‌of‌‌the‌‌certificate‌‌ of‌ ‌registration‌ ‌is‌ ‌meant‌ ‌to‌ ‌recognize‌ ‌the‌ ‌instances‌ ‌when‌ ‌the‌‌ certificate‌‌of‌‌registration‌‌is‌‌not‌‌reflective‌‌of‌‌ownership‌‌of‌‌the‌‌holder‌‌ thereof,‌‌such‌‌as‌‌when:‌‌ ‌ 1) the‌ ‌first‌ ‌registrant‌ ‌has‌ ‌acquired‌ ‌ownership‌ ‌of‌ ‌the‌ ‌mark‌‌ through‌ ‌registration‌ ‌but‌ ‌subsequently‌ ‌lost‌ ‌the‌ ‌same‌‌due‌‌to‌‌ non-use‌‌or‌‌abandonment‌‌(e.g.,‌‌failure‌‌to‌‌file‌‌the‌‌Declaration‌‌ of‌‌Actual‌‌Use);‌ ‌ 2) the‌‌registration‌‌was‌‌done‌‌in‌‌bad‌‌faith;‌ ‌ 3) the‌‌mark‌‌itself‌‌becomes‌‌generic;‌ ‌ 4) the‌‌mark‌‌was‌‌registered‌‌contrary‌‌to‌‌the‌‌IP‌‌Code;‌‌or‌ ‌ 5) the‌‌registered‌‌mark‌‌is‌‌being‌‌used‌‌by,‌‌or‌‌with‌‌the‌‌permission‌‌ of,‌ ‌the‌ ‌registrant‌ ‌so‌ ‌as‌ ‌to‌ ‌misrepresent‌ ‌the‌ ‌source‌ ‌of‌ ‌the‌‌ goods‌‌or‌‌services‌‌on‌‌or‌‌in‌‌connection‌‌with‌‌which‌‌the‌‌mark‌‌ is‌‌used.‌ ‌ Since‌‌Natrapharm‌‌was‌‌not‌‌shown‌‌to‌‌have‌‌been‌‌in‌‌bad‌‌faith,‌‌it‌‌is‌‌thus‌‌ considered‌‌to‌‌have‌‌acquired‌‌all‌‌the‌‌rights‌‌of‌‌a‌‌trademark‌‌owner‌‌under‌‌ the‌‌IP‌‌Code‌‌upon‌‌the‌‌registration‌‌of‌‌the‌‌"ZYNAPSE"‌‌mark.‌ ‌ Consequently,‌ ‌Zuneca's‌ ‌counterclaims‌ ‌against‌ ‌Natrapharm‌ ‌were‌‌ correctly‌ ‌dismissed‌ ‌by‌‌the‌‌lower‌‌courts.‌‌To‌‌be‌‌sure,‌‌Zuneca‌‌did‌‌not‌‌ have‌ ‌any‌ ‌right‌ ‌to‌ ‌prevent‌ ‌third‌ ‌parties,‌ ‌including‌‌Natrapharm,‌‌from‌‌ using‌ ‌marks‌ ‌confusingly‌ ‌similar‌ ‌to‌‌its‌‌unregistered‌‌"ZYNAPS"‌‌mark‌‌ because‌ ‌it‌ ‌is‌ ‌not‌ ‌an‌ ‌"owner‌ ‌of‌ ‌a‌ ‌registered‌ ‌mark"‌ ‌contemplated‌ ‌in‌‌ Section‌‌147.1.‌ ‌ However,‌ ‌Zuneca,‌ ‌as‌ ‌a‌ ‌prior‌ ‌user‌ ‌in‌ ‌good‌ ‌faith‌,‌ ‌is‌ ‌protected‌ ‌by‌‌ Section‌ ‌159.1‌ ‌and‌ ‌cannot‌ ‌be‌ ‌prevented‌ ‌by‌‌Natrapharm‌‌from‌‌using‌‌ its‌‌ZYNAPS‌‌trademark.‌ ‌ Birkenstock‌‌Orthopaedie‌‌Gmbh‌‌and‌‌Co.‌‌Kg‌‌v.‌‌ Philippine‌‌Shoe‌‌Expo‌‌Marketing‌‌2 ‌ 013‌ ‌ WON‌ ‌the‌ ‌subject‌ ‌marks‌‌should‌‌be‌‌allowed‌‌registration‌‌in‌‌the‌‌name‌‌ of‌‌petitioner.‌ ‌ YES‌.‌‌It‌‌must‌‌be‌‌emphasized‌‌that‌‌‌registration‌‌of‌‌a‌‌trademark,‌‌by‌‌itself,‌‌ is‌ ‌not‌ ‌a‌ ‌mode‌ ‌of‌ ‌acquiring‌ ‌ownership‌.‌ ‌If‌ ‌the‌ ‌applicant‌ ‌is‌ ‌not‌ ‌the‌‌ owner‌ ‌of‌‌the‌‌trademark,‌‌he‌‌has‌‌no‌‌right‌‌to‌‌apply‌‌for‌‌its‌‌registration.‌‌ Registration‌ ‌merely‌ ‌creates‌ ‌a‌ ‌prima‌ ‌facie‌ ‌presumption‌ ‌of‌ ‌the‌‌ validity‌ ‌of‌ ‌the‌ ‌registration‌,‌ ‌of‌ ‌the‌ ‌registrant’s‌ ‌ownership‌ ‌of‌ ‌the‌‌ trademark,‌ ‌and‌ ‌of‌ ‌the‌ ‌exclusive‌ ‌right‌ ‌to‌ ‌the‌ ‌use‌ ‌thereof.‌ ‌Such‌‌ presumption,‌‌just‌‌like‌‌the‌‌presumptive‌‌regularity‌‌in‌‌the‌‌performance‌‌ of‌ ‌official‌ ‌functions,‌ ‌is‌‌rebuttable‌‌and‌‌must‌‌give‌‌way‌‌to‌‌evidence‌‌to‌‌ the‌‌contrary.‌ ‌ In‌ ‌the‌ ‌instant‌ ‌case,‌ ‌petitioner‌ ‌was‌ ‌able‌ ‌to‌ ‌establish‌ ‌that‌ ‌it‌ ‌is‌ ‌the‌‌ owner‌‌of‌‌the‌‌mark‌‌“BIRKENSTOCK.”‌‌It‌‌submitted‌‌evidence‌‌relating‌‌to‌‌ the‌ ‌origin‌ ‌and‌ ‌history‌ ‌of‌ ‌“BIRKENSTOCK”‌ ‌and‌ ‌its‌‌use‌‌in‌‌commerce‌‌ long‌ ‌before‌ ‌respondent‌ ‌was‌ ‌able‌ ‌to‌ ‌register‌ ‌the‌ ‌same‌ ‌here‌ ‌in‌ ‌the‌‌ Philippines.‌ ‌ FC‌‌Philippines,‌‌Inc.‌‌v.‌‌Barrio‌‌Fiesta‌‌Manufacturing‌‌‌2016‌ ‌ The‌‌ownership‌‌of‌‌a‌‌trademark‌‌is‌a ‌ cquired‌‌by‌‌ ‌ 1. its‌‌registration‌A ‌ ND‌ ‌ 2. its‌‌actual‌‌use‌‌ ‌ by‌‌the‌‌manufacturer‌‌or‌‌distributor‌‌of‌‌the‌‌goods‌‌made‌‌available‌‌to‌‌the‌‌ purchasing‌‌public.‌ ‌ A‌‌certificate‌‌of‌‌registration‌‌of‌‌a‌‌mark,‌‌once‌‌issued,‌‌constitutes‌‌‌prima‌‌ facie‌‌evidence‌‌of‌ ‌ 1. the‌‌validity‌‌of‌‌the‌‌registration,‌‌ ‌ 2. the‌‌registrant's‌‌ownership‌‌of‌‌the‌‌mark,‌‌and‌‌ ‌ 3. the‌‌registrant's‌‌exclusive‌‌right‌‌to‌‌use‌‌the‌‌same‌‌in‌‌connection‌‌ with‌‌the‌‌goods‌‌or‌‌services‌‌and‌‌those‌‌that‌‌are‌‌related‌‌thereto‌‌ specified‌‌in‌‌the‌‌certificate.‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 100‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ R.A.‌‌No.‌‌8293,‌‌however,‌‌requires‌‌the‌‌applicant‌‌for‌‌registration‌‌or‌‌the‌‌ registrant‌‌to‌‌file‌‌a‌‌declaration‌‌of‌‌actual‌‌use‌‌(DAU)‌‌of‌‌the‌‌mark,‌‌with‌‌ evidence‌ ‌to‌ ‌that‌ ‌effect,‌ ‌within‌ ‌three‌ ‌(3)‌ ‌years‌ ‌from‌ ‌the‌ ‌filing‌‌of‌‌ the‌‌application‌‌for‌‌registration‌;‌‌otherwise,‌‌the‌‌application‌‌shall‌‌be‌‌ refused‌‌or‌‌the‌‌mark‌‌shall‌‌be‌‌removed‌‌from‌‌the‌‌register.‌ ‌ 3.‌‌Acquisition‌‌of‌‌ownership‌‌of‌‌trade‌‌name‌ ‌ the‌ ‌name,‌ ‌signature,‌ ‌or‌ ‌portrait‌‌of‌‌a‌‌deceased‌‌President‌‌of‌‌the‌‌ Philippines,‌ ‌during‌ ‌the‌ ‌life‌ ‌of‌ ‌the‌ ‌surviving‌ ‌spouse,‌ ‌if‌ ‌any,‌‌ except‌b ‌ y‌‌the‌‌latter's‌‌written‌‌consent;‌ ‌ WON‌ ‌petitioner‌ ‌is‌ ‌entitled‌ ‌to‌‌its‌‌trademark‌‌registration‌‌of‌‌“KOLIN”‌‌ over‌‌its‌‌specific‌‌goods‌‌of‌‌television‌‌sets‌‌and‌‌DVD‌‌players.‌ ‌ d. Is‌ ‌identical‌ ‌with‌ ‌a‌‌registered‌‌mark‌‌‌belonging‌‌to‌‌a‌‌different‌‌ proprietor‌‌or‌a ‌ ‌‌mark‌‌with‌‌an‌‌earlier‌‌filing‌‌or‌‌priority‌‌date‌;‌ ‌ automatically‌ ‌preclude‌ ‌the‌ ‌registration‌ ‌of‌ ‌what‌‌appears‌‌to‌‌be‌‌ an‌‌identical‌‌mark‌,‌‌if‌‌that‌‌be‌‌the‌‌case.‌‌ ‌ e. Is‌ ‌identical‌ ‌with,‌ ‌or‌ ‌confusingly‌ ‌similar‌ ‌to,‌ ‌or‌ ‌constitutes‌ ‌a‌‌ translation‌ ‌of‌ ‌a‌ ‌mark‌ ‌which‌ ‌is‌ ‌considered‌ ‌by‌ ‌the‌ ‌competent‌‌ authority‌ ‌of‌ ‌the‌ ‌Philippines‌ ‌to‌ ‌be‌ W ‌ ELL-KNOWN‌‌ internationally‌‌and‌‌in‌‌the‌‌Philippines‌.‌‌ ‌ It‌‌is‌‌‌hornbook‌‌doctrine‌‌that‌‌‌emphasis‌‌should‌‌be‌‌on‌‌the‌‌similarity‌‌ of‌‌the‌‌products‌‌involved‌‌and‌‌not‌‌on‌‌the‌‌arbitrary‌‌classification‌‌ or‌‌general‌‌description‌‌of‌‌their‌‌properties‌‌or‌‌characteristics.‌‌ ‌ Tradename‌‌Infringement‌ ‌ A‌ ‌trade‌ ‌name‌ ‌need‌ ‌not‌ ‌be‌ ‌registered‌ ‌with‌ ‌the‌ ‌IPO‌ ‌before‌ ‌an‌‌ infringement‌‌suit‌‌may‌‌be‌‌filed‌‌by‌‌its‌‌owner‌‌against‌‌the‌‌owner‌‌of‌‌an‌‌ infringing‌ ‌trademark.‌ ‌All‌ ‌that‌ ‌is‌ ‌required‌‌is‌‌that‌‌the‌‌trade‌‌name‌‌is‌‌ previously‌ ‌used‌ ‌in‌ ‌trade‌ ‌or‌ ‌commerce‌ ‌in‌ ‌the‌ ‌Philippines.‌‌ (‌Coffee‌‌Partners‌‌v.‌‌San‌‌Francisco‌‌Coffee‌‌and‌‌Roastery‌‌‌2010‌)‌ ‌ a) Notwithstanding‌ ‌any‌ ‌laws‌ ‌or‌ ‌regulations‌ ‌providing‌ ‌for‌ ‌any‌ obligation‌ ‌to‌ ‌register‌ ‌trade‌ ‌names,‌ ‌such‌ ‌names‌ ‌shall‌ ‌be‌‌ protected,‌ ‌even‌ ‌prior‌ ‌to‌ ‌or‌ ‌without‌ ‌registration‌,‌ ‌against‌‌ any‌‌unlawful‌‌act‌‌committed‌‌by‌‌third‌‌parties.‌ ‌ b) In‌ ‌particular,‌ ‌any‌ ‌subsequent‌ ‌use‌‌of‌‌the‌‌trade‌‌name‌‌by‌‌a‌‌third‌‌ party,‌‌whether‌‌as‌‌a‌‌trade‌‌name‌‌or‌‌a‌‌mark‌‌or‌‌collective‌‌mark,‌‌or‌‌ any‌‌such‌‌use‌‌of‌‌a‌‌similar‌‌trade‌‌name‌‌or‌‌mark,‌‌likely‌‌to‌‌mislead‌‌ the‌‌public,‌‌shall‌‌be‌‌deemed‌u ‌ nlawful‌.‌‌(‌§165.2‌)‌ ‌ Account‌ ‌shall‌ ‌be‌ ‌taken‌ ‌of‌ ‌the‌ ‌knowledge‌ ‌of‌ ‌the‌ ‌relevant‌‌ sector‌‌of‌‌the‌‌public‌,‌‌rather‌‌than‌‌of‌‌the‌‌public‌‌at‌‌large;‌ ‌ f. DILUTES‌ ‌well-known‌‌marks‌;‌ ‌ g. Is‌‌likely‌‌to‌‌mislead‌‌the‌‌public‌;‌ ‌ h. Consists‌‌exclusively‌‌of‌‌signs‌‌that‌‌are‌g ‌ eneric‌;‌ ‌ i. Consists‌ ‌exclusively‌ ‌of‌ ‌signs‌ ‌or‌ ‌of‌ ‌indications‌ ‌that‌ ‌have‌‌ become‌‌customary‌o ‌ r‌‌usual‌;‌ ‌ j. Consists‌ ‌exclusively‌ ‌of‌ ‌signs‌ ‌or‌‌of‌‌indications‌‌that‌‌may‌‌serve‌‌ in‌ ‌trade‌ ‌to‌ ‌designate‌ ‌the‌ ‌kind,‌ ‌quality,‌ ‌quantity,‌ ‌intended‌‌ purpose,‌ ‌value,‌ ‌geographical‌ ‌origin,‌ ‌time‌ ‌of‌‌production‌‌of‌‌the‌‌ goods‌ ‌or‌ ‌rendering‌ ‌of‌ ‌the‌ ‌services,‌‌or‌‌other‌‌characteristics‌‌of‌‌ the‌‌goods‌‌or‌‌services;‌ ‌ 4.‌‌Non-registrable‌‌marks‌ ‌ A‌ ‌mark‌ ‌is‌ ‌susceptible‌ ‌to‌ ‌registration‌ ‌if‌ ‌it‌ ‌is‌ ‌crafted‌ ‌fancifully‌ ‌or‌‌ arbitrarily‌‌‌and‌‌is‌‌capable‌‌of‌‌identifying‌‌and‌‌distinguishing‌‌the‌‌goods‌‌of‌‌ one‌‌manufacturer‌‌or‌‌seller‌‌from‌‌those‌‌of‌‌another.‌‌Thus,‌‌the‌‌mark‌‌must‌‌ be‌‌distinctive‌.‌‌A‌‌mark‌c‌ annot‌‌be‌‌registered‌‌if‌‌it:‌ ‌ a. Consists‌ ‌of‌ ‌immoral‌,‌ ‌deceptive‌ ‌or‌ ‌scandalous‌ ‌matter,‌ ‌or‌‌ matter‌ ‌which‌ ‌may‌ ‌disparage‌ ‌or‌ ‌falsely‌ ‌suggest‌ ‌a‌‌ connection‌ ‌with‌ ‌persons,‌ ‌living‌‌or‌‌dead,‌‌institutions,‌‌beliefs,‌‌ or‌‌national‌‌symbols,‌‌or‌b ‌ ring‌‌them‌‌into‌‌contempt‌‌or‌‌disrepute‌;‌ ‌ b. Consists‌ ‌of‌ ‌the‌‌‌flag‌‌or‌‌coat‌‌of‌‌arms‌‌or‌‌other‌‌insignia‌‌of‌‌the‌‌ Philippines‌‌or‌‌of‌‌any‌‌foreign‌‌nation,‌‌or‌‌any‌‌simulation‌‌thereof;‌ ‌ c. Consists‌‌of‌‌a‌‌name,‌‌portrait‌‌or‌‌signature‌‌identifying‌‌a‌‌particular‌‌ living‌‌individual‌e‌ xcept‌b ‌ y‌‌the‌‌person's‌‌written‌‌consent;‌‌or‌‌ ‌ k. Consists‌‌of‌‌shapes‌;‌ ‌ l. Consists‌‌of‌‌color‌‌alone‌,‌‌unless‌‌defined‌‌by‌‌a‌‌given‌‌form;‌‌or‌ ‌ m. Is‌‌contrary‌‌to‌‌public‌‌order‌‌or‌‌morality‌.‌ ‌ As‌ ‌regards‌ ‌signs‌ ‌or‌ ‌devices‌ ‌mentioned‌ ‌in‌ ‌paragraphs‌ ‌(j),‌‌(k),‌‌and‌‌ (l),‌‌nothing‌‌shall‌‌prevent‌‌the‌‌registration‌‌of‌‌any‌‌such‌‌sign‌‌or‌‌device‌‌ which‌h ‌ as‌‌become‌‌distinctive‌.‌‌ ‌ The‌ ‌Office‌ ‌may‌ ‌accept‌ ‌as‌ ‌prima‌ ‌facie‌ ‌evidence‌ ‌that‌ ‌the‌‌mark‌‌has‌‌ become‌‌distinctive,‌‌proof‌‌of‌‌substantially‌‌exclusive‌‌and‌‌continuous‌‌ use‌‌thereof‌‌by‌‌the‌‌applicant‌‌in‌‌commerce‌‌in‌‌the‌‌Philippines‌‌for‌‌five‌‌ (5)‌‌years‌‌‌before‌‌the‌‌claim‌‌of‌‌distinctiveness‌‌is‌‌made.‌ ‌ Taiwan‌‌Kolin‌‌v.‌‌Kolin‌‌Electronics‌‌‌2015‌ ‌ YES‌.‌ ‌Mere‌ ‌uniformity‌ ‌in‌ ‌categorization,‌ ‌by‌ ‌itself,‌ ‌does‌ ‌not‌‌ In‌ ‌resolving‌‌‌whether‌‌or‌‌not‌‌the‌‌products‌‌of‌‌the‌‌parties‌‌involved‌‌are‌‌ related‌,‌‌the‌‌doctrine‌‌in‌‌‌Mighty‌‌Corporation‌‌is‌‌authoritative.‌ ‌There,‌‌ the‌‌Court‌‌held‌‌that‌‌the‌‌goods‌‌should‌‌be‌‌tested‌‌against‌‌several‌‌factors‌‌ before‌ ‌arriving‌ ‌at‌ ‌a‌ ‌sound‌ ‌conclusion‌ ‌on‌ ‌the‌ ‌question‌ ‌of‌‌ relatedness‌.‌ ‌ FC‌‌Philippines,‌‌Inc.‌‌v.‌‌Barrio‌‌Fiesta‌‌Manufacturing‌‌‌2016‌ ‌ WON‌ ‌Nutri-Asia‌ ‌cannot‌ ‌claim‌ ‌exclusive‌ ‌ownership‌ ‌and‌ ‌use‌ ‌of‌ ‌the‌‌ "PAPA"‌ ‌mark‌ ‌for‌ ‌its‌ ‌sauce‌ ‌products‌ ‌because‌‌"PAPA"‌‌is‌‌supposedly‌‌a‌‌ common‌‌term‌‌of‌‌endearment‌‌for‌‌one's‌‌father.‌ ‌ NO‌.‌ ‌A‌ ‌person's‌ ‌father‌ ‌has‌ ‌no‌ ‌logical‌ ‌connection‌ ‌with‌ ‌catsup‌‌ products,‌‌and‌‌that‌‌precisely‌‌makes‌‌"PAPA"‌‌as‌‌an‌‌arbitrary‌‌mark‌‌ capable‌ ‌of‌ ‌being‌ ‌registered‌,‌ ‌as‌ ‌it‌ ‌is‌ ‌distinctive‌,‌‌coming‌‌from‌‌a‌‌ family‌ ‌name‌ ‌that‌ ‌started‌ ‌the‌ ‌brand‌ ‌several‌ ‌decades‌ ‌ago.‌ ‌What‌ ‌was‌‌ registered‌ ‌was‌ ‌not‌ ‌the‌ ‌word‌‌"Papa"‌‌as‌‌defined‌‌in‌‌the‌‌dictionary,‌‌but‌‌ the‌‌word‌‌"Papa"‌‌as‌‌the‌‌last‌‌name‌‌of‌‌the‌‌original‌‌owner‌‌of‌‌the‌‌brand.‌ ‌ Mang‌‌Inasal‌‌Philippines,‌‌Inc.‌‌v.‌‌IFP‌‌Manufacturing‌‌‌2017‌ ‌ WON‌‌“INASAL”‌‌can‌‌be‌‌appropriated‌‌as‌‌a‌‌mark.‌ ‌ YES‌.‌‌The‌‌dominant‌‌element‌‌"INASAL,"‌‌‌as‌‌stylized‌‌in‌‌the‌‌Mang‌‌Inasal‌‌ mark,‌ ‌is‌ ‌different‌ ‌from‌‌the‌‌term‌ ‌"inasal'‌‌per‌‌se.‌ ‌The‌‌term‌ ‌"‌inasal‌"‌‌ per‌‌se‌ ‌is‌‌a‌‌descriptive‌‌term‌‌that‌‌cannot‌‌be‌‌appropriated.‌‌ ‌ However,‌ ‌the‌ ‌dominant‌ ‌element‌ ‌"INASAL,"‌ ‌as‌ ‌stylized‌ ‌in‌ ‌the‌ ‌Mang‌ Inasal‌ ‌mark,‌ ‌is‌ ‌not.‌ ‌Petitioner,‌ ‌as‌ ‌the‌ ‌registered‌ ‌owner‌ ‌of‌‌the‌‌Mang‌‌ Inasal‌‌mark,‌‌can‌‌claim‌‌exclusive‌‌use‌‌of‌‌such‌‌element.‌ ‌ Seri‌‌Somboonsakdikul‌‌v.‌‌Orlane‌‌S.A.‌‌‌2017‌ ‌ WON‌ ‌there‌ ‌is‌ ‌confusing‌ ‌similarity‌ ‌between‌ ‌ORLANE‌ ‌and‌ ‌LOLANE‌‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 101‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ which‌‌would‌‌bar‌‌the‌‌registration‌‌of‌‌LOLANE‌‌before‌‌the‌‌IPO.‌ ‌ NO‌.‌ ‌There‌ ‌is‌ ‌no‌ ‌colorable‌ ‌imitation‌‌between‌‌the‌‌marks‌‌LOLANE‌‌ and‌‌ORLANE‌‌which‌‌would‌‌lead‌‌to‌‌any‌‌likelihood‌‌of‌‌confusion‌‌to‌‌the‌‌ ordinary‌‌purchasers.‌‌In‌‌determining‌‌the‌‌likelihood‌‌of‌‌confusion,‌‌the‌‌ Court‌‌must‌‌consider:‌‌ ‌ a) the‌‌resemblance‌b ‌ etween‌‌the‌‌trademarks;‌ ‌ b) the‌ ‌similarity‌ ‌of‌ ‌the‌ ‌goods‌ ‌to‌ ‌which‌ ‌the‌ ‌trademarks‌ ‌are‌‌ attached;‌ ‌ c) the‌‌likely‌‌effect‌‌on‌‌the‌‌purchaser‌‌and‌ ‌ d) the‌‌registrant's‌‌express‌‌or‌‌implied‌‌consent‌‌and‌‌other‌‌fair‌‌and‌‌ equitable‌‌considerations.‌ ‌ The‌ ‌most‌ ‌essential‌ ‌requirement‌ ‌for‌ ‌the‌ ‌determination‌ ‌of‌‌ likelihood‌‌of‌‌confusion‌‌is‌‌the‌‌existence‌‌of‌‌resemblance‌‌between‌‌ the‌‌trademarks,‌‌i.e.,‌‌‌colorable‌‌imitation‌.‌‌‌Absent‌‌any‌‌finding‌‌of‌‌its‌‌ existence,‌ ‌there‌ ‌can‌ ‌be‌ ‌no‌ ‌likelihood‌ ‌of‌ ‌confusion.‌ ‌Colorable‌‌ imitation‌ ‌has‌ ‌been‌ ‌defined‌ ‌as‌ ‌"such‌ ‌similarity‌ ‌in‌ ‌form,‌ ‌content,‌‌ words,‌‌sound,‌‌meaning,‌‌special‌‌arrangement‌‌or‌‌general‌‌appearance‌‌of‌‌ the‌ ‌trademark‌‌or‌‌trade‌‌name‌‌in‌‌their‌‌overall‌‌presentation‌‌or‌‌in‌‌their‌‌ essential‌ ‌and‌ ‌substantive‌ ‌and‌ ‌distinctive‌ ‌parts‌ ‌as‌ ‌would‌ ‌likely‌‌ mislead‌‌or‌‌confuse‌‌persons‌‌in‌‌the‌‌ordinary‌‌course‌‌of‌‌purchasing‌‌the‌‌ genuine‌‌article."‌ ‌ Here,‌ ‌there‌ ‌is‌ ‌no‌ ‌confusing‌ ‌similarity‌ ‌between‌ ‌the‌‌two‌‌marks.‌‌‌The‌‌ suffix‌ ‌LANE‌ ‌is‌ ‌not‌ ‌the‌ ‌dominant‌ ‌feature‌ ‌of‌ ‌petitioner's‌ ‌mark.‌‌ Neither‌ ‌can‌ ‌it‌ ‌be‌ ‌considered‌ ‌as‌ ‌the‌ ‌dominant‌ ‌feature‌ ‌of‌ ‌ORLANE‌‌ which‌‌would‌‌make‌‌the‌‌two‌‌marks‌‌confusingly‌‌similar.‌ ‌ Kensonic,‌‌Inc.‌‌v.‌‌Uni-Line‌‌Multi-Resources,‌‌Inc.‌‌(Phil.)‌‌2 ‌ 018‌ ‌ Is‌‌the‌S ‌ AKURA‌m ‌ ark‌‌capable‌‌of‌‌appropriation?‌ ‌ YES‌.‌ ‌What‌ ‌is‌ ‌prohibited‌ ‌is‌ ‌not‌ ‌having‌ ‌a‌ ‌generic‌ ‌mark‌ ‌but‌‌ having‌ ‌such‌ ‌generic‌ ‌mark‌ ‌being‌ ‌identifiable‌ ‌to‌ ‌the‌ ‌good‌ ‌or‌ service‌.‌ ‌ Although‌ ‌SAKURA‌ ‌refers‌ ‌to‌ ‌the‌ ‌Japanese‌ ‌flowering‌ ‌cherry‌ ‌and‌ ‌is,‌‌ therefore,‌ ‌of‌‌a‌‌generic‌‌nature,‌‌such‌‌mark‌‌did‌‌not‌‌identify‌‌Kensonic's‌‌ goods.‌‌Kensonic's‌‌DVD‌‌or‌‌VCD‌‌players‌‌and‌‌other‌‌products‌‌could‌‌not‌‌ be‌ ‌identified‌ ‌with‌ ‌cherry‌ ‌blossoms.‌ ‌Hence,‌ ‌the‌ ‌mark‌ ‌can‌ ‌be‌‌ appropriated‌.‌‌Kensonic's‌‌‌prior‌‌use‌‌of‌‌the‌‌mark‌‌since‌‌1994‌‌made‌‌it‌‌ the‌ ‌owner‌ ‌of‌ ‌the‌ ‌mark,‌ ‌and‌ ‌its‌ ‌ownership‌ ‌cannot‌ ‌anymore‌ ‌be‌‌ challenged.‌ ‌ Great‌‌White‌‌Shark‌‌v.‌‌Caralde,‌‌Jr‌‌‌2012‌ ‌ A‌ ‌trademark‌ ‌device‌ ‌is‌ ‌susceptible‌ ‌to‌ ‌registration‌ ‌if‌ ‌it‌ ‌is‌ ‌crafted‌‌ fancifully‌ ‌or‌ ‌arbitrarily‌ ‌and‌ ‌is‌ ‌capable‌ ‌of‌ ‌identifying‌ ‌and‌‌ distinguishing‌‌the‌‌goods‌‌of‌‌one‌‌manufacturer‌‌or‌‌seller‌‌from‌‌those‌‌of‌‌ another.‌ ‌Apart‌ ‌from‌ ‌its‌ ‌commercial‌ ‌utility,‌ ‌the‌ ‌benchmark‌ ‌of‌‌ trademark‌‌registrability‌‌is‌‌distinctiveness‌.‌ ‌Thus,‌‌a‌‌generic‌‌figure,‌‌ as‌ ‌that‌ ‌of‌ ‌a‌ ‌shark‌ ‌in‌ ‌this‌ ‌case,‌ ‌if‌ ‌employed‌ ‌and‌ ‌designed‌ ‌in‌ ‌a‌‌ distinctive‌‌manner,‌‌can‌‌be‌‌a‌‌registrable‌‌trademark‌‌device‌ ‌ 5.‌‌Prior‌‌use‌‌of‌‌mark‌‌as‌‌a‌‌requirement‌ ‌ Zuneca‌‌Pharmaceutical‌‌v.‌‌Natrapharm‌‌‌2020‌‌En‌‌Banc‌ ‌ The‌‌current‌‌rule‌‌under‌‌the‌‌IP‌‌Code‌‌is‌‌thus‌‌in‌‌stark‌‌contrast‌‌to‌‌the‌‌rule‌‌ on‌‌acquisition‌‌of‌‌ownership‌‌under‌‌the‌‌Trademark‌‌Law,‌‌as‌‌amended.‌‌ At‌ ‌present,‌ ‌as‌ ‌expressed‌ ‌in‌ ‌the‌ ‌language‌ ‌of‌ ‌the‌‌provisions‌‌of‌‌the‌‌IP‌‌ Code,‌ ‌prior‌ ‌use‌ ‌no‌ ‌longer‌ ‌determines‌ ‌the‌ ‌acquisition‌ ‌of‌‌ ownership‌ ‌of‌ ‌a‌ ‌mark‌ ‌in‌ ‌light‌ ‌of‌ ‌the‌ ‌adoption‌ ‌of‌ ‌the‌ ‌rule‌ ‌that‌‌ ownership‌‌of‌‌a‌‌mark‌‌is‌‌acquired‌‌through‌‌registration‌‌made‌‌validly‌‌in‌‌ accordance‌‌with‌‌the‌‌provisions‌‌of‌‌the‌‌IP‌‌Code.‌ Fredco‌‌Manufacturing‌‌v.‌‌Harvard‌‌University‌‌2 ‌ 011‌ ‌ WON‌ ‌Fredco‌ ‌can‌ ‌validly‌ ‌cancel‌ ‌the‌ ‌registration‌ ‌of‌ ‌Harvard‌‌ University.‌ ‌NO‌.‌ ‌There‌ ‌are‌ ‌two‌ ‌compelling‌ ‌reasons‌ ‌why‌ ‌Fredco's‌‌ petition‌‌must‌‌fail.‌ ‌ First‌,‌ ‌Fredco's‌ ‌registration‌ ‌of‌ ‌the‌ ‌mark‌ ‌"Harvard"‌ ‌and‌ ‌its‌‌ identification‌‌of‌‌origin‌‌as‌‌"Cambridge,‌‌Massachusetts"‌‌falsely‌‌suggest‌‌ that‌‌Fredco‌‌or‌‌its‌‌goods‌‌are‌‌connected‌‌with‌‌Harvard‌‌University.‌‌That‌‌ should‌ ‌not‌ ‌have‌ ‌been‌ ‌allowed‌ ‌because‌ ‌Section‌‌4(a)‌‌of‌‌R.A.‌‌No.‌‌166‌‌ prohibits‌ ‌the‌ ‌registration‌ ‌of‌ ‌a‌ ‌mark‌ ‌"‌which‌ ‌may‌ ‌disparage‌ ‌or‌‌ falsely‌ ‌suggest‌ ‌a‌ ‌connection‌ ‌with‌ ‌persons,‌ ‌living‌ ‌or‌ ‌dead,‌‌ institutions,‌‌beliefs‌‌‌x‌‌x‌‌x."‌‌This‌‌provision‌‌is‌‌intended‌‌to‌‌protect‌‌the‌‌ right‌ ‌of‌ ‌publicity‌ ‌of‌ ‌famous‌ ‌individuals‌ ‌and‌ ‌institutions‌ ‌from‌‌ commercial‌‌exploitation‌‌of‌‌their‌‌goodwill‌‌by‌‌others.‌‌What‌‌Fredco‌‌has‌‌ done‌ ‌is‌ ‌precisely‌ ‌to‌ ‌exploit‌ ‌commercially‌ ‌the‌ ‌goodwill‌ ‌of‌ ‌Harvard‌‌ University‌ ‌without‌‌the‌‌latter's‌‌consent.‌‌‌Such‌‌violation‌‌is‌‌a‌‌ground‌‌ for‌‌cancellation‌o ‌ f‌‌Fredco's‌‌registration‌‌of‌‌the‌‌mark‌‌"Harvard."‌ ‌ Second‌,‌‌the‌‌Philippines‌‌and‌‌the‌‌US‌‌are‌‌both‌‌signatories‌‌to‌‌the‌‌‌Paris‌‌ Convention‌‌for‌‌the‌‌Protection‌‌of‌‌Industrial‌‌Property.‌‌Thus,‌‌under‌‌ Philippine‌‌law,‌‌a‌‌trade‌‌name‌‌of‌‌a‌‌national‌‌of‌‌a‌‌State‌‌that‌‌is‌‌a‌‌party‌‌to‌‌ the‌ ‌Paris‌ ‌Convention,‌‌whether‌‌or‌‌not‌‌the‌‌trade‌‌name‌‌forms‌‌part‌‌of‌‌a‌‌ trademark,‌ ‌is‌ ‌protected‌ ‌"without‌ ‌the‌ ‌obligation‌ ‌of‌ ‌filing‌ ‌or‌‌ registration."‌ ‌ Indeed,‌ ‌Section‌ ‌123.1(e)‌ ‌of‌ ‌R.A.‌ ‌No.‌ ‌8293‌ ‌now‌ ‌categorically‌ ‌states‌ that‌‌"‌a‌‌mark‌‌which‌‌is‌‌considered‌‌by‌‌the‌‌competent‌‌authority‌‌of‌‌ the‌ ‌Philippines‌ ‌to‌ ‌be‌ ‌well-known‌ ‌internationally‌ ‌and‌ ‌in‌ ‌the‌‌ Philippines‌,‌ ‌whether‌ ‌or‌ ‌not‌ ‌it‌ ‌is‌ ‌registered‌ ‌here‌,"‌ ‌cannot‌ ‌be‌‌ registered‌‌by‌‌another‌‌in‌‌the‌‌Philippines‌.‌ ‌ W‌‌Land‌‌Holding,‌‌Inc.‌‌v.‌‌Starwood‌‌Hotels‌‌and‌‌ Resorts‌‌Worldwide,‌‌Inc.‌‌‌2017‌ ‌ The‌ ‌"‌use‌"‌ ‌which‌ ‌the‌ ‌law‌ ‌requires‌ ‌to‌ ‌maintain‌ ‌the‌ ‌registration‌ ‌of‌ ‌a‌‌ mark‌‌must‌‌be‌‌genuine,‌‌and‌‌not‌‌merely‌‌token.‌‌G ‌ enuine‌‌use‌‌may‌‌be‌ characterized‌ ‌as‌ ‌a‌ ‌bona‌ ‌fide‌ ‌use‌ ‌which‌‌results‌‌or‌‌tends‌‌to‌‌result,‌‌in‌‌ one‌‌way‌‌or‌‌another,‌‌into‌‌a‌‌‌commercial‌‌interaction‌‌or‌‌transaction‌‌ "in‌‌the‌‌ordinary‌‌course‌‌of‌‌trade."‌ ‌ The‌‌use‌‌of‌‌a‌‌registered‌‌mark‌‌representing‌‌the‌‌owner's‌‌goods‌‌or‌‌ services‌ ‌by‌ ‌means‌ ‌of‌ ‌an‌ ‌interactive‌ ‌website‌ ‌may‌ ‌constitute‌‌ proof‌‌of‌‌actual‌‌use‌‌that‌‌is‌‌sufficient‌‌to‌‌maintain‌‌the‌‌registration‌‌ of‌‌the‌‌same.‌ ‌ It‌‌must‌‌be‌‌emphasized,‌‌however,‌‌that‌‌the‌‌‌mere‌‌exhibition‌‌‌of‌‌goods‌‌ or‌ ‌services‌ ‌over‌ ‌the‌ ‌internet,‌ ‌without‌ ‌more,‌ ‌is‌ ‌not‌ ‌enough‌ ‌to‌ constitute‌‌actual‌‌use.‌‌‌It‌‌must‌‌be‌‌shown‌‌that‌‌the‌‌owner‌‌has‌‌‌actually‌‌ transacted‌.‌ ‌A‌ ‌showing‌ ‌of‌ ‌an‌ ‌actual‌ ‌commercial‌ ‌link‌ ‌to‌ ‌the‌‌ country‌‌is‌‌therefore‌‌imperative.‌ ‌ Thus,‌‌Starwood's‌‌use‌‌of‌‌its‌‌"W"‌‌mark‌‌through‌‌its‌‌interactive‌‌website‌‌ is‌ ‌intended‌ ‌to‌ ‌produce‌ ‌a‌ ‌discernible‌ ‌commercial‌ ‌effect‌ ‌or‌ ‌activity‌‌ within‌ ‌the‌ ‌Philippines,‌ ‌or‌ ‌at‌ ‌the‌ ‌very‌ ‌least,‌ ‌seeks‌ ‌to‌ ‌establish‌‌ commercial‌ ‌interaction‌ ‌with‌ ‌local‌ ‌consumers.‌ ‌Accordingly,‌‌ Starwood's‌ ‌use‌ ‌of‌ ‌the‌ ‌"W"‌ ‌mark‌ ‌in‌ ‌its‌ ‌reservation‌ ‌services‌‌ through‌ ‌its‌ ‌website‌ ‌constitutes‌ ‌use‌ ‌of‌ ‌the‌ ‌mark‌ ‌sufficient‌ ‌to‌‌ keep‌‌its‌‌registration‌‌in‌‌force.‌ ‌ 6.‌‌Tests‌‌to‌‌determine‌‌confusing‌‌similarity‌‌between‌‌marks‌ ‌ In‌ ‌determining‌ ‌if‌ ‌colorable‌ ‌imitation‌ ‌exists,‌ ‌jurisprudence‌ ‌has‌‌ developed‌ ‌two‌ ‌kinds‌ ‌of‌ ‌tests‌ ‌—‌ ‌the‌ ‌Dominancy‌ ‌Test‌ ‌and‌ ‌the‌‌ Holistic‌‌Test.‌‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 102‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ a.‌‌Dominancy‌‌test‌ ‌ mere‌ ‌likelihood‌ ‌of‌ ‌confusion‌ ‌that‌ ‌provides‌‌the‌‌impetus‌‌to‌‌accord‌‌ protection‌‌to‌‌trademarks‌‌already‌‌registered‌‌with‌‌the‌‌IPO.‌ ‌ ⭐The‌ ‌test‌ ‌of‌ ‌dominancy‌ ‌focuses‌ ‌on‌ ‌the‌ ‌similarity‌ ‌of‌ ‌the‌‌ prevalent‌ ‌features‌ ‌of‌ ‌the‌ ‌competing‌ ‌trademarks‌ ‌which‌ ‌might‌‌ c.‌‌Idem‌‌sonans‌‌ ‌ cause‌‌confusion‌‌or‌‌deception‌‌and‌‌thus‌‌constitute‌‌infringement.‌ ‌ Prosel‌‌Pharmaceuticals‌‌v.‌‌Tynor‌‌Drug‌‌House‌‌‌2020‌ ‌ Infringement‌‌occurs‌‌if‌‌the‌‌competing‌‌trademark‌‌contains‌‌the‌‌main,‌‌ Petitioner's‌ ‌registration‌ ‌of‌ ‌CEEGEEFER‌ ‌as‌ ‌a‌ ‌drug‌ ‌and‌ ‌not‌ ‌just‌ ‌a‌‌ essential,‌ ‌and‌ ‌dominant‌ ‌features‌ ‌of‌ ‌another,‌ ‌and‌ ‌confusion‌ ‌or‌‌ vitamin‌ ‌food‌ ‌supplement‌ ‌does‌ ‌not‌ ‌exculpate‌ ‌it‌ ‌from‌ ‌liability.‌‌ deception‌ ‌is‌ ‌likely‌ ‌to‌ ‌result.‌ ‌Exact‌ ‌duplication‌ ‌or‌ ‌imitation‌ ‌is‌‌ CEEGEEFER's‌ ‌classification‌ ‌as‌ ‌a‌ ‌drug‌ ‌is‌ ‌immaterial.‌ ‌Since‌ ‌the‌ ‌case‌‌ NOT‌‌required.‌‌ ‌ involves‌‌a‌‌violation‌‌of‌‌a‌‌trademark,‌‌the‌‌gravamen‌‌of‌‌the‌‌offense‌‌is‌‌ Upon‌ ‌the‌ ‌passage‌‌of‌‌the‌‌IPC,‌‌the‌‌trend‌‌has‌‌been‌‌to‌‌veer‌‌away‌‌from‌‌ a‌‌likelihood‌‌of‌‌confusion‌‌between‌‌the‌‌two‌‌marks.‌‌Both‌‌products‌‌ the‌‌holistic‌‌test‌‌and‌‌to‌‌focus‌‌more‌‌on‌‌the‌‌‌dominancy‌‌test.‌ ‌ are‌ ‌over-the-counter‌ ‌multivitamins‌ ‌that‌ ‌do‌ ‌not‌ ‌require‌ ‌a‌ ‌medical‌‌ prescription.‌ ‌As‌ ‌such,‌ ‌CEEGEEFER‌ ‌and‌ ‌CHERIFER‌ ‌may‌ ‌be‌ ‌easily‌‌ b.‌‌Holistic‌‌test‌ ‌ obtained‌‌without‌‌the‌‌advice‌‌of‌‌another‌‌person.‌‌Therefore,‌‌the‌‌parties'‌‌ Mandates‌ ‌that‌ ‌the‌ ‌entirety‌ ‌of‌ ‌the‌ ‌marks‌ ‌in‌ ‌question‌ ‌must‌ ‌be‌‌ target‌ ‌market‌ ‌may‌ ‌be‌ ‌confused,‌‌mistaken,‌‌or‌‌deceived‌‌into‌‌thinking‌‌ that‌‌CEEGEEFER‌‌is‌‌the‌‌same‌‌as‌‌CHERIFER.‌ ‌ considered‌‌in‌‌determining‌‌confusing‌‌similarity.‌ ‌ Citigroup,‌‌Inc.‌‌v.‌‌Citystate‌‌Savings‌‌Bank,‌‌Inc.‌‌‌2018‌‌Leonen,‌‌J‌ ‌ A‌‌visual‌‌comparison‌‌of‌‌the‌‌marks‌‌reveals‌‌no‌‌likelihood‌‌of‌‌confusion.‌‌ The‌ ‌most‌ ‌noticeable‌ ‌part‌ ‌of‌ ‌this‌ ‌mark‌‌is‌‌the‌ ‌golden‌‌lion's‌‌head‌‌ device‌,‌‌and‌‌finds‌‌that‌‌after‌‌noticing‌‌the‌‌image‌‌of‌‌the‌‌lion's‌‌head,‌‌the‌‌ words‌‌"CITY"‌‌and‌‌"CASH"‌‌are‌‌equally‌‌prominent.‌ ‌ The‌ ‌context‌ ‌where‌ ‌respondent's‌ ‌mark‌ ‌is‌ ‌to‌ ‌be‌ ‌used,‌‌namely,‌‌for‌‌its‌‌ ATM‌‌services,‌‌which‌‌could‌‌only‌‌be‌‌secured‌‌at‌‌respondent's‌‌premises‌‌ and‌‌not‌‌in‌‌an‌‌open‌‌market‌‌of‌‌ATM‌‌services,‌‌further‌‌‌diminishes‌‌the‌‌ possibility‌‌of‌‌confusion‌‌‌on‌‌the‌‌part‌‌of‌‌prospective‌‌customers.‌ ‌ ABS-CBN‌‌Publishing,‌‌Inc.‌‌v.‌‌Director,‌‌Bureau‌‌of‌‌Trademarks‌‌‌2018‌ ‌ WON‌‌the‌‌ODG‌‌was‌‌correct‌‌in‌‌refusing‌‌to‌‌register‌‌the‌‌applicant‌‌mark‌‌ for‌ ‌being‌ ‌identical‌ ‌and‌ ‌confusingly‌ ‌similar‌ ‌with‌ ‌the‌ ‌cited‌ ‌marks‌‌ already‌‌registered‌‌with‌‌the‌‌IPO.‌ ‌ YES‌.‌ ‌The‌ ‌dominant‌ ‌feature‌ ‌of‌ ‌the‌ ‌applicant‌ ‌mark‌ ‌is‌ ‌the‌ ‌word‌‌ "METRO"‌ ‌which‌ ‌is‌ ‌identical,‌ ‌both‌ ‌visually‌ ‌and‌ ‌aurally,‌ ‌to‌ ‌the‌‌cited‌‌ marks‌ ‌already‌ ‌registered‌ ‌with‌ ‌the‌ ‌IPO.‌ ‌The‌ ‌concurrent‌ ‌use‌ ‌by‌ ‌the‌‌ parties‌ ‌of‌ ‌the‌ ‌word‌ ‌METRO‌ ‌is‌ ‌likely‌ ‌to‌ ‌cause‌ ‌confusion‌ ‌among‌‌ purchasers‌ ‌as‌ ‌well‌ ‌as‌ ‌confusion‌ ‌of‌ ‌business‌ ‌or‌ ‌origin‌ ‌hence,‌‌ registration‌‌of‌‌this‌‌subject‌‌application‌‌is‌‌proscribed.‌ ‌ It‌ ‌must‌ ‌be‌ ‌emphasized‌ ‌that‌ ‌absolute‌ ‌certainty‌‌of‌‌confusion‌‌or‌‌even‌‌ actual‌‌confusion‌‌is‌‌not‌‌required‌‌to‌‌refuse‌‌registration.‌‌Indeed,‌‌it‌‌is‌‌the‌‌ Given‌‌the‌‌‌phonetic‌‌‌and‌‌visual‌‌similarities‌‌between‌‌the‌‌two‌‌products,‌‌ it‌ ‌is‌ ‌obvious‌ ‌that‌ ‌petitioner‌ ‌attempted‌ ‌to‌ ‌pass‌ ‌CEEGEEFER‌ ‌as‌ ‌a‌‌ colorable‌‌imitation‌‌of‌‌CHERIFER.‌ ‌ The‌ ‌determining‌ ‌point‌ ‌in‌ ‌trademark‌ ‌infringement‌ ‌is‌‌a‌‌likelihood‌‌of‌‌ confusion.‌‌The‌‌fact‌‌that‌‌CEEGEEFER‌‌is‌‌‌idem‌‌sonans‌‌for‌‌CHERIFER‌‌is‌‌ enough‌ ‌to‌ ‌violate‌ ‌respondent's‌ ‌right‌‌to‌‌protect‌‌its‌‌trademark‌,‌‌ CHERIFER.‌ ‌ ⭐‌ ‌The‌ ‌ponencia‌ ‌adopts‌ ‌the‌‌observations‌‌of‌‌Justice‌‌Leonen‌‌in‌‌‌Asia‌‌ Pacific‌ ‌Resources‌ ‌International‌ ‌Holdings,‌ ‌Ltd.‌ ‌v.‌ ‌Paperone,‌ ‌Inc‌.‌‌that‌‌ there‌‌should‌‌be‌‌"‌objective,‌‌scientific,‌‌and‌‌economic‌‌standards‌‌to‌‌ determine‌‌whether‌‌goods‌‌or‌‌services‌‌offered‌‌by‌‌two‌‌parties‌‌are‌‌ so‌‌related‌‌that‌‌there‌‌is‌‌a‌‌likelihood‌‌of‌‌confusion‌."‌ ‌ 7.‌‌Well-known‌‌marks‌ ‌ c) the‌‌degree‌‌of‌t‌ he‌‌inherent‌‌or‌‌acquired‌d ‌ istinction‌‌of‌‌the‌‌mark;‌ ‌ d) the‌‌quality-image‌o ‌ r‌‌reputation‌a‌ cquired‌‌by‌‌the‌‌mark;‌ ‌ e) the‌‌extent‌‌to‌‌which‌‌the‌‌mark‌‌has‌‌been‌r‌ egistered‌i‌ n‌‌the‌‌world‌;‌ ‌ f) the‌ ‌exclusivity‌ ‌of‌ ‌registration‌ ‌attained‌ ‌by‌ ‌the‌ ‌mark‌ ‌in‌ ‌the‌‌ world;‌ ‌ g) the‌‌extent‌‌to‌‌which‌‌the‌‌mark‌‌has‌‌been‌u ‌ sed‌‌in‌‌the‌‌world;‌ ‌ h) the‌‌exclusivity‌‌of‌‌use‌‌‌attained‌‌by‌‌the‌‌mark‌‌in‌‌the‌‌world;‌ ‌ i) the‌‌‌commercial‌‌value‌‌‌attributed‌‌to‌‌the‌‌mark‌‌in‌‌the‌‌world;‌ ‌ j) the‌‌record‌‌of‌‌successful‌‌protection‌‌‌of‌‌the‌‌rights‌‌in‌‌the‌‌mark;‌ ‌ k) the‌ ‌outcome‌ ‌of‌ ‌litigations‌ ‌dealing‌ ‌with‌‌the‌‌issue‌‌of‌‌whether‌‌ the‌‌mark‌‌is‌‌a‌‌well-known‌‌mark;‌‌and‌ ‌ l) the‌‌presence‌‌or‌‌absence‌‌of‌‌‌identical‌‌or‌‌similar‌‌marks‌‌validly‌‌ registered.‌ ‌ 8.‌‌Rights‌‌conferred‌‌by‌‌registration‌ ‌ The‌ ‌owner‌ ‌of‌ ‌a‌ ‌registered‌ ‌mark‌ ‌shall‌‌have‌‌the‌‌‌exclusive‌‌right‌‌to‌‌ prevent‌‌all‌‌third‌‌parties‌‌not‌‌having‌‌the‌‌owner's‌‌consent‌‌from‌‌using‌‌ in‌ ‌the‌ ‌course‌ ‌of‌ ‌trade‌ ‌identical‌ ‌or‌ ‌similar‌ ‌signs‌ ‌or‌ ‌containers‌‌for‌‌ goods‌ ‌or‌ ‌services‌ ‌which‌ ‌are‌ ‌identical‌ ‌or‌ ‌similar‌ ‌where‌ ‌such‌ ‌use‌‌ would‌‌result‌‌in‌‌a‌‌likelihood‌‌of‌‌confusion,‌w ‌ hich‌‌is‌‌presumed‌.‌ ‌ The‌ ‌exclusive‌ ‌right‌ ‌of‌ ‌the‌ ‌owner‌‌of‌‌a‌‌‌well-known‌‌mark‌‌which‌‌is‌‌ registered‌ ‌in‌ ‌the‌ ‌Philippines,‌ ‌shall‌ ‌extend‌ ‌to‌ ‌goods‌ ‌and‌ ‌services‌‌ which‌ ‌are‌ ‌not‌ ‌similar‌ ‌to‌ ‌those‌ ‌in‌ ‌respect‌ ‌of‌ ‌which‌ ‌the‌ ‌mark‌ ‌is‌‌ registered.‌‌(§ ‌ 147‌)‌ ‌ 9.‌‌Use‌‌by‌‌third‌‌parties‌‌of‌‌names,‌‌etc.‌‌similar‌‌to‌‌registered‌‌ Criteria‌ ‌for‌ ‌determining‌ ‌whether‌ ‌a‌ ‌mark‌ ‌is‌ ‌well-known.‌ ‌—‌ ‌In‌‌ mark‌ ‌ determining‌ ‌whether‌ ‌a‌ ‌mark‌ ‌is‌ ‌well-known,‌ ‌the‌ ‌following‌ ‌criteria‌ ‌or‌‌ any‌‌combination‌‌‌thereof‌‌may‌‌be‌‌taken‌‌into‌‌account:‌ ‌ Registration‌ ‌of‌ ‌the‌ ‌mark‌ ‌shall‌ ‌not‌ ‌confer‌ ‌on‌ ‌the‌ ‌registered‌‌owner‌‌ the‌‌right‌‌to‌‌preclude‌‌third‌‌parties‌‌from‌‌using‌‌bona‌‌fide‌‌their‌‌names,‌‌ a) the‌‌‌duration,‌‌extent‌‌and‌‌geographical‌‌area‌‌‌of‌‌any‌‌use‌‌of‌‌the‌‌ addresses,‌ ‌pseudonyms,‌ ‌a‌‌geographical‌‌name,‌‌or‌‌exact‌‌indications‌‌ mark,‌‌in‌‌particular,‌‌the‌‌duration,‌‌extent‌‌and‌‌geographical‌‌area‌‌of‌‌ concerning‌ ‌the‌ ‌kind,‌ ‌quality,‌ ‌quantity,‌ ‌destination,‌ ‌value,‌ ‌place‌ ‌of‌‌ any‌ ‌promotion‌ ‌of‌ ‌the‌‌mark,‌‌including‌‌advertising‌‌or‌‌publicity‌‌ origin,‌ ‌or‌ ‌time‌ ‌of‌ ‌production‌ ‌or‌ ‌of‌ ‌supply,‌ ‌of‌ ‌their‌ ‌goods‌ ‌or‌‌ and‌ ‌the‌ ‌presentation,‌ ‌at‌ ‌fairs‌ ‌or‌ ‌exhibitions,‌ ‌of‌ ‌the‌ ‌goods‌‌ services.‌‌(‌§148‌)‌ ‌ and/or‌‌services‌‌to‌‌which‌‌the‌‌mark‌‌applies;‌ ‌ b) the‌‌‌market‌‌share‌,‌‌in‌‌the‌‌Philippines‌‌and‌‌in‌‌other‌‌countries,‌‌of‌‌ the‌‌goods‌‌and/or‌‌services‌‌to‌‌which‌‌the‌‌mark‌‌applies;‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 103‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ specified‌‌in‌‌the‌‌certificate.‌ ‌ 10.‌‌Infringement‌‌and‌‌remedies‌ ‌ a.‌‌Trademark‌‌infringement‌ The‌ ‌elements‌ ‌of‌ ‌trademark‌ ‌infringement‌ ‌under‌ ‌the‌‌IP‌‌Code‌‌are‌‌the‌‌ following:‌‌ ‌ 1) REGISTRATION‌‌‌—‌‌the‌‌trademark‌‌being‌‌infringed‌‌is‌‌registered‌‌ in‌‌the‌‌IPO;‌ ‌ Registration‌ ‌is‌ ‌NOT‌ ‌required‌ ‌to‌ ‌protect‌ ‌the‌ ‌goodwill‌ ‌that‌‌ identifies‌‌in‌‌the‌‌mind‌‌of‌‌the‌‌public‌‌the‌‌goods‌‌he‌‌manufactures‌‌ or‌‌deals‌‌in.‌ ‌ Republic‌‌Gas,‌‌et.‌‌al.‌‌v.‌‌Petron,‌‌et.‌‌al.‌‌2 ‌ 013‌ ‌ WON‌‌probable‌‌cause‌‌exists‌‌to‌‌hold‌‌petitioners‌‌liable‌‌for‌‌the‌‌crime‌‌of‌‌ trademark‌‌infringement.‌ ‌ 3) USE‌‌‌—‌‌the‌‌infringing‌‌mark‌‌or‌‌trade‌‌name‌‌is‌‌used‌‌in‌‌connection‌‌ with‌ ‌the‌ ‌sale,‌ ‌offering‌ ‌for‌ ‌sale,‌ ‌or‌ ‌advertising‌ ‌of‌ ‌any‌ ‌goods,‌‌ business‌ ‌or‌ ‌services;‌ ‌or‌ ‌the‌ ‌infringing‌ ‌mark‌ ‌or‌‌trade‌‌name‌‌is‌‌ applied‌‌to‌‌labels,‌‌signs,‌‌prints,‌‌packages,‌‌wrappers,‌‌receptacles‌‌ or‌ ‌advertisements‌ ‌intended‌ ‌to‌ ‌be‌ ‌used‌ ‌upon‌‌or‌‌in‌‌connection‌‌ with‌‌such‌‌goods,‌‌business‌‌or‌‌services;‌ ‌ A‌ ‌certificate‌ ‌of‌ ‌registration‌ ‌of‌ ‌a‌ ‌mark,‌ ‌once‌ ‌issued,‌ ‌constitutes‌‌ prima‌‌facie‌e‌ vidence‌‌of‌ ‌ 1. the‌‌validity‌‌of‌‌the‌‌registration,‌‌ ‌ 2. the‌‌registrant's‌‌ownership‌‌of‌‌the‌‌mark,‌‌and‌‌ ‌ 3. the‌ ‌registrant's‌ ‌exclusive‌ ‌right‌ ‌to‌ ‌use‌ ‌the‌ ‌same‌ ‌in‌ ‌connection‌‌ with‌ ‌the‌ ‌goods‌ ‌or‌ ‌services‌ ‌and‌ ‌those‌ ‌that‌ ‌are‌ ‌related‌ ‌thereto‌‌ 1. made‌ ‌it‌ ‌categorically‌ ‌clear‌ ‌that‌ ‌the‌ ‌mere‌ ‌unauthorized‌ ‌use‌ ‌of‌ ‌a‌ container‌‌bearing‌‌a‌‌registered‌‌trademark‌‌in‌‌connection‌‌with‌‌the‌‌sale,‌‌ distribution‌ ‌or‌ ‌advertising‌ ‌of‌ ‌goods‌ ‌or‌ ‌services‌ ‌which‌ ‌is‌ ‌likely‌ ‌to‌‌ cause‌ ‌confusion,‌ ‌mistake‌ ‌or‌ ‌deception‌ ‌among‌ ‌the‌ ‌buyers‌ ‌or‌‌ consumers‌‌can‌‌be‌‌considered‌‌as‌t‌ rademark‌‌infringement.‌ ‌ NO‌.‌‌It‌‌is‌‌essential‌‌to‌‌prove‌‌the‌‌existence‌‌of‌‌fraud,‌‌or‌‌the‌‌intent‌‌ to‌ ‌deceive,‌ ‌actual‌ ‌or‌ ‌probable.‌ ‌Here,‌ ‌records‌ ‌are‌ ‌bereft‌ ‌of‌ ‌any‌‌ showing‌ ‌that‌ ‌petitioners‌ ‌gave‌ ‌their‌ ‌goods/services‌ ‌the‌ ‌general‌‌ appearance‌‌that‌‌it‌‌was‌‌respondent‌‌which‌‌was‌‌offering‌‌the‌‌same‌‌to‌‌the‌‌ public.‌ ‌Neither‌ ‌did‌ ‌petitioners‌ ‌employ‌ ‌any‌ ‌means‌ ‌to‌ ‌induce‌ ‌the‌ public‌ ‌towards‌ ‌a‌ ‌false‌ ‌belief‌ ‌that‌ ‌it‌ ‌was‌ ‌offering‌ ‌respondent’s‌‌ goods/services.‌ ‌Nor‌ ‌did‌ ‌petitioners‌ ‌make‌ ‌any‌ ‌false‌ ‌statement‌ ‌or‌‌ commit‌ ‌acts‌ ‌tending‌ ‌to‌ ‌discredit‌ ‌the‌ ‌goods/services‌ ‌offered‌ ‌by‌‌ respondent.‌‌Accordingly,‌‌‌the‌‌element‌‌of‌‌FRAUD‌‌which‌‌is‌‌the‌‌core‌‌ of‌‌unfair‌‌competition‌‌had‌‌not‌‌been‌‌established‌.‌ ‌ 4) CONFUSION‌ ‌CAUSED‌ ‌—‌ ‌the‌ ‌use‌ ‌or‌ ‌application‌ ‌of‌ ‌the‌‌ infringing‌‌mark‌‌or‌‌trade‌‌name‌‌is‌‌likely‌‌to‌‌cause‌‌confusion‌‌or‌‌ mistake‌ ‌or‌ ‌to‌ ‌deceive‌ ‌purchasers‌‌or‌‌others‌‌as‌‌to‌‌the‌‌goods‌‌or‌‌ Zuneca‌‌Pharmaceutical‌‌v.‌‌Natrapharm‌‌‌2020‌‌En‌‌Banc‌ ‌ services‌‌themselves‌‌or‌‌as‌‌to‌‌the‌‌source‌‌or‌‌origin‌‌of‌‌such‌‌goods‌‌ Should‌Z ‌ uneca‌‌be‌‌held‌‌liable‌‌for‌‌trademark‌‌infringement?‌ ‌ or‌‌services‌‌or‌‌the‌‌identity‌‌of‌‌such‌‌business;‌‌and‌ ‌ 5) NO‌‌CONSENT‌‌—‌‌it‌‌is‌‌without‌‌the‌‌consent‌‌of‌‌the‌‌trademark‌‌or‌‌ trade‌‌name‌‌owner‌‌or‌‌the‌‌assignee‌‌thereof.‌ ‌ b.‌‌Damages‌ ‌ YES‌.‌ ‌Reading‌ ‌Sec‌ ‌155‌ ‌of‌ ‌the‌ ‌IPC,‌ ‌the‌ ‌Court‌ ‌in‌‌a‌‌very‌‌similar‌‌case,‌‌ ‌ 014‌ ‌ Registration‌ ‌is‌ ‌NOT‌ ‌necessary‌‌for‌‌purposes‌‌of‌‌filing‌‌a‌‌case‌‌ Shang‌‌Properties‌‌Realty‌‌v.‌‌St.‌‌Francis‌‌Development‌‌2 for‌u ‌ nfair‌‌competition‌‌‌or‌‌false‌‌designation‌‌of‌‌origin‌.‌ ‌ WON‌‌petitioners‌‌are‌‌guilty‌‌of‌‌unfair‌‌competition‌‌in‌‌using‌‌the‌‌marks‌‌ “THE‌ ‌ST.‌ ‌FRANCIS‌ ‌TOWERS”‌ ‌and‌ ‌“THE‌ ‌ST.‌ ‌FRANCIS‌ ‌SHANGRI-LA‌‌ 2) COLORABLE‌ ‌IMITATION‌ ‌—‌ ‌the‌ ‌trademark‌ ‌or‌ ‌trade‌ ‌name‌ ‌is‌‌ PLACE.”‌ ‌ reproduced,‌‌counterfeited,‌‌copied,‌‌or‌‌colorably‌‌imitated‌‌by‌‌the‌‌ infringer;‌ ‌ "ZYNAPS"‌‌mark‌‌and‌‌accordingly‌‌protected‌‌under‌‌Section‌‌159.1.‌ NO‌.‌ ‌Even‌ ‌without‌‌Section‌‌159.1‌‌of‌‌the‌‌IP‌‌Code,‌‌a‌‌third‌‌party's‌‌prior‌ use‌ ‌of‌ ‌an‌ ‌unregistered‌ ‌mark,‌ ‌if‌ ‌said‌ ‌mark‌ ‌subsequently‌ ‌becomes‌‌ registered‌ ‌by‌ ‌another,‌ ‌could‌ ‌not‌ ‌be‌ ‌considered‌ ‌as‌ ‌trademark‌‌ infringement‌ ‌because‌ ‌there‌ ‌was‌ ‌no‌ ‌trademark‌ ‌registration‌ ‌-‌ ‌a‌‌ requirement‌ ‌for‌ ‌a‌ ‌trademark‌ ‌infringement‌ ‌action‌ ‌to‌ ‌prosper‌‌-‌‌when‌‌ the‌‌third‌‌party‌‌was‌‌using‌‌its‌‌mark.‌ ‌ Essentially,‌ ‌Section‌ ‌159.1‌ ‌is‌ ‌an‌ ‌exception‌ ‌to‌ ‌the‌ ‌rights‌ ‌of‌ ‌the‌‌ trademark‌‌owner‌‌in‌‌Section‌‌147.1‌.‌ ‌ The‌‌Court‌‌declares‌‌ZUNECA‌‌as‌‌the‌‌prior‌‌user‌‌in‌‌good‌‌faith‌‌of‌‌the‌‌ The‌ ‌owner‌ ‌of‌ ‌a‌ ‌registered‌ ‌mark‌ ‌may‌ ‌recover‌ damages‌ from‌‌ any‌ ‌person‌ ‌who‌ ‌infringes‌ ‌his‌ ‌rights,‌ ‌and‌‌the‌‌measure‌‌of‌‌the‌‌ damages‌‌‌suffered‌‌shall‌‌be‌‌either‌‌ ‌ a. the‌‌reasonable‌‌profit‌,‌‌or‌‌ ‌ b. a‌ ‌reasonable‌ ‌percentage‌‌based‌‌upon‌‌the‌‌amount‌‌ of‌ ‌gross‌ ‌sales‌ ‌of‌ ‌the‌ ‌defendant‌ ‌or‌ ‌the‌ ‌value‌ ‌of‌ ‌the‌‌ services‌ ‌in‌ ‌connection‌ ‌with‌ ‌which‌ ‌the‌ ‌mark‌‌or‌‌trade‌‌ name‌‌was‌‌used‌‌in‌‌the‌‌infringement‌‌of‌‌the‌‌rights‌‌of‌‌the‌‌ complaining‌‌party.‌‌ ‌ 2. On‌ ‌application‌ ‌of‌ ‌the‌ ‌complainant,‌ ‌the‌ ‌court‌ ‌may‌ ‌impound‌‌ during‌ ‌the‌ ‌pendency‌ ‌of‌ ‌the‌ ‌action,‌ ‌sales‌ ‌invoices‌‌and‌‌other‌‌ documents‌‌evidencing‌‌sales.‌ ‌ 3. In‌ ‌cases‌ ‌where‌ ‌actual‌ ‌intent‌ ‌to‌ ‌mislead‌ ‌the‌ ‌public‌ ‌or‌ ‌to‌‌ defraud‌ ‌the‌ ‌complainant‌ ‌is‌ ‌shown,‌ ‌in‌ ‌the‌ ‌discretion‌ ‌of‌ ‌the‌‌ court,‌‌the‌d ‌ amages‌‌may‌‌be‌‌doubled‌.‌‌ ‌ 4. The‌ ‌complainant,‌ ‌upon‌ ‌proper‌ ‌showing,‌ ‌may‌ ‌also‌ ‌be‌ ‌granted‌‌ injunction‌.‌ ‌ c.‌‌Requirement‌‌of‌‌notice‌ ‌ In‌‌any‌‌suit‌‌for‌‌infringement,‌‌the‌‌owner‌‌of‌‌the‌‌registered‌‌mark‌‌shall‌‌ not‌ ‌be‌ ‌entitled‌ ‌to‌ ‌recover‌ ‌profits‌ ‌or‌‌damages‌‌unless‌‌the‌‌acts‌‌have‌‌ been‌ ‌committed‌ ‌with‌ ‌knowledge‌ ‌that‌ ‌such‌ ‌imitation‌ ‌is‌ ‌likely‌ ‌to‌‌ cause‌‌confusion,‌‌or‌‌to‌‌cause‌‌mistake,‌‌or‌‌to‌‌deceive.‌‌ ‌ Such‌‌knowledge‌‌is‌‌presumed‌‌if‌‌the‌‌registrant‌‌gives‌‌notice‌‌that‌‌his‌‌ mark‌ ‌is‌ ‌registered‌ ‌by‌ ‌displaying‌ ‌with‌ ‌the‌ ‌mark‌ ‌the‌ ‌words‌‌ '"Registered‌ ‌Mark"‌ ‌or‌ ‌®‌ ‌or‌ ‌if‌‌the‌‌defendant‌‌had‌‌otherwise‌‌actual‌‌ notice‌‌of‌‌the‌‌registration.‌‌(§ ‌ 158‌)‌ ‌ d.‌‌Penalties‌ ‌ Independent‌ ‌of‌ ‌the‌ ‌civil‌ ‌and‌ ‌administrative‌‌sanctions‌‌imposed‌‌by‌‌ law,‌‌a‌‌criminal‌‌penalty‌‌of‌‌ ‌ a. imprisonment‌‌from‌‌two‌‌(2)‌‌years‌‌to‌‌five‌‌(5)‌‌years‌‌and‌‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 104‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ b. a‌‌fine‌‌ranging‌‌from‌‌P50K‌‌-‌‌P200K,‌‌ ‌ shall‌‌be‌‌imposed‌‌on‌‌any‌‌person‌‌who‌‌is‌‌found‌‌guilty‌‌of‌‌committing‌ ‌ 1. Trademark‌‌Infringement;‌ ‌ 2. Unfair‌‌Competition;‌ ‌ 3. False‌ ‌Designations‌ ‌of‌ ‌Origin;‌ ‌False‌ ‌Description‌ ‌or‌‌ Representation.‌ ‌ Uyco‌‌v.‌‌Lo‌‌2 ‌ 013‌‌re‌‌False‌‌Designations‌‌of‌‌Origin‌ ‌ The‌‌law‌‌on‌‌trademarks‌‌and‌‌trade‌‌names‌‌precisely‌‌precludes‌‌a‌‌person‌‌ from‌ ‌profiting‌ ‌from‌ ‌the‌ ‌business‌ ‌reputation‌ ‌built‌ ‌by‌ ‌another‌ ‌and‌‌ from‌‌deceiving‌‌the‌‌public‌‌as‌‌to‌‌the‌‌origins‌‌of‌‌products.‌ ‌ The‌ ‌argument‌ ‌that‌ ‌the‌ ‌words‌ ‌“Made‌ ‌in‌ ‌Portugal”‌ ‌and‌ ‌“Original‌‌ Portugal”‌‌refer‌‌to‌‌the‌‌origin‌‌of‌‌the‌‌design‌‌and‌‌not‌‌to‌‌the‌‌origin‌‌of‌‌the‌‌ goods‌‌does‌‌not‌‌negate‌‌the‌‌finding‌‌of‌‌probable‌‌cause;‌‌at‌‌the‌‌same‌‌time,‌‌ it‌ ‌is‌ ‌an‌ ‌argument‌ ‌that‌ ‌the‌ ‌petitioners‌ ‌are‌ ‌not‌ ‌barred‌ ‌by‌ ‌this‌‌ Resolution‌‌from‌‌raising‌‌as‌‌a‌‌defense‌‌during‌‌the‌‌hearing‌‌of‌‌the‌‌case.‌ ‌ 11.‌‌Unfair‌‌competition‌ ‌ Republic‌‌Gas,‌‌et.‌‌al.‌‌v.‌‌Petron,‌‌et.‌‌al.‌‌2 ‌ 013‌ ‌ WON‌‌probable‌‌cause‌‌exists‌‌to‌‌hold‌‌petitioners‌‌liable‌‌for‌‌the‌‌crime‌‌of‌‌ unfair‌‌competition.‌ ‌ YES‌.‌‌From‌‌jurisprudence,‌‌unfair‌‌competition‌‌has‌‌been‌‌defined‌‌as‌‌the‌‌ passing‌‌off‌‌(or‌‌palming‌‌off)‌‌or‌‌attempting‌‌to‌‌pass‌‌off‌‌upon‌‌the‌‌public‌‌ of‌ ‌the‌ ‌goods‌ ‌or‌ ‌business‌ ‌of‌‌one‌‌person‌‌as‌‌the‌‌goods‌‌or‌‌business‌‌of‌‌ another‌‌with‌‌the‌‌end‌‌and‌‌probable‌‌effect‌‌of‌‌deceiving‌‌the‌‌public.‌ ‌ Passing‌ ‌off‌ ‌(or‌ ‌palming‌ ‌off)‌ ‌takes‌ ‌place‌ ‌where‌ ‌the‌ ‌defendant,‌ ‌by‌‌ imitative‌ ‌devices‌ ‌on‌ ‌the‌ ‌general‌ ‌appearance‌ ‌of‌ ‌the‌ ‌goods,‌‌misleads‌‌ prospective‌ ‌purchasers‌ ‌into‌ ‌buying‌ ‌his‌ ‌merchandise‌ ‌under‌ ‌the‌‌ impression‌‌that‌‌they‌‌are‌‌buying‌‌that‌‌of‌‌his‌‌competitors.‌ ‌ San‌‌Miguel‌‌Pure‌‌Foods‌‌Co.,‌‌Inc.‌‌v.‌‌Foodsphere,‌‌Inc.‌‌‌2018‌ ‌ WON‌‌Foodsphere‌‌is‌‌liable‌‌for‌‌unfair‌‌competition.‌ ‌ YES‌.‌ ‌Thus,‌ ‌the‌ ‌essential‌ ‌elements‌ ‌of‌ ‌an‌ ‌action‌ ‌for‌ ‌unfair‌‌ competition‌‌are:‌‌ ‌ 1) confusing‌ ‌similarity‌ ‌in‌ ‌the‌ ‌general‌ ‌appearance‌ ‌of‌ ‌the‌‌ goods;‌‌and‌‌ ‌ 2) intent‌‌to‌‌deceive‌t‌ he‌‌public‌‌and‌‌defraud‌a‌ ‌‌competitor.‌‌ ‌ The‌ ‌confusing‌ ‌similarity‌ ‌may‌ ‌or‌ ‌may‌ ‌not‌ ‌result‌ ‌from‌ ‌similarity‌‌in‌‌ the‌ ‌marks,‌ ‌but‌ ‌may‌ ‌result‌ ‌from‌ ‌other‌ ‌external‌ ‌factors‌ ‌in‌ ‌the‌‌ packaging‌ ‌or‌ ‌presentation‌‌of‌‌the‌‌goods.‌‌‌The‌‌intent‌‌to‌‌deceive‌‌and‌‌ defraud‌ ‌may‌ ‌be‌ ‌inferred‌ ‌from‌‌the‌‌similarity‌‌of‌‌the‌‌appearance‌‌of‌‌ the‌‌goods‌‌as‌‌offered‌‌for‌‌sale‌‌to‌‌the‌‌public.‌‌‌Actual‌‌fraudulent‌‌intent‌‌ need‌‌not‌‌be‌‌shown.‌ ‌ Foodsphere's‌ ‌intent‌ ‌to‌ ‌deceive‌ ‌the‌‌public,‌‌to‌‌defraud‌‌its‌‌competitor,‌‌ and‌‌to‌‌ride‌‌on‌‌the‌‌goodwill‌‌of‌‌SMPFCI's‌‌products‌‌is‌‌evidenced‌‌by‌‌the‌‌ fact‌ ‌that‌‌not‌‌only‌‌did‌‌Foodsphere‌‌switch‌‌from‌‌its‌‌old‌‌box‌‌packaging‌‌ to‌‌the‌‌same‌‌paper‌‌ham‌‌bag‌‌packaging‌‌as‌‌that‌‌used‌‌by‌‌SMPFCI,‌‌it‌‌also‌‌ used‌‌the‌‌same‌‌layout‌‌design‌‌printed‌‌on‌‌the‌‌same.‌ ‌ Asia‌‌Pacific‌‌Resources‌‌International‌‌Holdings,‌‌Ltd.‌‌v.‌‌ Paperone,‌‌Inc‌.‌2 ‌ 018‌ ‌ WON‌‌Paperone‌‌is‌‌liable‌‌for‌‌unfair‌‌competition.‌ ‌ YES‌.‌ ‌Relative‌ ‌to‌ ‌the‌ ‌issue‌ ‌on‌ ‌confusion‌ ‌of‌‌marks‌‌and‌‌trade‌‌names,‌‌ jurisprudence‌‌has‌‌noted‌‌two‌‌types‌‌of‌‌confusion,‌‌viz.:‌‌ ‌ 1) confusion‌ ‌of‌ ‌goods‌ ‌(product‌ ‌confusion),‌ ‌where‌ ‌the‌‌ ordinarily‌‌prudent‌‌purchaser‌‌would‌‌be‌‌induced‌‌to‌‌purchase‌‌ one‌ ‌product‌ ‌in‌ ‌the‌ ‌belief‌ ‌that‌ ‌he‌‌was‌‌purchasing‌‌the‌‌other;‌‌ and‌‌ ‌ 2) confusion‌ ‌of‌ ‌business‌ ‌(source‌ ‌or‌ ‌origin‌ ‌confusion),‌‌ where,‌ ‌although‌ ‌the‌ ‌goods‌ ‌of‌ ‌the‌ ‌parties‌ ‌are‌ ‌different,‌ ‌the‌‌ product,‌‌the‌‌mark‌‌of‌‌which‌‌registration‌‌is‌‌applied‌‌for‌‌by‌‌one‌‌ party,‌ ‌is‌ ‌such‌ ‌as‌ ‌might‌‌reasonably‌‌be‌‌assumed‌‌to‌‌originate‌‌ with‌ ‌the‌ ‌registrant‌ ‌of‌ ‌an‌ ‌earlier‌ ‌product;‌ ‌and‌ ‌the‌ ‌public‌‌ would‌ ‌then‌ ‌be‌ ‌deceived‌ ‌either‌ ‌into‌ ‌that‌ ‌belief‌ ‌or‌ ‌into‌ ‌the‌‌ belief‌‌that‌‌there‌‌is‌‌some‌‌connection‌‌between‌‌the‌‌two‌‌parties,‌‌ though‌‌inexistent.‌ ‌ Thus,‌ ‌while‌ ‌there‌ ‌is‌ ‌confusion‌ ‌of‌ ‌goods‌ ‌when‌ ‌the‌ ‌products‌ ‌are‌‌ competing‌,‌ ‌confusion‌ ‌of‌ ‌business‌ ‌exists‌ ‌when‌ ‌the‌ ‌products‌ ‌are‌‌ non-competing‌ ‌but‌ ‌related‌ ‌enough‌ ‌to‌ ‌produce‌ ‌confusion‌ ‌of‌‌ affiliation‌.‌ ‌ This‌‌case‌‌falls‌‌under‌‌the‌‌second‌‌type‌‌of‌‌confusion.‌‌‌The‌‌element‌‌ of‌ ‌intent‌ ‌to‌ ‌deceive‌ ‌and‌ ‌to‌ ‌defraud‌ ‌may‌ ‌be‌ ‌inferred‌ ‌from‌ ‌the‌‌ similarity‌ ‌of‌ ‌the‌‌appearance‌‌of‌‌the‌‌goods‌‌as‌‌offered‌‌for‌‌sale‌‌to‌‌ the‌‌public.‌‌Contrary‌‌to‌‌the‌‌ruling‌‌of‌‌the‌‌CA,‌‌actual‌‌fraudulent‌‌intent‌‌ need‌‌not‌‌be‌‌shown.‌‌Factual‌‌circumstances‌‌were‌‌established‌‌showing‌‌ that‌ ‌respondent‌ ‌adopted‌ ‌PAPERONE‌ ‌in‌‌its‌‌trade‌‌name‌‌even‌‌with‌‌the‌‌ prior‌ ‌knowledge‌ ‌of‌ ‌the‌ ‌existence‌ ‌of‌ ‌PAPER‌ ‌ONE‌ ‌as‌ ‌a‌ ‌trademark‌ ‌of‌‌ petitioner.‌ ‌ 12.‌‌Registration‌‌of‌‌marks‌‌under‌‌the‌‌Madrid‌‌Protocol‌ ‌ See‌M ‌ C‌‌17-011‌ ‌ a.‌‌Coverage‌ ‌ Shall‌ ‌apply‌‌to‌‌all‌‌international‌‌applications‌‌filed‌‌under‌‌the‌‌Madrid‌‌ Protocol‌ ‌where‌ ‌IPOPHL‌ ‌is‌ ‌the‌ ‌Office‌ ‌of‌ ‌Origin,‌ ‌and‌ ‌international‌‌ registrations‌ ‌where‌ ‌the‌ ‌Philippines‌ ‌is‌ ‌a‌ ‌Designated‌ ‌Contracting‌‌ Party.‌ ‌ b.‌‌Rights‌‌conferred‌ ‌ Effects‌‌of‌‌an‌‌International‌‌Registration.‌‌ ‌ 1) An‌ ‌international‌ ‌registration‌ ‌designating‌ ‌the‌ ‌Philippines‌‌shall‌‌ have‌ ‌the‌ ‌same‌ ‌effect,‌ ‌from‌ ‌the‌ ‌date‌ ‌of‌ ‌the‌ ‌international‌‌ registration,‌‌as‌‌if‌‌an‌‌application‌‌for‌‌the‌‌registration‌‌of‌‌the‌‌mark‌‌ had‌‌been‌‌filed‌‌directly‌‌with‌‌the‌‌IPOPHL‌‌under‌‌the‌‌IP‌‌Code‌‌and‌‌ the‌‌TM‌‌Regulations.‌‌ ‌ 2) If‌ ‌no‌ ‌refusal‌ ‌is‌ ‌notified‌ ‌by‌ ‌the‌ ‌IPOPHL‌ ‌to‌ ‌the‌ ‌International‌‌ Bureau‌ ‌in‌ ‌accordance‌ ‌with‌ ‌the‌ ‌Madrid‌ ‌Protocol‌ ‌and‌ ‌the‌‌ Common‌ ‌Regulations,‌ ‌or‌ ‌if‌ ‌a‌ ‌refusal‌ ‌has‌ ‌been‌ ‌so‌‌notified‌‌but‌‌ has‌‌been‌‌subsequently‌‌withdrawn,‌‌or‌‌if‌‌a‌‌statement‌‌of‌‌grant‌‌of‌‌ protection‌‌is‌‌sent‌‌by‌‌the‌‌IPOPHL,‌‌the‌‌protection‌‌of‌‌the‌‌mark‌‌in‌‌ the‌ ‌Philippines‌ ‌shall‌ ‌be‌ ‌the‌ ‌same‌ ‌as‌ ‌if‌ ‌the‌ ‌mark‌ ‌had‌ ‌been‌‌ registered‌ ‌directly‌ ‌by‌ ‌the‌ ‌IPOPHL‌ ‌on‌ ‌the‌ ‌date‌ ‌of‌ ‌the‌‌ international‌‌registration.‌ ‌ c.‌‌Requirements‌‌for‌‌registration‌ ‌ To‌‌file‌‌file‌‌an‌‌international‌‌application‌‌with‌‌IPOPHL,‌‌one‌‌must‌ ‌ 1. Be‌‌a‌‌national‌‌of‌‌the‌‌Philippines;‌ ‌ 2. Domiciled‌‌in‌‌the‌‌Philippines;‌‌and‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 105‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ 3. Have‌ ‌a‌ ‌real‌ ‌and‌ ‌effective‌ ‌industrial‌ ‌or‌ ‌commercial‌‌ establishment‌‌in‌‌the‌‌Philippines.‌ ‌ Must‌ ‌have‌ ‌a‌ ‌duly‌ ‌maintained‌ ‌local‌ ‌trademark‌‌registration‌‌or‌‌an‌‌active‌‌ local‌‌trademark‌‌application‌‌with‌‌IPOPHL.‌ ‌ d.‌‌Term‌‌of‌‌protection‌ ‌ The‌ ‌trademark‌ ‌registration‌‌granted‌‌through‌‌the‌‌Madrid‌‌Protocol‌‌is‌‌ valid‌‌for‌1 ‌ 0‌‌years‌‌‌from‌‌the‌‌date‌‌of‌‌registration.‌‌ ‌ One‌ ‌can‌ ‌renew‌ ‌the‌ ‌registration‌ ‌at‌ ‌the‌ ‌end‌ ‌of‌ ‌each‌ ‌10-year‌ ‌period‌‌ directly‌‌with‌‌WIPO‌‌with‌‌effect‌‌in‌‌the‌‌designated‌‌Contracting‌‌Parties‌‌ concerned.‌ ‌ ‌ Trademark‌‌ Tradename‌‌ Infringement‌ ‌ Infringement‌ ‌ Legal‌‌Basis‌ ‌ Needs‌‌ registration?‌ ‌ Acts‌‌ prohibited‌ ‌ Is‌‌fraud‌‌an‌‌ element?‌ ‌ Unfair‌‌ Competition‌ ‌ 155‌ ‌ 165‌ ‌ 168‌ ‌ ✔‌ ‌ ✘‌ ‌ ✘‌ ‌ Unauthorized‌‌ use/‌‌ reproduction/‌‌ counterfeiting/‌‌ copying‌‌or‌‌ colorable‌‌ imitation‌ ‌ ✘‌ ‌ Unauthorized‌‌ use/‌‌ reproduction/‌‌ counterfeiting/‌‌ copying‌ ‌ ✘‌ ‌ Passing‌‌off‌‌of‌‌ one’s‌‌goods‌‌ giving‌‌them‌‌the‌‌ general‌‌ appearance‌‌of‌‌ the‌‌goods‌‌of‌‌ another‌ ‌ ✔‌ ‌ (‌Co‌‌v.‌‌Sps‌‌Yeung‌‌‌2014‌)‌ ‌ Law‌‌on‌‌Copyright‌ ‌ 1.‌‌Basic‌‌principles‌ ‌ a. b. creation.‌ ‌ 2.‌‌Copyrightable‌‌works‌ ‌ 1) Literary‌‌and‌‌Artistic‌‌Works;‌ ‌ 2) Derivative‌‌Works;‌ ‌ ABS-CBN‌‌v.‌‌Gozon‌‌‌2015‌‌Leonen,‌‌J‌ ‌ WON‌‌news‌‌footage‌‌is‌‌copyrightable‌‌under‌‌the‌‌law;‌ ‌ 3) Published‌‌Edition‌‌of‌‌Work.‌ ‌ a.‌‌Original‌‌works‌ ‌ §172.‌ ‌Literary‌ ‌and‌ ‌Artistic‌ ‌Works.‌ ‌—‌ ‌172.1.‌ ‌Literary‌ ‌and‌‌ artistic‌ ‌works,‌ ‌hereinafter‌ ‌referred‌ ‌to‌ ‌as‌ ‌"‌works‌",‌ ‌are‌ ‌original‌‌ intellectual‌ ‌creations‌ ‌in‌ ‌the‌ ‌literary‌ ‌and‌ ‌artistic‌ ‌domain‌‌ protected‌‌from‌‌the‌‌moment‌‌of‌‌their‌‌creation‌‌xxxx.‌ ‌ 172.2.‌ ‌Works‌ ‌are‌ ‌protected‌ ‌by‌ ‌the‌ ‌sole‌ ‌fact‌ ‌of‌ ‌their‌ ‌creation‌,‌‌ irrespective‌‌of‌‌their‌‌mode‌‌or‌‌form‌‌of‌‌expression,‌‌as‌‌well‌‌as‌‌of‌‌their‌‌ content,‌‌quality‌‌and‌‌purpose.‌ ‌ b.‌‌Derivative‌‌works‌ ‌ §173.‌ ‌Derivative‌ ‌Works.‌ ‌—‌ ‌173.1.‌ ‌The‌ ‌following‌ ‌derivative‌‌ works‌‌shall‌‌also‌‌be‌‌protected‌‌by‌‌copyright:‌ ‌ a) Dramatizations,‌ ‌translations,‌ ‌adaptations,‌ ‌abridgments,‌‌ arrangements,‌ ‌and‌‌other‌‌‌alterations‌‌‌of‌‌literary‌‌or‌‌artistic‌‌ works;‌‌and‌ ‌ YES‌.‌‌It‌‌is‌‌true‌‌that‌‌under‌‌Section‌‌175‌‌of‌‌the‌‌IPC,‌‌"news‌‌of‌‌the‌‌day‌‌and‌‌ other‌‌miscellaneous‌‌facts‌‌having‌‌the‌‌character‌‌of‌‌mere‌‌items‌‌of‌‌press‌‌ information"‌ ‌are‌ ‌considered‌ ‌unprotected‌ ‌subject‌ ‌matter.‌ ‌However,‌‌ the‌ ‌Code‌ ‌does‌‌not‌‌state‌‌that‌‌‌expression‌‌‌of‌‌the‌‌news‌‌of‌‌the‌‌day,‌‌ particularly‌ ‌when‌ ‌it‌ ‌underwent‌ ‌a‌ ‌creative‌ ‌process,‌ ‌is‌ ‌not‌‌ entitled‌‌to‌‌protection.‌ ‌ News‌‌or‌‌the‌‌event‌‌itself‌‌is‌‌NOT‌‌copyrightable.‌‌‌However,‌‌an‌‌event‌‌ can‌ ‌be‌ ‌captured‌ ‌and‌ ‌presented‌ ‌in‌‌a‌‌specific‌‌medium.‌‌As‌‌recognized‌‌ by‌ ‌this‌ ‌court‌ ‌in‌ ‌Joaquin‌ ‌v.‌ ‌Drilon‌,‌ ‌television‌ ‌"involves‌ ‌a‌ ‌whole‌‌ spectrum‌‌of‌‌visuals‌‌and‌‌effects,‌‌video‌‌and‌‌audio."‌‌News‌‌coverage‌‌in‌‌ television‌‌involves‌‌framing‌‌shots,‌‌using‌‌images,‌‌graphics,‌‌and‌‌sound‌‌ effects.‌‌It‌‌involves‌‌creative‌‌process‌‌and‌‌originality.‌‌‌Television‌‌news‌‌ footage‌‌is‌‌an‌‌expression‌o ‌ f‌‌the‌‌news.‌ ‌ News‌ ‌as‌ ‌expressed‌ ‌in‌ ‌a‌ ‌video‌ ‌footage‌ ‌is‌ ‌entitled‌ ‌to‌ ‌copyright‌‌ protection.‌ ‌Broadcasting‌‌organizations‌‌have‌‌not‌‌only‌‌copyright‌‌on‌‌ but‌‌also‌‌neighboring‌‌rights‌‌over‌‌their‌‌broadcasts.‌ ‌Copyrightability‌‌of‌‌ a‌ ‌work‌ ‌is‌ ‌different‌ ‌from‌ ‌fair‌ ‌use‌ ‌of‌ ‌a‌ ‌work‌ ‌for‌ ‌purposes‌ ‌of‌ ‌news‌‌ reporting.‌ ‌ b) Collections‌ ‌of‌ ‌literary,‌ ‌scholarly‌ ‌or‌ ‌artistic‌ ‌works,‌ ‌and‌‌ compilations‌ ‌of‌ ‌data‌ ‌and‌ ‌other‌ ‌materials‌ ‌which‌ ‌are‌‌ Olaño‌‌v.‌‌Lim‌‌Eng‌‌Co‌‌‌2016‌‌ ‌ original‌ ‌by‌ ‌reason‌ ‌of‌ ‌the‌ ‌selection‌ ‌or‌ ‌coordination‌ ‌or‌‌ WON‌t‌ he‌‌hatch‌‌doors‌‌of‌‌LEC‌‌fall‌‌within‌‌copyrightable‌‌works.‌ ‌ arrangement‌‌of‌‌their‌‌contents.‌ ‌ NO‌.‌ ‌It‌ ‌is‌ ‌clear‌ ‌that‌ ‌the‌ ‌hatch‌ ‌doors‌ ‌were‌ ‌NOT‌ ‌artistic‌ ‌works‌‌ 173.2.‌ ‌Derivative‌ ‌works‌ ‌shall‌ ‌be‌‌protected‌‌as‌‌new‌‌works‌‌if‌‌such‌‌ within‌‌the‌‌meaning‌‌of‌‌copyright‌‌laws.‌‌‌A‌‌copyrightable‌‌work‌‌refers‌‌ new‌‌work‌‌shall‌‌not:‌‌ ‌ to‌ ‌literary‌ ‌and‌ ‌artistic‌ ‌works‌ ‌defined‌ ‌as‌ ‌original‌ ‌intellectual‌‌ creations‌‌in‌‌the‌‌literary‌‌and‌‌artistic‌‌domain.‌ ‌ a) affect‌ ‌the‌ ‌force‌ ‌of‌ ‌any‌ ‌subsisting‌ ‌copyright‌ ‌upon‌ ‌the‌‌ original‌‌works‌‌employed‌‌or‌‌any‌‌part‌‌thereof,‌‌or‌‌ ‌ A‌ ‌hatch‌ ‌door,‌ ‌by‌ ‌its‌ ‌nature,‌ ‌is‌ ‌an‌ ‌object‌ ‌of‌ ‌utility.‌ ‌A‌ ‌"‌useful‌‌ b) be‌‌construed‌‌to‌‌imply‌‌any‌‌right‌‌to‌‌such‌‌use‌‌of‌‌the‌‌original‌‌ works,‌‌or‌ ‌ A‌ ‌copyright‌ ‌refers‌ ‌to‌ ‌"the‌ ‌right‌ ‌granted‌ ‌by‌ ‌a‌ ‌statute‌ ‌to‌ ‌the‌‌ proprietor‌‌of‌‌an‌‌intellectual‌‌production‌‌to‌‌its‌‌exclusive‌‌use‌‌and‌‌ enjoyment‌‌to‌‌the‌‌extent‌‌specified‌‌in‌‌the‌‌statute."‌ ‌ Rights‌ ‌over‌ ‌copyrights‌ ‌are‌ ‌conferred‌ ‌from‌ ‌the‌ ‌moment‌ ‌of‌‌ shall‌ ‌have‌ ‌a‌ ‌copyright‌ ‌consisting‌ ‌merely‌ ‌of‌ ‌the‌ ‌right‌ ‌of‌‌ reproduction‌ ‌of‌ ‌the‌ ‌typographical‌ ‌arrangement‌ ‌of‌ ‌the‌ ‌published‌‌ edition‌‌of‌‌the‌‌work.‌ ‌ c) to‌‌secure‌‌or‌‌extend‌‌copyright‌‌in‌‌such‌‌original‌‌works.‌ ‌ §174.‌‌‌Published‌‌Edition‌‌of‌‌Work.‌ ‌—‌‌In‌‌addition‌‌to‌‌the‌‌right‌‌to‌‌ publish‌ ‌granted‌ ‌by‌ ‌the‌ ‌author,‌ ‌his‌ ‌heirs,‌ ‌or‌‌assigns,‌‌the‌‌publisher‌‌ article‌"‌‌defined‌‌as‌‌an‌‌article‌‌"having‌‌an‌‌intrinsic‌‌utilitarian‌‌function‌‌ that‌‌is‌‌not‌‌merely‌‌to‌‌portray‌‌the‌‌appearance‌‌of‌‌the‌‌article‌‌or‌‌to‌‌convey‌‌ information"‌i‌ s‌‌excluded‌‌from‌‌copyright‌‌eligibility.‌ ‌ The‌ ‌only‌ ‌instance‌ ‌when‌ ‌a‌ ‌useful‌ ‌article‌ ‌may‌ ‌be‌ ‌the‌ ‌subject‌ ‌of‌‌ copyright‌‌protection‌‌is‌‌when‌‌it‌‌incorporates‌‌a‌‌design‌‌element‌‌that‌‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 106‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ is‌ ‌physically‌ ‌or‌ ‌conceptually‌ ‌separable‌ ‌from‌ ‌the‌ ‌underlying‌‌ product.‌ ‌This‌ ‌means‌ ‌that‌‌the‌‌utilitarian‌‌article‌‌can‌‌function‌‌without‌‌ the‌ ‌design‌ ‌element.‌ ‌In‌ ‌such‌ ‌an‌ ‌instance,‌ ‌the‌ ‌design‌ ‌element‌ ‌is‌‌ eligible‌‌for‌‌copyright‌‌protection.‌ ‌ approval‌ ‌or‌ ‌conditions‌ ‌shall‌ ‌be‌ ‌required‌ ‌for‌ ‌the‌ ‌use‌ ‌for‌‌any‌‌ purpose‌‌of‌‌ ‌ 1. statutes,‌‌ ‌ 2. rules‌‌and‌‌regulations,‌‌and‌‌ ‌ 3. §175.‌ ‌Unprotected‌ ‌Subject‌ ‌Matter.‌ ‌—‌ ‌Notwithstanding‌ ‌the‌‌ provisions‌ ‌of‌ ‌Sections‌ ‌172‌ ‌and‌ ‌173,‌ ‌no‌ ‌protection‌ ‌shall‌ ‌extend,‌‌ under‌‌this‌‌law,‌‌to‌‌any‌‌ ‌ speeches,‌ ‌lectures,‌‌sermons,‌‌addresses,‌‌and‌‌dissertations,‌‌ pronounced,‌ ‌read‌ ‌or‌ ‌rendered‌ ‌in‌ ‌courts‌ ‌of‌ ‌justice,‌ ‌before‌‌ administrative‌ ‌agencies,‌‌in‌‌deliberative‌‌assemblies‌‌and‌‌in‌‌ meetings‌‌of‌‌public‌‌character.‌‌ ‌ a) idea,‌ ‌procedure,‌ ‌system,‌ ‌method‌ ‌or‌ ‌operation,‌ ‌concept,‌‌ principle,‌‌discovery‌‌or‌‌mere‌‌data‌‌as‌‌such,‌‌‌even‌‌‌if‌‌they‌‌are‌‌ expressed,‌‌explained,‌‌illustrated‌‌or‌‌embodied‌‌in‌‌a‌‌work;‌‌ ‌ 176.2.‌ ‌The‌ ‌author‌ ‌of‌ ‌speeches,‌ ‌lectures,‌ ‌sermons,‌‌addresses,‌‌and‌‌ dissertations‌ ‌shall‌ ‌have‌ ‌the‌ ‌exclusive‌ ‌right‌ ‌of‌ ‌making‌ ‌a‌‌ collection‌o ‌ f‌‌his‌‌works.‌ ‌ 3.‌‌Non-copyrightable‌‌works‌ ‌ b) news‌ ‌of‌‌the‌‌day‌‌and‌‌other‌‌miscellaneous‌‌facts‌‌having‌‌the‌‌ character‌‌of‌‌mere‌‌items‌‌of‌‌press‌‌information;‌‌or‌‌ ‌ c) any‌ ‌official‌ ‌text‌ ‌of‌ ‌a‌ ‌legislative,‌ ‌administrative‌ ‌or‌ ‌legal‌‌ nature,‌‌as‌‌well‌‌as‌‌any‌‌official‌‌translation‌‌thereof.‌ ‌ Joaquin,‌‌Jr.‌‌v.‌‌Drilon,‌‌et.‌‌al.‌ ‌ §177‌.‌‌‌Copyright‌‌or‌‌Economic‌‌Rights‌.‌‌—‌‌Subject‌‌to‌‌the‌‌provisions‌‌ of‌ ‌Chapter‌ ‌VIII,‌ ‌copyright‌ ‌or‌ ‌economic‌ ‌rights‌ ‌shall‌ ‌consist‌ ‌of‌ ‌the‌‌ exclusive‌‌right‌‌to‌‌carry‌‌out,‌‌authorize‌‌or‌‌prevent‌‌the‌‌following‌‌ acts:‌ ‌ The‌ ‌copyright‌ ‌does‌ ‌NOT‌ ‌extend‌ ‌to‌ ‌the‌ ‌general‌ ‌concept‌ ‌or‌‌ format‌‌of‌‌its‌‌dating‌‌game‌‌show.‌‌Accordingly,‌‌‌by‌‌the‌‌very‌‌nature‌‌of‌‌ the‌‌subject‌‌of‌‌petitioner‌‌BJPI’s‌‌copyright‌,‌‌the‌‌investigating‌‌prosecutor‌‌ should‌ ‌have‌ ‌the‌ ‌opportunity‌ ‌to‌ ‌compare‌ ‌the‌ ‌videotapes‌ ‌of‌ ‌the‌‌ two‌‌shows.‌ ‌ Mere‌ ‌description‌ ‌by‌ ‌words‌ ‌of‌ ‌the‌ ‌general‌ ‌format‌ ‌of‌ ‌the‌ ‌two‌ ‌dating‌‌ game‌ ‌shows‌ ‌is‌ ‌insufficient;‌ ‌the‌ ‌presentation‌ ‌of‌ ‌the‌ ‌master‌‌ videotape‌‌in‌‌evidence‌‌was‌‌indispensable‌‌to‌‌the‌‌determination‌‌of‌‌ the‌‌existence‌‌of‌‌probable‌‌cause.‌ ‌ However‌,‌ ‌prior‌ ‌approval‌ ‌of‌ ‌the‌ ‌government‌ ‌agency‌ ‌or‌ ‌office‌‌ wherein‌‌the‌‌work‌‌is‌‌created‌‌shall‌‌be‌‌‌necessary‌‌for‌‌exploitation‌‌of‌‌ such‌ ‌work‌ ‌for‌ ‌profit‌.‌ ‌Such‌ ‌agency‌ ‌or‌ ‌office‌ ‌may,‌ ‌among‌ ‌other‌‌ things,‌ ‌impose‌ ‌as‌ ‌a‌ ‌condition‌ ‌the‌ ‌payment‌ ‌of‌ ‌royalties.‌ ‌No‌‌prior‌‌ 1. Reproduction‌ ‌of‌ ‌the‌ ‌work‌ ‌or‌‌‌substantial‌‌‌portion‌‌of‌‌the‌‌ work;‌ ‌ 2. Dramatization,‌ ‌translation,‌ ‌adaptation,‌ ‌abridgment,‌‌ arrangement‌‌or‌‌other‌t‌ ransformation‌o ‌ f‌‌the‌‌work;‌ ‌ 3. The‌ ‌first‌ ‌public‌ ‌distribution‌ ‌of‌ ‌the‌ ‌original‌ ‌and‌ ‌each‌‌ copy‌ ‌of‌ ‌the‌ ‌work‌ ‌by‌ ‌sale‌ ‌or‌ ‌other‌ ‌forms‌ ‌of‌ ‌transfer‌ ‌of‌‌ ownership;‌ ‌ 4. Rental‌ ‌of‌ ‌the‌ ‌original‌ ‌or‌ ‌a‌ ‌copy‌ ‌irrespective‌ ‌of‌ ‌its‌‌ ownership;‌ ‌ 5. Public‌‌display‌‌‌of‌‌the‌‌original‌‌or‌‌a‌‌copy‌‌of‌‌the‌‌work;‌ ‌ 6. Public‌‌performance‌‌‌of‌‌the‌‌work;‌‌and‌ ‌ 7. Other‌‌communication‌‌‌to‌‌the‌‌public‌‌of‌‌the‌‌work.‌ ‌ §193.‌‌‌Scope‌‌of‌‌Moral‌‌Rights.‌‌—‌‌The‌‌author‌‌of‌‌a‌‌work‌‌shall‌‌have‌‌ the‌‌right:‌ ‌ 1. of‌‌Attribution‌;‌ ‌ 2. to‌‌Alter‌‌or‌‌Withhold‌‌Publication‌;‌ ‌ 3. to‌‌Object‌‌to‌‌Modification‌;‌‌and‌ ‌ Against‌ ‌the‌ ‌Use‌ ‌of‌ ‌Name‌ ‌in‌ ‌a‌ ‌Distorted‌ ‌Version‌ ‌of‌‌ Work‌.‌ ‌ §211‌.‌‌‌Scope‌‌of‌‌Right.‌‌—‌‌Subject‌‌to‌‌the‌‌provisions‌‌of‌‌Section‌‌212,‌‌ broadcasting‌ ‌organizations‌ ‌shall‌ ‌enjoy‌ ‌the‌ ‌exclusive‌ ‌right‌ ‌to‌‌ carry‌‌out,‌‌authorize‌‌or‌‌prevent‌‌any‌‌of‌‌the‌‌following‌‌acts:‌ ‌ 1. The‌‌rebroadcasting‌o ‌ f‌‌their‌‌broadcasts;‌ 2. The‌ ‌recording‌ ‌in‌ ‌any‌ ‌manner,‌ ‌including‌ ‌the‌ ‌making‌ ‌of‌‌ films‌ ‌or‌ ‌the‌ ‌use‌ ‌of‌ ‌video‌ ‌tape,‌‌of‌‌their‌‌broadcasts‌‌for‌‌the‌‌ purpose‌ ‌of‌ ‌communication‌ ‌to‌ ‌the‌ ‌public‌ ‌of‌ ‌television‌‌ broadcasts‌‌of‌‌the‌‌same;‌‌and‌ ‌ 3. The‌ ‌use‌ ‌of‌ ‌such‌ ‌records‌ ‌for‌ ‌fresh‌ ‌transmissions‌ ‌or‌ ‌for‌‌ fresh‌‌recording.‌ 4.‌‌Rights‌‌of‌‌copyright‌‌owner‌ ‌ To‌ ‌begin‌ ‌with,‌ ‌the‌ ‌format‌ ‌of‌ ‌a‌ ‌show‌ ‌is‌ ‌not‌ ‌copyrightable.‌‌ Petitioner‌ ‌BJPI’s‌ ‌copyright‌ ‌covers‌‌‌audio-visual‌‌recordings‌‌‌of‌‌each‌‌ episode‌‌of‌‌Rhoda‌‌and‌‌Me‌.‌ ‌ §176.‌ ‌Works‌ ‌of‌ ‌the‌ ‌Government.‌ ‌—‌ ‌176.1.‌ ‌No‌ ‌copyright‌ ‌shall‌‌ subsist‌‌in‌‌any‌‌work‌‌of‌‌the‌‌Government‌‌of‌‌the‌‌Philippines.‌‌ ‌ 4. §212‌.‌ ‌Limitations‌ ‌on‌ ‌Rights.‌ ‌—‌ ‌The‌ ‌provisions‌ ‌of‌ ‌Chapter‌ ‌VIII‌‌ shall‌‌apply‌‌mutatis‌‌mutandis‌‌‌to‌‌the‌‌rights‌‌of‌‌performers,‌‌producers‌‌ of‌‌sound‌‌recordings‌‌and‌‌broadcasting‌‌organizations.‌ ‌ ABS-CBN‌‌v.‌‌Gozon‌‌‌2015‌‌Leonen,‌‌J‌ ‌ Under‌‌‌Section‌‌211‌‌‌of‌‌the‌‌IPC‌‌broadcasting‌‌organizations‌‌are‌‌granted‌‌ a‌ ‌more‌ ‌specific‌ ‌set‌ ‌of‌ ‌rights‌ ‌called‌ ‌related‌ ‌or‌ ‌neighboring‌‌ rights‌.‌ ‌ Broadcasting‌ ‌organizations‌ ‌shall‌ ‌enjoy‌ ‌the‌ ‌right‌ ‌to‌ ‌authorize‌ ‌or‌‌ prohibit:‌ ‌ a) the‌‌rebroadcasting‌o ‌ f‌‌their‌‌broadcasts;‌ b) the‌‌fixation‌‌of‌‌their‌‌broadcasts;‌ ‌ c) the‌‌reproduction:‌ ‌ i) of‌ ‌fixations,‌ ‌made‌ ‌without‌ ‌their‌ ‌consent,‌ ‌of‌ ‌their‌‌ broadcasts;‌ ‌ ii) of‌‌fixations,‌‌made‌‌in‌‌accordance‌‌with‌‌the‌‌provisions‌‌of‌‌ Article‌ ‌15,‌ ‌of‌ ‌their‌ ‌broadcasts,‌ ‌if‌ ‌the‌ ‌reproduction‌ ‌is‌ made‌ ‌for‌ ‌purposes‌ ‌different‌ ‌from‌ ‌those‌ ‌referred‌ ‌to‌ ‌in‌‌ those‌‌provisions;‌ ‌ d) the‌ ‌communication‌ ‌to‌ ‌the‌ ‌public‌ ‌of‌ ‌their‌ ‌television‌‌ broadcasts‌ ‌if‌ ‌such‌ ‌communication‌ ‌is‌ ‌made‌ ‌in‌ ‌places‌‌ accessible‌ ‌to‌‌the‌‌public‌‌against‌‌payment‌‌of‌‌an‌‌entrance‌‌fee;‌‌ it‌ ‌shall‌ ‌be‌ ‌a‌ ‌matter‌‌for‌‌the‌‌domestic‌‌law‌‌of‌‌the‌‌State‌‌where‌‌ protection‌ ‌of‌ ‌this‌ ‌right‌ ‌is‌ ‌claimed‌ ‌to‌ ‌determine‌ ‌the‌‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 107‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ conditions‌‌under‌‌which‌‌it‌‌may‌‌be‌‌exercised.‌ ‌ Rebroadcasting‌ ‌as‌ ‌defined‌ ‌in‌ ‌Article‌ ‌3(g)‌ ‌of‌ ‌the‌ ‌1961‌ ‌Rome‌‌ Convention‌ ‌is‌ ‌"‌the‌ ‌simultaneous‌ ‌broadcasting‌ ‌by‌ ‌one‌‌broadcasting‌‌ organization‌ ‌of‌ ‌the‌ ‌broadcast‌ ‌of‌ ‌another‌ ‌broadcasting‌‌ organization‌."‌ ‌ Works‌ ‌ Works‌‌of‌‌Joint‌‌ Authorship‌ ‌ EXC‌:‌ Duration‌‌of‌‌Economic‌‌Rights‌ ‌ Literary‌‌and‌‌Artistic‌‌ Works‌‌and‌‌Derivative‌‌ Works‌ ‌ Life‌‌of‌‌author‌‌‌+50‌‌years‌‌‌after‌‌his‌‌death.‌ ‌ Works‌‌of‌‌Joint‌‌ Authorship‌ ‌ Life‌‌of‌‌the‌‌last‌‌surviving‌‌author‌+ ‌ 50‌‌years‌‌ after‌‌his‌‌death‌ ‌ Anonymous‌‌or‌‌ Pseudonymous‌‌ Works‌ ‌ 50‌‌years‌‌‌from‌‌date‌‌it‌‌is‌‌first‌‌lawfully‌‌ published‌‌If‌‌before‌‌expiration‌‌of‌‌period,‌‌ identity‌‌is‌‌revealed‌‌or‌‌no‌‌longer‌‌in‌‌doubt,‌‌ the‌‌rule‌‌on‌‌Literary‌‌and‌‌Joint‌‌Authorship‌‌ applies‌ ‌ Work‌‌of‌‌Applied‌‌Art‌ 25‌‌years‌‌‌from‌‌date‌‌of‌‌making‌ ‌ Photographic‌‌works‌ ‌ If‌‌published‌‌–‌‌50‌‌years‌‌from‌‌publication;‌‌ Audiovisual‌‌works‌ ‌ Unpublished‌‌–‌‌50‌‌years‌‌from‌‌making.‌ ‌ Performances‌‌not‌‌ incorporated‌‌in‌ ‌ recordings‌ ‌ Work‌‌in‌‌the‌‌ Course‌‌of‌‌ Employment‌ ‌ Commissioned‌‌ Work‌ ‌ Audiovisual‌‌ Work‌ ‌ 50‌‌years‌f‌ rom‌‌end‌‌of‌‌the‌‌year‌‌in‌‌which‌‌ performance‌‌took‌‌place‌ ‌ Sound‌‌recordings‌‌ 50‌‌years‌‌‌from‌‌end‌‌of‌‌the‌‌year‌‌in‌‌which‌‌ and‌‌performances‌‌ recording‌‌took‌‌place‌ ‌ incorporated‌‌therein‌ ‌ ⭐§214‌.‌ ‌Calculation‌ ‌of‌ ‌Term.‌ ‌—‌ ‌The‌ ‌term‌ ‌of‌ ‌protection‌‌ subsequent‌‌to‌‌the‌‌death‌‌of‌‌the‌‌author‌‌shall‌‌run‌‌from‌‌the‌‌date‌‌of‌‌his‌‌ death‌‌or‌‌of‌‌publication,‌‌but‌‌such‌‌terms‌‌shall‌‌always‌‌be‌‌‌deemed‌‌to‌‌ begin‌ ‌on‌ ‌the‌ ‌first‌ ‌day‌ ‌of‌ ‌January‌ ‌of‌ ‌the‌ ‌year‌ ‌following‌ ‌the‌‌ event‌‌which‌‌gave‌‌rise‌‌to‌‌them.‌ ‌ Letters‌ ‌ 5.‌‌Rules‌‌on‌‌ownership‌‌of‌‌copyright‌ ‌ Original‌‌Literary‌‌ Author‌ ‌ and‌‌Artistic‌‌ GR‌:‌ Anonymous‌‌ ‌Co-authors,‌‌subject‌‌to‌‌agreement;‌‌or‌‌in‌‌ the‌‌absence‌‌thereof,‌‌on‌‌rules‌‌on‌‌ co-ownership;‌ ‌ ‌if‌‌a‌‌work‌‌of‌‌joint‌‌authorship‌‌consists‌‌of‌‌ parts‌‌that‌‌can‌‌be‌‌used‌‌separately‌‌and‌‌the‌‌ author‌‌of‌‌each‌‌part‌‌can‌‌be‌‌identified,‌‌the‌‌ author‌‌of‌‌each‌‌part‌‌shall‌‌be‌‌the‌‌original‌‌ owner‌‌of‌‌the‌‌copyright‌‌in‌‌the‌‌part‌‌that‌‌he‌‌ has‌‌created.‌ ‌ a) EE‌‌—‌‌creation‌‌is‌‌NOT‌‌part‌‌of‌‌regular‌‌duty;‌ ‌ b) ER‌‌—‌‌result‌‌of‌‌the‌‌performance‌‌of‌‌his‌‌ regularly-assigned‌‌duties,‌u ‌ nless‌t‌ here‌‌is‌‌an‌‌ agreement,‌‌express‌‌or‌‌implied,‌‌to‌‌the‌‌ contrary.‌ ‌ a) Commissioner‌o ‌ wns‌‌the‌‌work;‌ ‌ b) Creator‌o ‌ wns‌‌the‌c‌ opyright,‌u ‌ nless‌t‌ here‌‌is‌‌ a‌‌written‌‌stipulation‌‌to‌‌the‌‌contrary.‌ ‌ Shall‌‌belong‌‌to‌‌the‌p ‌ roducer‌,‌‌the‌‌author‌‌of‌‌the‌‌ scenario,‌‌the‌‌composer‌o ‌ f‌‌the‌‌music,‌‌the‌‌film‌‌ director‌,‌‌and‌‌the‌‌author‌‌of‌‌the‌‌work‌‌so‌‌adapted.‌ ‌ However‌,‌‌subject‌‌to‌‌contrary‌‌or‌‌other‌‌stipulations‌‌ among‌‌the‌‌creators,‌‌the‌p ‌ roducer‌‌shall‌‌exercise‌‌ the‌‌copyright‌‌‌to‌‌an‌‌extent‌‌required‌‌for‌‌the‌‌ exhibition‌‌of‌‌the‌‌work‌‌in‌‌any‌‌manner,‌‌ ‌ except‌f‌ or‌‌the‌r‌ ight‌‌to‌‌collect‌‌performing‌‌ license‌‌fees‌‌‌for‌‌the‌‌performance‌‌of‌‌musical‌‌ compositions,‌‌with‌‌or‌‌without‌‌words,‌‌which‌‌are‌‌ incorporated‌‌into‌‌the‌‌work.‌ ‌ a) Writer‌o ‌ wns‌‌copyright;‌ ‌ b) Recipient‌o ‌ wns‌‌letter,‌b ‌ ut‌i‌ t‌‌cannot‌‌be‌‌ published‌‌or‌‌disseminated‌‌without‌‌the‌‌ consent‌‌of‌‌the‌‌writer‌‌or‌‌his‌‌heirs.‌ ‌ Publishers‌‌shall‌‌be‌‌deemed‌‌to‌‌represent‌‌the‌‌ and‌‌ authors‌‌of‌‌articles‌‌and‌‌other‌‌writings‌‌published‌‌ Pseudonymous‌‌ unless‌‌ ‌ Works‌ ‌ 1. the‌‌contrary‌‌appears,‌‌or‌‌ ‌ 2. the‌‌pseudonyms‌‌or‌‌adopted‌‌name‌l‌ eaves‌‌ no‌‌doubt‌‌as‌‌to‌‌the‌‌author's‌‌identity,‌‌or‌‌ ‌ 3. if‌‌the‌‌author‌‌of‌‌the‌‌anonymous‌‌works‌ discloses‌‌his‌‌identity.‌ ‌ 6.‌‌Limitations‌‌on‌‌copyright‌ ‌ §184.‌‌‌Limitations‌‌on‌‌Copyright.‌ ‌—‌‌‌184.1.‌‌The‌‌following‌‌acts‌‌ shall‌‌NOT‌‌constitute‌‌infringement‌‌of‌‌copyright‌:‌ ‌ a) The‌‌‌recitation‌‌or‌‌performance‌‌of‌‌a‌‌work‌,‌‌ ‌ i) ii) iii) once‌ ‌it‌ ‌has‌ ‌been‌ ‌lawfully‌ ‌made‌ ‌accessible‌ ‌to‌ ‌the‌‌ public,‌‌ ‌ if‌‌done‌‌privately‌‌and‌‌ ‌ free‌ ‌of‌ ‌charge‌ ‌or‌ ‌if‌ ‌made‌ ‌strictly‌ ‌for‌ ‌a‌ ‌charitable‌ ‌or‌‌ religious‌‌institution‌‌or‌‌society;‌ ‌ b) The‌‌‌making‌‌of‌‌quotations‌‌from‌‌a‌‌published‌‌work‌‌if‌‌they‌‌are‌‌ compatible‌‌with‌‌fair‌‌use;‌ ‌ c) The‌ ‌reproduction‌ ‌or‌ ‌communication‌ ‌to‌ ‌the‌ ‌public‌ ‌by‌ ‌mass‌‌ media‌ ‌of‌ ‌articles‌ ‌on‌ ‌current‌ ‌political,‌ ‌social,‌ ‌economic,‌‌ scientific‌ ‌or‌ ‌religious‌ ‌topic,‌ ‌lectures‌,‌ ‌addresses‌ ‌and‌ ‌other‌‌ works‌‌of‌‌the‌‌same‌‌nature;‌ ‌ d) The‌‌reproduction‌‌and‌‌communication‌‌to‌‌the‌‌public‌‌of‌‌literary,‌‌ scientific‌ ‌or‌ ‌artistic‌ ‌works‌ ‌as‌ ‌part‌ ‌of‌ ‌reports‌ ‌of‌ ‌current‌‌ events‌;‌ ‌ e) The‌ ‌inclusion‌ ‌of‌ ‌a‌ ‌work‌ ‌in‌ ‌a‌ ‌publication,‌ ‌broadcast,‌ ‌or‌‌other‌‌ communication‌ ‌to‌‌the‌‌public,‌‌sound‌‌recording‌‌or‌‌film,‌‌if‌‌such‌‌ inclusion‌ ‌is‌ ‌made‌ ‌by‌ ‌way‌ ‌of‌ ‌illustration‌ ‌for‌ ‌teaching‌‌ purposes‌‌and‌‌is‌‌compatible‌‌with‌‌fair‌‌use;‌ ‌ f) The‌ ‌recording‌ ‌made‌ ‌in‌ ‌schools,‌ ‌universities,‌ ‌or‌‌ educational‌‌institutions‌‌‌of‌‌a‌‌work‌‌included‌‌in‌‌a‌‌broadcast:‌‌ ‌ Provided‌,‌ ‌That‌ ‌such‌ ‌recording‌ ‌must‌ ‌be‌ ‌deleted‌ ‌within‌ ‌a‌‌ reasonable‌‌period‌‌after‌‌they‌‌were‌‌first‌‌broadcast;‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 108‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ g) The‌ ‌making‌ ‌of‌ ‌ephemeral‌ ‌recordings‌ ‌by‌ ‌a‌ ‌broadcasting‌‌ organization;‌ ‌ h) The‌ ‌use‌ ‌of‌ ‌a‌ ‌work‌ ‌by‌ ‌or‌‌under‌‌the‌‌direction‌‌or‌‌control‌‌of‌‌the‌‌ Government‌,‌ ‌by‌ ‌the‌ ‌National‌ ‌Library‌ ‌or‌ ‌by‌ ‌educational,‌‌ scientific‌ ‌or‌ ‌professional‌ ‌institutions‌ ‌where‌ ‌such‌ ‌use‌‌is‌‌in‌‌ the‌‌public‌‌interest‌‌and‌‌is‌‌compatible‌‌with‌‌fair‌‌use;‌ ‌ i) The‌‌public‌‌performance‌‌or‌‌the‌‌communication‌‌to‌‌the‌‌public‌‌of‌‌ a‌ ‌work,‌ ‌in‌ ‌a‌ ‌place‌ ‌where‌ ‌no‌‌admission‌‌fee‌‌is‌‌charged‌,‌‌by‌‌a‌‌ club‌ ‌or‌ ‌institution‌ ‌for‌ ‌charitable‌‌or‌‌educational‌‌purpose‌‌only,‌‌ whose‌‌‌aim‌‌is‌‌not‌‌profit‌‌making;‌ ‌ j) Public‌ ‌display‌ ‌of‌ ‌the‌ ‌original‌‌or‌‌a‌‌copy‌‌of‌‌the‌‌work‌‌not‌‌made‌‌ by‌ ‌means‌ ‌of‌ ‌a‌ ‌film,‌ ‌slide,‌ ‌television‌ ‌image‌ ‌or‌ ‌otherwise‌ ‌on‌‌ screen‌‌or‌‌by‌‌means‌‌of‌‌any‌‌other‌‌device‌‌or‌‌process;‌ ‌ k) Any‌ ‌use‌ ‌made‌ ‌of‌ ‌a‌ ‌work‌ ‌for‌ ‌the‌ ‌purpose‌ ‌of‌ ‌any‌ ‌judicial‌‌ proceedings‌‌‌or‌‌for‌‌the‌‌giving‌‌of‌‌professional‌‌advice‌‌by‌‌a‌‌legal‌‌ practitioner.‌ ‌ l) The‌ ‌reproduction‌ ‌or‌ ‌distribution‌ ‌of‌ ‌published‌ ‌articles‌ ‌or‌‌ materials‌‌in‌‌a‌‌specialized‌‌format‌‌exclusively‌‌‌for‌‌the‌‌use‌‌of‌‌the‌‌ blind,‌‌visually-‌‌and‌‌reading-impaired‌‌persons‌:‌‌ ‌ Provided‌,‌‌That‌‌such‌‌copies‌‌and‌‌distribution‌‌shall‌‌ ‌ decompilation‌‌is‌‌done‌‌for‌‌the‌‌purpose‌‌of‌‌obtaining‌‌the‌‌information‌‌ necessary‌ ‌to‌ ‌achieve‌‌such‌‌interoperability.‌‌(‌as‌‌amended‌‌by‌‌RA‌‌No‌‌ 10372‌)‌ ‌ ABS-CBN‌‌v.‌‌Gozon‌‌‌2015‌‌Leonen,‌‌J‌ ‌ FOUR-FACTOR‌‌TEST.‌‌‌In‌‌determining‌‌whether‌‌the‌‌use‌‌made‌‌of‌‌a‌‌work‌‌ in‌‌any‌‌particular‌‌case‌‌is‌‌FAIR‌‌USE‌,‌‌the‌‌factors‌‌to‌‌be‌‌considered‌‌shall‌‌ include:‌ ‌ a. The‌ ‌purpose‌ ‌and‌ ‌character‌‌of‌‌the‌‌use,‌‌including‌‌whether‌‌ such‌ ‌use‌ ‌is‌ ‌of‌ ‌a‌ ‌commercial‌ ‌nature‌ ‌or‌ ‌is‌ ‌for‌ ‌non-profit‌‌ educational‌‌purposes;‌ ‌ b. The‌‌nature‌o ‌ f‌‌the‌‌copyrighted‌‌work;‌ ‌ c. The‌ ‌amount‌ ‌and‌ ‌substantiality‌ ‌of‌ ‌the‌ ‌portion‌ ‌used‌ ‌in‌‌ relation‌‌to‌‌the‌‌copyrighted‌‌work‌‌as‌‌a‌‌whole;‌‌and‌ ‌ d. The‌‌‌effect‌‌of‌‌the‌‌use‌‌‌upon‌‌the‌‌potential‌‌market‌‌for‌‌or‌‌value‌‌ of‌‌the‌‌copyrighted‌‌work.‌ ‌ GMA-7's‌ ‌rebroadcast‌ ‌of‌‌ABS-CBN's‌‌news‌‌footage‌‌without‌‌the‌‌latter's‌‌ consent‌ ‌is‌ ‌not‌ ‌an‌ ‌issue.‌ ‌The‌ ‌mere‌ ‌act‌ ‌of‌ ‌rebroadcasting‌ ‌without‌ authority‌ ‌from‌ ‌the‌ ‌owner‌ ‌of‌ ‌the‌ ‌broadcast‌ ‌gives‌ ‌rise‌ ‌to‌ ‌the‌‌ probability‌t‌ hat‌‌a‌‌crime‌‌was‌‌committed‌‌under‌‌the‌‌IPC.‌ ‌ 7.‌‌Copyright‌‌infringement‌ ‌ a) To‌‌an‌i‌ njunction‌r‌ estraining‌‌such‌‌infringement.‌ b) To‌‌pay‌‌to‌‌the‌‌copyright‌‌proprietor‌‌or‌‌his‌‌assigns‌‌or‌‌heirs‌‌such‌‌ actual‌‌damages‌:‌‌ ‌ Provided‌,‌ ‌That‌ ‌the‌ ‌amount‌‌of‌‌damages‌‌to‌‌be‌‌awarded‌‌shall‌‌be‌‌ doubled‌‌against‌‌any‌‌person‌‌who:‌ ‌ i) ii) Circumvents‌‌effective‌‌technological‌‌measures;‌‌or‌ ‌ Remove‌‌or‌‌alter‌‌any‌‌‌electronic‌‌rights‌‌management‌‌ information‌ ‌from‌ ‌a‌ ‌copy‌ ‌of‌ ‌a‌ ‌work,‌ ‌or‌ ‌distribute,‌‌ import‌‌for‌‌distribution,‌‌broadcast,‌‌or‌‌communicate‌‌to‌‌ the‌ ‌public‌ ‌works‌ ‌or‌ ‌copies‌ ‌of‌ ‌works‌ ‌knowing‌ ‌that‌‌ electronic‌ ‌rights‌ ‌management‌ ‌information‌ ‌has‌ ‌been‌‌ removed‌ ‌or‌ ‌altered‌ ‌without‌ ‌authority.‌ ‌(‌aab‌ ‌RA‌ ‌No‌‌ 10372‌)‌ ‌ c) Deliver‌‌under‌‌oath,‌‌for‌‌‌impounding‌,‌‌sales‌‌invoices‌‌and‌‌other‌‌ documents‌ ‌evidencing‌ ‌sales,‌ ‌all‌ ‌articles‌ ‌and‌ ‌their‌ ‌packaging‌‌ alleged‌‌to‌‌infringe‌‌a‌‌copyright‌‌and‌‌implements.‌ ‌ d) Deliver‌ ‌under‌ ‌oath‌ ‌for‌ ‌destruction‌ ‌without‌ ‌any‌‌ compensation‌‌‌all‌‌infringing‌‌copies‌‌or‌‌devices.‌ ‌ e) Such‌ ‌other‌ ‌terms‌ ‌and‌ ‌conditions,‌ ‌including‌ ‌the‌ ‌payment‌ ‌of‌‌ moral‌‌and‌‌exemplary‌‌damages.‌ ‌ §216.‌ ‌Infringement‌.‌ ‌—‌ ‌A‌ ‌person‌ ‌infringes‌ ‌a‌ ‌right‌ ‌protected‌‌ b.‌‌Criminal‌‌penalties‌ ‌ under‌‌this‌‌Act‌‌when‌‌one:‌ ‌ 2. indicate‌ ‌the‌ ‌copyright‌ ‌owner‌ ‌and‌ ‌the‌ ‌date‌ ‌of‌ ‌the‌ ‌original‌‌ Any‌‌person‌‌infringing‌‌any‌‌right‌‌secured‌‌by‌‌provisions‌‌of‌‌Part‌‌IV‌‌of‌‌ publication.‌(‌ as‌‌amended‌‌by‌‌RA‌‌No‌‌10372)‌ ‌ a) Directly‌‌commits‌a‌ n‌‌infringement;‌ ‌ this‌‌Act‌‌or‌a ‌ iding‌‌or‌‌abetting‌‌‌such‌‌infringement‌‌shall‌‌be‌‌guilty.‌ ‌ b) Benefits‌ ‌from‌ ‌the‌ ‌infringing‌ ‌activity‌ ‌of‌ ‌another‌ ‌person‌‌ a.‌‌Fair‌‌use‌ ‌ The‌ ‌respective‌ ‌maximum‌ ‌penalty‌ ‌shall‌ ‌be‌ ‌imposed‌ ‌when‌ ‌the‌‌ who‌‌commits‌‌an‌‌infringement‌‌if‌‌the‌‌person‌‌benefiting‌‌has‌‌ §185‌.‌‌‌Fair‌‌Use‌‌of‌‌a‌‌Copyrighted‌‌Work.‌‌‌—‌‌185.1.‌‌The‌‌fair‌‌use‌‌ infringement‌‌is‌‌committed‌‌by:‌ ‌ been‌ ‌given‌ ‌notice‌ ‌of‌ ‌the‌ ‌infringing‌ ‌activity‌ ‌and‌ ‌has‌ ‌the‌‌ of‌ ‌a‌ ‌copyrighted‌ ‌work‌ ‌for‌ ‌criticism,‌ ‌comment,‌ ‌news‌ ‌reporting,‌‌ right‌ ‌and‌ ‌ability‌ ‌to‌ ‌control‌ ‌the‌ ‌activities‌ ‌of‌ ‌the‌ ‌other‌‌ a) The‌‌circumvention‌‌of‌‌effective‌‌technological‌‌measures;‌ ‌ teaching‌ ‌including‌ ‌limited‌ ‌number‌ ‌of‌ ‌copies‌ ‌for‌ ‌classroom‌ ‌use,‌‌ person;‌ ‌ scholarship,‌ ‌research,‌ ‌and‌ ‌similar‌ ‌purposes‌ ‌is‌ ‌not‌ ‌an‌‌ b) The‌ ‌removal‌ ‌or‌ ‌alteration‌ ‌of‌ ‌any‌ ‌electronic‌ ‌rights‌‌ c) With‌‌ k nowledge‌‌ o f‌‌ i nfringing‌‌ a ctivity,‌‌ i ‌ nduces‌ , ‌‌ c ‌ auses‌‌ o ‌ r‌‌ infringement‌‌of‌‌copyright.‌‌ ‌ management‌‌information;‌‌or‌ ‌ materially‌ ‌contributes‌ ‌to‌ ‌the‌ ‌infringing‌ ‌conduct‌ ‌of‌‌ Decompilation‌,‌‌which‌‌is‌‌understood‌‌here‌‌to‌‌be‌‌the‌‌reproduction‌‌of‌‌ c) The‌‌distribution‌‌of‌‌works‌‌or‌‌copies‌‌of‌‌works‌‌knowing‌‌that‌‌ another.‌ ‌ the‌ ‌code‌ ‌and‌ ‌translation‌ ‌of‌ ‌the‌ ‌forms‌ ‌of‌ ‌a‌ ‌computer‌ ‌program‌ ‌to‌‌ electronic‌ ‌rights‌ ‌management‌ ‌information‌ ‌has‌ ‌been‌‌ achieve‌‌the‌‌‌interoperability‌‌‌of‌‌an‌‌independently‌‌created‌‌computer‌‌ a.‌‌Remedies‌ ‌ removed‌‌or‌‌altered‌‌without‌‌authority.‌ ‌ program‌‌with‌‌other‌‌programs‌‌may‌‌also‌‌constitute‌‌fair‌‌use‌‌under‌‌the‌‌ 216.1‌‌R ‌ emedies‌‌for‌‌Infringement.‌‌‌—‌‌Any‌‌person‌‌infringing‌‌a‌‌ Olaño‌‌v.‌‌Lim‌‌Eng‌‌Co‌‌‌2016‌‌ ‌ criteria‌ ‌established‌ ‌by‌ ‌this‌ ‌section,‌ ‌to‌ ‌the‌ ‌extent‌ t‌ hat‌ ‌such‌‌ right‌‌protected‌‌under‌‌this‌‌law‌‌shall‌‌be‌‌liable:‌ ‌ 1. be‌‌made‌‌on‌‌a‌n ‌ onprofit‌‌basis‌a‌ nd‌‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 109‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ For‌ ‌a‌ ‌claim‌ ‌of‌ ‌copyright‌ ‌infringement‌ ‌to‌ ‌prevail,‌ ‌the‌ ‌evidence‌ ‌on‌‌ record‌‌must‌‌demonstrate:‌‌ ‌ ABS-CBN‌‌v.‌‌Gozon‌‌‌2015‌‌Leonen,‌‌J‌ ‌ 1) ownership‌ ‌of‌ ‌a‌ ‌validly‌ ‌copyrighted‌ ‌material‌ ‌by‌ ‌the‌‌ complainant;‌‌and‌‌ ‌ WON‌‌‌lack‌‌of‌‌knowledge‌‌‌that‌‌a‌‌material‌‌is‌‌copyrighted‌‌is‌‌a‌‌defense‌‌ against‌‌copyright‌‌infringement‌‌and‌‌that‌‌‌good‌‌faith‌‌is‌‌a‌‌defense‌‌in‌‌a‌‌ criminal‌‌prosecution‌‌for‌‌violation‌‌of‌‌the‌‌IPC.‌ ‌ 2) infringement‌o ‌ f‌‌the‌‌copyright‌‌by‌‌the‌‌respondent.‌ ‌ NO‌.‌‌Infringement‌‌under‌‌the‌‌IPC‌‌is‌‌‌malum‌‌prohibitum.‌‌The‌‌IPC‌‌is‌‌a‌‌ special‌‌law.‌‌The‌‌general‌‌rule‌‌is‌‌that‌‌acts‌‌punished‌‌under‌‌a‌‌special‌‌law‌‌ are‌‌malum‌‌prohibitum.‌‌The‌‌IPC‌‌requires‌‌‌strict‌‌liability‌‌‌for‌‌copyright‌‌ infringement‌ ‌whether‌ ‌for‌ ‌a‌‌civil‌‌action‌‌or‌‌a‌‌criminal‌‌prosecution;‌‌it‌‌ does‌‌not‌‌require‌m ‌ ens‌‌rea‌‌‌or‌‌culpa‌.‌ ‌ The‌‌respondent‌‌failed‌‌to‌‌substantiate‌‌the‌‌alleged‌‌reproduction‌‌of‌‌the‌‌ drawings/sketches‌ ‌of‌ ‌hatch‌ ‌doors‌ ‌copyrighted‌ ‌under‌ ‌the‌ ‌First‌‌ Certificate‌ ‌of‌ ‌Registration‌.‌ ‌LEC's‌ ‌copyright‌ ‌protection‌ ‌thereunder‌‌ covered‌ ‌only‌ ‌the‌ ‌hatch‌ ‌door‌ ‌sketches/‌ ‌drawings‌ ‌and‌ ‌not‌ ‌the‌‌ actual‌ ‌hatch‌ ‌door‌ ‌they‌ ‌depict‌.‌ ‌To‌ ‌constitute‌ ‌infringement,‌ ‌the‌‌ usurper‌ ‌must‌ ‌have‌ ‌copied‌ ‌or‌ ‌appropriated‌ ‌the‌ ‌original‌ ‌work‌ ‌of‌ ‌an‌‌ author‌ ‌or‌ ‌copyright‌ ‌proprietor;‌ ‌absent‌ ‌copying,‌ ‌there‌ ‌can‌ ‌be‌ ‌no‌‌ infringement‌‌of‌‌copyright‌.‌ ‌ WON‌ ‌GMA-7's‌ ‌officers‌ ‌and‌ ‌employees‌ ‌cannot‌ ‌be‌ ‌held‌ ‌liable‌ ‌for‌‌ infringement.‌ ‌ Only‌ ‌Dela‌ ‌Peña-Reyes‌ ‌and‌ ‌Manalastas‌ ‌should‌ ‌be‌ ‌implicated.‌‌ Section‌ ‌217‌ ‌states‌ ‌that‌ ‌"‌any‌ ‌person‌"‌ ‌may‌ ‌be‌ ‌found‌ ‌guilty‌ ‌of‌‌ infringement.‌ ‌The‌ ‌criminal‌ ‌liability‌ ‌of‌ ‌a‌ ‌corporation's‌ ‌officers‌ ‌or‌‌ employees‌ ‌stems‌ ‌from‌ ‌their‌ a ‌ ctive‌ ‌participation‌ ‌in‌ ‌the‌‌ commission‌‌of‌‌the‌‌wrongful‌‌act.‌ ‌ Unlike‌ ‌a‌ ‌patent,‌ ‌a‌ ‌copyright‌ ‌gives‌ ‌no‌ ‌exclusive‌ ‌right‌ ‌to‌ ‌the‌ ‌art‌‌ disclosed;‌ ‌protection‌‌is‌‌given‌‌only‌‌to‌‌the‌‌expression‌‌of‌‌the‌‌idea‌‌ —‌‌‌not‌‌the‌‌idea‌‌itself‌.‌ ‌ Anent,‌‌LEC's‌‌‌Second‌‌Certificate‌‌of‌‌Registration‌,‌‌the‌‌Court‌‌finds‌‌that‌‌ the‌‌ownership‌‌thereof‌‌was‌‌not‌‌established‌‌by‌‌the‌‌evidence‌‌on‌‌record‌‌ because‌‌the‌‌‌element‌‌of‌‌copyrightability‌‌is‌‌absent.‌‌‌Here,‌‌evidence‌‌ negating‌ ‌originality‌ ‌and‌‌‌copyrightability‌as‌‌elements‌‌of‌‌copyright‌‌ ownership‌ ‌was‌ ‌satisfactorily‌ ‌proffered‌ ‌against‌ ‌LEC's‌ ‌certificate‌ ‌of‌‌ registration.‌ ‌ Microsoft‌‌v.‌‌Manansala‌‌‌2015‌ ‌ WON‌ ‌the‌ ‌printing‌ ‌or‌ ‌copying‌ ‌is‌ ‌essential‌ ‌in‌ ‌the‌ ‌commission‌ ‌of‌ ‌the‌‌ crime‌‌of‌‌copyright‌‌infringement.‌ ‌ NO‌.‌ ‌The‌ ‌"‌gravamen‌ ‌of‌ ‌copyright‌ ‌infringement‌,‌"‌ ‌according‌ ‌to‌‌ NBI-Microsoft‌ ‌Corporation‌ ‌v.‌ ‌Hwang‌ ‌is‌ ‌not‌ ‌merely‌ ‌the‌‌ unauthorized‌ ‌manufacturing‌ ‌of‌ ‌intellectual‌ ‌works‌ ‌but‌ ‌rather‌ ‌the‌‌ unauthorized‌‌performance‌‌of‌‌any‌‌of‌‌the‌‌acts‌c‌ overed‌‌by‌‌Sec‌‌5.‌ ‌ Habana,‌‌et.‌‌al.‌‌v.‌‌Felicidad‌‌Robles‌‌and‌‌Goodwill‌‌Trading‌‌Co.,‌‌Inc.‌ ‌ It‌ ‌does‌ ‌not‌ ‌necessarily‌ ‌require‌ ‌that‌ ‌the‌ ‌entire‌ ‌copyrighted‌‌work,‌‌or‌‌ even‌ ‌a‌ ‌large‌ ‌portion‌ ‌of‌ ‌it,‌‌be‌‌copied.‌‌‌If‌‌so‌‌much‌‌is‌‌taken‌‌that‌‌the‌‌ value‌ ‌of‌‌the‌‌original‌‌work‌‌is‌‌substantially‌‌diminished,‌‌there‌‌is‌‌ an‌ ‌infringement‌ ‌of‌ ‌copyright‌ ‌and‌ ‌to‌ ‌an‌ ‌injurious‌ ‌extent,‌ ‌the‌‌ work‌‌is‌‌appropriated.‌ ‌ A‌‌copy‌‌of‌‌a‌‌piracy‌‌is‌‌an‌‌infringement‌‌of‌‌the‌‌original,‌‌and‌‌it‌‌is‌‌no‌‌ defense‌‌that‌‌the‌‌pirate,‌‌in‌‌such‌‌cases,‌‌did‌‌not‌‌know‌‌whether‌‌or‌‌ not‌‌he‌‌was‌‌infringing‌‌any‌‌copyright‌;‌‌he‌‌at‌‌least‌‌knew‌‌that‌‌what‌‌he‌‌ was‌‌copying‌‌was‌‌not‌‌his,‌‌and‌‌he‌‌copied‌‌at‌‌his‌‌peril.‌ ‌ The‌ ‌mere‌ ‌sale‌ ‌of‌ ‌the‌ ‌illicit‌ ‌copies‌ ‌of‌ ‌the‌ ‌software‌ ‌programs‌ ‌was‌‌ enough‌ ‌by‌ ‌itself‌ ‌to‌ ‌show‌ ‌the‌ ‌existence‌ ‌of‌ ‌probable‌ ‌cause‌ ‌for‌‌ copyright‌ ‌infringement.‌‌There‌‌was‌‌no‌‌need‌‌for‌‌the‌‌petitioner‌‌to‌‌still‌‌ prove‌‌who‌‌copied,‌‌replicated‌‌or‌‌reproduced‌‌the‌‌software‌‌programs.‌ ‌ c.‌‌Perfection‌‌of‌‌security‌‌interests‌ ‌ d.‌‌Priority‌‌of‌‌security‌‌interests‌ ‌ e.‌‌Enforcement‌‌of‌‌security‌‌interests‌ ‌ f.‌‌Prior‌‌interests‌‌and‌‌the‌‌transitional‌‌period‌ ‌ Real‌‌Estate‌‌Mortgage‌‌Law‌ ‌ a.‌‌Definition‌‌and‌‌characteristics‌ ‌ b.‌‌Object‌‌of‌‌Real‌‌Estate‌‌Mortgage‌ ‌ c.‌‌Rights‌‌to‌‌alienate‌ ‌ d.‌‌Essential‌‌requisites‌ ‌ e.‌‌Foreclosure‌ ‌ Guaranty‌ ‌ a.‌‌Nature‌‌and‌‌extent‌ ‌ b.‌‌Effects‌ ‌ c.‌‌Extinguishment‌ ‌ d.‌‌Legal‌‌and‌‌judicial‌‌bonds‌ ‌ Surety‌ ‌ a.‌‌Concept‌ ‌ b.‌‌Forms‌ ‌ c.‌‌Obligations‌‌secured‌ ‌ d.‌‌Distinctions‌ ‌ ‌ Secured‌‌Transactions‌‌ ‌ Personal‌‌Property‌‌Securities‌‌Act‌ ‌ In‌ ‌cases‌ ‌of‌ ‌infringement,‌ ‌copying‌ ‌alone‌ ‌is‌ ‌not‌ ‌what‌ ‌is‌‌ prohibited.‌‌The‌‌copying‌‌must‌‌produce‌‌an‌‌"‌injurious‌‌effect‌".‌‌‌For‌‌ another‌‌to‌‌represent‌‌a‌‌work‌‌as‌‌her‌‌own‌‌is‌‌injury‌‌enough‌.‌ ‌ a.‌‌Definition‌‌and‌‌scope‌ ‌ b.‌‌Asset-specific‌‌rules‌ ‌ Letters‌‌of‌‌Credit‌ ‌ a.‌‌Definition‌‌and‌‌purpose‌ ‌ b.‌‌Kinds‌ ‌ c.‌‌Rule‌‌of‌‌strict‌‌compliance‌ ‌ d.‌‌Independence‌‌principle‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 110‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ Personal‌‌Property‌‌Securities‌‌Act‌ ‌ RA‌‌No‌‌11057‌‌|‌‌Personal‌‌Property‌‌Security‌‌Act‌ Implementing‌‌Rules‌‌and‌‌Regulations‌‌of‌‌RA‌‌No‌‌11057‌ a.‌‌Definition‌‌and‌‌scope‌ ‌ the‌ ‌proceeds‌ ‌were‌ ‌commingled‌ ‌and‌ ‌the‌ ‌time‌ ‌the‌‌ Secured‌ ‌creditor‌ ‌—‌‌a‌‌person‌‌that‌‌has‌‌a‌‌security‌‌interest.‌‌For‌‌ security‌‌interest‌‌in‌‌the‌‌proceeds‌‌is‌‌claimed.‌ ‌ the‌ ‌purposes‌ ‌of‌ ‌registration‌ ‌and‌ ‌priority‌ ‌only,‌ ‌it‌ ‌includes‌ ‌a‌‌ buyer‌ ‌of‌ ‌account‌ ‌receivable‌ ‌and‌ ‌a‌ ‌lessor‌ ‌of‌ ‌goods‌ ‌under‌ ‌an‌‌ Tangible‌‌assets‌‌commingled‌‌in‌‌a‌‌mass‌ ‌ operating‌‌lease‌‌for‌‌not‌‌less‌‌than‌o ‌ ne‌‌(1)‌‌year‌.‌ ‌ a) A‌ ‌security‌ ‌interest‌ ‌in‌ ‌a‌‌tangible‌‌asset‌‌that‌‌is‌‌commingled‌‌in‌‌a‌‌ mass‌‌extends‌‌to‌‌the‌‌mass‌.‌ ‌ b.‌‌Asset-specific‌‌rules‌ ‌ b. b) A‌‌security‌‌interest‌‌that‌‌extends‌‌to‌‌a‌‌mass‌‌is‌‌‌limited‌‌to‌‌the‌‌same‌‌ proportion‌‌of‌‌the‌‌mass‌‌as‌‌the‌‌quantity‌‌of‌‌the‌‌encumbered‌‌asset‌‌ bore‌‌to‌‌the‌‌quantity‌‌of‌‌the‌‌entire‌‌mass‌‌‌immediately‌‌after‌‌the‌‌ commingling‌.‌ ‌ Security‌ ‌interest‌ ‌—‌ ‌a‌ ‌property‌ ‌right‌ ‌in‌ ‌collateral‌ ‌that‌ ‌secures‌‌ Future‌‌property‌ ‌ payment‌ ‌or‌ ‌other‌ ‌performance‌ ‌of‌ ‌an‌ ‌obligation,‌ ‌regardless‌ ‌of‌‌ A‌‌security‌‌agreement‌m ‌ ay‌‌provide‌‌ ‌ whether‌‌the‌‌parties‌‌have‌‌denominated‌‌it‌‌as‌‌a‌‌security‌‌interest,‌‌and‌‌ a) for‌ ‌the‌ ‌creation‌ ‌of‌ ‌a‌ ‌security‌ ‌interest‌ ‌in‌ ‌future‌ ‌property‌ ‌or‌‌ regardless‌ ‌of‌‌the‌‌type‌‌of‌‌asset,‌‌the‌‌status‌‌of‌‌the‌‌grantor‌‌or‌‌secured‌‌ after-acquired‌ ‌assets‌,‌ ‌but‌ ‌the‌ ‌security‌ ‌interest‌ ‌in‌ ‌that‌‌ Accounts‌‌receivables‌ ‌ creditor,‌‌or‌‌the‌‌nature‌‌of‌‌the‌‌secured‌‌obligation;‌‌including‌‌the‌‌right‌‌ property‌‌is‌‌created‌‌only‌‌when‌‌the‌‌grantor‌‌acquires‌‌rights‌‌in‌‌it‌‌ of‌ ‌a‌ ‌buyer‌ ‌of‌ ‌accounts‌ ‌receivable‌ ‌and‌ ‌a‌‌lessor‌‌under‌‌an‌‌operating‌‌ a) Any‌ s‌ tipulation‌‌limiting‌‌the‌‌grantor's‌‌right‌‌to‌‌create‌‌a‌‌security‌‌ or‌‌the‌‌power‌‌to‌‌encumber‌‌it.‌ ‌ lease‌‌for‌‌not‌‌less‌‌than‌‌one‌‌(1)‌‌year‌.‌ ‌ interest‌‌shall‌‌be‌v ‌ oid‌.‌ ‌ b) that‌ ‌a‌ ‌security‌ ‌interest‌ ‌in‌ ‌a‌ ‌tangible‌ ‌asset‌ ‌that‌ ‌is‌‌ Control‌ ‌agreement‌ ‌—‌ ‌an‌ ‌agreement‌ i‌ n‌ ‌writing‌ ‌between‌ ‌the‌‌ b) This‌ s‌ ection‌ ‌shall‌ ‌apply‌ ‌only‌ ‌to‌ ‌accounts‌ ‌receivable‌ ‌arising‌‌ transformed‌ ‌into‌ ‌a‌ ‌product‌ ‌extends‌ ‌to‌ ‌the‌ ‌product‌.‌ ‌It‌ ‌is‌‌ grantor‌ ‌and‌ ‌the‌ ‌secured‌ ‌creditor‌ ‌which‌ ‌perfects‌ ‌the‌ ‌security‌‌ from:‌ ‌ limited‌ ‌to‌ ‌the‌ ‌value‌ ‌of‌ ‌the‌ ‌encumbered‌ ‌asset‌ ‌immediately‌‌ interests‌‌over‌i‌ ntangible‌a‌ sset.‌ ‌ before‌‌it‌‌became‌‌part‌‌of‌‌the‌‌product‌.‌‌e.g‌.‌‌raw‌‌materials.‌ ‌ i) A‌ ‌contract‌‌for‌‌the‌‌‌supply‌‌or‌‌lease‌‌of‌‌goods‌‌or‌‌services‌‌ GR‌:‌ The‌ ‌PPSA‌ ‌shall‌ ‌apply‌ ‌to‌ ‌all‌ ‌transactions‌ ‌of‌ ‌any‌ ‌form‌ ‌that‌‌ other‌‌than‌‌financial‌‌services‌;‌ ‌ c) that‌ ‌a‌ ‌security‌ ‌interest‌ ‌in‌ ‌a‌ ‌tangible‌ ‌asset‌ ‌extends‌ ‌to‌ ‌its‌‌ secure‌‌an‌‌obligation‌‌with‌‌movable‌‌collateral‌ ‌ replacement‌.‌ ‌It‌ ‌is‌ ‌limited‌ ‌to‌ ‌the‌ ‌value‌ ‌of‌ ‌the‌ ‌encumbered‌‌ ii) A‌ ‌construction‌ ‌contract‌ ‌or‌ ‌contract‌ ‌for‌ ‌the‌ ‌sale‌ ‌or‌‌ asset‌‌immediately‌‌before‌‌it‌‌was‌‌replaced‌.‌ ‌ EXC‌:‌ interests‌‌in‌‌ ‌ lease‌‌of‌‌real‌‌property‌;‌‌and‌ ‌ 1. 2. aircrafts‌ ‌subject‌ ‌to‌ ‌RA‌ ‌No.‌ ‌9497,‌ ‌or‌ ‌the‌ ‌"Civil‌ ‌Aviation‌‌ Authority‌‌Act‌‌of‌‌2008",‌‌and‌‌ ‌ ships‌‌‌subject‌‌to‌‌PD‌‌No,‌‌1521,‌‌or‌‌the‌‌"Ship‌‌Mortgage‌‌Decree‌‌of‌‌ 1978".‌ ‌ The‌‌parties‌‌in‌‌a‌‌security‌‌agreement‌‌‌under‌‌the‌‌PPSA‌‌are:‌ ‌ a. Rights‌‌to‌‌proceeds‌‌and‌‌commingled‌‌funds‌ ‌ a) A‌ ‌security‌ ‌interest‌ ‌in‌ ‌personal‌ ‌property‌ ‌shall‌ ‌extend‌ ‌to‌ ‌its‌‌ identifiable‌‌or‌‌traceable‌p ‌ roceeds.‌ ‌ b) Where‌ ‌proceeds‌ ‌in‌ ‌the‌ ‌form‌ ‌of‌ ‌funds‌ ‌credited‌ ‌to‌ ‌a‌ ‌deposit‌‌ account‌‌or‌‌money‌‌are‌c‌ ommingled‌w ‌ ith‌‌other‌‌funds:‌ ‌ Grantor‌— ‌ ‌‌ i) 1) The‌ ‌person‌ ‌who‌ ‌grants‌ ‌a‌ ‌security‌ ‌interest‌‌in‌‌collateral‌‌to‌‌ secure‌‌its‌‌own‌‌obligation‌‌or‌‌that‌‌of‌‌another‌‌person;‌ ‌ 2) A‌‌buyer‌‌or‌‌other‌‌transferee‌‌of‌‌a‌‌collateral‌‌that,‌‌acquires‌‌its‌‌ right‌‌subject‌‌to‌‌a‌‌security‌‌interest;‌ ‌ 3) A‌ ‌transferor‌ ‌in‌ ‌an‌ ‌outright‌ ‌transfer‌ ‌of‌ ‌an‌ ‌accounts‌‌ receivable:‌‌or‌ ‌ 4) A‌‌lessee‌‌of‌‌goods;‌ ‌ The‌ ‌security‌ ‌interest‌ ‌shall‌ ‌extend‌ ‌to‌‌the‌‌commingled‌‌ money‌ ‌or‌ ‌funds,‌ ‌notwithstanding‌ ‌that‌ ‌the‌ ‌proceeds‌‌ have‌ ‌ceased‌ ‌to‌ ‌be‌ ‌identifiable‌ ‌to‌ ‌the‌ ‌extent‌ ‌they‌‌ remain‌‌traceable‌;‌ ‌ ii) The‌ ‌security‌ ‌interest‌ ‌in‌ ‌the‌ ‌commingled‌ ‌funds‌ ‌or‌‌ money‌‌shall‌‌be‌‌limited‌‌to‌‌the‌‌amount‌‌of‌‌the‌‌proceeds‌ immediately‌‌before‌‌they‌‌were‌‌commingled‌;‌‌and‌ ‌ iii) The‌‌security‌‌interest‌‌against‌‌the‌‌commingled‌‌funds‌‌or‌‌ money‌ ‌shall‌‌be‌‌‌limited‌‌‌to‌‌the‌‌‌lowest‌‌amount‌‌of‌‌the‌‌ commingled‌ ‌funds‌ ‌or‌ ‌money‌ ‌between‌ ‌the‌ ‌time‌ ‌when‌‌ iii) A‌ ‌contract‌‌for‌‌the‌‌sale,‌‌lease‌‌or‌‌license‌‌of‌‌‌intellectual‌‌ property‌.‌ ‌ c.‌‌Perfection‌‌of‌‌security‌‌interests‌ ‌ a) A‌‌security‌‌interest‌‌shall‌‌be‌‌perfected‌‌when‌‌it‌‌has‌‌been‌‌‌created‌‌ and‌‌the‌‌secured‌‌creditor‌‌has‌‌taken‌‌one‌‌of‌‌the‌‌following‌‌actions:‌ ‌ i) R‌egistration‌o‌ f‌‌a‌‌notice‌‌with‌‌the‌‌Registry;‌ ‌ The‌ ‌period‌ ‌of‌ ‌effectiveness‌ ‌of‌ ‌a‌ ‌notice‌ ‌may‌ ‌be‌‌ continued‌ ‌for‌ ‌an‌ ‌additional‌ ‌days‌ ‌by‌ ‌registering‌ ‌an‌‌ amendment‌ ‌notice‌ ‌which‌ ‌must‌ ‌be‌ ‌registered‌ ‌within‌‌ six‌ ‌(6)‌ ‌months‌ ‌before‌ ‌the‌ ‌expiration‌ ‌of‌ ‌the‌‌effective‌‌ period‌‌of‌‌the‌‌notice.‌ ‌ ii) P‌ossession‌ ‌of‌ ‌the‌ ‌collateral‌ ‌by‌ ‌the‌ ‌secured‌ ‌creditor;‌‌ and‌ ‌ iii) C‌ontrol‌o‌ f‌‌investment‌‌property‌‌and‌‌deposit‌‌account.‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 111‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ Means‌‌of‌‌Perfection‌ ‌ Type‌‌of‌‌Asset‌ ‌ Tangible‌ ‌ Investment‌‌Property‌‌ and‌‌Deposit‌‌Account‌ ‌ Registration‌ Possession‌ ‌ ✔‌ ‌ ✔‌ ‌ ✔‌ ‌ ‌ Control‌ ‌ ‌ ✔‌ ‌ d) Any‌ ‌rights‌ ‌to‌ ‌set-off‌ ‌shall‌ ‌have‌ ‌priority‌ ‌over‌ ‌a‌ ‌security‌‌ interest‌‌in‌‌the‌‌deposit‌‌account.‌ ‌ e) A‌ ‌security‌ ‌interest‌ ‌in‌ ‌electronic‌ ‌non-intermediated‌ ‌securities‌‌ perfected‌‌by‌‌a‌‌notation‌‌of‌‌the‌‌security‌‌interests‌‌in‌‌the‌‌books‌‌ maintained‌‌for‌‌that‌‌purpose‌‌by‌‌or‌‌on‌‌behalf‌‌of‌‌the‌‌issuer‌‌shall‌‌ have‌‌priority.‌ ‌ f) b) On‌ ‌perfection,‌ ‌a‌ ‌security‌ ‌interest‌ ‌becomes‌ ‌effective‌‌against‌‌ third‌‌parties.‌ ‌ d.‌‌Priority‌‌of‌‌security‌‌interests‌ ‌ General‌‌Rule‌‌‌—‌‌‌The‌‌priority‌‌of‌‌security‌‌interests‌‌and‌‌liens‌‌in‌‌the‌‌ same‌ ‌collateral‌ ‌shall‌ ‌be‌ ‌determined‌ ‌according‌ ‌to‌ ‌time‌ ‌of‌‌ registration‌ ‌of‌ ‌a‌ ‌notice‌‌or‌‌perfection‌‌by‌‌other‌‌means‌,‌‌‌without‌‌ regard‌‌to‌‌the‌o ‌ rder‌‌of‌‌creation‌o ‌ f‌‌the‌‌security‌‌interests‌‌and‌‌liens.‌ ‌ Tangible‌‌Assets‌ ‌ a) Secured‌ ‌creditor's‌ ‌possession‌ ‌of‌ ‌the‌ ‌certificate‌ ‌shall‌ ‌have‌‌ priority‌ ‌over‌ ‌a‌ ‌competing‌ ‌security‌ ‌interest‌ ‌perfected‌ ‌by‌‌ registration.‌ ‌ b) Possession‌‌‌of‌‌the‌‌instrument‌‌or‌‌the‌‌negotiable‌‌document‌‌shall‌‌ have‌‌priority‌‌over‌‌a‌‌security‌‌interest‌‌perfected‌‌by‌‌registration.‌ ‌ g) A‌ ‌security‌ ‌interest‌ ‌in‌ ‌electronic‌ ‌securities‌ ‌held‌ ‌with‌ ‌an‌‌ intermediary‌‌and‌‌perfected‌‌through‌‌a‌‌control‌‌agreement‌‌shall‌‌ have‌‌priority.‌ ‌ b) A‌‌security‌‌interest‌‌in‌‌a‌‌deposit‌‌account‌‌or‌‌investment‌‌property‌‌ that‌ ‌is‌ ‌perfected‌ ‌by‌ ‌a‌ ‌control‌ ‌agreement‌ ‌shall‌‌have‌‌priority‌‌ over‌‌a‌‌competing‌‌security‌‌interest‌‌‌except‌‌‌a‌‌security‌‌interest‌‌of‌‌ the‌‌‌deposit-taking‌‌institution‌o ‌ r‌‌the‌‌intermediary.‌ ‌ c) The‌‌order‌‌of‌‌priority‌‌among‌‌competing‌‌security‌‌interests‌‌shall‌‌ be‌ ‌determined‌ ‌on‌ ‌the‌ ‌basis‌ ‌of‌ ‌the‌ ‌time‌ ‌of‌ ‌conclusion‌ ‌of‌‌the‌‌ control‌‌agreements.‌ ‌ Type‌‌of‌‌Asset‌ ‌ Equipment‌ ‌ Consumer‌‌Goods‌ ‌ Shall‌‌have‌‌priority‌ ‌ If‌‌notice‌‌is‌‌registered‌‌within‌‌‌three‌‌(3)‌‌ business‌‌days‌‌‌after‌‌receipt‌‌of‌‌possession.‌ ‌ If‌‌notice‌‌is‌‌registered‌‌not‌‌later‌‌than‌t‌ hree‌‌(3)‌‌ business‌‌days‌‌‌after‌‌receipt‌‌of‌‌possession.‌ ‌ 1. Inventory,‌‌IP‌‌and‌‌ 2. Livestock‌ ‌ Upon‌‌perfection‌‌through‌‌possession;‌‌or‌ ‌ Upon‌‌notice‌‌to‌‌holder‌‌of‌‌conflicting‌‌ security‌‌interest.‌ ‌ h) The‌ ‌order‌ ‌of‌ ‌priority‌ ‌among‌ ‌competing‌ ‌security‌ ‌interests‌ ‌in‌‌ e.‌‌Enforcement‌‌of‌‌security‌‌interests‌ ‌ electronic‌ ‌securities‌ ‌NOT‌ ‌held‌ ‌with‌ ‌an‌ ‌intermediary‌ ‌is‌‌ 1. Whether‌ ‌through‌ ‌a‌ ‌judicial‌ ‌or‌ ‌extrajudicial‌ ‌process,‌‌including‌‌ determined‌ ‌on‌ ‌the‌ ‌basis‌ ‌of‌ ‌the‌ ‌time‌ ‌of‌ ‌conclusion‌ ‌of‌ ‌the‌‌ the‌‌sale‌‌of‌‌the‌‌secured‌‌assets‌‌through‌‌either‌‌a‌‌public‌‌or‌‌private‌‌ control‌‌agreements.‌ ‌ disposition.‌‌ ‌ Specific‌‌Cases‌ ‌ 2. The‌‌right‌‌of‌‌the‌‌higher-ranking‌‌secured‌‌creditor‌‌to‌‌take‌‌over‌‌the‌‌ Priority‌ ‌and‌ ‌Right‌ ‌of‌ ‌Retention‌ ‌by‌ ‌Operation‌ ‌of‌ ‌Law.‌ ‌—‌ ‌A‌‌ enforcement‌ ‌process‌ ‌shall‌ ‌include‌ ‌the‌ ‌right‌ ‌to‌ ‌enforce‌ ‌the‌‌ person‌‌who‌‌ ‌ rights‌‌by‌‌any‌‌method.‌ ‌ Intangible‌‌Assets‌ ‌ a) A‌‌security‌‌interest‌‌in‌‌a‌‌‌deposit‌‌account‌‌with‌‌respect‌‌to‌‌which‌‌ the‌‌secured‌‌creditor‌‌is‌‌the‌deposit-taking‌‌institution‌‌or‌‌the‌ intermediary‌ ‌shall‌ ‌have‌ ‌priority‌ ‌over‌ ‌a‌ ‌competing‌ ‌security‌‌ interest‌‌perfected‌‌by‌‌any‌‌method.‌ ‌ A‌ ‌security‌ ‌interest‌ ‌in‌ ‌electronic‌ ‌securities‌ ‌NOT‌ ‌held‌ ‌with‌ ‌an‌‌ intermediary‌ ‌perfected‌ ‌by‌ ‌the‌ ‌conclusion‌ ‌of‌ ‌a‌ ‌control‌‌ agreement‌ ‌shall‌ ‌have‌ ‌priority‌ ‌over‌ ‌a‌ ‌security‌‌interest‌‌in‌‌the‌‌ same‌‌securities‌‌perfected‌‌by‌‌registration.‌ ‌ Purchase‌‌Money‌‌Security‌‌Interest‌‌—‌‌a‌‌security‌‌interest‌‌in‌‌goods‌‌ taken‌ ‌by‌ ‌the‌ ‌seller‌ ‌to‌ ‌secure‌ ‌the‌ ‌price‌ ‌or‌ ‌by‌ ‌a‌ ‌person‌ ‌who‌ ‌gives‌‌ value‌‌to‌‌enable‌‌the‌‌grantor‌‌to‌‌acquire‌‌the‌‌goods‌‌to‌‌the‌‌extent‌‌that‌‌the‌‌ credit‌‌is‌‌used‌‌for‌‌that‌‌purpose.‌ ‌ 1. provides‌ ‌services‌ ‌or‌ ‌materials‌ ‌with‌ ‌respect‌‌to‌‌the‌‌goods,‌‌ in‌‌the‌‌ordinary‌‌course‌‌of‌‌business,‌‌and‌‌ ‌ 2. retains‌‌possession‌‌of‌‌the‌‌goods‌‌ ‌ shall‌ ‌have‌ ‌priority‌ ‌over‌ ‌a‌ ‌perfected‌ ‌security‌ ‌interest‌ ‌in‌‌the‌‌goods‌ until‌‌payment‌‌thereof.‌ ‌ ⭐‌Transferee‌ ‌Exceptions.‌ ‌—‌ ‌Any‌ ‌party‌ ‌who‌ ‌obtains,‌ ‌in‌ ‌the‌‌ ordinary‌ ‌course‌ ‌of‌ ‌business,‌ ‌any‌ ‌movable‌ ‌property‌ ‌containing‌ ‌a‌‌ security‌ ‌interest‌ ‌shall‌ ‌take‌ ‌the‌ ‌same‌ ‌free‌‌of‌‌such‌‌security‌‌interest‌‌ provided‌‌he‌‌was‌‌in‌‌good‌‌faith.‌‌ ‌ No‌ ‌such‌ ‌good‌ ‌faith‌ ‌shall‌ ‌exist‌ ‌if‌ ‌the‌ ‌security‌ ‌interest‌ ‌in‌ ‌the‌‌ movable‌ ‌property‌ ‌was‌ ‌registered‌ ‌prior‌ ‌to‌ ‌his‌ ‌obtaining‌ ‌the‌‌ property‌.‌ ‌ 3. After‌‌default,‌‌a‌‌secured‌‌creditor‌‌may‌‌sell‌‌or‌‌otherwise‌‌dispose‌‌ of‌ ‌the‌ ‌collateral,‌‌publicly‌‌or‌‌privately,‌‌in‌‌its‌‌present‌‌condition‌‌ or‌ ‌following‌ ‌any‌ ‌commercially‌ ‌reasonable‌ ‌preparation‌ ‌or‌‌ processing.‌ ‌ A‌ ‌disposition‌ ‌is‌ ‌not‌ ‌commercially‌ ‌unreasonable‌ ‌merely‌‌ because‌‌a‌‌better‌‌price‌‌could‌‌have‌‌been‌‌obtained‌‌by‌‌disposition‌‌ at‌ ‌a‌ ‌different‌ ‌time‌ ‌or‌‌by‌‌a‌‌different‌‌method‌‌from‌‌the‌‌time‌‌and‌‌ method‌‌selected‌‌by‌‌the‌‌secured‌‌creditor.‌ ‌ If‌ ‌a‌ ‌method‌‌of‌‌disposition‌‌of‌‌collateral‌‌has‌‌been‌‌‌approved‌‌in‌‌ any‌ ‌legal‌ ‌proceeding‌,‌ ‌it‌ ‌is‌ ‌conclusively‌ ‌commercially‌‌ reasonable.‌ ‌ Notification‌‌Requirements‌‌Prior‌‌to‌‌Disposition‌ ‌ Not‌ ‌later‌ ‌than‌ ‌ten‌ ‌(10)‌ ‌days‌ ‌before‌ ‌disposition‌ ‌of‌ ‌the‌ ‌collateral,‌ ‌the‌‌ secured‌‌creditor‌‌shall‌‌notify:‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 112‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ 1) The‌‌grantor‌;‌ ‌ 2) Any‌‌‌other‌‌secured‌‌creditor‌‌‌or‌‌lien‌‌holder‌‌who,‌‌five‌‌(5)‌‌days‌‌ before‌‌the‌‌date‌‌notification‌‌is‌‌sent‌‌to‌‌the‌‌grantor,‌‌held‌‌a‌‌security‌‌ interest‌ ‌or‌ ‌lien‌ ‌in‌ ‌the‌ ‌collateral‌ ‌that‌ ‌was‌ ‌perfected‌ ‌by‌‌ registration;‌‌and‌ ‌ 3. b) Judicial‌‌‌—‌‌The‌‌secured‌‌creditor‌‌shall‌‌ ‌ i) 3) Any‌ ‌other‌ ‌person‌ ‌from‌ ‌whom‌ ‌the‌ ‌secured‌ ‌creditor‌ ‌received‌‌ notification‌.‌ ‌ Application‌‌of‌‌Proceeds‌ ‌ 1) The‌‌‌reasonable‌‌expenses‌;‌ ‌ 2) The‌ ‌satisfaction‌ ‌of‌ ‌the‌ ‌obligation‌ ‌secured‌ ‌by‌ ‌the‌ ‌security‌‌ interest‌‌of‌‌the‌‌enforcing‌‌secured‌‌creditor;‌‌and‌ ‌ 3) The‌‌‌satisfaction‌‌of‌‌obligations‌‌secured‌‌by‌‌any‌‌‌subordinate‌‌ security‌‌interest‌o ‌ r‌‌lien.‌ ‌ Right‌‌of‌‌Buyers‌‌and‌‌Other‌‌T hird‌‌Parties‌ ‌ If‌‌a‌‌secured‌‌creditor‌‌ ‌ a) sells‌‌‌the‌‌collateral,‌‌the‌‌buyer‌‌shall‌‌acquire‌‌the‌‌grantor's‌‌right‌‌in‌‌ the‌ ‌asset‌ ‌free‌ ‌of‌ ‌the‌ ‌rights‌ ‌of‌ ‌any‌ ‌secured‌ ‌creditor‌ ‌or‌ ‌lien‌‌ holder.‌ ‌ Expedited‌‌Repossession‌‌of‌‌the‌‌Collateral‌‌ ‌ a) Extrajudicial‌‌‌—‌‌The‌‌secured‌‌creditor‌‌may‌‌take‌‌possession‌‌of‌‌ the‌ ‌collateral‌ ‌without‌ ‌judicial‌ ‌process‌ ‌if‌ ‌the‌ ‌security‌‌ agreement‌ ‌so‌ ‌stipulates‌:‌ ‌Provided‌,‌ ‌that‌ ‌possession‌ ‌can‌ ‌be‌‌ taken‌‌‌without‌‌a‌‌breach‌‌of‌‌the‌‌peace‌w ‌ hich‌‌shall‌‌include‌‌ ‌ 1. 2. entering‌ ‌the‌ ‌private‌ ‌residence‌ ‌of‌ ‌the‌ ‌grantor‌ ‌without‌‌ permission,‌‌ ‌ resorting‌‌to‌‌physical‌‌violence‌‌or‌‌intimidation,‌‌or‌‌ ‌ be‌‌entitled‌‌to‌‌an‌‌‌expedited‌‌hearing‌;‌ ‌ ii) provide‌‌the‌‌debtor,‌‌grantor,‌‌a‌‌‌copy‌‌of‌‌the‌‌application‌;‌‌ and‌ ‌ iii) be‌ ‌entitled‌ ‌to‌ ‌an‌ ‌order‌ ‌granting‌ ‌possession‌ ‌of‌ ‌the‌‌ collateral.‌ ‌ Right‌‌of‌‌Redemption‌ ‌ ‌ Real‌‌Estate‌‌Mortgage‌‌Law‌‌ ‌ Chapter‌‌III‌‌Title‌‌XVI‌‌Book‌‌IV‌‌of‌‌the‌‌Civil‌‌Code‌ Act‌‌No‌‌3135‌‌‌as‌‌amended‌‌by‌‌‌Act‌‌No‌‌4118‌ a.‌‌Definition‌‌and‌‌characteristics‌ A‌ ‌real‌ ‌estate‌ ‌mortgage‌ ‌is‌ ‌an‌ ‌accessory‌ ‌contract‌ ‌whereby‌ ‌the‌‌ debtor‌ ‌guarantees‌ ‌the‌ ‌performance‌ ‌of‌ ‌the‌ ‌principal‌ ‌obligation‌ ‌by‌‌ subjecting‌ ‌real‌ ‌property‌ ‌or‌ ‌real‌ ‌rights‌ ‌as‌ ‌security‌ ‌in‌ ‌case‌ ‌of‌‌ non-performance‌‌of‌‌such‌‌obligation‌‌within‌‌the‌‌period‌‌agreed‌‌upon.‌ ‌ a) Any‌ ‌person‌ ‌who‌ ‌is‌ ‌entitled‌ ‌to‌ ‌receive‌ ‌a‌ ‌notification‌ ‌of‌‌ disposition‌ ‌is‌ ‌entitled‌ ‌to‌ ‌redeem‌ ‌the‌ ‌collateral‌ ‌by‌ ‌paying‌ ‌or‌‌ otherwise‌ ‌performing‌ ‌the‌ ‌secured‌‌obligation‌‌in‌‌full,‌‌including‌‌ Characteristics‌ ‌ the‌‌reasonable‌‌cost‌‌of‌‌enforcement‌.‌ ‌ 1) Accessory;‌ ‌ b) The‌‌right‌‌of‌‌redemption‌‌may‌‌be‌‌exercised,‌u ‌ nless‌:‌ ‌ 2) Indivisible;‌ ‌ i) The‌ ‌person‌ ‌entitled‌ ‌to‌ ‌redeem‌ ‌has,‌ ‌after‌ ‌the‌ ‌default,‌‌ 3) Inseparable;‌ ‌ waived‌i‌ n‌‌writing‌‌the‌‌right‌‌to‌‌redeem;‌ ‌ ii) b) leases‌‌or‌‌licenses‌‌the‌‌collateral,‌‌the‌‌lessee‌‌or‌‌licensee‌‌shall‌‌be‌‌ entitled‌‌to‌‌the‌‌benefit‌‌of‌‌the‌‌lease‌‌or‌‌license‌‌during‌‌its‌‌term‌ ‌ c) sells,‌ ‌leases‌ ‌or‌ ‌licenses‌ ‌the‌ ‌collateral‌ ‌not‌ ‌in‌ ‌compliance‌‌ herein,‌ ‌the‌ ‌buyer,‌ ‌lessee‌ ‌or‌ ‌licensee‌ ‌of‌ ‌the‌ ‌collateral‌ ‌shall‌‌ acquire‌‌the‌‌rights‌‌or‌‌benefits,‌p ‌ rovided‌h ‌ e‌‌was‌‌in‌‌good‌‌faith.‌ ‌ period‌‌from‌‌the‌‌date‌‌of‌‌effectivity‌‌of‌‌the‌‌PPSA‌‌‌until‌‌the‌‌date‌‌when‌‌ the‌‌Registry‌‌has‌‌been‌‌established‌‌and‌‌operational‌.‌ ‌ being‌‌accompanied‌‌by‌‌a‌‌law‌‌enforcement‌‌officer‌‌when‌‌ taking‌‌possession‌‌or‌‌confronting‌‌the‌‌grantor.‌ ‌ iii) The‌ ‌collateral‌ ‌is‌ ‌sold‌ ‌or‌ ‌otherwise‌ ‌disposed‌ ‌of,‌‌ acquired‌ ‌or‌ ‌collected‌ ‌by‌ ‌the‌ ‌secured‌ ‌creditor,‌ ‌or‌ when‌‌an‌‌agreement‌‌with‌‌those‌‌effects‌‌on‌‌the‌‌collateral‌‌ is‌‌concluded‌‌by‌‌the‌‌secured‌‌creditor;‌‌or‌ ‌ The‌‌secured‌‌creditor‌‌has‌r‌ etained‌t‌ he‌‌collateral.‌ ‌ f.‌‌Prior‌‌interests‌‌and‌‌the‌‌transitional‌‌period‌ ‌ 4) Real‌‌Right;‌ ‌ 5) Real‌‌Property.‌ ‌ Obligations‌‌Secured‌‌by‌‌REM‌ ‌ Dragnet‌ ‌or‌ ‌Blanket‌ ‌Mortgage‌ ‌Clause‌ ‌—‌ ‌a‌ ‌stipulation‌ ‌in‌ ‌a‌‌ mortgage‌ ‌contract‌ ‌which‌ ‌provides‌ ‌that‌ ‌the‌ ‌property‌ ‌will‌ ‌serve‌ ‌as‌‌ collateral‌‌not‌‌just‌‌for‌‌the‌‌present‌‌loan‌‌but‌‌also‌‌for‌‌future‌‌loans‌‌that‌‌ may‌‌be‌‌granted‌‌by‌‌the‌‌bank‌‌to‌‌the‌‌borrower.‌ ‌ A‌‌prior‌‌interest‌‌that‌‌was‌‌perfected‌‌under‌‌prior‌‌law‌‌continues‌‌to‌‌be‌‌ deemed‌ ‌perfected‌ ‌under‌ ‌the‌ ‌PPSA‌ ‌and‌ ‌these‌‌rules‌‌until‌‌the‌‌earlier‌‌ EXC‌:‌ ‌ of:‌ ‌ 1. Debts‌‌not‌‌made‌‌by‌‌the‌‌debtor‌‌of‌‌the‌‌first‌‌mortgage;‌ ‌ 1) The‌ ‌time‌ ‌the‌ ‌prior‌ ‌interest‌ ‌would‌ ‌cease‌ ‌to‌ ‌be‌ ‌perfected‌‌ 2. Debts‌‌secured‌‌by‌‌another‌‌collateral‌‌under‌‌Reliance‌‌of‌‌Security‌‌ under‌‌prior‌‌law;‌‌and‌ ‌ Test,‌e‌ xcluding‌e‌ xcess‌‌amounts.‌ ‌ 2) The‌‌beginning‌‌of‌‌full‌‌implementation‌‌of‌‌the‌‌PPSA.‌ ‌ b.‌‌Object‌‌of‌‌Real‌‌Estate‌‌Mortgage‌ ‌ The‌‌transitional‌‌period‌‌shall‌‌begin‌‌on‌‌February‌‌9,‌‌2019‌,‌‌which‌‌ is‌‌the‌‌date‌‌of‌‌effectivity‌‌of‌‌the‌‌PPSA.‌‌Transitional‌‌period‌‌means‌‌the‌‌ 1. Immovables‌‌and‌‌alienable‌‌real‌‌rights;‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 113‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ 2. 3. Extends‌ ‌to‌ ‌natural‌ ‌accessions,‌ ‌improvements,‌ ‌growing‌ ‌fruits,‌‌ rents‌ ‌and‌ ‌income‌ ‌not‌ ‌yet‌ ‌received,‌ ‌indemnity‌ ‌and‌ ‌just‌‌ compensation;‌‌(A ‌ rt‌‌2127,‌‌NCC‌)‌ ‌ Future‌‌properties‌‌CANNOT‌‌be‌‌included.‌ ‌ c.‌‌Rights‌‌to‌‌alienate‌ ‌ Mortgage‌‌credit‌ ‌ The‌‌mortgage‌‌credit‌‌may‌‌be‌‌alienated‌‌or‌‌assigned‌‌to‌‌a‌‌third‌‌person,‌‌ in‌‌whole‌‌or‌‌in‌‌part,‌‌with‌‌the‌‌formalities‌‌required‌‌by‌‌law.‌‌(‌Art‌‌2128,‌‌ NCC‌)‌ ‌ Collateral‌ ‌ A‌ ‌stipulation‌ ‌forbidding‌‌the‌‌owner‌‌from‌‌alienating‌‌the‌‌immovable‌‌ mortgaged‌‌shall‌‌be‌V ‌ OID‌.‌‌(‌Art‌‌2130,‌‌NCC‌)‌ ‌ A‌ ‌stipulation‌ ‌prohibiting‌ ‌the‌ ‌mortgagor‌‌from‌‌entering‌‌into‌‌second‌‌ or‌‌subsequent‌‌mortgages‌‌was‌‌held‌v ‌ alid‌.‌ ‌ d.‌‌Essential‌‌requisites‌ ‌ 1) It‌ ‌must‌ ‌be‌ ‌constituted‌ ‌to‌ ‌secure‌ ‌the‌ ‌performance‌ ‌of‌ ‌the‌‌ principal‌‌obligation;‌ ‌ 2) The‌‌‌mortgagor‌‌must‌‌be‌‌the‌‌absolute‌‌owner‌‌of‌‌the‌‌property‌‌ mortgaged;‌ ‌ 3) The‌ ‌mortgagor‌ ‌should‌ ‌have‌ ‌the‌ ‌free‌‌disposal‌‌of‌‌the‌‌property‌‌ mortgaged,‌ ‌and‌ ‌in‌ ‌the‌ ‌absence‌ ‌thereof,‌ ‌he‌ ‌should‌ ‌be‌ ‌legally‌‌ authorized‌‌‌for‌‌the‌‌purpose;‌ ‌ 4) When‌ ‌the‌ p ‌ rincipal‌ o ‌ bligation‌ ‌becomes‌ d ‌ ue,‌ ‌the‌ p ‌ roperty‌‌ mortgaged‌ ‌may‌ ‌be‌ ‌alienated‌ ‌for‌ ‌the‌ ‌payment‌ ‌of‌ ‌such‌‌ obligation;‌ ‌ If‌ ‌the‌ ‌instrument‌ ‌is‌ ‌not‌ ‌recorded,‌ ‌the‌ ‌mortgage‌ ‌is‌ ‌nevertheless‌‌ binding‌‌between‌‌the‌‌parties‌.‌‌(‌Art‌‌2125,‌‌NCC‌)‌ ‌ Understandably,‌ ‌the‌ ‌third‌ ‌party‌‌adversely‌‌possessing‌‌the‌‌foreclosed‌‌ property‌‌cannot‌‌be‌‌dispossessed‌‌by‌‌a‌‌mere‌‌ex‌‌parte‌‌possessory‌‌writ‌‌ in‌‌favor‌‌of‌‌the‌‌purchaser,‌‌because‌‌to‌‌do‌‌so‌‌would‌‌be‌‌tantamount‌‌to‌‌a‌‌ summary‌‌ejectment‌‌of‌‌the‌‌third‌‌party‌‌in‌‌violation‌‌of‌‌the‌‌latter's‌‌right‌‌ to‌‌due‌‌process.‌ ‌ Fallarme‌‌v.‌‌Pagedped‌‌‌2020‌ ‌ The‌‌effect‌‌of‌‌the‌‌failure‌‌of‌‌the‌‌mortgagee‌‌to‌‌make‌‌the‌‌subordinate‌‌lien‌‌ holder‌ ‌a‌ ‌defendant‌ ‌is‌ ‌that‌ ‌the‌ ‌decree‌ ‌entered‌ ‌in‌ ‌the‌ ‌foreclosure‌‌ proceeding‌‌would‌‌not‌‌deprive‌‌the‌‌subordinate‌‌lien‌‌holder‌‌of‌‌his‌‌right‌‌ of‌ ‌redemption.‌ ‌A‌ ‌decree‌ ‌of‌ ‌foreclosure‌ ‌in‌ ‌a‌ ‌suit‌ ‌to‌ ‌which‌ ‌the‌‌ holders‌ ‌of‌ ‌a‌ ‌second‌ ‌lien‌ ‌are‌ ‌not‌ ‌parties‌ ‌leaves‌ ‌the‌ ‌equity‌ ‌of‌‌ redemption‌ ‌in‌ ‌favor‌ ‌of‌ ‌the‌ ‌lien‌ ‌holders‌ ‌unforeclosed‌ ‌and‌‌ unaffected‌.‌ ‌ Panacan‌‌Lumber‌‌Co.,‌‌et‌‌al.‌‌v.‌‌Solidbank‌‌Corp.‌‌2 ‌ 020‌ ‌ WON‌‌the‌‌extra-judicial‌‌foreclosure‌‌of‌‌the‌‌REM‌‌is‌‌null‌‌and‌‌void‌‌due‌‌ to‌ ‌the‌ ‌lack‌ ‌of‌ ‌personal‌ ‌notice‌ ‌to‌ ‌petitioners‌ ‌of‌ ‌the‌ ‌two‌ ‌amended‌‌ petitions‌‌for‌‌extra-judicial‌‌foreclosure‌‌filed‌‌by‌‌Solidbank.‌ ‌ YES‌.‌‌Well-settled‌‌is‌‌the‌‌rule‌‌that‌‌personal‌‌notice‌‌to‌‌the‌‌mortgagor‌‌in‌‌ Here,‌ ‌since‌ ‌Fallarme‌ ‌was‌ ‌not‌ ‌impleaded‌ ‌as‌ ‌a‌ ‌defendant‌ ‌in‌ ‌the‌‌ foreclosure‌ ‌proceedings‌ ‌initiated‌ ‌by‌ ‌Pagedped‌ ‌in‌ ‌2005,‌ ‌as‌‌ subordinate‌ ‌lienholder‌,‌ ‌however,‌ ‌she‌ ‌acquired‌ ‌an‌ ‌equity‌ ‌of‌‌ redemption.‌‌Thus,‌‌failure‌‌of‌‌the‌‌mortgagee‌‌to‌‌join‌‌a‌‌subordinate‌‌lien‌‌ holder‌ ‌as‌ ‌defendant‌ ‌in‌ ‌the‌ ‌foreclosure‌ ‌proceeding‌ ‌does‌‌not‌‌nullify‌‌ the‌ ‌foreclosure‌ ‌proceeding‌,‌ ‌but‌ ‌kept‌ ‌alive‌ ‌the‌ ‌equity‌ ‌of‌‌ redemption‌‌acquired‌‌by‌‌said‌‌junior‌‌lien-holder‌.‌ ‌ extrajudicial‌‌foreclosure‌‌proceedings‌‌is‌‌‌not‌‌necessary.‌‌An‌exception‌‌ to‌‌this‌‌rule‌‌is‌‌‌when‌‌the‌‌parties‌‌stipulate‌‌that‌‌personal‌‌notice‌‌is‌‌ additionally‌‌required‌t‌ o‌‌be‌‌given‌‌to‌‌the‌‌mortgagor.‌ ‌ WON‌‌the‌‌mortgage‌‌contract‌‌includes‌‌PLC's‌‌other‌‌loan‌‌obligations.‌ ‌ YES‌,‌ ‌but‌ ‌only‌ ‌as‌ ‌to‌ ‌the‌ ‌renewal‌ ‌of‌ ‌the‌ ‌P700K‌ ‌loan.‌ ‌Although‌ ‌a‌‌ blanket‌ ‌mortgage‌ ‌or‌ ‌a‌ ‌dragnet‌ ‌clause‌‌is‌‌generally‌‌recognized‌‌as‌‌ valid,‌ ‌these‌ ‌other‌ ‌obligations,‌ ‌past‌ ‌or‌ ‌future,‌ ‌secured‌ ‌by‌ ‌the‌ ‌REM‌‌ must‌ ‌be‌ ‌specifically‌ ‌described‌ ‌within‌ ‌the‌ ‌terms‌ ‌of‌ ‌the‌ ‌mortgage‌‌ contract.‌ ‌Here,‌ ‌the‌ ‌REM‌ ‌with‌ ‌maximum‌ ‌amount‌ ‌of‌ ‌P2M‌ ‌was‌‌ constituted‌ ‌by‌ ‌the‌ ‌parties‌ ‌to‌ ‌secure‌ ‌PLC's‌ ‌loan‌ ‌obligation‌ ‌in‌ ‌the‌‌ amount‌‌of‌‌P700K.‌‌There‌‌is‌‌no‌‌doubt,‌‌therefore,‌‌as‌‌to‌‌the‌‌inclusion‌‌of‌‌ the‌‌renewal‌‌PN‌‌under‌‌the‌‌coverage‌‌of‌‌the‌‌Deed‌‌of‌‌REM.‌ ‌ The‌ ‌equity‌ ‌of‌ ‌redemption‌ ‌also‌ ‌does‌ ‌not‌ ‌constitute‌ ‌a‌ ‌bar‌ ‌to‌ ‌the‌‌ registration‌‌of‌‌the‌‌property‌‌in‌‌the‌‌name‌‌of‌‌the‌‌mortgagee.‌‌ ‌ Sy‌‌v.‌‌China‌‌Banking‌‌‌2020‌ ‌ The‌‌general‌‌rule‌‌is‌‌that‌‌the‌‌court‌‌possesses‌‌no‌‌discretion‌‌to‌‌deny‌‌an‌‌ application‌ ‌for‌ ‌writ‌ ‌of‌ ‌possession‌ ‌if‌ ‌the‌ ‌judgment‌ ‌debtor‌ ‌failed‌ ‌to‌‌ redeem‌ ‌the‌ ‌foreclosed‌ ‌property‌ ‌within‌ ‌the‌ ‌legal‌ ‌redemption‌ ‌period‌‌ and‌ ‌hence,‌ ‌ownership‌ ‌is‌ ‌consolidated‌ ‌to‌ ‌the‌ ‌purchaser‌ ‌in‌ ‌the‌‌ extrajudicial‌‌foreclosure‌‌sale.‌‌However,‌‌the‌‌court's‌‌obligation‌‌to‌‌issue‌‌ an‌ ‌ex‌ ‌parte‌ ‌writ‌ ‌of‌ ‌possession‌ ‌in‌ ‌favor‌ ‌of‌ ‌the‌ ‌purchaser,‌ ‌in‌ ‌an‌‌ extra-judicial‌ ‌foreclosure‌ ‌sale,‌ ‌ceases‌ ‌to‌ ‌be‌ ‌ministerial‌ ‌in‌‌ exceptional‌‌cases‌‌ ‌ No‌‌automatic‌‌attribution‌‌of‌‌property‌‌by‌‌the‌‌creditor,‌‌otherwise‌‌ it‌‌will‌‌amount‌‌to‌p ‌ actum‌‌commissorium‌.‌ ‌ 1. where‌‌a‌‌third‌‌party‌‌is‌‌claiming‌‌the‌‌property‌‌adversely‌‌to‌‌that‌‌ of‌‌the‌‌judgment‌‌debtor/mortgagor,‌‌and‌‌ ‌ 5) The‌ ‌subject‌ ‌matter‌ ‌of‌ ‌the‌ ‌contract‌ ‌must‌ ‌be‌ ‌immovable‌‌ property‌‌or‌‌alienable‌‌real‌‌rights‌‌upon‌‌immovable.‌ ‌ 2. where‌ ‌such‌ ‌third‌ ‌party‌ ‌is‌ ‌a‌ ‌stranger‌ ‌to‌ ‌the‌ ‌foreclosure‌‌ proceedings‌‌wherefrom‌‌the‌‌ex‌‌parte‌‌writ‌‌of‌‌possession‌‌was‌‌ applied‌‌for.‌‌ ‌ It‌ ‌is‌ ‌indispensable,‌ ‌in‌ ‌order‌ ‌that‌ ‌a‌ ‌mortgage‌ ‌may‌ ‌be‌ ‌validly‌‌ constituted,‌‌that‌‌the‌‌document‌‌in‌‌which‌‌it‌‌appears‌‌be‌‌‌recorded‌‌‌in‌‌ the‌‌Registry‌‌of‌‌Property.‌‌ ‌ The‌‌Deed‌‌of‌‌REM‌‌is‌‌clear‌‌and‌‌explicit‌‌that‌‌it‌‌only‌‌covers‌‌certain‌‌loans‌‌ and‌ ‌other‌ ‌accommodations‌ ‌obtained‌ ‌from‌ ‌Solidbank‌ ‌without‌‌ reference‌‌to‌‌its‌‌past‌‌obligations‌‌such‌‌as‌‌the‌‌FLC.‌‌Further,‌‌the‌‌Deed‌‌of‌‌ REM‌‌has‌‌a‌‌maximum‌‌limit‌‌of‌‌P2M.‌‌Plainly,‌‌the‌‌obligation‌‌under‌‌FLC‌‌ exceeds‌‌this‌‌benchmark.‌ ‌ ‌ Guaranty‌‌ ‌ Title‌‌XV‌‌Book‌‌IV‌‌of‌‌the‌‌Civil‌‌Code‌ a.‌‌Nature‌‌and‌‌extent‌ ‌ 1. A‌ ‌guaranty‌ ‌is‌ ‌a‌‌contract‌‌by‌‌virtue‌‌of‌‌which‌‌a‌‌person,‌‌called‌‌ the‌ ‌guarantor,‌ ‌binds‌ ‌himself‌ ‌to‌ ‌the‌ ‌creditor‌ ‌to‌ ‌fulfill‌ ‌the‌‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 114‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ obligation‌ ‌of‌ ‌the‌ ‌principal‌ ‌debtor‌ ‌in‌ ‌case‌ ‌the‌ ‌latter‌ ‌should‌‌ fail‌‌to‌‌do‌‌so‌.‌‌(A ‌ rt‌‌2047,‌‌NCC‌)‌‌ ‌ 2. It‌ ‌is‌ ‌gratuitous‌,‌ ‌unless‌ ‌there‌ ‌is‌ ‌a‌ ‌stipulation‌ ‌to‌ ‌the‌ ‌contrary.‌‌ (‌Art‌‌2048,‌‌NCC‌)‌ ‌ 3. It‌ ‌is‌ ‌not‌ ‌presumed‌;‌‌it‌‌must‌‌be‌‌‌express‌‌‌and‌‌cannot‌‌extend‌‌to‌‌ more‌‌than‌‌what‌‌is‌‌stipulated‌‌therein.‌ ‌ 4. It‌‌must‌‌be‌‌in‌‌writing.‌ ‌ the‌‌creditor‌‌may‌‌demand‌‌another‌‌who‌‌has‌‌all‌‌the‌‌qualifications‌‌ except‌ ‌where‌ ‌the‌ ‌creditor‌ ‌has‌ ‌required‌ ‌and‌ ‌stipulated‌ ‌that‌ ‌a‌‌ specified‌‌person‌‌should‌‌be‌‌the‌‌guarantor.‌ ‌ 2. Creditor‌;‌ ‌ 3. Principal‌‌Debtor‌.‌ ‌ clause‌ ‌between‌ ‌the‌ ‌buyer‌ ‌and‌ ‌the‌ ‌seller‌ ‌be‌ ‌invoked‌ ‌by‌‌a‌‌non-party‌‌ such‌‌as‌‌the‌‌surety.‌ ‌ Right‌‌to‌‌protection‌‌and‌‌indemnification‌ ‌ A‌ ‌compromise‌ ‌between‌ ‌the‌ ‌creditor‌ ‌and‌ ‌the‌ ‌principal‌ ‌debtor‌‌ benefits‌ ‌the‌ ‌guarantor‌ ‌but‌ ‌does‌ ‌not‌ ‌prejudice‌ ‌him.‌ ‌That‌ ‌which‌ ‌is‌‌ entered‌ ‌into‌ ‌between‌ ‌the‌ ‌guarantor‌ ‌and‌ ‌the‌ ‌creditor‌ ‌benefits‌ ‌but‌‌ does‌‌not‌‌prejudice‌‌the‌‌principal‌‌debtor.‌‌(A ‌ rt‌‌2063,‌‌NCC‌)‌ ‌ b.‌‌Effects‌ ‌ 5. The‌‌creditor‌‌is‌‌not‌‌bound‌‌to‌‌accept‌‌payment‌‌or‌‌performance‌‌by‌‌ ⭐‌Excussion‌ ‌ The‌ ‌guarantor‌ ‌who‌ ‌pays‌ ‌for‌ ‌a‌ ‌debtor‌ ‌must‌ ‌be‌ ‌indemnified‌‌by‌‌the‌‌ a‌ ‌third‌ ‌person‌ ‌who‌ ‌has‌ ‌no‌ ‌interest‌ ‌in‌ ‌the‌ ‌fulfillment‌ ‌of‌ ‌the‌‌ The‌ ‌guarantor‌ ‌cannot‌ ‌be‌ ‌compelled‌ ‌to‌ ‌pay‌ ‌the‌‌creditor‌‌unless‌‌the‌‌ latter.‌ ‌ obligation,‌‌unless‌‌there‌‌is‌‌a‌‌stipulation‌‌to‌‌the‌‌contrary.‌ ‌ latter‌‌has‌‌exhausted‌‌all‌‌the‌‌property‌‌of‌‌the‌‌debtor,‌‌and‌‌has‌‌resorted‌‌ The‌‌indemnity‌c‌ omprises:‌ ‌ 6. Delegacion‌ ‌—‌ ‌Whoever‌ ‌pays‌ ‌for‌ ‌another‌ ‌may‌ ‌demand‌ ‌from‌‌ to‌‌all‌‌the‌‌legal‌‌remedies‌‌against‌‌the‌‌debtor.‌‌(A ‌ rt‌‌2058,‌‌NCC‌)‌ ‌ 1) The‌‌total‌‌amount‌‌of‌‌the‌‌debt;‌ ‌ the‌ ‌debtor‌‌what‌‌he‌‌has‌‌paid,‌‌except‌‌that‌‌if‌‌he‌‌paid‌‌without‌‌the‌‌ The‌‌excussion‌‌shall‌‌‌not‌‌take‌‌place‌:‌ ‌ knowledge‌‌or‌‌against‌‌the‌‌will‌‌of‌‌the‌‌debtor,‌‌he‌‌can‌‌recover‌‌only‌‌ 2) The‌ ‌legal‌ ‌interests‌ ‌thereon‌ ‌from‌ ‌the‌ ‌time‌ ‌the‌ ‌payment‌ ‌was‌‌ insofar‌ ‌as‌ ‌the‌ ‌payment‌ ‌has‌ ‌been‌ ‌beneficial‌‌to‌‌the‌‌debtor.‌‌(‌Art‌‌ 1) If‌‌the‌‌guarantor‌‌has‌‌expressly‌‌renounced‌‌it;‌ ‌ made‌‌known‌‌to‌‌the‌‌debtor,‌‌even‌‌though‌‌it‌‌did‌‌not‌‌earn‌‌interest‌‌ 1236,‌‌NCC‌)‌‌ ‌ for‌‌the‌‌creditor;‌ ‌ 2) If‌‌he‌‌has‌‌bound‌‌himself‌‌solidarily‌‌with‌‌the‌‌debtor‌‌—‌s‌ urety‌;‌ ‌ 7. Expromision‌‌—‌‌‌Whoever‌‌pays‌‌on‌‌behalf‌‌of‌‌the‌‌debtor‌‌without‌‌ 3) The‌‌‌expenses‌‌‌incurred‌‌by‌‌the‌‌guarantor‌‌after‌‌having‌‌notified‌‌the‌‌ 3) In‌‌case‌‌of‌‌insolvency‌‌of‌‌the‌‌debtor;‌ ‌ the‌ ‌knowledge‌ ‌or‌ ‌against‌ ‌the‌ ‌will‌‌of‌‌the‌‌latter,‌‌cannot‌‌compel‌‌ debtor‌‌that‌‌payment‌‌had‌‌been‌‌demanded‌‌of‌‌him;‌ ‌ the‌ ‌creditor‌ ‌to‌ ‌subrogate‌ ‌him‌ ‌in‌ ‌his‌ ‌rights,‌ ‌such‌ ‌as‌ ‌those‌‌ 4) When‌ ‌he‌ ‌has‌ ‌absconded,‌ ‌or‌ ‌cannot‌ ‌be‌ ‌sued‌ ‌within‌ ‌the‌‌ 4) Damages‌,‌‌if‌‌they‌a‌ re‌‌due.‌‌(A ‌ rt‌‌2066,‌‌NCC‌)‌ ‌ arising‌‌from‌‌a‌‌mortgage,‌g ‌ uaranty‌,‌‌or‌‌penalty.‌‌(A ‌ rt‌‌1237,‌‌NCC‌)‌‌ ‌ Philippines‌‌unless‌h ‌ e‌‌has‌‌left‌‌a‌‌manager‌‌or‌‌representative;‌ ‌ The‌ ‌guarantor‌ ‌may‌ ‌set‌ ‌up‌ ‌against‌ ‌the‌ ‌creditor‌ ‌all‌ ‌the‌ ‌defenses‌‌ Obligations‌‌secured‌‌by‌‌guaranty‌ ‌ 5) If‌‌it‌‌may‌‌be‌‌presumed‌‌that‌‌an‌‌execution‌‌on‌‌the‌‌property‌‌of‌‌the‌‌ which‌ ‌pertain‌ ‌to‌ ‌the‌ ‌principal‌‌debtor‌‌and‌‌are‌‌inherent‌‌in‌‌the‌‌debt;‌‌ principal‌ ‌debtor‌ ‌would‌ ‌not‌ ‌result‌ ‌in‌ ‌the‌ ‌satisfaction‌ ‌of‌ ‌the‌‌ 1. Voidable‌‌and‌‌unenforceable‌‌contracts;‌ ‌ but‌‌not‌‌those‌‌that‌‌are‌‌personal‌‌to‌‌the‌‌debtor‌.‌‌(‌Art‌‌2081,‌‌NCC‌)‌ ‌ obligation.‌‌(A ‌ rt‌‌2059,‌‌NCC‌)‌ ‌ ⭐The‌ ‌guarantor,‌ ‌even‌ ‌before‌ ‌having‌ ‌paid,‌ ‌may‌ ‌proceed‌ ‌against‌ ‌the‌‌ 2. Natural‌‌obligations;‌ ‌ 6) In‌‌the‌‌case‌‌of‌‌judicial‌‌bondsman‌‌(‌Art‌‌2084,‌‌NCC‌);‌‌and‌ ‌ principal‌‌debtor:‌ ‌ 3. Future‌‌debts‌‌with‌‌unknown‌‌amount;‌ ‌ 7) When‌ ‌the‌ ‌guarantor‌ ‌has‌ ‌constituted‌ ‌in‌ ‌favor‌ ‌of‌ ‌the‌ ‌creditor‌‌a‌‌ 1) When‌‌he‌‌is‌‌sued‌‌for‌‌the‌‌payment;‌ ‌ 4. Conditional‌‌obligations.‌ ‌ pledge‌‌or‌‌mortgage‌‌as‌a ‌ dditional‌‌security‌.‌ ‌ 2) In‌‌case‌‌of‌‌insolvency‌o ‌ f‌‌the‌‌principal‌‌debtor;‌ ‌ Parties‌‌to‌‌a‌‌guaranty‌ ‌ In‌ ‌order‌ ‌that‌ ‌the‌ ‌guarantor‌ ‌may‌ ‌make‌ ‌use‌ ‌of‌ ‌the‌ ‌benefit‌ ‌of‌‌ 3) When‌ ‌the‌ ‌debtor‌ ‌has‌ ‌bound‌ ‌himself‌ ‌to‌ ‌relieve‌ ‌him‌ ‌from‌ ‌the‌‌ excussion,‌ ‌he‌ ‌must‌ ‌set‌ ‌it‌ ‌up‌ ‌against‌ ‌the‌ ‌creditor‌ ‌upon‌‌the‌‌latter's‌‌ 1. Guarantor‌‌‌—‌‌shall‌‌be‌‌subject‌‌to‌‌the‌‌jurisdiction‌‌of‌‌the‌‌court‌‌of‌‌ guaranty‌ ‌within‌ ‌a‌ ‌specified‌ ‌period,‌ ‌and‌ ‌this‌ ‌period‌ ‌has‌‌ demand‌ ‌for‌ ‌payment‌ ‌from‌ ‌him,‌ ‌and‌ ‌point‌ ‌out‌ ‌to‌ ‌the‌ ‌creditor‌‌ the‌ ‌place‌ ‌where‌ ‌this‌ ‌obligation‌ ‌is‌ ‌to‌ ‌be‌ ‌complied‌ ‌with.‌‌If‌‌the‌‌ expired‌;‌ ‌ available‌ ‌property‌ ‌of‌ ‌the‌ ‌debtor‌ ‌within‌ ‌Philippine‌ ‌territory,‌‌ guarantor‌‌should‌‌be‌‌ ‌ 4) When‌ ‌the‌ ‌debt‌ ‌has‌ ‌become‌ ‌demandable‌,‌ ‌by‌ ‌reason‌ ‌of‌ ‌the‌‌ sufficient‌‌to‌‌cover‌‌the‌‌amount‌‌of‌‌the‌‌debt.‌‌(A ‌ rt‌‌2060,‌‌NCC‌)‌ ‌ a. convicted‌ ‌in‌ ‌the‌ ‌first‌ ‌instance‌ ‌of‌ ‌a‌ ‌crime‌ ‌involving‌‌ expiration‌‌of‌‌the‌‌period‌‌for‌‌payment;‌ ‌ Gilat‌‌Satellite‌‌v.‌‌UCPB‌‌‌2014‌ ‌ dishonesty‌‌or‌‌ ‌ 5) After‌‌the‌‌lapse‌‌of‌‌‌ten‌‌years‌,‌‌when‌‌the‌‌principal‌‌obligation‌‌has‌‌ The‌‌existence‌‌of‌‌a‌‌suretyship‌‌agreement‌‌does‌‌not‌‌give‌‌the‌‌surety‌‌the‌‌ b. should‌‌become‌‌insolvent,‌‌ ‌ no‌‌fixed‌‌period‌‌for‌‌its‌‌maturity,‌‌‌unless‌‌‌it‌‌be‌‌of‌‌such‌‌nature‌‌that‌‌ right‌ ‌to‌ ‌intervene‌ ‌in‌ ‌the‌ ‌principal‌ ‌contract,‌ ‌nor‌ ‌can‌ ‌an‌ ‌arbitration‌‌ it‌ ‌cannot‌ ‌be‌ ‌extinguished‌ ‌except‌ ‌within‌ ‌a‌ ‌period‌ ‌longer‌ ‌than‌‌ ten‌‌years;‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 115‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ 6) If‌‌there‌‌are‌‌reasonable‌‌grounds‌‌to‌‌fear‌‌that‌‌the‌‌principal‌‌debtor‌‌ intends‌‌to‌a ‌ bscond‌;‌ ‌ 4. A‌‌‌sub-guarantor‌,‌‌in‌‌case‌‌of‌‌the‌‌insolvency‌‌of‌‌the‌‌guarantor‌‌for‌‌ whom‌‌he‌‌bound‌‌himself,‌‌is‌‌responsible‌‌to‌‌the‌‌co-guarantors‌‌in‌‌ the‌‌same‌‌terms‌‌as‌‌the‌‌guarantor.‌‌(A ‌ rt‌‌2075,‌‌NCC‌)‌ ‌ 7) If‌ ‌the‌ ‌principal‌ ‌debtor‌ ‌is‌ ‌in‌ ‌imminent‌ ‌danger‌ ‌of‌‌becoming‌‌ insolvent‌.‌ ‌ c.‌‌Extinguishment‌ ‌ In‌‌all‌‌these‌‌cases,‌‌the‌‌action‌‌of‌‌the‌‌guarantor‌‌is‌‌ ‌ b) to‌ ‌demand‌ ‌a‌ ‌security‌ ‌that‌ ‌shall‌ ‌protect‌ ‌him‌ ‌from‌ ‌any‌‌ proceedings‌‌by‌‌the‌‌creditor‌‌and‌‌from‌‌the‌‌danger‌‌of‌‌insolvency‌‌ of‌‌the‌‌debtor.‌‌(A ‌ rt‌‌2071,‌‌NCC‌)‌ ‌ An‌‌‌extension‌‌‌granted‌‌to‌‌the‌‌debtor‌‌by‌‌the‌‌creditor‌‌‌without‌‌the‌‌ consent‌‌of‌‌the‌‌guarantor‌‌‌extinguishes‌‌‌the‌‌guaranty.‌‌(‌Art‌‌2076,‌‌ NCC‌)‌ ‌ 2. A‌‌release‌‌made‌‌by‌‌the‌‌creditor‌‌in‌‌favor‌‌of‌‌one‌‌of‌‌the‌‌guarantors,‌‌ without‌ ‌the‌ ‌consent‌ ‌of‌ ‌the‌ ‌others‌,‌‌benefits‌‌all‌‌to‌‌the‌‌extent‌‌of‌‌ the‌ ‌share‌ ‌of‌ ‌the‌ ‌guarantor‌ ‌to‌ ‌whom‌ ‌it‌ ‌has‌ ‌been‌ ‌granted.‌ ‌(‌Art‌‌ 2079,‌‌NCC‌)‌ ‌ Right‌‌to‌‌subrogation‌ ‌ 1. The‌ ‌guarantor‌ ‌who‌ ‌pays‌ ‌is‌‌subrogated‌‌by‌‌virtue‌‌thereof‌‌to‌‌all‌‌ the‌‌rights‌‌which‌‌the‌‌creditor‌‌had‌‌against‌‌the‌‌debtor.‌ ‌ 2. If‌ ‌the‌ ‌guarantor‌ ‌should‌ ‌pay‌ ‌without‌ ‌notifying‌ ‌the‌ ‌debtor,‌ ‌the‌‌ latter‌‌may‌‌enforce‌‌against‌‌him‌‌all‌‌the‌‌defenses‌‌which‌‌he‌‌could‌‌ have‌ ‌set‌ ‌up‌ ‌against‌ ‌the‌ ‌creditor‌ ‌at‌ ‌the‌ ‌time‌ ‌the‌ ‌payment‌ ‌was‌‌ made.‌‌(‌Art‌‌2068,‌‌NCC‌)‌ ‌ 3. If‌‌the‌‌creditor‌‌voluntarily‌‌accepts‌‌immovable‌‌or‌‌other‌‌property‌‌ in‌ ‌payment‌ ‌of‌ ‌the‌ ‌debt,‌ ‌even‌ ‌if‌ ‌he‌‌should‌‌afterwards‌‌lose‌‌the‌‌ same‌ ‌through‌ ‌eviction,‌ ‌the‌ ‌guarantor‌ ‌is‌ ‌released.‌ ‌(‌Art‌ ‌2077,‌‌ NCC‌)‌ ‌ 4. The‌‌mere‌‌failure‌‌on‌‌the‌‌part‌‌of‌‌the‌‌creditor‌‌to‌‌demand‌‌payment‌‌ after‌‌the‌‌debt‌‌has‌‌become‌‌due‌‌does‌‌not‌‌of‌‌itself‌‌constitute‌‌any‌‌ extension‌‌of‌‌time‌‌referred‌‌to‌‌herein.‌‌(A ‌ rt‌‌2079,‌‌NCC‌)‌ ‌ 3. If‌ ‌the‌ ‌debt‌ ‌was‌ ‌for‌‌a‌‌period‌‌and‌‌the‌‌guarantor‌‌paid‌‌it‌‌before‌‌it‌‌ became‌ ‌due,‌ ‌he‌ ‌cannot‌ ‌demand‌ ‌reimbursement‌ ‌of‌ ‌the‌ ‌debtor‌‌ until‌‌the‌‌expiration‌‌of‌‌the‌‌period‌‌unless‌‌the‌‌payment‌‌has‌‌been‌‌ CCC‌‌Insurance‌‌v.‌‌Kawasaki‌‌Steel‌‌‌2015‌ ‌ ratified‌‌by‌‌the‌‌debtor.‌‌(A ‌ rt‌‌2069,‌‌NCC‌)‌ ‌ There‌‌was‌‌no‌‌creditor-debtor‌‌relationship‌‌between‌‌the‌‌Republic‌‌and‌‌ FFMCCI‌ ‌and‌ ‌Article‌ ‌2079‌ ‌of‌ ‌the‌ ‌Civil‌ ‌Code‌ ‌did‌ ‌not‌ ‌apply‌.‌ ‌The‌‌ 4. In‌‌case‌‌of‌‌a‌‌gratuitous‌‌guaranty,‌‌if‌‌the‌‌guarantor‌‌was‌‌prevented‌‌ extension‌‌granted‌‌by‌‌the‌‌Republic‌‌to‌‌Kawasaki‌‌modified‌‌the‌‌deadline‌‌ by‌‌a‌‌fortuitous‌‌event‌‌from‌‌advising‌‌the‌‌debtor‌‌of‌‌the‌‌payment,‌‌ for‌‌the‌‌completion‌‌of‌‌the‌‌Project‌‌under‌‌the‌‌Construction‌‌Contract,‌‌but‌‌ and‌‌the‌‌creditor‌‌becomes‌‌insolvent,‌‌the‌‌debtor‌‌shall‌‌reimburse‌‌ had‌ ‌no‌ ‌effect‌ ‌on‌ ‌the‌ ‌obligations‌ ‌of‌ ‌FFMCCI‌ ‌to‌ ‌Kawasaki‌ ‌under‌ ‌the‌‌ the‌‌guarantor‌‌for‌‌the‌‌amount‌‌paid.‌‌(A ‌ rt‌‌2070,‌‌NCC‌)‌ ‌ Consortium‌ ‌Agreement,‌ ‌much‌ ‌less,‌ ‌on‌‌the‌‌liabilities‌‌of‌‌CCCIC‌‌under‌‌ Rights‌‌of‌‌co-guarantors‌ ‌ the‌‌Surety‌‌and‌‌Performance‌‌Bonds.‌ ‌ 1. The‌‌obligation‌‌to‌‌answer‌‌for‌‌the‌‌same‌‌is‌‌‌divided‌‌among‌‌all.‌‌Or‌‌ by‌‌default,‌‌JOINT.‌‌ ‌ d.‌‌Legal‌‌and‌‌judicial‌‌bonds‌ ‌ 2. The‌‌‌benefit‌‌of‌‌division‌‌against‌‌the‌‌co-guarantors‌‌ceases‌‌in‌‌the‌‌ same‌ ‌cases‌ ‌and‌ ‌for‌ ‌the‌ ‌same‌ ‌reasons‌ ‌as‌ ‌the‌ ‌benefit‌ ‌of‌‌ excussion‌‌against‌‌the‌‌principal‌‌debtor.‌‌(A ‌ rt‌‌2065,‌‌NCC‌)‌ ‌ 1. 3. If‌‌any‌‌of‌‌the‌‌guarantors‌‌should‌‌be‌‌insolvent,‌‌his‌‌share‌‌shall‌‌be‌‌ borne‌ ‌by‌ ‌the‌ ‌others,‌ ‌including‌ ‌the‌ ‌payer,‌ ‌in‌ ‌the‌ ‌same‌‌ proportion.‌ ‌ 2. A‌ ‌judicial‌ ‌bondsman‌ ‌cannot‌ ‌demand‌ ‌the‌ ‌exhaustion‌ ‌of‌ ‌the‌‌ property‌‌of‌‌the‌‌principal‌‌debtor.‌ ‌ 4. A‌ ‌sub-surety‌ ‌in‌ ‌the‌ ‌same‌‌case,‌‌cannot‌‌demand‌‌the‌‌exhaustion‌‌ of‌‌the‌‌property‌‌of‌‌the‌‌debtor‌‌or‌‌of‌‌the‌‌surety.‌‌(A ‌ rt‌‌2084,‌‌NCC‌)‌ ‌ 1. a) to‌‌‌obtain‌‌release‌‌from‌‌the‌‌guaranty‌,‌‌or‌‌ ‌ 3. The‌‌bondsman‌‌who‌‌is‌‌to‌‌be‌‌offered‌‌in‌‌virtue‌‌of‌‌a‌‌provision‌‌of‌‌ law‌ ‌or‌ ‌of‌ ‌a‌ ‌judicial‌ ‌order‌ ‌shall‌ ‌have‌ ‌the‌ ‌same‌ ‌qualifications.‌‌ (‌Art‌‌2082,‌‌NCC‌)‌ ‌ If‌‌the‌‌person‌‌bound‌‌to‌‌give‌‌a‌‌bond‌‌in‌‌the‌‌cases‌‌of‌‌the‌‌preceding‌‌ article,‌ ‌should‌ ‌not‌ ‌be‌ ‌able‌ ‌to‌ ‌do‌ ‌so,‌ ‌a‌ ‌pledge‌ ‌or‌ ‌mortgage‌‌ considered‌‌sufficient‌‌to‌‌cover‌‌his‌‌obligation‌‌shall‌‌be‌‌admitted‌‌ in‌‌lieu‌‌thereof.‌‌(A ‌ rt‌‌2083,‌‌NCC‌)‌ ‌ Surety‌ ‌ a.‌‌Concept‌ ‌ Suretyship‌ ‌is‌ ‌a‌ ‌contract‌ ‌by‌ ‌virtue‌ ‌of‌ ‌which‌ ‌a‌ ‌person‌ ‌binds‌‌ himself‌‌solidarily‌w ‌ ith‌‌the‌‌principal‌‌debtor‌‌to‌‌fulfill‌‌the‌‌obligation.‌ ‌ Although‌ ‌the‌ ‌contract‌ ‌of‌ ‌a‌ ‌surety‌ ‌is‌ ‌secondary‌ ‌only‌ ‌to‌ ‌a‌ ‌valid‌‌ principal‌‌obligation,‌‌the‌‌surety‌‌becomes‌‌liable‌‌for‌‌the‌‌debt‌‌or‌‌duty‌‌ of‌‌another‌‌although‌‌it‌‌possesses‌‌no‌‌direct‌‌or‌‌personal‌‌interest‌‌over‌‌ the‌ ‌obligations‌ ‌nor‌ ‌does‌ ‌it‌ ‌receive‌ ‌any‌ ‌benefit‌ ‌therefrom.‌‌ (‌Philippine‌ ‌Charter‌ ‌Insurance‌ ‌Corporation‌ ‌v.‌ ‌Petroleum‌‌ Distributors‌‌‌2012‌)‌ ‌ b.‌‌Forms‌ ‌ Private/‌‌Gratuitous/‌‌ Accommodation‌‌Surety‌ ‌ Compensated‌‌Corporate‌‌ Surety‌ ‌ Signs‌‌for‌‌Friendship‌ ‌ Signs‌‌for‌‌Cash‌ ‌ Surety‌‌does‌‌not‌‌prepare‌‌the‌ contract‌ ‌ Contract‌‌of‌‌Adhesion‌ ‌ Assume‌‌obligation‌‌on‌‌the‌‌basis‌‌ of‌‌the‌‌debtor’s‌‌representations‌‌ and‌‌without‌‌legal‌‌advice‌ ‌ Assumes‌‌obligation‌‌only‌‌after‌‌ full‌‌investigation‌‌has‌‌been‌‌made‌ ‌ Rule‌‌of‌S‌ trictissimi‌‌Juris‌ ‌ Rule‌‌of‌‌Interpretation‌ ‌ c.‌‌Obligations‌‌secured‌ ‌ Comprehensive‌ ‌or‌ ‌Continuing‌ ‌Surety‌ ‌—‌ ‌Existing‌ ‌and‌ ‌Future‌‌ obligations;‌ ‌ By‌ ‌executing‌ ‌this‌ ‌type‌ ‌of‌ ‌surety‌ ‌agreement,‌ ‌the‌ ‌principal‌ ‌places‌‌ itself‌‌in‌‌a‌‌position‌‌to‌‌enter‌‌into‌‌the‌‌projected‌‌series‌‌of‌‌transactions‌‌ with‌ ‌its‌ ‌creditor;‌ ‌there‌ ‌would‌ ‌be‌ ‌no‌ ‌need‌ ‌to‌ ‌execute‌ ‌a‌ ‌separate‌‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 116‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ surety‌‌contract‌‌or‌‌bond‌‌for‌‌each‌‌financing‌‌or‌‌credit‌‌accommodation‌‌ extended‌‌to‌‌the‌‌principal‌‌debtor.‌ ‌ d.‌‌Distinctions‌ ‌ Suretyship‌ ‌ Standby‌‌Letter‌‌of‌‌Credit‌ ‌ Attached‌‌to‌‌underlying‌‌ transaction‌ ‌ Independent‌‌from‌‌underlying‌‌ transaction‌ ‌ Completion‌‌of‌‌obligor’s‌‌ performance‌ ‌ Expectation‌‌of‌‌cash‌‌payment‌‌in‌‌ the‌‌event‌‌of‌‌nonperformance‌ ‌ No‌‌duty‌‌to‌‌indemnify‌‌the‌‌ beneficiary‌‌until‌‌the‌‌beneficiary‌‌ establishes‌‌the‌‌fact‌‌of‌‌the‌‌ obligor’s‌‌performance,‌‌normally‌‌ in‌‌a‌‌litigation‌‌process‌ ‌ The‌‌beneficiary‌‌avoids‌‌that‌‌ litigation‌‌burden‌‌and‌‌receives‌‌his‌‌ money‌‌promptly‌‌upon‌ presentation‌‌of‌‌the‌‌required‌ documents.‌ ‌ See‌T ‌ ransfield‌‌v.‌‌Luzon‌‌Hydro‌ ‌ Suretyship‌ ‌ Guaranty‌ ‌ Liability‌‌is‌‌primary‌ ‌ Liability‌‌is‌s‌ ubsidiary‌ ‌ Assumes‌‌liability‌‌as‌‌a‌‌regular‌‌ party‌ ‌ Assumes‌‌liability‌‌by‌‌ independent‌‌agreement‌ ‌ Liability‌‌is‌‌original‌ ‌ Liability‌‌is‌c‌ ollateral‌ ‌ Insurer‌‌of‌d ‌ ebt‌ ‌ Insurer‌‌of‌s‌ olvency‌o ‌ f‌‌debtor‌ ‌ Excussion‌‌and‌‌division‌N ‌ OT‌‌ available‌ ‌ HAS‌b ‌ enefit‌‌of‌‌excussion‌‌and‌‌ division‌ ‌ Allied‌‌Banking‌‌v.‌‌Yujuico‌‌‌2015‌ ‌ ‌ Mercantile‌‌Insurance‌‌v.‌‌DMCI-Laing‌‌Construction‌‌‌2019‌ ‌ Mercantile‌ ‌obligated‌ ‌itself‌ ‌to‌ ‌pay‌ ‌DLCI‌ ‌immediately‌ ‌upon‌ ‌demand,‌‌ notwithstanding‌ ‌any‌ ‌dispute‌ ‌as‌ ‌to‌ ‌the‌ ‌fulfillment‌ ‌of‌ ‌Altech's‌‌ obligations‌ ‌under‌ ‌the‌ ‌Sub-Contract.‌ ‌The‌ ‌Performance‌ ‌Bond‌ ‌thus‌ stands‌‌as‌‌a‌‌contract‌‌of‌‌surety.‌ ‌ The‌ ‌surety's‌‌liability‌‌attaches‌‌the‌‌moment‌‌a‌‌demand‌‌for‌‌payment‌‌is‌‌ made‌‌by‌‌the‌‌creditor.‌‌‌It‌‌is‌‌not‌‌necessary‌‌that‌‌the‌‌original‌‌debtor‌‌ first‌‌failed‌‌to‌‌pay‌‌before‌‌the‌‌surety‌‌could‌‌be‌‌made‌‌liable‌.‌ ‌ As‌ ‌to‌ ‌the‌ ‌applicability‌ ‌of‌ ‌Article‌ ‌2080,‌ ‌in‌ ‌Bicol‌ ‌Savings‌ ‌&‌ ‌Loan‌‌ Association‌ ‌v.‌ ‌Guinhawa‌,‌ ‌the‌ ‌Court‌ ‌unequivocally‌ ‌ruled‌ ‌that‌‌Article‌‌ 2080‌‌applies‌‌only‌‌with‌‌respect‌‌to‌‌the‌‌liability‌‌of‌‌a‌‌‌guarantor‌.‌‌Verily,‌‌ a‌ ‌surety's‌ ‌liability‌ ‌stands‌ ‌without‌ ‌regard‌ ‌to‌ ‌the‌ ‌debtor's‌ ‌ability‌ ‌to‌‌ perform‌‌his‌‌obligations‌‌under‌‌the‌‌contract‌‌subject‌‌of‌‌the‌‌suretyship.‌ ‌ Cellpage‌‌International‌‌Corp.‌‌v.‌‌The‌‌Solid‌‌Guaranty,‌‌Inc.‌‌‌2020‌ ‌ ‌ Suretyship‌ ‌ Joint‌‌and‌‌Solidary‌‌Obligations‌ ‌ The‌‌surety‌‌who‌‌does‌‌pay‌‌the‌ creditor‌‌has‌‌the‌‌right‌‌to‌‌recover‌‌ the‌‌full‌‌amount‌‌paid,‌‌and‌‌not‌‌just‌‌ any‌‌proportional‌‌share,‌‌from‌‌the‌‌ principal‌‌debtor/s.‌ ‌ The‌‌solidary‌‌debtor‌‌who‌‌effected‌‌ the‌‌payment‌‌to‌‌the‌‌creditor‌‌may‌‌ claim‌‌from‌‌his‌‌co-debtors‌‌only‌ the‌‌share‌‌which‌‌corresponds‌‌to‌‌ each,‌‌with‌‌the‌‌interest‌‌for‌‌the‌‌ payment‌‌already‌‌made.‌ ‌ A‌‌suretyship‌‌agreement‌‌is‌‌a‌‌contract‌‌of‌‌adhesion‌‌ordinarily‌‌prepared‌‌ by‌ ‌the‌ ‌surety‌ ‌or‌ ‌insurance‌ ‌company.‌ ‌Therefore,‌ ‌its‌ ‌provisions‌ ‌are‌‌ interpreted‌ ‌liberally‌ ‌in‌ ‌favor‌ ‌of‌ ‌the‌ ‌insured‌ ‌and‌ ‌strictly‌ ‌against‌ ‌the‌‌ insurer.‌‌The‌‌oft-repeated‌‌rule‌‌in‌‌suretyship‌‌is‌‌that‌‌a‌‌surety's‌‌liability‌‌ is‌ ‌joint‌ ‌and‌ ‌solidary‌ ‌with‌‌that‌‌of‌‌the‌‌principal‌‌debtor.‌‌This‌‌makes‌‌a‌‌ surety‌ ‌agreement‌ ‌an‌ ‌ancillary‌ ‌contract‌ ‌as‌ ‌it‌ ‌presupposes‌ ‌the‌‌ existence‌‌of‌‌a‌‌principal‌‌agreement.‌‌Although‌‌the‌‌surety's‌‌obligation‌‌is‌‌ merely‌ ‌secondary‌ ‌or‌ ‌collateral‌ ‌to‌ ‌the‌ ‌obligation‌ ‌contracted‌ ‌by‌ ‌the‌‌ principal,‌ ‌this‌ ‌Court‌ ‌has‌ ‌nevertheless‌ ‌characterized‌ ‌the‌ ‌surety's‌‌ liability‌ ‌to‌ ‌the‌ ‌creditor‌ ‌of‌‌the‌‌principal‌‌as‌‌"‌direct,‌‌primary,‌‌and‌‌ absolute‌;‌ ‌in‌ ‌other‌ ‌words,‌‌the‌‌surety‌‌is‌‌directly‌‌and‌‌equally‌‌bound‌‌ with‌‌the‌‌principal."‌ ‌ Although‌‌the‌‌first‌‌part‌‌of‌‌the‌‌continuing‌‌guaranties‌‌showed‌‌that‌‌Jesus‌‌ as‌ ‌the‌ ‌signatory‌ ‌had‌ ‌agreed‌ ‌to‌ ‌be‌ ‌bound‌ ‌"either‌ ‌as‌ ‌guarantor‌ ‌or‌‌ otherwise,"‌‌the‌‌usage‌‌of‌‌term‌‌guaranty‌‌or‌‌guarantee‌‌in‌‌the‌‌caption‌‌of‌‌ the‌ ‌documents,‌ ‌or‌ ‌of‌ ‌the‌ ‌word‌ ‌guarantor‌ ‌in‌ ‌the‌ ‌contents‌ ‌of‌ ‌the‌‌ documents‌ ‌did‌ ‌not‌ ‌conclusively‌ ‌characterize‌ ‌the‌ ‌nature‌ ‌of‌ ‌the‌‌ obligations‌ ‌assumed‌ ‌therein.‌ ‌What‌ ‌properly‌ ‌characterized‌ ‌and‌‌ defined‌‌the‌‌undertakings‌‌were‌‌the‌‌contents‌‌of‌‌the‌‌documents‌‌and‌‌the‌‌ intention‌ ‌of‌ ‌the‌ ‌parties.‌ ‌With‌ ‌the‌ ‌stipulations‌ ‌in‌ ‌the‌ ‌continuing‌‌ guaranties‌‌indicating‌‌that‌‌he‌‌was‌‌the‌‌surety‌‌of‌‌the‌‌credit‌‌line‌‌extended‌‌ to‌‌YLTC,‌‌Jesus‌‌was‌‌solidarily‌‌liable‌‌to‌‌Genbank‌‌for‌‌the‌‌indebtedness‌‌ of‌‌YLTC.‌‌ ‌ WON‌‌Solid‌‌Guaranty‌‌is‌‌liable‌‌to‌‌Cellpage‌‌in‌‌the‌‌absence‌‌of‌‌a‌‌written‌‌ principal‌‌contract.‌ ‌ YES‌.‌ ‌The‌ ‌surety‌ ‌bonds‌ ‌herein‌ ‌do‌ ‌not‌ ‌expressly‌ ‌require‌ ‌the‌‌ submission‌ ‌of‌ ‌a‌ ‌written‌ ‌principal‌ ‌agreement.‌ ‌Nowhere‌ ‌in‌ ‌the‌ ‌said‌‌ surety‌ ‌bonds‌ ‌did‌ ‌Solid‌ ‌Guaranty‌ ‌and‌ ‌Cellpage‌ ‌stipulate‌ ‌that‌ ‌Solid‌‌ Guaranty's‌ ‌performance‌ ‌of‌‌its‌‌obligations‌‌under‌‌the‌‌surety‌‌bonds‌‌is‌‌ preconditioned‌ ‌upon‌ ‌Cellpage's‌ ‌submission‌ ‌of‌ ‌a‌ ‌written‌ ‌principal‌‌ agreement.‌‌ ‌ Letters‌‌of‌‌Credit‌ ‌ Articles‌‌567-572‌‌of‌‌the‌‌Code‌‌of‌‌Commerce‌ a.‌‌Definition‌‌and‌‌purpose‌ ‌ Article‌ ‌567‌.‌ ‌Letters‌ ‌of‌ ‌credit‌ ‌are‌ ‌those‌ ‌issued‌ ‌by‌ ‌one‌ ‌merchant‌ ‌to‌‌ another,‌‌‌or‌‌for‌‌the‌‌purpose‌‌of‌‌attending‌‌to‌‌a‌‌commercial‌‌transaction.‌ 1. An‌ ‌engagement‌‌by‌‌a‌‌bank‌‌or‌‌other‌‌person‌‌made‌‌at‌‌the‌‌request‌‌ of‌ ‌a‌ ‌customer‌ ‌that‌ ‌the‌ ‌issuer‌ ‌will‌ ‌honor‌ ‌drafts‌ ‌or‌ ‌other‌‌ demands‌ ‌for‌ ‌payment‌ ‌upon‌ ‌compliance‌ ‌with‌ ‌the‌ ‌conditions‌‌ specified‌‌in‌‌the‌‌credit.‌‌(P ‌ rudential‌‌Bank‌‌v.‌‌IAC‌)‌ ‌ 2. A‌ ‌letter‌ ‌from‌ ‌a‌ ‌merchant‌ ‌or‌ ‌a‌ ‌bank‌ ‌or‌ ‌banker‌ ‌in‌ ‌one‌ ‌place,‌‌ addressed‌ ‌to‌ ‌another,‌ ‌in‌ ‌another‌ ‌place‌ ‌or‌ ‌country,‌ ‌requesting‌‌ the‌ ‌addressee‌ ‌to‌ ‌pay‌ ‌money‌ ‌or‌ ‌deliver‌ ‌goods‌ ‌to‌‌a‌‌third‌‌party‌ named‌ ‌therein‌ ‌the‌ ‌writer‌ ‌of‌ ‌the‌ ‌letter‌ ‌undertaking‌ ‌to‌ ‌provide‌‌ him‌‌the‌‌money‌‌for‌‌the‌‌goods‌‌or‌‌to‌‌repay‌‌him.‌ ‌ From‌ ‌this‌ ‌definition,‌ ‌it‌ ‌can‌ ‌be‌ ‌seen‌ ‌that‌ ‌there‌ ‌are‌ ‌three‌ ‌(3)‌‌ parties‌‌‌in‌‌a‌‌letter‌‌of‌‌credit‌‌transaction:‌ ‌ a. Buyer‌ ‌—‌ ‌procures‌ ‌the‌ L ‌ oC‌ ‌and‌ ‌obliges‌ ‌himself‌ ‌to‌‌ reimburse‌ ‌the‌ ‌issuing‌ ‌bank‌ ‌upon‌ ‌receipt‌ ‌of‌ ‌the‌‌ documents‌‌of‌‌title;‌ ‌ b. Issuing‌ ‌or‌ ‌Opening‌ ‌Bank‌ ‌—‌ ‌undertakes‌ ‌to‌ ‌pay‌ ‌the‌‌ seller‌‌upon‌‌receipt‌‌of‌‌the‌‌draft‌‌and‌‌proper‌‌documents‌‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 117‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ of‌ ‌title‌ ‌and‌ ‌to‌ ‌surrender‌ ‌the‌ ‌documents‌ ‌to‌ ‌the‌ ‌buyer‌‌ upon‌‌reimbursement;‌‌and‌ ‌ 5. c. It‌ ‌is‌ ‌deemed‌ ‌consummated‌ ‌upon‌ ‌payment‌ ‌of‌ ‌the‌‌amount‌‌in‌‌ foreign‌ ‌currency‌ ‌to‌ ‌the‌ ‌credit‌ ‌in‌ ‌his‌ ‌country‌ ‌by‌ ‌the‌ ‌agent‌ ‌or‌‌ correspondent‌‌bank‌‌of‌‌the‌‌bank‌‌in‌‌the‌‌country‌‌of‌‌the‌‌debtor.‌ ‌ affirmative‌‌steps‌‌to‌‌comply‌‌with‌‌ accompany‌‌the‌‌beneficiary's‌‌ the‌‌sales‌‌agreement.‌ ‌ draft‌‌tend‌‌to‌s‌ how‌‌that‌‌the‌‌ applicant‌‌has‌‌not‌‌performed.‌ ‌ Seller‌ ‌—‌ ‌in‌ ‌compliance‌ ‌with‌ ‌the‌ ‌contract‌ ‌of‌ ‌sale,‌‌ ships‌ ‌the‌ ‌goods‌ ‌to‌ ‌the‌ ‌buyer‌ ‌and‌ ‌delivers‌ ‌the‌‌ b.‌‌Kinds‌ ‌ The‌‌beneficiary‌‌must‌‌ The‌‌beneficiary‌‌must‌‌certify‌‌that‌‌ documents‌ ‌of‌ ‌title‌ ‌and‌ ‌draft‌ ‌to‌ ‌the‌ ‌issuing‌ ‌bank‌ ‌to‌‌ demonstrate‌‌by‌‌documents‌‌that‌‌ his‌ ‌obligor‌ ‌has‌ ‌not‌ ‌performed‌‌ recover‌‌payment.‌ ‌ 1) Confirmed‌ ‌LC‌ ‌—‌ ‌whenever‌‌the‌‌beneficiary‌‌stipulates‌‌that‌‌the‌‌ he‌‌has‌‌performed‌‌‌his‌‌contract.‌ ‌ the‌‌contract‌ ‌ obligation‌ ‌of‌ ‌the‌ ‌opening‌ ‌bank‌ ‌shall‌ ‌also‌ ‌be‌ ‌made‌ ‌the‌‌ Parties‌m ‌ ay‌‌‌include:‌ ‌ obligation‌‌of‌‌another‌‌bank‌‌to‌‌himself.‌ ‌ c.‌‌Rule‌‌of‌‌strict‌‌compliance‌ ‌ d. Advising‌ ‌or‌ ‌notifying‌‌bank‌‌‌—‌‌conveys‌‌to‌‌the‌‌seller‌‌ 2) Irrevocable‌ ‌LC‌ ‌—‌ ‌is‌ ‌a‌‌definite‌‌undertaking‌‌on‌‌the‌‌part‌‌of‌‌the‌‌ the‌‌existence‌‌of‌‌the‌‌credit;‌‌not‌‌liable‌‌under‌‌the‌‌LoC.‌ ‌ The‌‌tender‌‌of‌‌documents‌‌by‌‌the‌‌beneficiary-seller‌‌must‌‌include‌‌all‌‌ issuing‌ ‌bank,‌ ‌that‌ ‌the‌ ‌provisions‌ ‌for‌ ‌payment,‌ ‌acceptance,‌‌or‌‌ e. Confirming‌‌bank‌‌‌—‌‌lends‌‌credence‌‌to‌‌the‌‌LoC‌‌issued‌‌ documents‌ ‌required‌ ‌by‌ ‌the‌ ‌letter.‌ ‌A‌ ‌correspondent‌ ‌bank‌ ‌which‌‌ negotiation‌ ‌contained‌ ‌in‌ ‌the‌ ‌credit‌ ‌will‌ ‌be‌ ‌duly‌ ‌fulfilled,‌‌ by‌‌a‌‌lesser‌‌known‌‌issuing‌‌bank;‌‌directly‌‌liable‌‌to‌‌pay‌‌ departs‌‌from‌‌what‌‌has‌‌been‌‌stipulated‌‌under‌‌the‌‌letter‌‌of‌‌credit,‌‌as‌‌ provided‌ ‌that‌ ‌all‌ ‌the‌ ‌terms‌ ‌and‌ ‌conditions‌ ‌of‌ ‌the‌ ‌credit‌ ‌are‌‌ the‌‌seller;‌ ‌ when‌‌it‌‌accepts‌‌a‌‌faulty‌‌tender,‌‌acts‌‌on‌‌its‌‌own‌‌risks‌‌and‌‌it‌‌may‌‌not‌‌ complied‌‌with.‌ ‌ thereafter‌‌be‌‌able‌‌to‌‌recover‌‌from‌‌the‌‌buyer‌‌or‌‌the‌‌issuing‌‌bank,‌‌as‌‌ f. Paying‌ ‌bank‌ ‌—‌ ‌undertakes‌ ‌to‌ ‌encash‌ ‌the‌ ‌drafts‌‌ 3) Revolving‌ ‌LC‌ ‌—‌ ‌provides‌ ‌for‌ ‌renewed‌ ‌credit‌ ‌to‌ ‌become‌‌ the‌‌case‌‌may‌‌be,‌‌the‌‌money‌‌thus‌‌paid‌‌to‌‌the‌‌beneficiary.‌ ‌ drawn‌‌by‌‌the‌‌seller.‌ ‌ available‌ ‌as‌ ‌soon‌ ‌as‌ ‌the‌ ‌opening‌ ‌bank‌ ‌has‌ ‌advised‌ ‌that‌ ‌the‌‌ There‌ ‌is‌ ‌no‌ ‌discretion‌ ‌in‌ ‌the‌ ‌bank‌‌or‌‌trust‌‌company‌‌to‌‌waive‌‌any‌‌ negotiating‌‌or‌‌paying‌‌bank‌‌that‌‌the‌‌drafts‌‌already‌‌drawn‌‌by‌‌the‌‌ g. Negotiating‌‌bank‌— ‌ ‌‌discounts‌‌the‌‌draft.‌ ‌ requirements.‌ ‌The‌ ‌terms‌ ‌of‌ ‌the‌ ‌letter‌ ‌constitutes‌ ‌an‌ ‌agreement‌‌ beneficiary‌ ‌have‌ ‌been‌ ‌reimbursed‌ ‌to‌ ‌the‌ ‌opening‌‌bank‌‌by‌‌the‌‌ Article‌‌568‌.‌‌The‌‌essential‌c‌ onditions‌o ‌ f‌‌letters‌‌of‌‌credit‌‌shall‌‌be:‌ ‌ between‌‌the‌‌purchaser‌‌and‌‌the‌‌bank.‌‌(F ‌ eati‌‌Bank‌‌and‌‌Trust‌‌v.‌‌CA‌)‌ ‌ buyer.‌ ‌ 1. To‌ ‌be‌ ‌issued‌ ‌in‌ ‌favor‌ ‌of‌ ‌a‌ ‌determined‌ ‌person‌ ‌and‌ ‌not‌ ‌to‌‌ order‌.‌‌Thus‌,‌‌an‌‌LoC‌‌cannot‌‌be‌‌a‌‌negotiable‌‌instrument.‌ ‌ 2. To‌‌be‌‌limited‌‌to‌‌a‌‌fixed‌‌and‌‌specified‌‌amount,‌‌or‌‌to‌‌one‌‌or‌‌more‌‌ indeterminate‌‌amounts,‌‌but‌‌all‌‌included‌‌in‌‌a‌‌maximum‌‌sum‌‌the‌‌ limit‌‌of‌‌which‌‌must‌‌be‌‌exactly‌‌stated.‌ ‌ Letters‌ ‌of‌ ‌credit‌ ‌which‌ ‌do‌ ‌not‌ ‌have‌ ‌one‌ ‌of‌ ‌these‌ ‌conditions‌ ‌shall‌ ‌be‌‌ considered‌‌simply‌‌as‌‌‌letters‌‌of‌‌recommendation‌.‌ ‌ Nature‌‌of‌‌a‌‌letter‌‌of‌‌credit‌ ‌ 1. NOT‌‌a‌‌contract‌‌of‌‌guaranty‌‌as‌‌it‌‌is‌‌a‌p ‌ rimary‌o ‌ bligation;‌ ‌ 2. NOT‌‌negotiable‌‌under‌‌the‌‌Code‌‌of‌‌Commerce;‌ ‌ 3. Bearer‌‌NOT‌‌bound‌‌to‌‌receive‌‌the‌‌money;‌ ‌ 4. Commitment‌ ‌by‌ ‌the‌ ‌issuer‌ ‌that‌ ‌the‌ ‌party‌ ‌in‌‌whose‌‌favor‌‌it‌‌is‌‌ issued‌‌and‌‌who‌‌can‌‌collect‌‌upon‌‌it‌‌will‌‌have‌‌his‌‌credit‌‌against‌‌ the‌‌applicant‌‌of‌‌the‌‌letter.‌ ‌ 4) Back-to-Back‌ ‌LC‌ ‌—‌ ‌a‌ ‌credit‌ ‌with‌ ‌identical‌ ‌documentary‌‌ Feati‌‌Bank‌‌and‌‌Trust‌‌v.‌‌CA‌‌r‌ e‌‌Doctrine‌‌of‌‌Strict‌‌Compliance‌ ‌ requirements‌ ‌and‌ ‌covering‌ ‌the‌ ‌same‌ ‌merchandise‌ ‌as‌ ‌another‌‌ WON‌ a ‌ ‌ ‌correspondent‌ ‌bank‌ ‌is‌ ‌to‌ ‌be‌ ‌held‌ ‌liable‌ ‌under‌ ‌the‌ ‌letter‌ ‌of‌‌ LoC,‌‌except‌‌for‌‌a‌‌difference‌‌in‌‌the‌‌price‌‌of‌‌the‌‌merchandise.‌‌The‌‌ credit‌ d ‌ espite‌ ‌non-compliance‌ ‌by‌ ‌the‌ ‌beneficiary‌ ‌with‌ ‌the‌ ‌terms‌‌ second‌‌LoC‌‌can‌‌be‌‌negotiated‌‌only‌‌after‌‌the‌‌first‌‌is‌‌negotiated.‌ ‌ thereof?‌ ‌ 5) Standby‌ ‌LC‌ ‌—‌ ‌a‌ ‌security‌‌arrangement‌‌for‌‌the‌‌performance‌‌of‌‌ certain‌ ‌obligations.‌ ‌It‌ ‌can‌ ‌be‌ ‌drawn‌ ‌against‌ ‌only‌ ‌if‌ ‌another‌‌ business‌‌transaction‌‌is‌‌not‌‌performed.‌‌It‌‌may‌‌be‌‌issued‌‌in‌‌lieu‌‌ of‌‌a‌‌performance‌‌bond‌.‌ ‌ There‌ ‌are‌ ‌three‌ ‌significant‌ ‌differences‌ ‌between‌ ‌commercial‌ ‌and‌‌ standby‌‌credits.‌‌(⭐‌Transfield‌‌v.‌‌Luzon‌‌Hydro‌)‌ ‌ Commercial‌‌LC‌ ‌ Standby‌‌LC‌ ‌ involves‌‌the‌‌payment‌‌of‌‌money‌‌ under‌‌a‌‌contract‌‌of‌‌sale‌ ‌ used‌‌in‌‌a‌‌non-sale‌‌setting‌ ‌ becomes‌‌payable‌‌upon‌‌the‌‌ presentation‌‌by‌‌the‌‌ seller-beneficiary‌‌of‌‌documents‌‌ that‌‌show‌‌he‌‌has‌‌taken‌‌ the‌‌credit‌‌is‌‌payable‌‌upon‌‌ certification‌‌of‌‌a‌‌party's‌‌ nonperformance‌‌of‌‌the‌‌ agreement.‌‌The‌‌documents‌‌that‌‌ NO‌.‌ ‌Under‌ ‌the‌ ‌provisions‌ ‌of‌ ‌the‌ ‌U.C.P.,‌ ‌the‌ ‌bank‌ ‌may‌ ‌only‌‌ negotiate,‌‌accept‌‌or‌‌pay,‌‌if‌‌the‌‌documents‌‌tendered‌‌to‌‌it‌‌are‌‌on‌‌ their‌ ‌face‌ ‌in‌ ‌accordance‌ ‌with‌ ‌the‌ ‌terms‌ ‌and‌ ‌conditions‌‌of‌‌the‌‌ documentary‌ ‌credit‌.‌ ‌And‌ ‌since‌ ‌a‌ ‌correspondent‌ ‌bank,‌ ‌like‌ ‌the‌‌ petitioner,‌‌principally‌‌deals‌‌only‌‌with‌‌documents,‌‌the‌‌absence‌‌of‌‌any‌‌ document‌‌required‌‌in‌‌the‌‌documentary‌‌credit‌‌justifies‌‌the‌‌refusal‌‌by‌‌ the‌‌correspondent‌‌bank‌‌to‌‌negotiate,‌‌accept‌‌or‌‌pay‌‌the‌‌beneficiary,‌‌as‌‌ it‌‌is‌‌not‌‌its‌‌obligation‌‌to‌‌look‌‌beyond‌‌the‌‌documents.‌‌It‌‌merely‌‌has‌‌to‌‌ rely‌ ‌on‌ ‌the‌ ‌completeness‌ ‌of‌ ‌the‌ ‌documents‌ ‌tendered‌ ‌by‌ ‌the‌‌ beneficiary.‌ ‌ d.‌‌Independence‌‌principle‌ ‌ There‌‌are‌‌at‌‌least‌‌‌three‌‌(3)‌‌distinct‌‌and‌‌independent‌‌contracts‌‌ involved‌‌in‌‌an‌‌LoC:‌ ‌ 1) Contract‌‌of‌‌sale‌‌between‌‌buyer‌‌and‌‌seller;‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 118‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ 2) Contract‌‌of‌‌the‌‌buyer‌‌with‌‌the‌‌issuing‌‌bank;‌‌and‌ ‌ Equitable‌‌PCI‌‌Bank‌‌v.‌‌Manila‌‌Adjusters‌‌2 ‌ 019‌ ‌ 3) The‌‌letter‌‌of‌‌credit‌‌proper.‌ ‌ WON‌‌MASCO‌‌submitted‌‌the‌‌required‌‌documents‌‌for‌‌it‌‌to‌‌be‌‌allowed‌‌ to‌‌draw‌‌from‌‌the‌‌proceeds‌‌of‌‌the‌‌LOC‌‌from‌‌the‌‌Bank.‌ ‌ Few‌ ‌things‌ ‌are‌ ‌more‌ ‌clearly‌ ‌settled‌ ‌in‌ ‌law‌ ‌than‌ ‌that‌ ‌the‌ ‌three‌‌ contracts‌ ‌which‌ ‌make‌‌up‌‌the‌‌letter‌‌of‌‌credit‌‌arrangement‌‌are‌‌to‌‌be‌‌ maintained‌‌in‌‌a‌‌state‌‌of‌‌perpetual‌‌separation‌.‌ ‌ YES‌.‌‌Both‌‌the‌‌CA‌‌and‌‌the‌‌RTC‌‌found‌‌that‌‌MASCO‌‌properly‌‌presented‌‌ the‌‌documentary‌‌requirements‌‌of‌‌the‌‌Bank‌‌in‌‌order‌‌to‌‌claim‌‌from‌‌the‌‌ LOC.‌ ‌The‌ ‌Bank‌ ‌was‌ ‌not‌ ‌able‌ ‌to‌ ‌overturn‌ ‌such‌ ‌finding‌ ‌as‌ ‌it‌ ‌merely‌‌ denied‌‌receipt‌‌of‌‌the‌‌same‌‌without‌‌corroborating‌‌evidence,‌‌except‌‌for‌‌ an‌ ‌allegation‌ ‌that‌ ‌all‌ ‌documents‌ ‌received‌ ‌by‌ ‌the‌ ‌Bank‌ ‌should‌ ‌go‌‌ through‌‌a‌‌metered‌‌machine‌‌which‌‌was‌‌not‌‌found‌‌on‌‌those‌‌documents‌‌ submitted‌‌by‌‌MASCO.‌ ‌ A‌ ‌direct‌ ‌consequence‌ ‌of‌ ‌the‌ ‌independence‌ ‌principle‌ ‌is‌ ‌the‌ ‌rule‌‌ that‌‌banks‌‌only‌‌deal‌‌with‌‌documents‌‌and‌‌not‌‌with‌‌goods,‌‌services‌‌ or‌ ‌obligations‌ ‌to‌ ‌which‌ ‌they‌ ‌relate.‌ ‌(‌BPI‌ ‌v.‌ ‌De‌ ‌Reny‌ ‌Fabric‌‌ Industries‌)‌ ‌ BPI‌‌v.‌‌De‌‌Reny‌‌Fabric‌‌Industries‌‌‌re‌‌Independence‌‌Principle‌ ‌ WON‌‌it‌‌was‌‌the‌‌duty‌‌of‌‌the‌‌foreign‌‌correspondent‌‌banks‌‌of‌‌BPI‌‌that‌‌ the‌‌shipment‌‌of‌‌J.B.‌‌Distributing‌‌conformed‌‌with‌‌the‌‌item‌‌appearing‌‌ in‌‌the‌‌L/C‌‌applications.‌ ‌ NO‌.‌‌De‌‌Reny‌‌cannot‌‌shift‌‌the‌‌burden‌‌of‌‌loss‌‌to‌‌BPI‌‌on‌‌account‌‌of‌‌the‌‌ References:‌‌Miravite,‌‌2019;‌‌and‌‌Sundiang‌‌&‌‌Aquino,‌‌2019‌ ‌ ‌ Special‌‌Laws‌ ‌ Truth‌‌in‌‌Lending‌‌Act‌ ‌ violation‌‌by‌‌their‌‌vendor‌‌of‌‌its‌‌prestation.‌ ‌ Banks,‌ ‌in‌ ‌providing‌‌financing‌‌in‌‌international‌‌business‌‌transactions‌‌ such‌ ‌as‌ ‌those‌ ‌entered‌ ‌into‌‌by‌‌the‌‌appellants,‌‌do‌‌not‌‌deal‌‌with‌‌the‌‌ property‌ ‌to‌ ‌be‌ ‌exported‌ ‌or‌ ‌shipped‌ ‌to‌ ‌the‌ ‌importer,‌‌but‌‌deal‌‌only‌‌ with‌‌documents.‌‌BPI‌‌introduced‌‌in‌‌evidence‌‌a‌‌provision‌‌contained‌‌ in‌ ‌the‌ ‌"‌Uniform‌ ‌Customs‌ ‌and‌ ‌Practices‌ ‌for‌ ‌Commercial‌‌ Documentary‌ ‌Credits‌ ‌Fixed‌ ‌for‌ ‌the‌ ‌Thirteenth‌ ‌Congress‌ ‌of‌‌ International‌ ‌Chamber‌ ‌of‌ ‌Commerce,"‌ ‌to‌ ‌which‌ ‌the‌ ‌Philippines‌ ‌is‌‌a‌‌ signatory‌‌nation.‌‌Article‌‌10‌‌thereof‌‌provides:‌ ‌ "‌In‌ ‌documentary‌ ‌credit‌ ‌operations,‌ ‌all‌‌parties‌‌concerned‌‌deal‌‌ in‌‌documents‌‌and‌‌not‌‌in‌‌goods‌.‌‌xxx."‌ ‌ GR‌:‌ EXC‌:‌ Under‌‌this‌‌principle,‌‌the‌‌applicant‌‌cannot‌‌enjoin‌‌the‌‌payment‌‌of‌‌ the‌ ‌obligation‌‌of‌‌the‌‌issuing‌‌bank‌‌under‌‌the‌‌LoC‌‌based‌‌on‌‌any‌‌ irregularity‌‌or‌‌non-performance‌‌of‌‌an‌‌obligation.‌ ‌ Anti-Money‌‌Laundering‌‌Act‌ ‌ Foreign‌‌Investments‌‌Act‌ ‌ b.‌‌Obligation‌‌of‌‌creditors‌‌to‌‌person‌‌to‌‌whom‌‌credit‌‌is‌‌ extended‌‌ ‌ Any‌ ‌creditor‌ ‌shall‌ ‌furnish‌ ‌to‌ ‌each‌ ‌person‌ ‌to‌‌whom‌‌credit‌‌is‌‌extended,‌‌ prior‌ ‌to‌ ‌the‌ ‌consummation‌ ‌of‌ ‌the‌ ‌transaction,‌ ‌a‌ ‌clear‌ ‌statement‌ ‌in‌‌ writing‌‌setting‌‌forth,‌‌to‌‌the‌‌extent‌‌applicable‌‌the‌‌following‌‌information:‌ ‌ 1) The‌ ‌cash‌‌price‌‌or‌‌delivered‌‌price‌‌of‌‌the‌‌property‌‌or‌‌service‌‌to‌‌ be‌‌acquired;‌ ‌ 2) the‌ ‌amounts,‌ ‌if‌ ‌any,‌ ‌to‌ ‌be‌ ‌credited‌ ‌as‌ ‌down‌ ‌payment‌ ‌and/or‌‌ trade-in;‌ ‌ 3) the‌‌difference‌‌between‌‌the‌‌amounts‌‌set‌‌forth‌‌under‌‌clauses‌‌(1)‌‌ and‌‌(2);‌ ‌ 4) the‌ ‌charges‌,‌ ‌individually‌ ‌itemized,‌ ‌which‌ ‌are‌ ‌paid‌ ‌or‌ ‌to‌ ‌be‌‌ paid‌ ‌by‌ ‌such‌ ‌person‌ ‌in‌ ‌connection‌ ‌with‌ ‌the‌ ‌transaction‌ ‌but‌‌ which‌‌are‌‌not‌‌incident‌‌to‌‌the‌‌extension‌‌of‌‌credit;‌ ‌ 5) the‌‌total‌‌amount‌‌to‌‌be‌‌financed;‌ ‌ 6) the‌‌finance‌‌charge‌‌‌expressed‌‌in‌‌terms‌‌of‌‌pesos‌‌and‌‌centavos;‌‌ and‌ ‌ 7) the‌‌percentage‌‌that‌‌the‌‌finance‌‌charge‌‌bears‌‌to‌‌the‌‌total‌‌amount‌‌ to‌ ‌be‌ ‌financed‌ ‌expressed‌ ‌as‌ ‌a‌ ‌simple‌ ‌annual‌ ‌rite‌ ‌on‌ ‌the‌‌ outstanding‌‌unpaid‌‌balance‌‌of‌‌the‌‌obligation.‌ ‌ Insolvency‌‌Laws‌ ‌ Data‌‌Privacy‌‌Act‌ ‌ c.‌‌Covered‌‌and‌‌excluded‌‌transactions‌ ‌ Philippine‌‌Competition‌‌Act‌ ‌ Applicable‌ ‌to‌ ‌all‌ ‌creditors‌ ‌engaged‌ ‌in‌ ‌the‌ ‌following‌ ‌types‌ ‌of‌ ‌credit‌‌ transactions:‌ ‌ Truth‌‌in‌‌Lending‌‌Act‌ ‌ RA‌‌No‌‌3765‌‌‌and‌‌its‌I‌ mplementing‌‌Rules‌‌and‌‌Regulations‌ ‌ When‌ ‌there‌ ‌is‌ ‌fraud‌ ‌or‌ ‌forgery‌‌‌in‌‌the‌‌underlying‌‌transaction‌‌ a.‌‌Purpose‌‌ ‌ or‌‌the‌‌tender‌‌documents.‌ ‌ To‌ ‌protect‌ ‌citizens‌ ‌from‌ ‌a‌ ‌lack‌ ‌of‌ ‌awareness‌ ‌of‌ ‌the‌ ‌true‌ ‌cost‌ ‌of‌‌ The‌‌untruthfulness‌‌of‌‌a‌‌certificate‌‌accompanying‌‌a‌‌demand‌‌for‌‌ credit‌ ‌to‌ ‌the‌‌user‌‌by‌‌assuring‌‌a‌‌full‌‌disclosure‌‌of‌‌such‌‌cost‌‌with‌‌a‌‌ payment‌ ‌under‌ ‌a‌ ‌standby‌ ‌credit‌ ‌may‌ ‌qualify‌ ‌as‌ ‌fraud‌‌ view‌‌of‌‌preventing‌‌the‌‌uninformed‌‌use‌‌of‌‌credit‌‌to‌‌the‌‌detriment‌‌of‌‌ sufficient‌ ‌to‌ ‌support‌ ‌an‌ ‌injunction‌ ‌against‌ ‌payment.‌‌ the‌‌national‌‌economy.‌ ‌ (⭐‌Transfield‌‌v.‌‌Luzon‌‌Hydro‌)‌ ‌ a) Any‌ ‌loans‌,‌ ‌mortgages‌,‌ ‌deeds‌ ‌of‌ ‌trust‌,‌ ‌advances‌ ‌and‌‌ discounts‌;‌ ‌ b) Any‌‌conditional‌‌sales‌‌contract,‌‌any‌‌contract‌‌to‌‌sell,‌‌or‌‌sale‌‌or‌‌ contract‌ ‌of‌ ‌sale‌ ‌of‌ ‌property‌ ‌or‌ ‌services,‌ ‌either‌ ‌for‌ ‌present‌ ‌or‌‌ future‌ ‌delivery,‌ ‌under‌‌which‌‌part‌‌or‌‌all‌‌of‌‌the‌‌price‌‌is‌‌payable‌‌ subsequent‌‌to‌‌the‌‌making‌‌of‌‌such‌‌sale‌‌or‌‌contract;‌ ‌ c) Any‌r‌ ental-purchase‌‌‌contract;‌ ‌ d) Any‌‌contract‌‌or‌‌arrangement‌‌for‌‌the‌‌‌hire‌,‌‌‌bailment‌,‌‌or‌‌‌leasing‌‌ of‌‌property;‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 119‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ e) Any‌ ‌option,‌ ‌demand,‌ ‌lien,‌ ‌pledge‌,‌ ‌or‌ ‌other‌ ‌claim‌ ‌against,‌ ‌or‌‌ for‌‌delivery‌‌of,‌‌property‌‌or‌‌money;‌ ‌ f) Any‌ ‌purchase,‌ ‌or‌ ‌other‌ ‌acquisition‌‌of,‌‌or‌‌any‌‌‌credit‌‌‌upon‌‌the‌‌ security‌ ‌of,‌ ‌any‌ ‌obligation‌ ‌or‌ ‌claim‌ ‌arising‌ ‌out‌ ‌of‌‌any‌‌of‌‌the‌‌ foregoing;‌‌and‌ ‌ Any‌‌person‌‌who‌‌‌wilfully‌‌violates‌‌‌any‌‌provision‌‌of‌‌this‌‌Act‌‌or‌‌any‌‌ regulation‌ ‌issued‌ ‌thereunder‌ ‌shall‌ ‌be‌ ‌fined‌ ‌by‌ ‌P1K‌ ‌-‌ ‌P5K‌ ‌or‌‌ imprisonment‌‌for‌6 ‌ ‌‌months‌‌-‌‌1‌‌year‌,‌‌or‌‌both.‌ ‌ ‌ Anti-Money‌‌Laundering‌‌Act‌ ‌ g) Any‌ ‌transaction‌ ‌or‌ ‌series‌ ‌of‌ ‌transactions‌ ‌having‌ ‌a‌ ‌similar‌‌ purpose‌‌or‌‌effect.‌ ‌ RA‌‌No‌‌9160‌‌‌aab‌‌RA‌‌No‌‌9194,‌‌10167,‌‌10365,‌‌10927‌ ‌ 2018‌‌IRR‌‌of‌‌RA‌‌No‌‌9160‌ Considering‌‌that‌‌the‌‌specific‌‌purpose‌‌of‌‌the‌‌law‌‌is‌‌the‌‌full‌‌disclosure‌‌of‌‌ the‌ ‌true‌ ‌cost‌‌of‌‌credit‌,‌‌the‌‌following‌‌categories‌‌of‌‌credit‌‌transactions‌‌ are‌o ‌ utside‌‌the‌‌scope‌o ‌ f‌‌the‌‌above‌‌regulations:‌ ‌ b.‌‌Covered‌‌institutions‌‌and‌‌their‌‌obligations‌ ‌ c.‌‌Covered‌‌and‌‌suspicious‌‌transactions‌ ‌ i) ii) iii) bank‌‌deposits,‌‌ ‌ insurance‌‌contracts,‌‌ ‌ The‌‌creditor‌‌shall‌‌be‌‌liable‌‌to‌‌such‌‌person‌‌in‌‌the‌‌amount‌‌of‌‌P100‌‌or‌‌ in‌‌an‌‌amount‌‌equal‌‌to‌‌‌twice‌‌the‌‌finance‌‌charge‌‌‌required‌‌by‌‌such‌‌ creditor‌ ‌in‌ ‌connection‌ ‌with‌ ‌such‌ ‌transaction,‌ ‌whichever‌ ‌is‌ ‌the‌‌ greater‌,‌‌ ‌ The‌‌following‌‌are‌‌the‌‌covered‌‌persons‌‌under‌‌the‌‌AMLA:‌ ‌ a) The‌‌following‌‌‌financial‌‌institutions:‌ ‌ f.‌‌Safe‌‌harbor‌‌provision‌ ‌ 2) Persons‌s‌ upervised‌‌or‌‌regulated‌‌by‌‌IC‌.‌ ‌ h.‌‌Authority‌‌to‌‌inquire‌‌into‌‌bank‌‌deposits‌ ‌ d.‌‌Consequences‌‌of‌‌non-compliance‌‌with‌‌obligation‌ ‌ To‌ ‌reinforce‌ ‌the‌ ‌fight‌ ‌against‌ ‌terrorism‌ ‌by‌ ‌preventing‌ ‌and‌‌ suppressing‌ ‌the‌‌commission‌‌of‌‌said‌‌offenses‌‌through‌‌freezing‌‌ and‌ ‌forfeiture‌ ‌of‌ ‌property‌ ‌or‌ ‌funds‌ ‌while‌ ‌protecting‌ ‌human‌‌ rights.‌ ‌ e.‌‌Anti-Money‌‌Laundering‌‌Council;‌‌functions‌ ‌ g.‌‌Application‌‌for‌‌freeze‌‌orders‌ ‌ sale‌‌of‌‌bonds,‌‌etc.‌ ‌ f) 1) Persons‌ ‌supervised‌ ‌and/or‌ ‌regulated‌ ‌by‌ ‌BSP‌,‌ ‌including‌‌ their‌ ‌subsidiaries‌ ‌and‌ ‌affiliates,‌ ‌which‌ ‌are‌ ‌also‌ ‌covered‌‌ persons,‌‌supervised‌‌and/or‌‌regulated‌‌by‌‌the‌‌BSP.‌ ‌ d.‌‌Money‌‌laundering;‌‌how‌‌committed;‌‌predicate‌‌crimes‌ ‌ b) Credit‌‌transactions‌‌in‌‌which‌‌the‌‌debtor‌‌is‌‌the‌‌one‌‌specifying‌‌ a‌‌definite‌‌and‌‌fixed‌‌set‌‌of‌‌credit‌‌terms‌s‌ uch‌‌as‌‌ ‌ e) To‌ ‌recognize‌ ‌and‌ ‌to‌ ‌adhere‌ ‌to‌ ‌international‌ ‌commitments‌ ‌to‌‌ combat‌‌the‌‌financing‌‌of‌‌terrorism.‌ ‌ b.‌‌Covered‌‌institutions‌‌and‌‌their‌‌obligations‌ ‌ a.‌‌Policy‌‌of‌‌the‌‌law‌ ‌ a) Credit‌‌transactions‌‌which‌‌‌do‌‌not‌‌involve‌‌the‌‌payment‌‌of‌‌any‌‌ finance‌‌charge‌‌‌by‌‌the‌‌debtor;‌‌and‌ ‌ Filipino‌ ‌people,‌ ‌against‌ ‌humanity‌ ‌and‌ ‌against‌‌the‌‌law‌‌of‌‌ nations‌.‌ ‌ i.‌‌Forfeiture‌ ‌ 3) Persons‌s‌ upervised‌‌or‌‌regulated‌‌by‌‌SEC‌.‌ ‌ b) The‌ ‌following‌ ‌Designated‌ ‌Non-Financial‌ ‌Businesses‌ ‌and‌‌ Professions‌‌or‌D ‌ NFBPs‌:‌ ‌ 1) Jewelry‌‌dealers.‌ ‌ j.‌‌Mutual‌‌Assistance‌‌Among‌‌States‌ ‌ a.‌‌Policy‌‌of‌‌the‌‌law‌ ‌ except‌ ‌that‌ ‌such‌ ‌liability‌ ‌shall‌ ‌not‌‌exceed‌‌P2,000‌‌on‌‌any‌‌credit‌‌ transaction.‌‌ ‌ a) To‌‌protect‌‌and‌‌preserve‌‌the‌‌integrity‌‌of‌‌the‌‌Philippine‌‌financial‌‌ system,‌‌including‌‌the‌‌confidentiality‌‌of‌‌bank‌‌accounts.‌ ‌ Action‌ ‌to‌ ‌recover‌ ‌such‌ ‌penalty‌ ‌may‌ ‌be‌ ‌brought‌ ‌by‌ ‌such‌ ‌person‌‌ within‌ ‌one‌ ‌year‌ ‌from‌ ‌the‌ ‌date‌ ‌of‌ ‌the‌ ‌occurrence‌ ‌of‌ ‌the‌‌ violation‌,‌ ‌in‌ ‌any‌ ‌court‌ ‌of‌ ‌competent‌ ‌jurisdiction.‌ ‌When‌ ‌the‌‌ aggrieved‌ ‌is‌ ‌entitled‌ ‌to‌ ‌a‌ ‌recovery,‌ ‌the‌ ‌creditor‌ ‌shall‌ ‌be‌‌liable‌‌for‌‌ reasonable‌‌attorney's‌‌fees‌‌and‌‌court‌‌costs‌.‌‌The‌‌one‌‌year‌‌period‌‌ is‌‌reckoned‌‌from‌‌the‌d ‌ ate‌‌of‌‌demand‌.‌ ‌ b) To‌ ‌ensure‌ ‌that‌ ‌the‌ ‌Philippines‌ ‌shall‌ ‌not‌ ‌be‌ ‌used‌ ‌as‌ ‌a‌ ‌money‌‌ laundering‌‌site‌‌for‌‌the‌‌proceeds‌‌of‌‌any‌‌unlawful‌‌activity.‌ ‌ c) To‌ ‌extend‌ ‌cooperation,‌ ‌consistent‌ ‌with‌ ‌Philippines'‌ ‌foreign‌‌ policy,‌ ‌in‌ ‌transnational‌ ‌investigations‌ ‌and‌ ‌prosecutions‌ ‌of‌‌ persons‌ ‌involved‌ ‌in‌ ‌money‌ ‌laundering‌ ‌activities‌ ‌wherever‌‌ committed.‌ ‌ d) To‌‌protect‌‌life,‌‌liberty‌‌and‌‌property‌‌from‌‌acts‌‌of‌‌terrorism‌‌and‌‌ to‌ ‌condemn‌ ‌terrorism‌ ‌and‌ ‌those‌ ‌who‌ ‌support‌ ‌and‌ ‌finance‌ ‌it;‌‌ and‌‌‌to‌‌make‌‌the‌‌financing‌‌of‌‌terrorism‌‌a‌‌crime‌‌against‌‌the‌‌ 2) Dealers‌‌in‌‌precious‌‌metals,‌‌and‌‌dealers‌‌in‌‌precious‌‌stones.‌ ‌ 3) Company‌ ‌service‌ ‌providers‌,‌ ‌which,‌ ‌as‌ ‌a‌ ‌business,‌ ‌provide‌‌ any‌‌of‌‌the‌‌following‌‌services‌‌to‌‌third‌‌parties:‌ ‌ a) acting‌‌as‌‌a‌‌formation‌‌agent‌‌‌of‌‌juridical‌‌persons;‌ ‌ b) acting‌‌as‌‌(or‌‌arranging‌‌for‌‌another‌‌person‌‌to‌‌act‌‌as)‌‌ ‌ i) a‌‌director‌o ‌ r‌‌corporate‌‌secretary‌o ‌ f‌‌a‌‌company,‌‌ ‌ ii) a‌‌partner‌‌of‌‌a‌‌partnership,‌‌or‌‌ ‌ iii) a‌ ‌similar‌ ‌position‌ ‌in‌ ‌relation‌ ‌to‌ ‌other‌ ‌juridical‌‌ persons;‌ ‌ c) providing‌ ‌a‌ ‌registered‌ ‌office;‌ ‌business‌ ‌address‌ ‌or‌‌ accommodation,‌ ‌correspondence‌ ‌or‌ ‌administrative‌‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 120‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ address‌‌for‌‌a‌‌company,‌‌a‌‌partnership‌‌or‌‌any‌‌other‌‌juridical‌‌ person‌‌or‌‌legal‌‌arrangement;‌‌and‌ ‌ d) acting‌ ‌as‌ ‌(or‌ ‌arranging‌ ‌for‌ ‌another‌ ‌person‌ ‌to‌ ‌act‌ ‌as)‌ ‌a‌‌ nominee‌‌shareholder‌f‌ or‌‌another‌‌person.‌ ‌ 4) Persons,‌ ‌including‌ ‌lawyers,‌ ‌accountants‌ ‌and‌ ‌other‌‌ professionals,‌‌who‌‌provide‌‌any‌‌of‌‌the‌‌following‌‌services:‌ ‌ a) Managing‌‌of‌‌client‌‌money,‌‌securities‌‌or‌‌other‌‌assets;‌ ‌ b) Management‌‌of‌‌bank,‌‌savings,‌‌securities‌‌or‌‌other‌‌assets;‌ ‌ c) Organization‌‌of‌‌contributions‌‌for‌‌the‌‌creation,‌‌operation‌‌or‌‌ management‌‌of‌‌companies;‌‌and‌ ‌ With‌ ‌respect‌ ‌to‌ ‌closed‌ ‌accounts,‌ ‌for‌ ‌at‌ ‌least‌ ‌five‌ ‌(5)‌ ‌years‌‌ from‌‌the‌‌dates‌‌when‌‌they‌‌were‌‌closed.‌ ‌ c.‌‌Covered‌‌and‌‌suspicious‌‌transactions‌‌ ‌ 1) transacts‌‌said‌‌monetary‌‌instrument‌‌or‌‌property;‌ ‌ "‌Covered‌‌Transaction‌"‌‌refers‌‌to:‌ ‌ 2) converts,‌ ‌transfers,‌ ‌disposes‌ ‌of,‌ ‌moves,‌ ‌acquires,‌ possesses‌‌or‌‌uses‌‌said‌‌monetary‌‌instrument‌‌or‌‌property;‌ ‌ 1) A‌‌transaction‌‌in‌‌cash‌‌or‌‌other‌‌equivalent‌‌monetary‌‌instrument‌‌ exceeding‌‌P500K‌‌‌within‌‌one‌‌(1)‌‌banking‌‌day;‌ ‌ 5) Casinos‌,‌ ‌including‌ ‌internet-based‌ ‌casinos‌ ‌and‌‌ship-based‌‌ casinos,‌ ‌with‌ ‌respect‌ ‌to‌‌their‌‌casino‌‌cash‌‌transactions‌‌related‌‌ to‌‌their‌‌gaming‌‌operations.‌ ‌ 2) A‌ ‌transaction‌ ‌with‌ ‌or‌ ‌involving‌ ‌jewelry‌ ‌dealers‌,‌ ‌dealers‌ ‌in‌‌ precious‌ ‌metals‌ ‌and‌ ‌dealers‌ ‌in‌ ‌precious‌ ‌stones‌ ‌in‌ ‌cash‌ ‌or‌ other‌‌equivalent‌‌monetary‌‌instrument‌e ‌ xceeding‌‌P1M‌.‌ ‌ The‌ ‌term‌ ‌'covered‌‌persons'‌‌shall‌‌‌EXCLUDE‌‌‌lawyers‌‌‌and‌‌‌accountants‌‌ acting‌‌as‌‌‌independent‌‌legal‌‌professionals‌‌ ‌ 3) A‌‌‌casino‌‌‌cash‌‌transaction‌‌‌exceeding‌‌P5M‌‌‌or‌‌its‌‌equivalent‌‌in‌‌ other‌‌currency.‌ ‌ 2. in‌‌relation‌‌to‌‌information‌‌concerning‌‌their‌‌clients‌‌or‌‌ ‌ "‌Suspicious‌ ‌Transaction‌"‌ ‌refers‌ ‌to‌ ‌a‌ ‌transaction,‌ ‌regardless‌ ‌of‌‌ where‌ ‌disclosure‌ ‌of‌ ‌information‌ ‌would‌ ‌compromise‌ ‌client‌‌ amount‌,‌ ‌where‌ ‌any‌ ‌of‌ ‌the‌ ‌suspicious‌ ‌circumstances‌ ‌is‌ ‌determined,‌‌ based‌‌on‌‌suspicion‌‌or,‌‌if‌‌available,‌r‌ easonable‌‌grounds‌,‌‌to‌‌be‌‌existing.‌ ‌ confidences‌‌or‌‌the‌‌attorney-client‌‌relationship:‌‌ ‌ Provided‌,‌‌That‌‌these‌‌lawyers‌‌and‌‌accountants‌‌ ‌ 1. are‌a ‌ uthorized‌‌to‌‌practice‌‌in‌‌the‌‌Philippines‌a‌ nd‌‌ ‌ 2. shall‌‌continue‌‌to‌‌be‌‌subject‌‌to‌‌the‌‌provisions‌‌of‌‌their‌‌respective‌‌ codes‌‌of‌‌conduct‌‌and/or‌‌professional‌‌responsibility.‌ ‌ Obligations‌ ‌ a) Customer‌ ‌Identification.‌ ‌—‌ ‌Covered‌ ‌institutions‌ ‌shall‌‌ establish‌ ‌and‌ ‌record‌ ‌the‌ ‌true‌ ‌identity‌ ‌of‌ ‌its‌ ‌clients‌ ‌based‌ ‌on‌‌ official‌ ‌documents.‌ ‌They‌ ‌shall‌‌maintain‌‌a‌‌system‌‌of‌‌verifying‌‌ the‌‌true‌‌identity‌‌of‌‌their‌‌clients.‌ ‌ b) Record‌ ‌Keeping.‌ ‌—‌‌All‌‌records‌‌of‌‌all‌‌transactions‌‌of‌‌covered‌‌ institutions‌‌shall‌‌be‌‌maintained‌‌and‌‌safely‌‌stored‌‌for‌‌five‌‌(5)‌‌ years‌f‌ rom‌‌the‌‌dates‌‌of‌‌transactions.‌‌ ‌ d.‌ ‌Money‌‌laundering;‌‌how‌‌committed;‌‌unlawful‌‌activities‌‌or‌‌ c) Reporting‌ ‌of‌ ‌Covered‌ ‌and‌ ‌Suspicious‌ ‌Transactions.‌ ‌—‌‌ predicate‌‌crimes‌ ‌ Covered‌ ‌persons‌ ‌shall‌ ‌report‌ ‌to‌ ‌the‌ ‌AMLC‌ ‌all‌ ‌covered‌‌ transactions‌ ‌and‌ ‌suspicious‌ ‌transactions‌ ‌within‌ ‌five‌ ‌(5)‌‌ Money‌‌laundering‌‌is‌‌committed‌‌by:‌ ‌ working‌‌days‌f‌ rom‌‌occurrence‌‌thereof,‌‌ ‌ a) Any‌ p ‌ erson‌ ‌who,‌ ‌knowing‌ ‌that‌ ‌any‌ ‌monetary‌ ‌instrument‌ ‌or‌‌ property‌‌represents,‌‌involves,‌‌or‌‌relates‌‌to‌‌the‌‌proceeds‌‌of‌‌any‌‌ unless‌ ‌the‌ ‌AMLC‌‌prescribes‌‌a‌‌different‌‌period‌‌‌not‌‌exceeding‌‌ unlawful‌‌activity:‌ ‌ fifteen‌‌(15)‌‌‌working‌‌days.‌ ‌ d) Creation,‌‌operation‌‌or‌‌management‌‌of‌‌juridical‌‌persons‌‌or‌‌ arrangements,‌‌and‌‌buying‌‌and‌‌selling‌‌business‌‌entities.‌ ‌ 1. 7) Any‌‌analogous‌‌or‌‌similar‌‌transactions‌‌to‌‌the‌‌foregoing.‌ ‌ 1) There‌‌is‌‌no‌‌underlying‌‌legal‌‌or‌‌trade‌‌obligation‌,‌‌purpose‌‌or‌‌ economic‌‌justification;‌ ‌ 2) The‌‌client‌‌is‌‌not‌‌properly‌‌identified‌;‌ ‌ 3) The‌‌amount‌‌involved‌‌is‌‌not‌‌commensurate‌‌with‌‌the‌‌business‌‌ or‌‌financial‌‌capacity‌‌of‌‌the‌‌client;‌ ‌ 4) It‌‌may‌‌be‌‌perceived‌‌that‌‌the‌‌client’s‌‌‌transaction‌‌is‌‌structured‌‌ in‌‌order‌‌to‌‌avoid‌‌‌being‌‌the‌‌subject‌‌of‌‌reporting‌‌requirements;‌ ‌ 5) Any‌‌circumstance‌‌relating‌‌to‌‌the‌‌transaction‌‌which‌‌is‌‌observed‌‌ to‌ ‌deviate‌ ‌from‌ ‌the‌ ‌profile‌ ‌of‌ ‌the‌ ‌client‌ ‌and/or‌ ‌the‌ ‌client’s‌‌ past‌‌transactions‌‌with‌‌the‌‌covered‌‌institution;‌ ‌ 6) The‌‌transaction‌‌is‌‌in‌‌a‌‌way‌‌‌related‌‌to‌‌an‌‌unlawful‌‌activity‌‌or‌‌ offense‌‌that‌‌is‌‌about‌‌to‌‌be,‌‌is‌‌being,‌‌or‌‌has‌‌been‌‌committed;‌ ‌ 3) conceals‌ ‌or‌ ‌disguises‌ ‌the‌ ‌true‌ ‌nature,‌ ‌source,‌ ‌location,‌‌ disposition,‌ ‌movement‌ ‌or‌ ‌ownership‌ ‌of‌ ‌or‌ ‌rights‌ ‌with‌‌ respect‌‌to‌‌said‌‌monetary‌‌instrument‌‌or‌‌property;‌ ‌ 4) attempts‌‌or‌‌conspires‌‌to‌‌commit‌‌ML‌‌offenses‌‌referred‌‌to‌‌ in‌‌(1),‌‌(2),‌‌or‌‌(3)‌‌above;‌ ‌ 5) aids,‌‌abets,‌‌assists‌‌in,‌‌or‌‌counsels‌‌the‌‌commission‌‌of‌‌the‌‌ ML‌‌offenses‌‌referred‌‌to‌‌in‌‌(1),‌‌(2),‌‌or‌‌(3)‌‌above;‌‌and‌ ‌ 6) performs‌‌or‌‌fails‌‌to‌‌perform‌‌any‌‌act‌‌as‌‌a‌‌result‌‌of‌‌which‌‌he‌‌ facilitates‌‌the‌‌offense‌‌of‌‌ML‌‌referred‌‌to‌‌in‌‌items‌‌(1),‌‌(2),‌‌ or‌‌(3)‌‌above.‌ ‌ b) Any‌‌covered‌‌person‌‌who,‌‌knowing‌‌that‌‌a‌‌covered‌‌or‌‌suspicious‌‌ transaction‌ ‌is‌ ‌required‌ ‌under‌ ‌the‌ ‌AMLA‌ ‌to‌ ‌be‌ ‌reported‌ ‌to‌‌the‌‌ AMLC,‌‌fails‌‌to‌‌do‌‌so.‌ ‌ Unlawful‌ ‌activities‌ ‌refer‌ ‌to‌ ‌any‌ ‌act‌ ‌or‌ ‌omission,‌ ‌or‌ ‌series‌ ‌or‌‌ combination‌ ‌thereof,‌ ‌involving‌ ‌or‌ ‌having‌ ‌direct‌ ‌relation,‌ ‌to‌ ‌the‌‌ following:‌‌(d ‌ eleted‌‌for‌‌brevity‌)‌ ‌ Same‌ ‌Conduct‌ ‌Approach.‌ —‌ ‌In‌ ‌determining‌ ‌whether‌ ‌or‌ ‌not‌ ‌a‌‌ felony‌ ‌or‌ ‌offense‌ ‌punishable‌ ‌under‌ ‌the‌ ‌penal‌ ‌laws‌ ‌of‌ ‌other‌‌ countries‌ ‌is‌ ‌"of‌ ‌a‌ ‌similar‌ ‌nature"‌ ‌so‌ ‌as‌ ‌to‌ ‌constitute‌ ‌an‌ ‌unlawful‌‌ activity‌‌under‌‌the‌‌AMLA,‌‌it‌‌is‌‌sufficient‌‌that‌‌‌both‌‌the‌‌Philippines‌‌ and‌ ‌the‌‌other‌‌jurisdiction‌‌criminalize‌‌the‌‌conduct‌‌or‌‌activity‌‌ underlying‌ ‌the‌ ‌offense‌,‌ ‌regardless‌ ‌of‌ ‌whether‌ ‌both‌ ‌countries‌‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 121‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ place‌ ‌the‌ ‌offense‌ ‌within‌ ‌the‌ ‌same‌ ‌category,‌ ‌or‌ ‌denominate‌ ‌the‌‌ offense‌‌under‌‌the‌‌same‌‌nomenclature.‌ ‌ 9) e.‌‌Anti-Money‌‌Laundering‌‌Council;‌‌functions‌‌ ‌ The‌ ‌powers‌‌and‌‌functions‌‌of‌‌the‌‌AMLC‌‌shall‌‌be‌‌exercised‌‌by‌‌a‌‌Council‌‌ composed‌‌of‌‌the‌‌following‌‌persons:‌ ‌ a) Chairperson‌‌—‌‌Governor‌‌of‌‌the‌‌BSP;‌ ‌ b) Member‌‌—‌‌Chairperson‌‌of‌‌the‌‌SEC;‌‌and‌ ‌ c) Member‌‌—‌‌Commissioner‌‌of‌‌the‌‌IC.‌ ‌ The‌‌Council‌‌shall‌‌act‌‌unanimously‌i‌ n‌‌the‌‌discharge‌‌of‌‌its‌‌functions.‌ ‌ 1) 2) 3) 4) 5) 6) 7) 8) to‌ ‌require‌ ‌and‌ ‌receive‌ ‌covered‌ ‌or‌ ‌suspicious‌ ‌transaction‌‌ reports‌f‌ rom‌‌covered‌‌institutions;‌ ‌ to‌‌require‌‌the‌‌Land‌‌Registration‌‌Authority‌‌and‌‌all‌‌its‌‌Registries‌‌ of‌ ‌Deeds‌ ‌to‌ ‌submit‌ ‌to‌ ‌the‌ ‌AMLC,‌ ‌reports‌ ‌on‌ ‌all‌ ‌real‌ ‌estate‌‌ transactions‌ ‌involving‌ ‌an‌ ‌amount‌ ‌in‌ ‌excess‌ ‌of‌ ‌P500K‌‌within‌‌ fifteen‌ ‌(15)‌ ‌days‌ ‌from‌ ‌the‌ ‌date‌ ‌of‌ ‌registration‌ ‌of‌ ‌the‌ transaction.‌ ‌ f.‌‌Safe‌‌harbor‌‌provision‌ ‌ NO‌ ‌administrative,‌ ‌criminal‌ ‌or‌ ‌civil‌‌proceedings‌‌shall‌‌lie‌‌against‌‌ any‌‌person‌‌ ‌ 1. for‌‌having‌‌made‌‌a‌‌CTR‌‌or‌‌an‌‌STR‌ 2. in‌‌the‌‌regular‌‌performance‌‌of‌‌his‌‌duties‌‌and‌ ‌ 3. in‌‌good‌‌faith,‌‌ ‌ 4. whether‌ ‌or‌ ‌not‌ ‌such‌ ‌reporting‌ ‌results‌ ‌in‌ ‌any‌ ‌criminal‌‌ to‌ ‌issue‌ ‌orders‌ ‌addressed‌ ‌to‌ ‌the‌ ‌appropriate‌ ‌Supervising‌‌ prosecution‌‌under‌‌the‌‌AMLA‌‌or‌‌any‌‌other‌‌Philippine‌‌law.‌ ‌ Authority‌ ‌or‌ ‌the‌ ‌covered‌ ‌institution‌ ‌to‌ ‌determine‌ ‌the‌ ‌true‌‌ identity‌‌of‌‌the‌‌owner‌‌‌of‌‌any‌‌monetary‌‌instrument‌‌or‌‌property‌‌ g.‌‌Application‌‌for‌‌freeze‌‌orders‌ ‌ subject‌ ‌of‌ ‌a‌ ‌covered‌ ‌transaction‌ ‌or‌ ‌suspicious‌ ‌transaction‌‌ The‌‌following‌‌requirements‌‌shall‌‌be‌‌observed‌‌in‌‌the‌‌issuance‌‌of‌‌freeze‌‌ report‌‌or‌‌request‌‌for‌‌assistance‌‌from‌‌a‌‌foreign‌‌State.‌ ‌ orders:‌ ‌ to‌‌institute‌‌ci‌ vil‌‌forfeiture‌‌proceedings‌‌and‌‌all‌‌other‌‌remedial‌‌ a) NO‌ ‌prior‌‌criminal‌‌charge‌,‌‌pendency‌‌of‌‌a‌‌case,‌‌or‌‌conviction‌‌ proceedings‌‌through‌‌the‌‌OSG;‌ ‌ for‌ ‌an‌ ‌unlawful‌ ‌activity‌ ‌or‌ ‌ML‌ ‌offense‌ ‌is‌ ‌necessary‌ ‌for‌ ‌the‌‌ to‌ ‌cause‌ ‌the‌ ‌filing‌ ‌of‌ ‌complaints‌ ‌with‌ ‌the‌ ‌DOJ‌ ‌or‌ ‌the‌‌ commencement‌‌or‌‌the‌‌resolution‌‌of‌‌a‌‌petition‌‌for‌‌freeze‌‌order.‌ ‌ Ombudsman‌‌for‌‌the‌‌prosecution‌‌of‌‌money‌‌laundering‌‌offenses;‌ ‌ b) No‌ ‌asset‌ ‌shall‌ ‌be‌ ‌frozen‌‌to‌‌the‌‌prejudice‌‌of‌‌a‌‌candidate‌‌for‌‌an‌‌ to‌ ‌investigate‌ ‌suspicious‌ ‌transactions‌ ‌and‌ ‌covered‌‌ electoral‌‌office‌‌during‌‌an‌‌election‌‌period.‌ ‌ transactions‌ ‌deemed‌ ‌suspicious‌ ‌after‌ ‌an‌ ‌investigation‌ ‌by‌‌ c) No‌ ‌court‌ ‌shall‌‌issue‌‌a‌‌TRO‌‌or‌‌a‌‌writ‌‌of‌‌injunction‌‌against‌‌any‌‌ AMLC,‌‌money‌‌laundering‌‌activities,‌‌and‌‌other‌‌violations;‌ ‌ freeze‌‌order,‌e‌ xcept‌t‌ he‌‌Supreme‌‌Court.‌ ‌ to‌ ‌apply‌ ‌before‌ ‌the‌ ‌CA,‌ ‌ex‌ ‌parte‌,‌ ‌for‌ ‌the‌ ‌freezing‌ ‌of‌ ‌any‌‌ Court-Issued‌‌Freeze‌‌Order‌ ‌ monetary‌ ‌instrument‌ ‌or‌ ‌property‌ ‌alleged‌ ‌to‌ ‌be‌ ‌laundered,‌‌ 1. Ex‌ ‌Parte‌ ‌Petition‌ ‌for‌ ‌Issuance‌ ‌of‌ ‌Freeze‌ ‌Order.‌ ‌—‌ ‌By‌‌ proceeds‌‌from,‌‌or‌‌instrumentalities‌‌used‌‌in‌‌or‌‌intended‌‌for‌‌use‌‌ authority‌‌of‌‌the‌‌Council,‌‌the‌‌‌AMLC‌‌Secretariat‌‌shall‌‌file‌‌before‌‌ in‌‌any‌‌unlawful‌‌activity;‌ ‌ the‌‌Court‌‌of‌‌Appeals‌,‌‌through‌‌the‌O ‌ SG‌.‌ ‌ to‌ ‌receive‌ ‌and‌ ‌take‌ ‌action‌ ‌in‌ ‌respect‌ ‌of,‌ ‌any‌ ‌request‌ ‌from‌‌ 2. Related‌‌Accounts.‌‌—‌‌‌The‌‌AMLC‌‌may‌‌include‌‌in‌‌its‌‌petition‌‌the‌‌ foreign‌ ‌states‌ ‌for‌ ‌assistance‌ ‌in‌ ‌their‌ ‌own‌ ‌anti-money‌‌ freezing‌‌of‌r ‌ elated‌‌and‌‌materially-linked‌‌‌accounts‌.‌ ‌ laundering‌‌operations;‌ ‌ to‌i‌ mpose‌‌administrative‌‌sanctions‌;‌‌and‌ ‌ 3. Period‌‌to‌‌Resolve‌‌Petition.‌‌—‌The‌CA‌‌shall‌‌resolve‌‌within‌‌‌24‌‌ hours‌f‌ rom‌‌filing‌t‌ hereof.‌ ‌ 4. Issuance.‌‌—‌‌‌Upon‌‌‌verified‌‌‌ex‌‌parte‌‌petition‌‌by‌‌the‌‌AMLC‌‌and‌‌ after‌ ‌determination‌ ‌that‌ ‌probable‌ ‌cause‌ ‌exists,‌ ‌the‌ ‌CA‌ ‌may‌‌ issue‌‌a‌‌freeze‌‌order,‌‌which‌‌shall‌‌be‌‌‌effective‌‌immediately‌,‌‌for‌‌ a‌‌period‌‌of‌2 ‌ 0‌‌days‌.‌ ‌ 5. Coverage‌.‌ ‌—‌ ‌The‌ ‌freeze‌ ‌order‌ ‌shall‌ ‌be‌ ‌limited‌ ‌only‌ ‌to‌ ‌the‌‌ amount‌ ‌of‌ ‌cash‌ ‌or‌ ‌monetary‌ ‌instrument,‌ ‌or‌ ‌value‌ ‌of‌‌ property‌‌that‌‌the‌‌CA‌‌finds‌‌there‌‌is‌‌probable‌‌cause‌.‌ 6. Summary‌‌Hearing‌‌and‌‌Extension.‌‌—‌‌‌Before‌‌the‌‌expiration‌‌of‌‌ the‌ ‌20-day‌ ‌freeze‌ ‌order,‌ ‌the‌ ‌CA‌ ‌shall‌ ‌conduct‌ ‌a‌ ‌summary‌‌ hearing‌,‌ ‌with‌ ‌notice‌ ‌to‌ ‌the‌ ‌parties,‌ ‌to‌ ‌determine‌ ‌whether‌ ‌or‌‌ not‌‌to‌‌modify‌‌or‌‌lift‌‌the‌‌freeze‌‌order,‌‌or‌‌to‌‌extend‌‌its‌‌effectivity.‌‌ Pending‌ ‌resolution‌ ‌by‌ ‌the‌ ‌CA,‌ ‌the‌ ‌freeze‌ ‌order‌ ‌shall‌ ‌remain‌‌ effective.‌ ‌ 7. Effectivity‌‌of‌‌Freeze‌‌Order.‌‌‌—‌‌‌Immediately‌‌‌and‌‌shall‌‌remain‌‌ effective‌‌for‌‌a‌‌total‌‌period‌n ‌ ot‌‌exceeding‌‌6‌‌months‌.‌ ‌ 8. Motion‌ ‌to‌ ‌Lift.‌‌—‌‌‌If‌‌a‌‌freeze‌‌order‌‌is‌‌imposed‌‌on‌‌an‌‌account,‌‌ including‌ ‌bank‌ ‌account,‌ ‌of‌ ‌a‌ ‌covered‌ ‌person‌ ‌that‌ ‌it‌ ‌uses‌ ‌for‌‌ payment‌‌of‌‌ ‌ a) salary,‌‌ ‌ b) rent,‌‌ ‌ c) suppliers,‌‌and/or‌‌ ‌ d) taxes‌‌ ‌ in‌‌the‌‌ordinary‌‌course‌‌of‌‌a‌‌legitimate‌‌business‌,‌‌the‌‌covered‌‌ person‌‌may‌‌apply‌‌with‌‌the‌‌court‌‌which‌‌issued‌‌the‌‌freeze‌‌order‌‌ to‌ ‌lift‌ ‌the‌ ‌same‌ ‌by‌ ‌submitting‌ ‌a‌‌bond‌‌or‌‌other‌‌acceptable‌‌ securities‌‌‌of‌‌‌equal‌‌value‌‌‌to‌‌the‌‌amount‌‌or‌‌value‌‌subject‌‌of‌‌the‌‌ freeze‌‌order.‌ ‌ The‌ ‌court‌ ‌must‌ ‌resolve‌ ‌the‌ ‌motion‌‌‌before‌‌the‌‌expiration‌‌of‌‌ the‌‌freeze‌‌order‌.‌ ‌ 9. Lifting‌‌the‌‌Effects‌‌of‌‌the‌‌Freeze‌‌Order.‌ ‌ a) The‌ ‌freeze‌‌order‌‌shall‌‌be‌‌‌deemed‌‌ipso‌‌facto‌‌‌lifted‌‌after‌‌ its‌‌expiration‌,‌‌‌unless‌‌‌an‌‌‌ML‌‌complaint‌‌against‌‌the‌‌person‌‌ whose‌ ‌monetary‌ ‌instrument‌ ‌or‌ ‌property‌ ‌was‌‌frozen,‌‌or‌‌a‌‌ Petition‌ ‌for‌ ‌Civil‌‌Forfeiture‌‌against‌‌the‌‌frozen‌‌monetary‌‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 122‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ instrument‌ ‌or‌ ‌property,‌ ‌has‌ ‌been‌ ‌filed,‌ ‌in‌ ‌which‌‌case‌‌the‌‌ freeze‌ ‌order‌ ‌shall‌ ‌remain‌ ‌effective‌ ‌until‌ ‌the‌ ‌ML‌ ‌case‌ ‌is‌‌ terminated‌ ‌or‌ ‌an‌ ‌asset‌ ‌preservation‌ ‌order‌ ‌is‌ ‌issued,‌‌ respectively.‌ ‌ b) Before‌ ‌the‌ ‌expiration‌ ‌of‌ ‌the‌ ‌freeze‌ ‌order,‌ ‌the‌ ‌covered‌‌ person‌‌shall‌‌secure‌‌a‌‌written‌‌confirmation‌‌from‌‌the‌‌AMLC‌‌ to‌ ‌ascertain‌ ‌if‌ ‌a‌ ‌petition‌ ‌for‌ ‌civil‌ ‌forfeiture‌ ‌or‌ ‌an‌ ‌ML‌‌ complaint‌‌has‌‌been‌‌filed.‌ ‌ AMLC-Issued‌‌Freeze‌‌Order‌ ‌ Freeze‌‌orders‌‌issued‌‌by‌‌the‌‌AMLC‌‌shall‌‌be‌‌governed‌‌by‌‌the‌‌‌TFPSA‌‌ and‌‌its‌‌IRR.‌ ‌ The‌ ‌AMLC,‌ ‌either‌ ‌upon‌ ‌its‌ ‌own‌ ‌initiative‌ ‌or‌ ‌at‌ ‌the‌ ‌request‌ ‌of‌ ‌the‌‌ ATC,‌ ‌is‌ ‌hereby‌ ‌authorized‌ ‌to‌ ‌issue,‌ ‌ex‌ ‌parte‌,‌ ‌an‌ ‌order‌ ‌to‌ ‌freeze‌‌ without‌‌delay:‌‌ ‌ a) property‌ ‌or‌ ‌funds‌ ‌that‌‌are‌‌in‌‌any‌‌way‌‌related‌‌to‌‌financing‌‌ of‌‌terrorism‌o ‌ r‌‌terrorist‌‌acts;‌‌or‌ ‌ b) property‌ ‌or‌ ‌funds‌ ‌of‌ ‌any‌ ‌person,‌ ‌terrorist‌ ‌organization,‌‌ association‌‌or‌‌group‌‌of‌‌persons‌‌in‌‌relation‌‌to‌‌whom‌‌there‌‌ is‌ ‌probable‌ ‌cause‌ ‌to‌ ‌believe‌ ‌that‌ ‌they‌ ‌are‌ ‌committing‌ ‌or‌‌ attempting‌ ‌or‌‌conspiring‌‌to‌‌commit,‌‌or‌‌participating‌‌in‌‌or‌‌ facilitating‌ ‌the‌ ‌commission‌ ‌of‌ ‌financing‌ ‌of‌ ‌terrorism‌ ‌or‌‌ terrorist‌‌acts.‌ ‌ The‌ ‌freeze‌ ‌order‌ ‌shall‌ ‌be‌ ‌effective‌ ‌for‌ ‌a‌ ‌period‌ ‌not‌ ‌exceeding‌‌ twenty‌ ‌(20)‌ ‌days.‌ ‌Upon‌ ‌a‌ ‌petition‌ ‌filed‌ ‌by‌ ‌the‌ ‌AMLC‌ ‌before‌ ‌the‌‌ expiration‌ ‌of‌ ‌the‌ ‌period,‌ ‌the‌ ‌effectivity‌ ‌of‌‌the‌‌freeze‌‌order‌‌may‌‌be‌‌ extended‌‌up‌‌to‌‌a‌‌period‌‌‌not‌‌exceeding‌‌six‌‌(6)‌‌months‌‌‌upon‌‌order‌‌ of‌‌the‌‌Court‌‌of‌‌Appeals:‌‌ ‌ h.‌‌Authority‌‌to‌‌inquire‌‌into‌‌bank‌‌deposits‌ ‌ c) Hijacking‌‌and‌‌other‌‌violations‌‌under‌‌RA‌‌6235;‌‌destructive‌‌ arson‌‌and‌‌murder;‌ ‌ Bank‌‌Inquiry‌‌Order‌‌by‌‌the‌‌Court‌ ‌ d) Felonies‌‌or‌‌offenses‌‌of‌‌a‌‌nature‌‌similar‌‌to‌‌those‌‌mentioned‌‌ in‌ ‌Rule‌ ‌11,‌ ‌Section‌ ‌2.1‌ ‌(a),‌ ‌(b)‌ ‌and‌ ‌(c),‌ ‌which‌ ‌are‌‌ punishable‌‌under‌‌the‌‌penal‌‌laws‌‌of‌‌other‌‌countries;‌ ‌ 1. Application‌ ‌for‌ ‌Issuance‌ ‌of‌ ‌Bank‌ ‌Inquiry‌ ‌Order.‌ ‌—‌ ‌By‌‌ authority‌ ‌of‌‌the‌‌Council,‌‌the‌‌AMLC‌‌Secretariat‌‌shall‌‌file‌‌before‌‌ the‌ ‌CA,‌ ‌through‌ ‌the‌ ‌OSG,‌ ‌an‌ ‌Ex‌ ‌Parte‌ ‌Application‌ ‌for‌ ‌the‌‌ Issuance‌‌of‌‌Bank‌‌Inquiry‌‌Order‌‌to‌‌examine‌‌or‌‌inquire‌‌into‌‌any‌‌ particular‌‌deposit‌‌or‌‌investment‌‌account‌‌that‌‌is‌‌‌related‌‌to‌‌an‌‌ unlawful‌‌activity‌‌or‌‌ML‌‌offense‌.‌ ‌ 2. Inquiry‌ ‌into‌ ‌or‌ ‌Examination‌ ‌of‌ ‌Related‌ ‌Accounts.‌ ‌—‌ ‌A‌‌ court‌ ‌order‌ ‌ex‌ ‌parte‌ ‌must‌ ‌be‌‌obtained‌‌before‌‌the‌‌AMLC‌‌can‌‌ inquire‌‌into‌‌the‌‌related‌‌accounts.‌ ‌ 3. No‌‌Prior‌‌Criminal‌‌Charge,‌‌Pendency‌‌of‌‌a‌‌Case,‌‌or‌‌ Conviction‌‌Necessary.‌ ‌ 4. Compliance‌‌with‌‌Article‌‌III,‌‌Sections‌‌2‌‌and‌‌3‌‌of‌‌the‌‌ Constitution.‌ ‌ 5. Period‌‌to‌‌Resolve‌‌Application.‌— ‌ ‌‌24‌‌HOURS;‌ ‌ 6. Bank‌ ‌Inquiry‌ ‌Order.‌ ‌—‌ ‌The‌ ‌AMLC‌ ‌may‌ ‌inquire‌ ‌into‌ ‌or‌‌ examine‌ ‌any‌ ‌particular‌ ‌deposit‌ ‌or‌ ‌investment‌ ‌account,‌‌ including‌ ‌related‌ ‌accounts,‌ ‌with‌‌any‌‌banking‌‌institution‌‌or‌‌ non-bank‌ ‌financial‌ ‌institution‌,‌ ‌upon‌ ‌order‌ ‌by‌ ‌the‌ ‌Court‌‌of‌‌ Appeals‌‌‌based‌‌on‌‌an‌‌ex‌‌parte‌‌‌application‌‌in‌‌cases‌‌of‌‌violation‌‌ of‌‌the‌‌AMLA‌‌when‌‌probable‌‌cause‌‌exists.‌ ‌ Bank‌‌Inquiry‌‌Order‌‌by‌‌the‌‌AMLC‌ ‌ 1. Provided‌,‌‌That‌‌the‌‌twenty-day‌‌period‌‌shall‌‌be‌‌tolled‌‌upon‌‌filing‌‌of‌‌a‌‌ petition‌‌to‌‌extend‌‌the‌‌effectivity‌‌of‌‌the‌‌freeze‌‌order.‌ ‌ Period‌‌of‌‌validity‌‌of‌‌a‌‌freeze‌‌order:‌‌may‌‌it‌‌be‌‌extended?‌‌‌YES‌‌‌for‌‌ a‌‌total‌‌period‌‌‌not‌‌exceeding‌‌six‌‌(6)‌‌months‌.‌ ‌ The‌‌AMLC‌‌shall‌‌issue‌‌an‌‌‌ex‌‌parte‌‌order‌‌authorizing‌‌the‌‌AMLC‌‌ Secretariat‌‌to‌‌inquire‌‌into‌‌or‌‌examine‌‌any‌‌particular‌‌deposit‌‌or‌‌ investment‌ ‌account,‌ ‌including‌ ‌related‌ ‌accounts,‌ ‌with‌ ‌any‌‌ banking‌ ‌institution‌‌or‌‌non-bank‌‌financial‌‌institution‌‌and‌‌ their‌‌subsidiaries‌‌and‌‌affiliates‌‌when‌‌it‌‌has‌‌been‌‌established‌‌ that‌ ‌probable‌ ‌cause‌ ‌exists‌ ‌that‌ ‌the‌ ‌deposits‌ ‌or‌ ‌investments‌‌ involved,‌ ‌including‌‌related‌‌accounts,‌‌are‌‌in‌‌any‌‌way‌‌related‌‌to‌‌ any‌‌of‌‌the‌‌following‌‌unlawful‌‌activities:‌ ‌ a) Kidnapping‌‌for‌‌ransom;‌ ‌ b) RA‌‌9165;‌ ‌ e) Terrorism‌‌and‌‌conspiracy‌‌to‌‌commit‌‌terrorism;‌‌and‌ ‌ f) 2. Financing‌ ‌of‌ ‌terrorism‌ ‌under‌ ‌Section‌ ‌4‌ ‌and‌ ‌offenses‌‌ punishable‌‌under‌‌Sections‌‌5,‌‌6,‌‌7‌‌and‌‌8‌‌of‌‌the‌‌TFPSA.‌ ‌ The‌‌relevant‌‌requirements‌‌for‌‌Bank‌‌Inquiry‌‌Order‌‌by‌‌the‌‌Court‌ shall‌ ‌apply‌ ‌to‌ ‌Bank‌‌Inquiry‌‌Order‌‌by‌‌the‌‌AMLC,‌‌including‌‌the‌‌ procedure‌‌for‌‌inquiry‌‌into‌‌related‌‌accounts.‌ ‌ i.‌‌Forfeiture‌ ‌ The‌ ‌following‌ ‌rules‌ ‌shall‌ ‌be‌ ‌observed‌ ‌in‌ ‌asset‌ ‌forfeiture‌‌ proceedings‌:‌ ‌ a) No‌‌prior‌‌criminal‌‌charge,‌‌pendency‌‌of‌‌a‌‌case,‌‌or‌‌conviction‌‌ for‌‌an‌‌unlawful‌‌activity‌‌or‌‌ML‌‌offense‌‌is‌‌necessary‌‌for‌‌the‌‌ commencement‌ ‌or‌ ‌the‌ ‌resolution‌ ‌of‌ ‌a‌ ‌petition‌ ‌for‌ ‌civil‌‌ forfeiture.‌ ‌ b) No‌‌asset‌‌shall‌‌be‌‌attached‌‌or‌‌forfeited‌‌to‌‌the‌‌prejudice‌‌of‌‌a‌‌ candidate‌‌for‌‌an‌‌electoral‌‌office‌‌during‌‌an‌‌election‌‌period.‌ ‌ Petition‌‌for‌‌Civil‌‌Forfeiture‌‌—‌‌Upon‌‌determination‌‌that‌‌probable‌‌ cause‌ ‌exists‌ ‌that‌ ‌any‌ ‌monetary‌ ‌instrument‌ ‌or‌ ‌property‌ ‌is‌ ‌in‌ ‌any‌‌ way‌ ‌related‌ ‌to‌ ‌an‌ ‌unlawful‌‌activity‌‌or‌‌ML‌‌offense,‌‌the‌‌AMLC‌‌shall‌‌ file‌ ‌with‌ ‌the‌ R ‌ TC‌,‌ ‌through‌ ‌the‌ ‌OSG,‌ ‌a‌ ‌verified‌ ‌petition‌ ‌for‌ ‌civil‌‌ forfeiture.‌ ‌ Equal‌ ‌Value‌ ‌Assets‌ ‌—‌‌Other‌‌monetary‌‌instrument‌‌or‌‌property‌‌of‌‌ equal‌ ‌value‌ ‌may‌ ‌be‌ ‌included‌ ‌in‌ ‌the‌ ‌Petition‌ ‌where‌ ‌the‌ ‌monetary‌‌ instrument‌‌or‌‌property‌‌that‌‌should‌‌be‌‌subject‌‌of‌‌forfeiture:‌ ‌ a) cannot‌‌be‌‌located‌‌‌despite‌‌due‌‌diligence;‌ ‌ b) has‌ ‌been‌ ‌substantially‌ ‌altered‌,‌ ‌destroyed,‌ ‌diminished‌ ‌in‌‌ value‌ ‌or‌ ‌otherwise‌ ‌rendered‌ ‌worthless‌ ‌by‌ ‌any‌ ‌act‌ ‌or‌‌ omission;‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 123‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ c) has‌ ‌been‌ ‌concealed‌,‌ ‌removed,‌ ‌converted,‌ ‌or‌ ‌otherwise‌‌ transferred;‌ d) is‌ ‌located‌ ‌outside‌ ‌the‌ ‌Philippines‌ ‌or‌ ‌has‌ ‌been‌ ‌placed‌ ‌or‌‌ brought‌‌outside‌‌the‌‌jurisdiction‌‌of‌‌the‌‌court;‌‌or‌ ‌ 1.‌‌Policy‌‌of‌‌the‌‌law‌ ‌ 2) giving‌‌information‌‌needed‌‌by‌‌the‌‌foreign‌‌State;‌‌and‌ ‌ 3) applying‌‌for‌‌an‌‌order‌‌of‌‌forfeiture‌‌of‌‌any‌‌monetary‌‌instrument‌‌ or‌‌property‌‌in‌‌the‌‌court.‌ ‌ Foreign‌‌investments‌‌shall‌‌be‌‌encouraged‌‌in‌‌enterprises‌‌that‌ a) significantly‌ ‌expand‌ ‌livelihood‌ opportunities‌‌for‌‌Filipinos;‌‌ ‌ Requirements‌ ‌—‌ ‌A‌‌request‌‌for‌‌mutual‌‌assistance‌‌from‌‌a‌‌foreign‌‌State‌‌ e) has‌ ‌been‌ ‌commingled‌ ‌with‌ ‌other‌ ‌monetary‌ ‌instruments‌‌ must‌‌ ‌ or‌ ‌property‌ ‌belonging‌ ‌to‌ ‌either‌ ‌the‌ ‌offender‌ ‌himself‌ ‌or‌ ‌a‌‌ 1) confirm‌ ‌that‌ ‌an‌ ‌investigation‌ ‌or‌ ‌prosecution‌ ‌is‌ ‌being‌‌ third‌‌person‌‌or‌‌entity,‌‌thereby‌‌rendering‌‌the‌‌same‌‌difficult‌‌ conducted‌ ‌in‌ ‌respect‌ ‌of‌‌a‌‌money‌‌launderer‌‌named‌‌therein‌‌or‌‌ to‌‌identify‌‌or‌‌be‌‌segregated‌‌for‌‌purposes‌‌of‌‌forfeiture.‌ ‌ that‌‌he‌‌has‌‌been‌‌convicted‌‌of‌‌any‌‌money‌‌laundering‌‌offense;‌ ‌ Asset‌‌Preservation‌‌Order.‌‌—‌‌Upon‌‌verified‌‌petition‌‌by‌‌the‌‌AMLC,‌‌ with‌ ‌prayer‌ ‌for‌ ‌issuance‌ ‌of‌ ‌asset‌ ‌preservation‌ ‌order,‌ ‌and‌ ‌after‌‌ determination‌ ‌that‌ ‌probable‌ ‌cause‌ ‌exists‌ ‌that‌ ‌any‌ ‌monetary‌‌ instrument‌‌or‌‌property‌‌is‌‌in‌‌any‌‌way‌‌related‌‌to‌‌an‌‌unlawful‌‌activity,‌‌ the‌ R ‌ TC‌ ‌may‌ ‌issue‌ ‌an‌ ‌asset‌ ‌preservation‌ ‌order‌ ‌which‌ ‌shall‌ ‌be‌‌ effective‌ ‌immediately‌,‌ ‌forbidding‌ ‌any‌ ‌transaction,‌ ‌withdrawal,‌‌ deposit,‌ ‌transfer,‌ ‌removal,‌ ‌conversion,‌ ‌concealment‌ ‌or‌ ‌other‌‌ disposition‌‌of‌‌the‌‌subject‌‌monetary‌‌instrument‌‌or‌‌property.‌ ‌ Motion‌‌to‌‌Discharge.‌‌‌—‌‌If‌‌an‌‌APO‌‌is‌‌imposed‌‌on‌‌an‌‌account‌‌of‌‌a‌‌ covered‌‌person‌‌that‌‌it‌‌uses‌‌for‌‌payment‌‌of‌‌ ‌ 1. salary,‌‌ ‌ 2. rent,‌‌ ‌ 3. suppliers,‌‌and/or‌‌ ‌ 4. taxes‌‌ ‌ in‌ ‌the‌ ‌ordinary‌ ‌course‌ ‌of‌ ‌a‌ ‌legitimate‌ ‌business‌,‌ ‌the‌ ‌covered‌‌ person‌‌may‌‌apply‌‌with‌‌the‌‌court‌‌which‌‌issued‌‌the‌‌APO‌‌to‌‌discharge‌‌ the‌ ‌same‌ ‌by‌ ‌submitting‌ ‌a‌ b ‌ ond‌ ‌or‌ ‌other‌ ‌acceptable‌‌securities‌‌of‌‌ equal‌‌value‌‌to‌‌the‌‌amount‌‌or‌‌value‌‌subject‌‌of‌‌the‌‌asset‌‌preservation‌‌ order.‌ ‌ ‌employment‌‌ b) enhance‌ ‌economic‌ ‌value‌ ‌of‌ ‌farm‌ ‌products;‌ ‌promote‌ ‌the‌‌ welfare‌‌of‌‌Filipino‌‌consumers;‌‌ ‌ c) expand‌‌the‌‌scope,‌‌quality‌‌and‌‌volume‌‌of‌‌exports‌‌and‌‌their‌‌ access‌‌to‌‌foreign‌‌markets;‌‌and/or‌‌ ‌ 2) state‌‌the‌‌‌grounds‌‌‌on‌‌which‌‌any‌‌person‌‌is‌‌being‌‌investigated‌‌or‌‌ prosecuted‌ ‌for‌ ‌money‌ ‌laundering‌ ‌or‌ ‌the‌ ‌details‌ ‌of‌ ‌his‌‌ conviction;‌ ‌ d) transfer‌ ‌relevant‌ ‌technologies‌ ‌in‌‌agriculture,‌‌industry‌‌and‌‌ support‌‌services.‌ ‌ GR‌:‌ 3) give‌‌sufficient‌‌particulars‌‌as‌‌to‌‌the‌i‌ dentity‌‌of‌‌said‌‌person;‌ ‌ 4) give‌‌particulars‌‌sufficient‌‌to‌‌identify‌‌any‌‌covered‌‌institution‌‌ believed‌‌to‌‌have‌‌any‌‌information,‌‌document,‌‌material‌‌or‌‌object‌‌ which‌‌may‌‌be‌‌of‌‌assistance‌‌to‌‌the‌‌investigation‌‌or‌‌prosecution;‌‌ ‌ EXC‌:‌ 5) ask‌ ‌from‌ ‌the‌ ‌covered‌ ‌institution‌ ‌concerned‌‌any‌‌information,‌‌ document,‌‌material‌‌or‌‌object‌‌‌which‌‌may‌‌be‌‌of‌‌assistance‌‌to‌‌ the‌‌investigation‌‌or‌‌prosecution;‌ ‌ There‌‌are‌‌no‌‌restrictions‌‌on‌‌the‌‌extent‌‌of‌‌foreign‌‌ownership‌‌of‌‌ export‌ ‌enterprises.‌ ‌In‌ ‌domestic‌‌market‌‌enterprises,‌‌foreigners‌‌ can‌‌invest‌‌as‌‌much‌‌as‌‌one‌‌hundred‌‌percent‌‌(100%)‌‌equity.‌ ‌ In‌‌areas‌‌included‌‌in‌‌the‌n ‌ egative‌‌list.‌ ‌ Foreign‌‌Investments‌‌Negative‌‌List‌‌or‌‌Negative‌‌List‌‌is‌‌a‌‌list‌‌of‌‌ areas‌‌of‌‌economic‌‌activity‌‌whose‌‌foreign‌‌ownership‌‌is‌‌limited‌‌ to‌‌a‌‌‌maximum‌‌of‌‌40%‌‌of‌‌the‌‌equity‌‌capital‌‌of‌‌the‌‌enterprises‌‌ engaged‌‌therein.‌ ‌ 6) specify‌ ‌the‌ ‌manner‌ ‌in‌ ‌which‌ ‌and‌‌to‌‌whom‌‌said‌‌information,‌‌ document,‌‌material‌‌or‌‌object‌‌obtained‌‌pursuant‌‌to‌‌said‌‌request,‌‌ 2.‌‌Definition‌‌of‌‌terms‌ ‌ is‌‌‌to‌‌be‌‌produced‌;‌ ‌ a.‌‌Foreign‌‌investment‌ ‌ 7) give‌‌all‌‌the‌‌particulars‌‌necessary‌‌for‌‌the‌‌issuance‌‌by‌‌the‌‌court‌‌ in‌‌the‌‌requested‌‌State‌‌of‌‌the‌‌writs,‌‌orders‌‌or‌‌processes‌‌needed‌‌ by‌‌the‌‌requesting‌‌State;‌‌and‌ ‌ 8) contain‌ ‌such‌ ‌other‌‌information‌‌as‌‌may‌‌assist‌‌in‌‌the‌‌execution‌‌ of‌‌the‌‌request.‌ ‌ ‌ References:‌‌Miravite,‌‌2019;‌‌and‌‌Sundiang‌‌&‌‌Aquino,‌‌2019‌ ‌ j.‌‌Mutual‌‌Assistance‌‌Among‌‌States‌ ‌ The‌‌principles‌‌of‌‌mutuality‌‌and‌‌reciprocity‌‌shall,‌‌for‌‌this‌‌purpose,‌‌be‌‌at‌‌ all‌‌times‌‌recognized.‌‌The‌‌AMLC‌‌may‌‌execute‌‌a‌‌‌request‌‌for‌‌assistance‌‌ from‌‌a‌‌foreign‌‌State‌‌‌by:‌‌ ‌ ‌and‌ Foreign‌‌Investments‌‌Act‌ ‌ RA‌‌No‌‌7042‌‌|‌‌Foreign‌‌Investments‌‌Act‌‌of‌‌1991‌ Shall‌ ‌mean‌ ‌as‌ ‌equity‌ ‌investment‌ ‌made‌ ‌by‌ ‌a‌ ‌non-Philippine‌‌ national‌ ‌in‌ ‌the‌ ‌form‌ ‌of‌ ‌foreign‌ ‌exchange‌ ‌and/or‌ ‌other‌ ‌assets‌‌ actually‌‌transferred‌‌to‌‌the‌‌Philippines‌‌and‌‌duly‌‌registered‌‌with‌‌the‌‌ BSP‌‌which‌‌shall‌‌assess‌‌and‌‌appraise‌‌the‌‌value‌‌of‌‌such‌‌assets‌‌‌other‌‌ than‌‌foreign‌‌exchange‌.‌ ‌ b.‌‌"Doing‌‌business"‌‌in‌‌the‌‌Philippines‌ ‌ The‌‌following‌‌are‌‌deemed‌d ‌ oing‌‌business‌‌‌in‌‌PH:‌ ‌ 1) Soliciting‌ ‌orders,‌ ‌service‌ ‌contracts,‌ ‌opening‌ ‌offices,‌ ‌whether‌‌ called‌‌liaison‌‌offices‌‌or‌‌branches;‌‌ ‌ 2) Appointing‌ ‌representatives‌ ‌or‌ ‌distributors‌ ‌domiciled‌ ‌in‌ ‌the‌‌ Philippines‌‌or‌‌who‌‌in‌‌any‌‌calendar‌‌year‌‌stay‌‌in‌‌the‌‌country‌‌for‌‌ 1) tracking‌ ‌down,‌ ‌freezing,‌ ‌restraining‌‌and‌‌seizing‌‌assets‌‌alleged‌‌ to‌‌be‌‌proceeds‌‌of‌‌any‌‌unlawful‌‌activity;‌‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 124‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ a‌‌period‌‌or‌‌periods‌‌totalling‌‌one‌‌hundred‌‌eighty‌‌(180)‌‌days‌‌or‌‌ more;‌‌ ‌ 3) Participating‌‌in‌‌the‌‌management,‌‌supervision‌‌or‌‌control‌‌of‌‌any‌‌ domestic‌ ‌business,‌ ‌firm,‌ ‌entity‌ ‌or‌ ‌corporation‌ ‌in‌ ‌the‌‌ Philippines;‌‌and‌‌ ‌ 4) Any‌ ‌other‌ ‌act‌ ‌or‌ ‌acts‌ ‌that‌‌imply‌‌a‌‌‌continuity‌‌of‌‌commercial‌‌ dealings‌ ‌or‌ ‌arrangements,‌ ‌and‌ ‌contemplate‌ ‌to‌ ‌that‌‌extent‌‌the‌‌ performance‌ ‌of‌ ‌acts‌ ‌or‌ ‌works,‌ ‌or‌ ‌the‌ ‌exercise‌ ‌of‌ ‌some‌ ‌of‌‌the‌‌ functions‌‌normally‌‌incident‌‌to,‌‌and‌‌in‌‌progressive‌‌prosecution‌‌ of,‌ ‌commercial‌ ‌gain‌ ‌or‌ ‌of‌ ‌the‌ ‌purpose‌ ‌and‌ ‌object‌ ‌of‌ ‌the‌‌ business‌‌organization.‌ ‌ It‌‌shall‌‌not‌‌be‌‌deemed‌‌to‌‌include‌‌ ‌ The‌‌appointment‌‌of‌‌a‌‌distributor‌‌in‌‌the‌‌Philippines‌‌is‌‌not‌‌sufficient‌‌ 4.‌‌Foreign‌‌investments‌‌in‌‌export‌‌enterprises‌ ‌ to‌‌constitute‌‌“doing‌‌business”‌‌‌unless‌‌it‌‌is‌‌under‌‌the‌‌full‌‌control‌‌ Foreign‌ ‌investment‌ ‌in‌ ‌export‌ ‌enterprises‌ ‌whose‌ ‌products‌ ‌and‌‌ of‌‌the‌‌foreign‌‌corporation‌.‌ ‌ ‌ services‌‌do‌‌not‌‌fall‌‌within‌‌the‌‌List‌‌A‌‌and‌‌B‌‌of‌‌the‌‌negative‌‌list‌‌under‌‌ On‌‌the‌‌other‌‌hand,‌‌if‌‌the‌‌distributor‌‌is‌‌an‌‌independent‌‌entity‌‌which‌‌ Section‌‌8‌‌is‌‌allowed‌‌up‌‌to‌‌100%‌‌ownership.‌ ‌ buys‌ ‌and‌ ‌distributes‌ ‌products,‌ ‌other‌ ‌than‌ ‌those‌ ‌of‌ ‌the‌ ‌foreign‌‌ corporation,‌‌for‌‌its‌‌own‌‌name‌‌and‌‌its‌‌own‌‌account,‌‌the‌‌latter‌‌cannot‌‌ 5.‌‌Foreign‌‌investments‌‌in‌‌domestic‌‌market‌‌enterprises‌ ‌ be‌‌considered‌‌to‌‌be‌‌doing‌‌business‌‌in‌‌the‌‌Philippines.‌‌(‌Steelcase‌‌v.‌‌ Non-Philippine‌‌nationals‌‌may‌‌own‌‌up‌‌to‌‌100%‌‌of‌‌domestic‌‌market‌‌ Design‌‌International‌‌Selections‌‌‌2012‌)‌ ‌ enterprises‌ ‌unless‌ ‌foreign‌ ‌ownership‌ ‌therein‌ ‌is‌ ‌prohibited‌ ‌or‌‌ limited‌ ‌by‌ ‌the‌ ‌Constitution‌ ‌and‌ ‌existing‌ ‌law‌ ‌or‌ ‌the‌ ‌Foreign‌‌ Investment‌‌Negative‌‌List‌‌under‌‌Section‌‌8.‌ ‌ By‌ ‌and‌ ‌large,‌ ‌to‌ ‌constitute‌ ‌“doing‌ ‌business”,‌ ‌the‌ ‌activity‌ ‌to‌ ‌be‌‌ undertaken‌‌in‌‌the‌‌Philippines‌‌is‌‌one‌‌that‌‌is‌‌for‌p ‌ rofit-making‌.‌ ‌ c.‌‌Export‌‌enterprise‌ ‌ 1) Mere‌ ‌investment‌ ‌as‌ ‌a‌ ‌shareholder‌ ‌by‌ ‌a‌ ‌foreign‌ ‌entity‌ ‌in‌‌ domestic‌ ‌corporations‌ ‌duly‌ ‌registered‌ ‌to‌ ‌do‌‌business,‌‌and/or‌‌ the‌‌exercise‌‌of‌‌rights‌‌as‌‌such‌‌investor;‌‌ ‌ Shall‌‌mean‌‌an‌‌enterprise‌‌ ‌ 2) Having‌ ‌a‌ ‌nominee‌ ‌director‌ ‌or‌‌officer‌‌to‌‌represent‌‌its‌‌interests‌‌ in‌‌such‌‌corporation;‌‌ ‌ b) wherein‌‌a‌‌trader‌‌purchases‌‌products‌‌domestically‌‌and‌‌exports‌‌ 60%‌‌or‌‌more‌‌of‌‌such‌‌purchases‌.‌ ‌ 6.‌‌Foreign‌‌Investment‌‌Negative‌‌List‌‌ ‌ a) List‌ ‌A‌ ‌shall‌ ‌enumerate‌ ‌the‌ ‌areas‌ ‌of‌ a‌ ctivities‌ ‌reserved‌ ‌to‌‌ Philippine‌ ‌nationals‌ ‌by‌ ‌mandate‌ ‌of‌ ‌the‌ ‌Constitution‌ ‌and‌‌ specific‌‌laws.‌ ‌ a) wherein‌ ‌a‌ ‌manufacture,‌ ‌processor‌ ‌or‌ ‌service‌ ‌(including‌‌ tourism)‌‌enterprise‌‌exports‌6 ‌ 0%‌‌or‌‌more‌‌of‌‌its‌‌output‌,‌‌or‌ b) List‌ ‌B‌ ‌shall‌ ‌contain‌ ‌the‌ ‌areas‌ ‌of‌ ‌activities‌ ‌and‌ ‌enterprises‌‌ regulated‌‌pursuant‌‌to‌‌law:‌ ‌ 1) which‌ ‌are‌ ‌defense-related‌ ‌activities,‌ ‌requiring‌ ‌prior‌‌ clearance‌‌and‌‌authorization‌‌from‌‌DND;‌‌or‌ ‌ 3) Appointing‌ ‌a‌ ‌representative‌ ‌or‌ ‌distributor‌ ‌domiciled‌ ‌in‌ ‌the‌‌ d.‌‌Domestic‌‌market‌‌enterprise‌ ‌ Philippines‌ ‌which‌ ‌transacts‌‌business‌‌in‌‌its‌‌own‌‌name‌‌and‌‌for‌‌ Shall‌‌mean‌‌an‌‌enterprise‌‌which‌‌ ‌ its‌‌own‌‌account.‌ ‌ 4) The‌‌publication‌‌of‌‌a‌‌general‌‌advertisement‌‌through‌‌any‌‌print‌‌or‌‌ broadcast‌‌media;‌ ‌ 5) Maintaining‌ ‌a‌ ‌stock‌ ‌of‌ ‌goods‌ ‌in‌‌the‌‌Philippines‌‌solely‌‌for‌‌the‌‌ purpose‌‌of‌‌having‌‌the‌‌same‌‌processed‌‌by‌‌another‌‌entity‌‌in‌‌the‌‌ Philippines;‌ ‌ 6) Consignment‌ ‌by‌ ‌a‌ ‌foreign‌ ‌entity‌ ‌of‌ ‌equipment‌ ‌with‌ ‌a‌ ‌local‌‌ company‌‌to‌‌be‌‌used‌‌in‌‌the‌‌processing‌‌of‌‌products‌‌for‌‌export;‌ ‌ 7) Collecting‌‌information‌‌in‌‌the‌‌Philippines;‌‌and‌ ‌ 8) Performing‌‌services‌‌auxiliary‌‌to‌‌an‌‌existing‌‌isolated‌‌contract‌‌of‌‌ sale‌ ‌which‌ ‌are‌‌not‌‌on‌‌a‌‌continuing‌‌basis,‌‌such‌‌as‌‌installing‌‌in‌‌ the‌ ‌Philippines‌ ‌machinery‌ ‌it‌ ‌has‌‌manufactured‌‌or‌‌exported‌‌to‌‌ the‌‌Philippines,‌‌servicing‌‌the‌‌same,‌‌training‌‌domestic‌‌workers‌‌ to‌‌operate‌‌it,‌‌and‌‌similar‌‌incidental‌‌services.‌‌ ‌ 2) which‌‌have‌‌implications‌‌on‌‌public‌‌health‌‌and‌‌morals.‌ ‌ a) produces‌‌goods‌‌for‌‌sale,‌‌or‌‌ ‌ b) renders‌‌services‌‌to‌‌the‌‌domestic‌‌market‌‌entirely‌‌or‌‌ ‌ c) if‌‌exporting‌‌a‌‌portion‌‌of‌‌its‌‌output‌‌fails‌‌to‌‌consistently‌‌export‌‌at‌‌ least‌‌60%‌‌thereof.‌ ‌ 3.‌‌Registration‌‌of‌‌investments‌‌of‌‌non-Philippine‌‌nationals‌ ‌ Without‌ ‌need‌ ‌of‌ ‌prior‌ ‌approval,‌‌a‌‌non-Philippine‌‌national‌‌may‌‌do‌‌ business‌ ‌or‌ ‌invest‌ ‌in‌ ‌a‌ ‌domestic‌ ‌enterprise‌ ‌up‌ ‌to‌ ‌100%‌ ‌of‌ ‌its‌‌ capital.‌ ‌ This‌‌may‌‌be‌‌done‌‌only‌‌upon‌‌registration‌‌with‌‌the‌‌SEC,‌‌or‌‌with‌‌the‌‌ Bureau‌ ‌of‌ ‌Trade‌ ‌Regulation‌ ‌and‌ ‌Consumer‌ ‌Protection‌ ‌(BTRCP)‌ ‌of‌‌ the‌‌DTI‌‌in‌‌the‌‌case‌‌of‌‌single‌‌proprietorships.‌ Insolvency‌‌Laws‌ ‌ ‌ Concurrence‌‌and‌‌Preference‌‌of‌‌Credits‌ ‌ a.‌‌Meaning‌‌of‌‌concurrence‌‌and‌‌preference‌ ‌ b.‌‌Exempt‌‌properties‌ ‌ c.‌‌Classification‌‌of‌‌credits‌ ‌ d.‌‌Order‌‌of‌‌preference‌‌of‌‌credits‌ ‌ Financial‌‌Rehabilitation‌‌and‌‌Insolvency‌‌Act‌ ‌ Declaration‌‌of‌‌Policy‌ ‌ Basic‌‌Concepts‌ ‌ Suspension‌‌of‌‌Payments‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 125‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ Modes‌‌of‌‌Rehabilitation‌ ‌ However,‌‌it‌‌becomes‌‌material‌‌when‌‌said‌‌assets‌‌are‌‌insufficient‌‌for‌‌ NB:‌‌ Art‌‌2241‌‌has‌‌been‌‌expressly‌‌repealed‌‌by‌‌the‌‌Personal‌‌ then‌‌some‌‌creditors‌‌of‌‌necessity‌‌will‌‌not‌‌be‌‌paid‌‌or‌‌some‌‌creditors‌‌ Property‌‌Securities‌‌Act.‌ ‌ will‌‌not‌‌obtain‌‌the‌‌full‌‌satisfaction‌‌of‌‌their‌‌claims.‌‌In‌‌this‌‌situation,‌‌ d.‌‌Order‌‌of‌‌preference‌‌of‌‌credits‌‌ ‌ the‌‌question‌‌of‌‌preference‌‌will‌‌then‌‌arise,‌‌that‌‌is‌‌to‌‌say‌‌who‌‌of‌‌the‌‌ Credits‌ ‌which‌‌are‌‌specially‌‌preferred‌‌because‌‌they‌‌constitute‌‌liens‌‌ creditors‌ ‌will‌ ‌be‌ ‌paid‌ ‌ahead‌ ‌of‌ ‌the‌ ‌others.‌ ‌(‌MBTC‌ ‌v.‌ ‌SF‌ ‌Naguiat‌‌ in‌ ‌turn,‌ t‌ ake‌ ‌precedence‌ ‌over‌ ‌ordinary‌ ‌preferred‌ ‌credits‌ ‌so‌ ‌far‌ ‌as‌‌ Enterprises‌‌‌2015‌‌Leonen,‌‌J)‌ ‌ ‌ concerns‌ ‌the‌ ‌property‌ ‌to‌ ‌which‌ ‌the‌ ‌liens‌ ‌have‌ ‌attached.‌ ‌The‌‌ A‌ p ‌ reference‌ ‌of‌ ‌credit‌‌‌bestows‌‌upon‌‌the‌‌preferred‌‌creditor‌‌an‌‌ specially‌ ‌preferred‌ ‌credits‌ ‌must‌ ‌be‌ ‌discharged‌ ‌first‌ ‌out‌ ‌of‌ ‌the‌‌ advantage‌ ‌of‌ ‌having‌‌his‌‌credit‌‌satisfied‌‌first‌‌ahead‌‌of‌‌other‌‌claims‌‌ proceeds‌ ‌of‌ ‌the‌ ‌property‌ ‌to‌ ‌which‌ ‌they‌ ‌relate,‌ ‌before‌ ‌ordinary‌‌ which‌‌may‌‌be‌‌established‌‌against‌‌the‌‌debtor.‌‌ ‌ preferred‌‌creditors‌‌may‌‌lay‌‌claim‌‌to‌‌any‌‌part‌‌of‌‌such‌‌proceeds.‌ ‌ i.‌‌Types‌ ‌ ii.‌‌Commencement‌‌order‌ ‌ iii.‌‌Stay‌‌or‌‌suspension‌‌order‌ ‌ iv.‌‌Rehabilitation‌‌receiver‌ ‌ v.‌‌Management‌‌committee‌ ‌ vi.‌‌Rehabilitation‌‌plan‌ ‌ Logically,‌‌it‌‌becomes‌‌material‌‌only‌‌when‌‌the‌‌properties‌‌and‌‌assets‌‌ of‌‌the‌‌debtors‌‌are‌‌insufficient‌‌to‌‌pay‌‌his‌‌debts‌‌in‌‌full.‌‌(‌DBP‌‌v.‌‌NLRC‌‌ and‌‌Ang‌)‌ ‌ vii.‌‌Cram‌‌down‌‌effect‌ ‌ Liquidation‌ ‌ ii.‌‌Conversion‌ ‌ iii.‌‌Liquidation‌‌order‌ ‌ iv.‌‌Rights‌‌of‌‌secured‌‌creditors‌ ‌ v.‌‌Liquidator‌ ‌ ‌ 1) Properties‌ ‌under‌ ‌subsisting‌ ‌conjugal‌ ‌partnership‌ ‌or‌ ‌absolute‌‌ community,‌ ‌except‌ ‌insofar‌‌as‌‌the‌‌latter‌‌have‌‌redounded‌‌to‌‌the‌‌ benefit‌‌of‌‌the‌‌family;‌ ‌ 1. 2) Property‌‌held‌‌by‌‌the‌‌insolvent‌‌debtor‌‌as‌‌a‌‌trustee‌‌of‌‌an‌‌express‌‌ or‌‌implied‌‌trust.‌ ‌ 3. The‌‌credits‌‌are‌‌classified‌‌into‌‌three‌‌general‌‌categories,‌‌namely,‌‌ ‌ vii.‌‌Liquidation‌‌plan‌ ‌ a) special‌‌preferred‌‌‌credits‌‌listed‌‌in‌‌Articles‌2 ‌ 241‌‌and‌‌2242‌ ‌ Cross-Border‌‌Insolvency‌‌Proceedings‌ ‌ These‌‌credits,‌‌which‌‌enjoy‌‌preference‌‌with‌‌respect‌‌to‌‌a‌‌specific‌‌ movable‌ ‌or‌ ‌immovable‌ ‌property,‌ ‌exclude‌ ‌all‌ ‌others‌ ‌to‌ ‌the‌‌ extent‌‌of‌‌the‌‌value‌‌of‌‌the‌‌property.‌‌If‌‌there‌‌are‌‌two‌‌or‌‌more‌‌liens‌‌ on‌‌the‌‌same‌‌specific‌‌property,‌‌the‌‌lienholders‌‌divide‌‌the‌‌value‌‌ of‌ ‌the‌ ‌property‌ ‌involved‌ ‌pro‌ ‌rata,‌ ‌after‌ ‌the‌ ‌taxes‌ ‌on‌‌the‌‌same‌‌ property‌‌are‌‌fully‌‌paid.‌ ‌ Remedies‌ ‌ ‌ Concurrence‌‌and‌‌Preference‌‌of‌‌Credits‌ ‌ property‌ ‌of‌ ‌the‌ ‌debtor‌ ‌or‌ ‌all‌ ‌of‌ ‌his‌ ‌property‌ ‌is‌ ‌subjected‌ ‌to‌ ‌the‌‌ claims‌ ‌of‌ ‌several‌ ‌creditors.‌ ‌The‌ ‌concurrence‌ ‌of‌ ‌credits‌ ‌raises‌ ‌no‌‌ questions‌ ‌of‌ ‌consequence‌ ‌where‌ ‌the‌ ‌value‌ ‌of‌ ‌the‌ ‌property‌ ‌or‌ ‌the‌‌ value‌ ‌of‌ ‌all‌ ‌assets‌ ‌of‌ ‌the‌ ‌debtor‌ ‌is‌ ‌sufficient‌ ‌to‌ ‌pay‌‌in‌‌full‌‌all‌‌the‌‌ creditors.‌‌ ‌ RA‌‌No‌‌10142‌‌|‌‌F inancial‌‌Rehabilitation‌‌and‌‌Insolvency‌‌Act‌‌of‌‌2010‌ ‌ c.‌‌Classification‌‌of‌‌credits‌ ‌ vi.‌‌Determination‌‌of‌‌claims‌ ‌ Concurrence‌ ‌of‌ ‌credits‌ ‌occurs‌ ‌when‌ ‌the‌ ‌same‌ ‌specific‌‌ Financial‌‌Rehabilitation‌‌and‌‌Insolvency‌‌Act‌ ‌ ‌ b.‌‌Exempt‌‌properties‌ ‌ i.‌‌Types‌ ‌ a.‌‌Meaning‌‌of‌‌concurrence‌‌and‌‌preference‌ ‌ ‌ b) ordinary‌‌preferred‌c‌ redits‌‌listed‌‌in‌‌Article‌‌2244‌ ‌ Creates‌ ‌no‌ ‌liens‌ ‌on‌ ‌determinate‌ ‌property‌ ‌which‌ ‌follow‌ ‌such‌‌ property.‌ ‌What‌ ‌is‌ ‌created‌ ‌are‌‌simply‌‌rights‌‌in‌‌favor‌‌of‌‌certain‌‌ creditors‌ ‌to‌ ‌have‌ ‌the‌ ‌cash‌ ‌and‌ ‌other‌ ‌assets‌ ‌of‌ ‌the‌ ‌insolvent‌‌ applied‌‌in‌‌a‌‌certain‌‌sequence‌‌or‌‌order‌‌of‌‌priority.‌ ‌ c) common‌c‌ redits‌‌under‌‌Article‌‌2245.‌ ‌ 2. A.M.‌‌No.‌‌00-8-10-SC‌‌|‌‌Rules‌‌of‌‌Procedure‌‌on‌‌Corporate‌ Rehabilitation‌ ‌ A.M.‌‌No.‌‌12-12-11-SC‌‌|‌‌F inancial‌‌Rehabilitation‌‌Rules‌‌of‌‌ Procedure‌‌(2013)‌‌‌⭐‌ ‌ A.M.‌‌No.‌‌15-04-06-SC‌‌|‌‌F inancial‌‌L iquidation‌‌And‌‌Suspension‌‌ of‌‌Payments‌‌Rules‌‌Of‌‌Procedure‌‌For‌‌Insolvent‌‌Debtors‌ ‌ ‌ Declaration‌‌of‌‌Policy‌ ‌ The‌‌‌purpose‌‌‌of‌‌‌rehabilitation‌‌proceedings‌‌is‌‌not‌‌only‌‌to‌‌enable‌‌ the‌‌company‌‌to‌‌gain‌‌a‌‌new‌‌lease‌‌on‌‌life,‌‌but‌‌also‌‌to‌‌allow‌‌creditors‌‌ to‌ ‌be‌ ‌paid‌ ‌their‌ ‌claims‌ ‌from‌ ‌its‌ ‌earnings‌ ‌when‌ ‌so‌ ‌rehabilitated.‌‌ (‌PAGTI‌‌v.‌‌Fastech‌‌Synergy‌2 ‌ 016‌)‌ ‌ The‌ ‌purpose‌ ‌of‌ ‌insolvency‌ ‌proceedings‌‌is‌‌to‌‌encourage‌‌debtors‌‌ and‌ ‌their‌ ‌creditors‌ ‌to‌ ‌collectively‌ ‌and‌ ‌realistically‌ ‌resolve‌ ‌and‌‌ adjust‌‌competing‌‌claims‌‌and‌‌property‌‌rights‌‌while‌‌ ‌ a) maintaining‌ ‌certainty‌ ‌and‌ ‌predictability‌ ‌in‌ ‌commercial‌‌ affairs,‌‌ ‌ b) preserving‌‌and‌‌maximizing‌‌the‌‌value‌‌of‌‌the‌‌assets‌‌of‌‌these‌‌ debtors,‌‌ ‌ c) recognizing‌ ‌creditor‌ ‌rights‌ ‌and‌ ‌respecting‌ ‌priority‌ ‌of‌‌ claims,‌‌and‌‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 126‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ d) ensuring‌‌equitable‌‌treatment‌‌of‌‌creditors‌‌who‌‌are‌‌similarly‌‌ situated.‌M ‌ BTC‌‌v.‌‌SF‌‌Naguiat‌‌Enterprises‌‌‌2015‌‌Leonen,‌‌J)‌ ‌ ‌ A‌ ‌corporate‌‌rehabilitation‌‌case‌‌‌is‌‌a‌‌‌special‌‌proceeding‌‌‌in‌‌rem‌‌ wherein‌‌the‌‌petitioner‌‌‌seeks‌‌to‌‌establish‌‌the‌‌status‌‌‌of‌‌a‌‌party‌‌or‌‌ a‌‌particular‌‌fact,‌‌i.e.,‌‌the‌‌inability‌‌of‌‌the‌‌corporate‌‌debtor‌‌to‌‌pay‌‌its‌‌ debts‌‌when‌‌they‌‌fall‌‌due.‌‌ ‌ course‌ ‌of‌‌business‌‌or‌‌has‌‌liabilities‌‌that‌‌are‌‌greater‌‌than‌‌its‌‌or‌‌his‌‌ assets.‌ ‌ Basic‌‌Concepts‌ ‌ Rehabilitation‌‌‌—‌‌‌the‌‌‌restoration‌‌‌of‌‌the‌‌debtor‌‌to‌‌a‌‌condition‌‌of‌‌ Philippine‌‌Bank‌‌of‌‌Communications‌‌v.‌‌ successful‌ ‌operation‌ ‌and‌ ‌solvency,‌ ‌if‌ ‌it‌ ‌is‌ ‌shown‌ ‌that‌ ‌its‌‌ continuance‌ ‌of‌ ‌operation‌ ‌is‌ ‌economically‌ ‌feasible‌ ‌and‌ ‌its‌‌ creditors‌ ‌can‌ ‌recover‌ ‌by‌ ‌way‌ ‌of‌ ‌the‌ ‌present‌ ‌value‌ ‌of‌ ‌payments‌‌ projected‌ ‌in‌ ‌the‌ ‌plan,‌ ‌more‌ ‌if‌ ‌the‌ ‌debtor‌ ‌continues‌ ‌as‌ ‌a‌ ‌going‌‌ concern‌‌than‌‌if‌‌it‌‌is‌‌immediately‌‌liquidated.‌ ‌ Basic‌‌Polyprinters‌‌and‌‌Packaging‌‌‌2014‌ ‌ As‌‌to‌‌the‌‌issue‌‌of‌‌insolvency,‌‌it‌‌must‌‌be‌‌noted‌‌that‌‌‌liquidity‌‌is‌‌NOT‌‌ an‌ ‌issue‌ ‌in‌ ‌a‌ ‌petition‌ ‌for‌ ‌rehabilitation.‌‌Consequently,‌‌the‌‌basic‌‌ issues‌ ‌in‌ ‌rehabilitation‌ ‌proceedings‌ ‌concern‌ ‌the‌ ‌viability‌ ‌and‌‌ desirability‌ ‌of‌ ‌continuing‌ ‌the‌ ‌business‌ ‌operations‌ ‌of‌ ‌the‌‌ petitioning‌‌corporation.‌‌ ‌ It‌ ‌is‌ ‌summary‌ ‌and‌ ‌non-adversarial‌ ‌in‌ ‌nature.‌ ‌Its‌ ‌end‌‌goal‌‌is‌‌to‌‌ secure‌ ‌the‌ ‌approval‌ ‌of‌ ‌a‌ ‌rehabilitation‌ ‌plan‌ ‌to‌ ‌facilitate‌ ‌the‌‌ In‌‌our‌‌jurisdiction,‌‌rehabilitation‌‌proceedings‌‌have‌‌a‌t‌ wo-fold‌‌purpose‌:‌‌ ‌ successful‌ ‌recovery‌ ‌of‌‌the‌‌corporate‌‌debtor.‌‌It‌‌does‌‌not‌‌seek‌‌relief‌‌ Moreover,‌ ‌FRIA‌ ‌has‌ ‌defined‌ ‌a‌ ‌corporate‌ ‌debtor‌ ‌as‌ ‌a‌ ‌corporation‌‌ 1. Equitable‌‌‌—‌‌‌Cram‌‌Down‌‌Principle‌.‌‌A‌‌rehabilitation‌‌plan‌‌may‌‌ duly‌ ‌organized‌ ‌and‌ ‌existing‌ ‌under‌ ‌Philippine‌ ‌laws‌‌that‌‌has‌‌become‌‌ from‌ ‌an‌ ‌injury‌ ‌caused‌ ‌by‌ ‌another‌ ‌party.‌ ‌(‌Golden‌ ‌Cane‌ ‌Furniture‌‌ be‌‌approved‌‌‌even‌‌over‌‌the‌‌opposition‌‌of‌‌the‌‌creditors‌‌holding‌‌a‌‌ insolvent‌.‌ H ‌ owever,‌ ‌petitioner‌ ‌is‌ ‌correct‌ ‌in‌ ‌arguing‌ ‌that‌ ‌Basic‌‌ Manufacturing‌ ‌v.‌ ‌Steelpro‌ ‌Philippines‌ ‌2016,‌ ‌Allied‌ ‌Banking‌ ‌v.‌‌ majority‌ ‌of‌ ‌the‌ ‌corporation’s‌ ‌total‌ ‌liabilities‌ ‌if‌ ‌there‌ ‌is‌ ‌a‌‌ Polyprinters‌ ‌ id‌ ‌not‌ ‌present‌ ‌any‌ ‌material‌ ‌financial‌ ‌commitment‌ ‌in‌‌ d Equitable‌‌PCI‌‌‌2018‌)‌ ‌ showing‌‌ ‌ the‌ ‌rehabilitation‌ ‌plan.‌ ‌Basic‌ ‌Polyprinters'‌ ‌financial‌ ‌commitments‌‌ a. that‌‌rehabilitation‌‌is‌‌feasible‌‌‌and‌‌ ‌ Viva‌‌Shipping‌‌Lines‌‌v.‌‌Keppel‌‌Philippines‌‌Mining‌‌‌2016‌‌Leonen,‌‌J‌‌ ‌ were‌‌insufficient‌‌for‌‌the‌‌purpose.‌ ‌ b. the‌ o ‌ pposition‌ o ‌ f‌ t ‌ he‌ c ‌ reditors‌ i ‌ s‌ m ‌ anifestly‌‌ a) The‌ ‌commitment‌ ‌to‌ ‌add‌‌P10M‌‌working‌‌capital‌‌appeared‌‌to‌‌ New‌‌Frontier‌‌Sugar‌‌v.‌‌RTC,‌‌Branch‌‌39,‌‌Iloilo‌‌City‌‌doctrinally‌‌requires‌‌ be‌‌doubtful‌‌considering‌‌that‌‌the‌‌insurance‌‌claim‌‌from‌‌which‌‌ unreasonable‌.‌ ‌ compliance‌ ‌with‌ ‌the‌ ‌procedural‌ ‌rules‌ ‌for‌‌‌appealing‌‌‌corporate‌‌ said‌ ‌working‌ ‌capital‌ ‌would‌ ‌be‌ ‌sourced‌ ‌had‌ ‌already‌ ‌been‌‌ rehabilitation‌ ‌decisions‌.‌ ‌Resort‌ ‌to‌ ‌liberal‌ ‌construction‌ ‌must‌ ‌be‌‌ 2. Rehabilitative‌— ‌ ‌‌ ‌ written-off.‌‌A‌‌claim‌‌that‌‌has‌‌been‌‌‌written-off‌‌‌is‌‌considered‌‌ rational‌ ‌and‌ ‌well-grounded,‌ ‌and‌ ‌its‌ ‌factual‌ ‌bases‌ ‌must‌ ‌be‌ ‌so‌ ‌clear‌‌ a‌ ‌bad‌ ‌debt‌ ‌or‌ ‌a‌ ‌worthless‌ ‌asset,‌ ‌and‌ ‌cannot‌ ‌be‌ ‌deemed‌ ‌a‌‌ such‌‌that‌‌they‌‌outweigh‌‌the‌‌intent‌‌or‌‌purpose‌‌of‌‌an‌‌apparent‌‌reading‌‌ a. May‌‌involve‌‌a‌‌reduction‌‌of‌‌liability‌.‌ ‌ material‌ ‌financial‌ ‌commitment‌ ‌for‌ ‌purposes‌ ‌of‌‌ of‌‌the‌‌rules.‌ ‌ b. The‌ ‌non-impairment‌ ‌clause‌ ‌may‌ ‌NOT‌ ‌be‌ ‌invoked‌‌ rehabilitation.‌ ‌ Due‌ ‌process‌ ‌dictates‌ ‌that‌ ‌creditors‌ ‌be‌ ‌impleaded‌ ‌to‌ ‌give‌ ‌them‌ ‌an‌‌ (‌Victorio-Aquino‌‌v.‌‌Pacific‌‌Plans‌‌‌2014‌)‌ ‌ b) The‌ ‌conversion‌ ‌of‌ ‌all‌ ‌deposits‌ ‌for‌ ‌future‌ ‌subscriptions‌ ‌to‌‌ opportunity‌ ‌to‌ ‌protect‌ ‌the‌ ‌property‌ ‌owed‌ ‌to‌ ‌them.‌ ‌Creditors‌ ‌are‌ common‌ ‌stock‌ ‌and‌‌the‌‌treatment‌‌of‌‌all‌‌payables‌‌to‌‌officers‌‌ Two‌ ‌fundamental‌ ‌requirements‌ ‌that‌ ‌must‌ ‌be‌ ‌provided‌ ‌for‌ ‌in‌ ‌the‌‌ indispensable‌ ‌parties‌ ‌to‌ ‌a‌ ‌rehabilitation‌ ‌case,‌ ‌even‌ ‌if‌ ‌a‌‌ and‌ ‌stockholders‌ ‌as‌‌trade‌‌payables‌‌was‌‌hardly‌‌constituting‌‌ Rehabilitation‌‌Plan:‌ ‌ rehabilitation‌‌case‌‌is‌‌non-adversarial.‌ ‌ material‌‌financial‌‌commitments.‌ ‌ A‌ ‌corporate‌ ‌rehabilitation‌ ‌case‌ ‌cannot‌ ‌be‌ ‌decided‌ ‌without‌ ‌the‌‌ creditors'‌‌participation.‌‌The‌‌court's‌‌role‌‌is‌‌to‌‌balance‌‌the‌‌interests‌‌of‌‌ the‌‌corporation,‌‌the‌‌creditors,‌‌and‌‌the‌‌general‌‌public‌.‌ ‌ Liberality‌‌in‌‌corporate‌‌rehabilitation‌‌procedure‌‌only‌‌generally‌‌ refers‌ ‌to‌ ‌the‌ ‌trial‌ ‌court,‌ ‌NOT‌ ‌to‌ ‌the‌ ‌proceedings‌ ‌before‌ ‌the‌‌ appellate‌ ‌court.‌ ‌Thus,‌ ‌Rule‌ ‌2,‌ ‌Section‌ ‌2‌ ‌of‌ ‌the‌ ‌Interim‌ ‌Rules‌ ‌of‌‌ Procedure‌ ‌on‌ ‌Corporate‌ ‌Rehabilitation,‌ ‌which‌ ‌refers‌ ‌to‌ ‌liberal‌‌ construction,‌‌is‌‌limited‌‌to‌‌the‌‌RTC.‌ ‌ The‌ ‌RTC‌ ‌found‌ ‌that‌ ‌petitioner's‌ ‌assets‌ ‌were‌ ‌non-performing‌.‌‌ Petitioner‌ ‌admitted‌ ‌this‌ ‌in‌ ‌its‌ ‌Amended‌ ‌Petition‌‌when‌‌it‌‌stated‌‌that‌‌ its‌ ‌vessels‌ ‌were‌ ‌no‌ ‌longer‌ ‌serviceable.‌ ‌The‌ ‌RTC‌ ‌thus‌ ‌correctly‌‌ dismissed‌‌petitioner's‌‌rehabilitation‌‌plan.‌ ‌ 1. Material‌ ‌Financial‌ ‌Commitment‌ ‌—‌ ‌becomes‌ ‌significant‌‌ Basic‌ ‌Polyprinters’s‌ ‌proposal‌ ‌to‌ ‌enter‌ ‌into‌ ‌the‌ ‌dacion‌ ‌en‌ ‌pago‌ ‌to‌‌ create‌‌a‌‌source‌‌of‌‌“fresh‌‌capital”‌‌was‌‌not‌‌feasible‌‌because‌‌the‌‌object‌‌ thereof‌ ‌would‌ ‌not‌ ‌be‌ ‌its‌ ‌own‌ ‌property‌ ‌but‌ ‌one‌ ‌belonging‌ ‌to‌ ‌its‌‌ affiliate,‌ ‌TOL‌ ‌Realty‌ ‌and‌ ‌Development‌ ‌Corporation,‌ ‌a‌ ‌corporation‌‌ also‌‌undergoing‌‌rehabilitation.‌ ‌ in‌ ‌gauging‌ ‌the‌ ‌resolve‌,‌ ‌determination‌,‌ ‌earnestness‌ ‌and‌‌ good‌ ‌faith‌ ‌of‌ ‌the‌ ‌distressed‌ ‌corporation‌ ‌in‌ ‌financing‌ ‌the‌‌ proposed‌‌rehabilitation‌‌plan.‌‌ ‌ 2. Liquidation‌ ‌Analysis‌ ‌—‌‌It‌‌is‌‌intended‌‌to‌‌ascertain‌‌if‌‌the‌‌ distressed‌ ‌corporation’s‌ ‌creditors‌ ‌can‌ ‌recover‌ ‌by‌ ‌way‌ ‌of‌‌ Suspension‌‌of‌‌Payments‌ ‌ the‌‌p ‌ resent‌‌value‌ ‌of‌‌payments‌‌projected‌‌in‌‌the‌‌plan,‌‌‌more‌‌if‌‌ the‌ ‌debtor‌ ‌continues‌ ‌as‌ ‌a‌ ‌going‌ ‌concern‌ ‌than‌ ‌if‌ ‌it‌ ‌is‌‌ An‌‌individual‌‌debtor‌‌‌who‌‌ ‌ immediately‌‌liquidated‌.‌ ‌ ‌ Insolvent‌ ‌—‌ ‌the‌ ‌financial‌ ‌condition‌ ‌of‌ ‌a‌‌debtor‌‌that‌‌is‌‌generally‌‌ 1. has‌‌assets‌‌that‌‌exceed‌‌his‌‌liabilities‌B ‌ UT‌ ‌ unable‌ ‌to‌ ‌pay‌ ‌its‌ ‌or‌ ‌his‌ ‌liabilities‌ ‌as‌‌they‌‌fall‌‌due‌‌in‌‌the‌‌ordinary‌‌ 2. foresees‌ ‌the‌ ‌impossibility‌ ‌of‌ ‌paying‌ ‌his‌ ‌debts‌ ‌when‌ ‌they‌‌ respectively‌‌fall‌‌due‌‌ ‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 127‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ may‌ ‌file‌ ‌a‌ ‌verified‌ ‌petition‌ ‌for‌ ‌suspension‌ ‌of‌ ‌payments‌ ‌in‌ ‌the‌‌ court‌ ‌having‌ ‌jurisdiction‌ ‌over‌ ‌the‌ ‌province‌ ‌or‌ ‌city‌ ‌where‌ ‌he‌ ‌has‌‌ resided‌‌for‌‌‌six‌‌(6)‌‌months‌‌‌prior‌‌to‌‌the‌‌filing.‌ ‌ Individual‌ ‌debtor‌ ‌shall‌ ‌refer‌ ‌to‌ ‌a‌ ‌natural‌ ‌person‌ ‌who‌ ‌is‌ ‌a‌‌ resident‌A ‌ ND‌‌citizen‌‌of‌‌the‌‌Philippines‌‌that‌‌has‌‌become‌‌insolvent.‌ ‌ If‌ ‌the‌ ‌Court‌ ‌finds‌‌the‌‌petition‌‌sufficient‌‌in‌‌form‌‌and‌‌substance,‌‌it‌‌shall‌‌ issue‌‌a‌‌Suspension‌‌of‌‌Payments‌‌Order‌:‌ ‌ a) prohibiting‌ ‌creditors‌‌from‌‌suing‌‌or‌‌instituting‌‌proceedings‌‌for‌‌ collection‌‌against‌‌the‌‌debtor,‌e‌ xcept‌:‌‌ ‌ i) creditors‌‌having‌‌claims‌‌for‌‌ ‌ 1) personal‌‌labor,‌‌ ‌ 2) maintenance,‌‌ ‌ accepted‌‌by‌‌the‌‌creditors‌‌or‌‌as‌‌soon‌‌as‌‌such‌‌proposed‌‌agreement‌‌is‌‌ rejected.‌ ‌ Modes‌‌of‌‌Rehabilitation‌ ‌ incurred‌ ‌within‌ ‌sixty‌ ‌(60)‌ ‌days‌ ‌immediately‌ ‌prior‌ ‌to‌ ‌the‌‌ filing‌‌of‌‌the‌‌petition;‌‌and‌ ‌ ii) secured‌c‌ reditors;‌ ‌ b) prohibiting‌ ‌the‌ ‌petitioner‌ ‌from‌ ‌selling,‌ ‌transferring,‌‌ encumbering‌‌or‌‌disposing‌‌his‌‌property,‌‌ ‌ except‌ ‌those‌ ‌used‌ ‌in‌‌the‌‌ordinary‌‌operations‌‌of‌‌commerce‌‌or‌‌ of‌ ‌industry‌ ‌in‌ ‌which‌ ‌the‌ ‌petitioner‌ ‌is‌ ‌engaged‌ ‌as‌ ‌long‌ ‌as‌ ‌the‌‌ proceedings‌‌are‌‌pending;‌ ‌ c) prohibiting‌‌the‌‌petitioner‌‌from‌‌making‌‌any‌‌payment‌‌outside‌‌of‌‌ the‌ ‌necessary‌ ‌or‌ ‌legitimate‌ ‌expenses‌ ‌of‌ ‌his‌ ‌business‌ ‌or‌‌ industry,‌‌as‌‌long‌‌as‌‌the‌‌proceedings‌‌are‌‌pending;‌‌and‌ ‌ a) Voluntary‌ ‌ The‌ ‌order‌ ‌suspending‌ ‌execution‌ ‌shall‌ ‌lapse‌ ‌when‌ ‌three‌ ‌(3)‌‌ months‌ ‌shall‌ ‌have‌ ‌passed‌ ‌without‌ ‌the‌‌proposed‌‌agreement‌‌being‌‌ 2. b) Involuntary‌ ‌ 2) Pre-negotiated‌ ‌ 3) Out-of-Court‌‌or‌‌Informal‌‌Restructuring‌‌Agreement‌‌or‌‌ Rehabilitation‌‌Plan‌ ‌ Court-supervised‌‌Rehabilitation‌ ‌ Voluntary‌ ‌ Involuntary‌ ‌ Debtor‌ ‌ - Owner‌‌of‌‌Sole‌‌Proprietorship;‌ ‌ - Majority‌‌of‌‌Partners;‌‌or‌ ‌ - Majority‌‌of‌‌the‌‌Board‌‌+‌‌at‌‌least‌‌ ⅔‌‌of‌‌the‌‌OCS‌‌or‌‌Members‌‌in‌‌ case‌‌of‌‌Corporation‌ ‌ Creditors‌ ‌ Any‌‌creditor‌‌or‌‌group‌‌of‌‌ creditors‌‌with‌‌a‌‌claim‌‌of‌‌at‌‌ least‌‌P1M‌‌or‌‌25%‌‌of‌‌the‌‌SCS,‌‌ whichever‌‌is‌‌higher.‌ ‌ In‌ ‌voluntary‌ ‌proceedings‌,‌ ‌a‌ ‌group‌ ‌of‌ ‌debtors‌ ‌may‌ ‌jointly‌ ‌file‌ ‌a‌‌ petition‌‌for‌‌rehabilitation‌‌ ‌ a‌ ‌creditor,‌ ‌other‌ ‌than‌ ‌the‌ ‌petitioner/s,‌ ‌has‌ ‌initiated‌‌ foreclosure‌ ‌proceedings‌ ‌against‌ ‌the‌‌debtor‌‌that‌‌will‌‌prevent‌‌ the‌ ‌debtor‌ ‌from‌ ‌paying‌ ‌its‌ ‌debts‌ ‌as‌ ‌they‌ ‌become‌ ‌due‌ ‌or‌ ‌will‌‌ render‌‌it‌‌insolvent.‌ ‌ Metrobank‌‌v.‌‌Fortuna‌‌Paper‌‌Mill‌‌&‌‌Packaging‌‌‌2018‌‌ ‌ WON‌ ‌Fortuna‌ ‌is‌ ‌qualified‌ ‌to‌ ‌file‌ ‌a‌‌petition‌‌for‌‌rehabilitation‌‌under‌‌ the‌‌Interim‌‌Rules.‌ ‌ YES‌.‌‌This‌‌Court‌‌need‌‌not‌‌distinguish‌‌whether‌‌the‌‌claim‌‌has‌‌already‌‌ matured‌‌or‌‌not.‌‌‌What‌‌is‌‌‌essential‌‌‌in‌‌case‌‌of‌‌rehabilitation‌‌is‌‌the‌‌ inability‌ ‌of‌ ‌the‌ ‌debtor‌ ‌corporation‌ ‌to‌ ‌pay‌ ‌its‌ ‌dues‌‌as‌‌they‌‌fall‌‌ due.‌ ‌In‌ ‌the‌ ‌case‌ ‌herein,‌ ‌accepting‌ ‌MBTC's‌ ‌proposition‌ ‌that‌ ‌debtor‌‌ companies‌ ‌already‌ ‌in‌ ‌default‌ ‌are‌ ‌unqualified‌ ‌to‌ ‌file‌ ‌a‌ ‌petition‌ ‌for‌‌ corporate‌ ‌rehabilitation‌ ‌not‌‌only‌‌contradicts‌‌the‌‌purpose‌‌of‌‌the‌‌law,‌‌ as‌‌stated,‌‌but‌‌also‌‌advocates‌‌a‌‌limiting‌‌bar‌‌that‌‌is‌‌not‌‌found‌‌under‌‌the‌‌ pertinent‌‌provisions.‌ ‌ Pre-negotiated‌‌Rehabilitation‌ ‌ An‌‌‌insolvent‌‌debtor‌,‌‌ ‌ 1. when‌‌one‌‌or‌‌more‌‌of‌‌its‌‌members‌‌foresee‌‌the‌‌impossibility‌‌of‌‌ meeting‌‌debts‌‌when‌‌they‌‌respectively‌‌fall‌‌due,‌‌and‌‌ ‌ 2. the‌‌financial‌‌distress‌‌would‌‌likely‌‌adversely‌‌affect‌‌ ‌ Motion‌‌to‌‌Suspend‌‌Pending‌‌Execution‌ ‌ Property‌ ‌held‌ ‌as‌ ‌security‌ ‌by‌ ‌secured‌ ‌creditors‌ ‌shall‌ ‌not‌ ‌be‌‌ subject‌‌‌to‌‌such‌‌suspension‌‌order.‌ ‌ that‌‌the‌‌debtor‌‌has‌‌failed‌‌generally‌‌to‌‌meet‌‌its‌‌liabilities‌‌as‌‌ they‌‌fall‌‌due;‌‌OR‌ ‌ 1) Court-supervised‌ ‌ d) appointing‌‌a‌c‌ ommissioner‌.‌ ‌ there‌‌is‌‌‌no‌‌genuine‌‌issue‌‌of‌‌fact‌‌or‌‌law‌‌on‌‌the‌‌claim/s‌‌of‌‌the‌‌ petitioner/s,‌‌AND‌ ‌ that‌ ‌the‌ ‌due‌ ‌and‌ ‌demandable‌ ‌payments‌ ‌thereon‌ ‌have‌ ‌not‌‌ been‌‌made‌‌for‌a ‌ t‌‌least‌‌sixty‌‌(60)‌‌days‌‌‌OR‌‌ ‌ i.‌‌Types‌ ‌ 3) expense‌‌of‌‌last‌‌illness‌‌and‌‌ ‌ 4) funeral‌‌of‌‌the‌‌wife‌‌or‌‌children‌‌of‌‌the‌‌debtor‌‌ ‌ 1. a. the‌‌financial‌‌condition,‌‌ ‌ b. operations‌‌of‌‌the‌‌other‌‌members‌‌of‌‌the‌‌group,‌‌and/or‌‌ ‌ c. the‌ ‌participation‌ ‌of‌ ‌the‌ ‌other‌ ‌members‌ ‌of‌ ‌the‌ ‌group‌ ‌is‌‌ essential‌ ‌under‌ ‌the‌ ‌terms‌ ‌and‌‌conditions‌‌of‌‌the‌‌proposed‌‌ Rehabilitation‌‌Plan.‌ ‌ In‌‌‌involuntary‌‌proceedings,‌‌creditors‌‌file‌‌a‌‌petition‌‌for‌‌rehabilitation‌‌ with‌‌the‌‌court‌‌if:‌ ‌ 1. by‌‌itself‌‌OR‌ ‌ 2. jointly‌‌with‌‌any‌‌of‌‌its‌‌creditors‌,‌‌ ‌ may‌ ‌file‌ ‌a‌ ‌verified‌ ‌petition‌ ‌with‌ ‌the‌ ‌court‌ ‌for‌ ‌the‌ ‌approval‌ ‌of‌ ‌a‌‌ Pre-negotiated‌‌Rehabilitation‌‌Plan‌‌which‌‌has‌‌been‌‌endorsed‌‌or‌‌ approved‌‌ ‌ 1. by‌ ‌creditors‌ holding‌ ‌at‌ ‌least‌ ‌two-thirds‌ ‌(2/3)‌ ‌of‌ ‌the‌‌ total‌‌liabilities‌‌of‌‌the‌‌debtor,‌‌ ‌ 2. including‌ ‌secured‌ ‌creditors‌ ‌holding‌ more‌ ‌than‌ ‌fifty‌‌ percent‌ ‌(50%)‌ ‌of‌ ‌the‌ ‌total‌ ‌secured‌ ‌claims‌‌of‌‌the‌‌debtor‌‌ AND‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 128‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ 3. unsecured‌ ‌creditors‌ ‌holding‌ more‌ ‌than‌ ‌fifty‌ ‌percent‌‌ (50%)‌‌of‌‌the‌‌total‌‌unsecured‌‌claims‌‌of‌‌the‌‌debtor.‌ ‌ b) publication‌ ‌of‌ ‌the‌ ‌notice‌ ‌of‌ ‌the‌‌agreement‌‌in‌‌a‌‌newspaper‌‌of‌‌ general‌‌circulation‌‌in‌‌the‌‌Philippines,‌‌once‌‌a‌‌week‌‌for‌‌two‌‌(2)‌‌ consecutive‌‌weeks;‌‌and‌ ‌ The‌‌Order‌‌shall‌‌have‌‌the‌‌‌same‌‌effects‌‌as‌‌a‌‌Commencement‌‌Order.‌‌It‌‌ c) the‌‌standstill‌‌period‌‌shall‌‌NOT‌‌exceed‌‌one‌‌hundred‌‌twenty‌‌ shall‌ ‌retroact‌ ‌to‌ ‌the‌ ‌date‌ ‌of‌ ‌the‌ ‌filing‌ ‌of‌‌the‌‌petition‌‌and‌‌shall‌‌be‌‌ effective‌ ‌for‌ ‌one‌ ‌hundred‌ ‌twenty‌‌(120)‌‌days‌‌from‌‌the‌‌filing‌‌of‌‌ (120)‌‌days‌‌‌from‌‌the‌‌date‌‌of‌‌effectivity.‌ ‌ the‌‌petition‌‌unless‌e‌ arlier‌‌lifted‌‌by‌‌the‌‌court‌‌on‌‌account‌‌of‌‌ ‌ The‌‌standstill‌‌period‌‌shall‌‌expire‌u ‌ pon‌‌ ‌ a) the‌‌approval‌‌of‌‌the‌‌Pre-Negotiated‌‌Rehabilitation‌‌Plan,‌‌or‌ ‌ 1) the‌ ‌lapse‌ ‌of‌ ‌120‌ ‌day‌s‌ ‌from‌ ‌the‌ ‌effectivity‌ ‌of‌ ‌the‌ ‌standstill‌‌ b) the‌‌termination‌‌of‌‌the‌‌rehabilitation‌‌proceedings.‌ ‌ The‌‌court‌‌shall‌‌have‌‌‌a‌‌maximum‌‌period‌‌of‌‌one‌‌hundred‌‌twenty‌‌ (120)‌‌days‌‌‌from‌‌the‌‌date‌‌of‌‌the‌‌filing‌‌of‌‌the‌‌petition‌‌to‌‌approve‌‌the‌‌ Rehabilitation‌‌Plan.‌‌‌If‌‌the‌‌court‌‌‌fails‌‌to‌‌act‌‌‌within‌‌the‌‌said‌‌period,‌‌ the‌‌Rehabilitation‌‌Plan‌‌shall‌‌be‌d ‌ eemed‌‌APPROVED‌.‌ ‌ Out-of-Court‌‌or‌‌Informal‌‌Restructuring‌‌ Agreement‌‌or‌‌Rehabilitation‌‌Plan‌ ‌ An‌‌OCRA‌‌‌shall‌‌comply‌‌with‌‌both‌‌requirements:‌ ‌ a) Approval‌‌by‌‌the:‌ ‌ 1) debtor;‌ ‌ 2) creditors‌‌‌representing‌‌‌at‌‌least‌‌sixty-seven‌‌percent‌‌‌(67%)‌‌ of‌‌the‌‌secured‌o ‌ bligations‌‌of‌‌the‌‌debtor;‌ ‌ 3) creditors‌ ‌representing‌ ‌at‌ ‌least‌ ‌seventy-five‌ ‌percent‌‌ (75%)‌‌of‌‌the‌u ‌ nsecured‌o ‌ bligations‌‌of‌‌the‌‌debtor;‌‌and,‌ ‌ 4) creditors‌ ‌holding‌ ‌at‌ ‌least‌ ‌eighty-five‌ ‌percent‌ ‌(85%)‌ ‌of‌‌ the‌‌‌total‌‌liabilities‌‌‌of‌‌the‌‌debtor;‌‌and,‌ ‌ b) Publication‌ ‌of‌ ‌the‌ ‌notice‌ ‌of‌ ‌the‌ ‌OCRA‌ ‌once‌ ‌a‌ ‌week‌ ‌for‌ ‌at‌‌ least‌ ‌three‌ ‌(3)‌ ‌consecutive‌ ‌weeks‌ ‌in‌ ‌a‌ ‌newspaper‌ ‌of‌ ‌general‌‌ circulation‌‌in‌‌the‌‌Philippines.‌ ‌ 2) the‌‌effectivity‌‌of‌‌the‌‌OCRA‌,‌‌or‌ ‌ 3) the‌‌‌termination‌‌of‌‌the‌‌negotiations‌‌‌for‌‌the‌‌OCRA‌‌as‌‌declared‌‌ by‌‌creditors‌‌representing‌‌more‌‌than‌‌fifty‌‌percent‌‌(50%)‌‌of‌‌the‌‌ total‌‌liabilities‌‌of‌‌the‌‌debtor,‌‌ ‌ whichever‌‌comes‌‌first.‌ ‌ Cram‌ ‌Down‌ ‌Effect.‌ ‌—‌ ‌An‌ ‌OCRA‌‌that‌‌is‌‌approved‌‌shall‌‌have‌‌the‌‌same‌‌ legal‌ ‌effect‌ ‌as‌ ‌the‌ ‌confirmation‌ ‌of‌ ‌a‌ ‌rehabilitation‌ ‌plan‌ ‌under‌ ‌a‌‌ court-supervised‌‌rehabilitation.‌ ‌ ii.‌‌Commencement‌‌order‌ ‌ The‌ ‌rehabilitation‌ ‌proceedings‌‌shall‌‌commence‌‌upon‌‌the‌‌issuance‌‌ of‌ ‌the‌ ‌Commencement‌ ‌Order.‌ ‌It‌ ‌shall‌ ‌be‌ ‌deemed‌ ‌to‌ ‌have‌‌ commenced‌‌from‌‌the‌‌DATE‌‌OF‌‌FILING‌‌of‌‌the‌‌petition‌,‌‌which‌‌is‌‌ also‌‌termed‌‌the‌c‌ ommencement‌‌date‌.‌ ‌ The‌‌commencement‌‌order‌‌primarily‌‌contains:‌‌ ‌ 1. a‌‌declaration‌‌that‌‌the‌‌debtor‌‌is‌‌under‌‌rehabilitation,‌‌ ‌ 2. the‌‌appointment‌‌of‌‌a‌‌rehabilitation‌‌receiver,‌‌ ‌ 3. a‌ ‌directive‌ ‌for‌ ‌all‌ ‌creditors‌ ‌to‌ ‌file‌ ‌their‌ ‌verified‌ ‌notices‌ ‌of‌‌ claim,‌‌and‌ ‌ Standstill‌ ‌Period.‌ ‌—‌ ‌May‌ ‌be‌ ‌agreed‌ ‌upon‌ ‌by‌‌the‌‌parties‌‌and‌‌shall‌‌be‌‌ 4. an‌‌order‌‌staying‌‌‌claims‌‌against‌‌the‌‌debtor.‌‌ ‌ effective‌ ‌and‌ ‌enforceable‌ ‌not‌ ‌only‌ ‌against‌ ‌the‌ ‌contracting‌ ‌parties‌ ‌but‌‌ The‌ ‌effects‌ ‌of‌ ‌the‌ ‌court's‌ ‌issuance‌ ‌of‌ ‌a‌ ‌Commencement‌ ‌Order‌ ‌shall‌‌ also‌‌against‌‌the‌‌other‌‌creditors‌‌provided‌‌it‌‌complies‌‌with‌‌the‌‌following‌‌ retroact‌‌to‌‌the‌‌date‌‌of‌‌the‌‌filing‌‌of‌‌the‌‌petition‌‌‌and‌‌shall:‌ ‌ conditions:‌ ‌ a) vest‌ ‌the‌ ‌rehabilitation‌ ‌receiver‌ ‌with‌ ‌all‌ ‌the‌ ‌powers‌ ‌and‌‌ a) approval‌ ‌of‌‌the‌‌agreement‌‌for‌‌a‌‌standstill‌‌period‌‌by‌‌creditors‌‌ functions,‌‌such‌‌as‌‌ ‌ representing‌ ‌more‌ ‌than‌ ‌fifty‌ ‌percent‌ ‌(50%)‌ ‌of‌ ‌the‌ ‌total‌‌ i) the‌‌right‌‌of‌‌access,‌‌and‌‌ ‌ the‌ ‌right‌ ‌to‌ ‌review‌ ‌and‌ ‌obtain‌ ‌records‌ ‌to‌ ‌which‌ ‌the‌‌ debtor's‌ ‌management‌ ‌and‌ ‌directors‌ ‌have‌ ‌access,‌‌ including‌ ‌bank‌ ‌accounts‌ ‌of‌ ‌whatever‌ ‌nature‌ ‌of‌ ‌the‌‌ debtor,‌ ‌ b) prohibit‌‌or‌‌otherwise‌‌serve‌‌as‌‌the‌‌legal‌‌basis‌‌for‌‌rendering‌‌null‌‌ and‌‌void‌‌the‌‌results‌‌of‌‌any‌‌extrajudicial‌‌activity‌‌or‌‌process‌‌to‌‌ ‌ i) ii) agreement,‌ ‌ liabilities‌‌‌of‌‌the‌‌debtor;‌ ‌ ii) iii) seize‌‌property,‌‌ ‌ sell‌‌encumbered‌‌property,‌‌or‌‌ ‌ otherwise‌ ‌attempt‌ ‌to‌ ‌collect‌ ‌on‌ ‌or‌ ‌enforce‌ ‌a‌ ‌claim‌‌ against‌‌the‌‌debtor‌‌after‌‌the‌‌commencement‌‌date‌‌ ‌ unless‌o ‌ therwise‌‌allowed;‌ ‌ c) serve‌‌as‌‌the‌‌legal‌‌basis‌‌for‌‌rendering‌‌null‌‌and‌‌void‌‌ ‌ i) any‌ ‌set-off‌ ‌after‌ ‌the‌ ‌commencement‌ ‌date‌ ‌of‌‌any‌‌debt‌‌ owed‌‌to‌‌the‌‌debtor‌‌by‌‌any‌‌of‌‌the‌‌debtor's‌‌creditors;‌ ‌ ii) the‌‌perfection‌‌of‌‌any‌‌lien‌‌against‌‌the‌‌debtor's‌‌property‌‌ after‌‌the‌‌commencement‌‌date;‌ ‌ d) consolidate‌ ‌all‌ ‌legal‌ ‌proceedings‌ ‌by‌ ‌and‌‌against‌‌the‌‌debtor‌‌to‌‌ the‌‌court;‌‌and‌ ‌ e) exempt‌ ‌the‌ ‌debtor‌ ‌from‌ ‌liability‌ ‌for‌ ‌taxes‌ ‌and‌ ‌fees,‌ ‌including‌‌ penalties,‌ ‌interests‌ ‌and‌ ‌charges‌ ‌thereof‌ ‌due‌ ‌to‌ ‌the‌ ‌national‌‌ government‌‌or‌‌the‌‌LGU‌‌as‌‌provided‌‌in‌‌Section‌‌19‌‌of‌‌the‌‌Act.‌ ‌ LBP‌‌v.‌‌Polillo‌‌Paradise‌‌Island‌‌Corp.‌‌‌2019‌ ‌ WON‌ ‌the‌ ‌Commencement‌ ‌Order‌ ‌issued‌ ‌by‌ ‌the‌‌RTC‌‌has‌‌the‌‌effect‌‌of‌‌ rendering‌‌void‌‌the‌‌foreclosure‌‌sale‌‌of‌‌the‌‌subject‌‌properties‌‌and‌‌the‌‌ effects‌‌thereof.‌ ‌ NO‌.‌ ‌The‌ ‌ownership‌ ‌of‌ ‌the‌ ‌subject‌ ‌properties‌ ‌was‌ ‌vested‌ ‌upon‌ ‌the‌‌ petitioner‌‌before‌‌the‌‌filing‌‌of‌‌the‌‌petition‌‌for‌‌corporate‌‌rehabilitation.‌ ‌ Here,‌‌the‌‌Commencement‌‌Order‌‌was‌‌issued‌‌on‌‌January‌‌11,‌‌2013.‌‌As‌‌ to‌‌the‌‌date‌‌of‌‌the‌‌filing‌‌of‌‌the‌‌petition,‌‌it‌‌was‌‌actually‌‌filed‌‌on‌‌‌August‌‌ 22,‌‌2012‌‌‌as‌‌evidenced‌‌by‌‌the‌‌rubber‌‌stamp‌‌of‌‌the‌‌RTC.‌‌ ‌ Be‌‌that‌‌as‌‌it‌‌may,‌‌petitioner‌‌still‌‌erred‌‌in‌‌considering‌‌August‌‌2012‌‌as‌‌ the‌ ‌reckoning‌ ‌point.‌ ‌It‌ ‌was‌ ‌the‌ ‌October‌ ‌18,‌ ‌2012‌ ‌amended‌‌ petition‌ ‌which‌ ‌was‌ ‌granted‌ ‌by‌ ‌the‌ ‌RTC‌ ‌and‌ ‌initiated‌ ‌the‌‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 129‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ rehabilitation‌ ‌proceedings.‌ ‌Thus‌ ‌the‌ ‌commencement‌ ‌date‌ ‌is‌‌ reckoned‌‌on‌‌October‌‌18,‌‌2012‌.‌ ‌ 2) suspend‌‌all‌‌actions‌‌to‌‌‌enforce‌‌any‌‌judgment,‌‌attachment‌‌or‌‌ other‌‌provisional‌‌remedies‌‌‌against‌‌the‌‌debtor;‌ ‌ reimburse‌ ‌themselves‌ ‌for‌ ‌any‌ ‌transactions‌ ‌settled‌ ‌for‌ ‌the‌‌ debtor;‌‌and‌ ‌ The‌‌Certificate‌‌of‌‌Sale‌‌was‌‌issued‌‌and‌‌registered‌‌on‌‌August‌‌22,‌‌2011.‌‌ As‌ ‌such,‌ ‌the‌ ‌last‌ ‌day‌ ‌of‌ ‌the‌ ‌redemption‌ ‌period‌ ‌is‌ ‌on‌ ‌August‌ ‌22,‌‌ 2012‌.‌ ‌Corollary,‌ ‌petitioner‌ ‌is‌ ‌no‌‌longer‌‌considered‌‌as‌‌respondent's‌‌ creditor.‌ ‌ 3) prohibit‌‌the‌‌debtor‌‌from‌‌‌selling,‌‌encumbering,‌‌transferring‌‌ or‌‌disposing‌‌‌in‌‌any‌‌manner‌‌any‌‌of‌‌its‌‌properties‌‌ ‌ g) any‌ ‌criminal‌ ‌action‌ ‌against‌ ‌the‌ ‌individual‌ ‌debtor‌ ‌or‌ ‌owner,‌‌ partner,‌ ‌director‌ ‌or‌ ‌officer‌‌of‌‌a‌‌debtor‌‌shall‌‌not‌‌be‌‌affected‌‌by‌‌ any‌‌proceeding‌‌commenced‌‌under‌‌the‌‌FRIA.‌‌(§ ‌ 18‌)‌ ‌ Attempts‌‌to‌‌seek‌‌legal‌‌or‌‌other‌‌recourse‌‌against‌‌the‌‌debtor‌‌outside‌‌these‌‌ proceedings‌ ‌shall‌ ‌be‌ ‌sufficient‌ ‌to‌ ‌support‌ ‌a‌ ‌finding‌ ‌of‌ ‌indirect‌‌ contempt‌‌of‌‌court‌.‌‌(‌§17,‌‌last‌‌par‌.)‌ ‌ The‌‌Commencement‌‌Order‌‌‌shall‌‌be‌‌effective‌‌for‌‌the‌‌duration‌‌of‌‌the‌‌ rehabilitation‌‌proceedings‌,‌‌unless‌‌ ‌ a) earlier‌‌lifted‌‌by‌‌the‌‌court,‌‌ ‌ b) the‌‌rehabilitation‌‌plan‌‌is‌‌seasonably‌‌confirmed‌‌or‌‌approved,‌‌or‌‌ ‌ c) the‌ ‌rehabilitation‌ ‌proceedings‌ ‌are‌ ‌ordered‌ ‌terminated‌ ‌by‌ ‌the‌‌ court‌‌pursuant‌‌to‌‌Section‌‌73‌‌of‌‌this‌‌Rule.‌ ‌ except‌i‌ n‌‌the‌‌ordinary‌‌course‌‌of‌‌business;‌‌and‌ ‌ 4) prohibit‌ ‌the‌ ‌debtor‌ ‌from‌ ‌making‌ ‌any‌ ‌payment‌ ‌of‌ ‌its‌‌ liabilities‌‌outstanding‌‌as‌‌of‌‌the‌‌commencement‌‌date‌‌ ‌ except‌a‌ s‌‌may‌‌be‌‌provided‌‌herein.‌ ‌ ⭐The‌‌Stay‌‌or‌‌Suspension‌‌Order‌‌‌shall‌‌NOT‌‌apply‌:‌ ‌ a) to‌ ‌cases‌ ‌already‌ ‌pending‌ ‌appeal‌ ‌in‌ ‌the‌ ‌SC‌ ‌as‌ ‌of‌‌ commencement‌‌date;‌ ‌ b) subject‌ ‌to‌ ‌the‌ ‌discretion‌ ‌of‌ ‌the‌ ‌court,‌ ‌to‌ ‌cases‌ ‌pending‌ ‌or‌‌ filed‌‌at‌‌a‌‌specialized‌‌court‌‌or‌‌quasi-judicial‌‌agency‌‌which,‌‌ upon‌ ‌determination‌ ‌by‌ ‌the‌ ‌court,‌ ‌is‌ ‌capable‌ ‌of‌ ‌resolving‌ ‌the‌‌ claim‌‌more‌‌quickly‌,‌‌fairly‌‌and‌‌efficiently‌‌than‌‌the‌‌court:‌‌ ‌ BIR‌‌v.‌‌Lepanto‌‌Ceramics,‌‌Inc.‌‌‌2017‌‌ ‌ WON‌‌the‌‌RTC‌‌Br.‌‌35‌‌correctly‌‌found‌‌Misajon,‌‌et‌‌al.‌‌to‌‌have‌‌defied‌‌the‌‌ Commencement‌ ‌Order‌ ‌and,‌ ‌accordingly,‌ ‌cited‌ ‌them‌ ‌for‌ ‌indirect‌‌ contempt.‌ ‌ YES‌.‌‌Creditors‌‌of‌‌the‌‌distressed‌‌corporation‌‌are‌‌not‌‌without‌‌remedy‌‌ as‌‌‌they‌‌may‌‌still‌‌submit‌‌their‌‌claims‌‌to‌‌the‌‌rehabilitation‌‌court‌‌ for‌ ‌proper‌ ‌consideration‌ ‌so‌ ‌that‌ ‌they‌ ‌may‌ ‌participate‌ ‌in‌ ‌the‌‌ proceedings.‌‌Any‌‌attempts‌‌to‌‌seek‌‌legal‌‌or‌‌other‌‌recourse‌‌against‌‌the‌‌ distressed‌ ‌corporation‌ ‌shall‌ ‌be‌ ‌sufficient‌ ‌to‌ ‌support‌ ‌a‌ ‌finding‌ ‌of‌‌ indirect‌‌contempt‌‌of‌‌court.‌ ‌ Here,‌‌the‌‌acts‌‌of‌‌sending‌‌a‌‌notice‌‌of‌‌informal‌‌conference‌‌and‌‌a‌‌Formal‌‌ Letter‌ ‌of‌ ‌Demand‌ ‌are‌ ‌part‌ ‌and‌ ‌parcel‌ ‌of‌ ‌the‌ ‌entire‌ ‌process‌ ‌for‌ ‌the‌‌ assessment‌ ‌and‌ ‌collection‌ ‌of‌ ‌deficiency‌ ‌taxes‌ ‌from‌ ‌a‌ ‌delinquent‌‌ taxpayer‌ ‌—‌ ‌an‌ ‌action‌ ‌or‌ ‌proceeding‌ ‌for‌ ‌the‌ ‌enforcement‌ ‌of‌‌a‌‌claim‌‌ which‌ ‌should‌‌have‌‌been‌‌suspended‌‌pursuant‌‌to‌‌the‌‌Commencement‌‌ Order.‌ ‌Unmistakably,‌ ‌Misajon,‌ ‌et‌ ‌al.'s‌ ‌foregoing‌ ‌acts‌ ‌are‌ ‌in‌ ‌clear‌‌ defiance‌‌of‌‌the‌‌Commencement‌‌Order.‌ ‌ iii.‌‌Stay‌‌or‌‌suspension‌‌order‌ ‌ Provided‌,‌‌That‌‌any‌‌final‌‌and‌‌executory‌‌judgment‌‌of‌‌such‌‌court‌‌ or‌‌agency‌‌shall‌‌be‌‌referred‌‌to‌‌the‌‌court‌‌and‌‌shall‌‌be‌‌treated‌‌as‌‌a‌‌ non-disputed‌‌‌claim‌;‌ ‌ c) ⭐to‌ ‌the‌ ‌enforcement‌ ‌of‌ ‌claims‌ ‌against‌ ‌sureties‌ ‌and‌‌‌other‌‌ persons‌ ‌solidarily‌ ‌liable‌ ‌with‌ ‌the‌ ‌debtor,‌‌and‌‌third‌‌party‌‌or‌‌ accommodation‌‌mortgagors‌‌as‌‌well‌‌as‌‌‌issuers‌‌of‌‌letters‌‌of‌‌ credit‌,‌‌ ‌ TIDCORP‌‌v.‌‌PVB‌‌‌2019‌ ‌ WON‌ ‌the‌ ‌Stay‌ ‌Order‌ ‌of‌ ‌the‌ ‌Rehabilitation‌ ‌Court‌ ‌divested‌‌the‌‌RTC's‌‌ jurisdiction‌‌to‌‌hear‌‌and‌‌decide‌‌PVB's‌‌Complaint.‌ ‌ NO‌.‌ ‌The‌ ‌Stay‌ ‌Order‌ ‌issued‌ ‌by‌ ‌the‌ ‌Rehabilitation‌ ‌Court‌ ‌did‌ ‌not‌‌ preclude‌ ‌the‌ ‌RTC‌ ‌from‌ ‌hearing‌ ‌and‌ ‌deciding‌ ‌respondent‌ ‌PVB's‌‌ Complaint.‌ ‌Section‌ ‌18(c)‌ ‌of‌ ‌the‌ ‌FRIA‌ ‌explicitly‌ ‌states‌ ‌that‌ ‌a‌ ‌stay‌‌ order‌ ‌shall‌ ‌not‌ ‌apply‌ ‌"to‌‌the‌‌enforcement‌‌of‌‌claims‌‌against‌‌sureties‌‌ and‌‌other‌‌persons‌‌solidarily‌‌liable‌‌with‌‌the‌‌debtor,‌‌and‌‌third‌‌party‌‌or‌‌ accommodation‌‌mortgagors‌‌as‌‌well‌‌as‌‌issuers‌‌of‌‌letters‌‌of‌‌credit.‌ ‌ In‌ ‌Situs‌ ‌Dev’t‌ ‌v.‌ ‌Asiatrust‌ ‌Bank‌,‌ ‌the‌ ‌Court‌ ‌held‌ ‌that‌ ‌when‌ ‌a‌ ‌stay‌‌ order‌ ‌is‌ ‌issued,‌ ‌the‌ ‌rehabilitation‌ ‌court‌ ‌is‌ ‌only‌ ‌empowered‌ ‌to‌‌ suspend‌‌claims‌‌against‌‌the‌‌‌debtor,‌‌its‌‌guarantors,‌‌and‌‌sureties‌‌ who‌‌are‌‌NOT‌‌solidarily‌‌liable‌‌with‌‌the‌‌debtor‌.‌‌Hence,‌‌the‌‌making‌‌ of‌‌claims‌‌against‌‌sureties‌‌and‌‌other‌‌persons‌‌solidarily‌‌liable‌‌with‌‌the‌‌ debtor‌‌is‌‌not‌‌barred‌‌by‌‌a‌‌stay‌‌order.‌ ‌ iv.‌‌Rehabilitation‌‌receiver‌ ‌ The‌‌rehabilitation‌‌receiver‌‌shall‌‌be‌‌deemed‌‌an‌‌officer‌‌of‌‌the‌‌court‌‌ with‌‌the‌‌principal‌‌duty‌‌‌of‌‌ ‌ unless‌ ‌the‌ ‌property‌ ‌subject‌ ‌of‌ ‌the‌ ‌third‌ ‌party‌ ‌or‌‌ accommodation‌ ‌mortgage‌ ‌is‌ ‌necessary‌ ‌for‌ ‌the‌‌ rehabilitation‌ ‌of‌‌the‌‌debtor‌‌as‌‌determined‌‌by‌‌the‌‌court‌‌upon‌‌ recommendation‌‌by‌‌the‌‌rehabilitation‌‌receiver;‌ ‌ 1. preserving‌‌and‌‌maximizing‌‌the‌‌value‌‌of‌‌the‌‌assets‌‌of‌‌the‌‌ debtor‌‌during‌‌the‌‌rehabilitation‌‌proceedings,‌‌ ‌ 2. determining‌ ‌the‌ ‌viability‌ ‌of‌ ‌the‌ ‌rehabilitation‌ ‌of‌ ‌the‌‌ debtor,‌‌ ‌ d) to‌ ‌any‌ ‌form‌ ‌of‌ ‌action‌ ‌of‌ ‌customers‌ ‌or‌‌clients‌‌of‌‌a‌‌‌securities‌‌ market‌‌participant‌;‌ ‌ 3. preparing‌ ‌and‌ ‌recommending‌ ‌a‌ ‌Rehabilitation‌ ‌Plan‌ ‌to‌‌ the‌‌court,‌‌and‌‌ ‌ e) to‌ ‌the‌‌actions‌‌of‌‌a‌‌‌licensed‌‌broker‌‌or‌‌dealer‌‌to‌‌sell‌‌pledged‌‌ securities‌‌of‌‌a‌‌debtor‌‌pursuant‌‌to‌‌a‌‌securities‌‌pledge‌‌or‌‌margin‌‌ agreement‌‌for‌‌the‌‌settlement‌‌of‌‌securities‌‌transactions;‌ 4. implementing‌‌the‌‌approved‌‌Rehabilitation‌‌Plan.‌ ‌ f) 1) suspend‌ ‌all‌ ‌actions‌ ‌or‌ ‌proceedings,‌ ‌in‌‌court‌‌or‌‌otherwise,‌‌for‌‌ the‌‌‌enforcement‌‌of‌‌claims‌a‌ gainst‌‌the‌‌debtor;‌ ‌ the‌ ‌clearing‌ ‌and‌ ‌settlement‌ ‌of‌ ‌financial‌ ‌transactions‌‌ through‌ ‌the‌ ‌facilities‌ ‌of‌‌a‌‌‌clearing‌‌agency‌‌or‌‌similar‌‌entities‌‌ as‌ ‌well‌ ‌as‌ ‌any‌ ‌form‌ ‌of‌ ‌actions‌‌of‌‌such‌‌agencies‌‌or‌‌entities‌‌to‌‌ v.‌‌Management‌‌committee‌ ‌ In‌‌addition,‌‌upon‌‌‌motion‌‌of‌‌any‌‌interested‌‌party‌,‌‌the‌‌court‌‌‌may‌‌‌appoint‌‌ and‌‌direct‌‌the‌‌rehabilitation‌‌receiver‌‌to‌‌ ‌ 1. assume‌‌the‌‌powers‌‌of‌‌management‌‌of‌‌the‌‌debtor,‌‌OR‌‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 130‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ 2. appoint‌ ‌a‌ ‌management‌ ‌committee‌ ‌that‌ ‌will‌ ‌undertake‌ ‌the‌‌ management‌‌of‌‌the‌‌debtor,‌‌ ‌ upon‌ ‌clear‌ ‌and‌ ‌convincing‌ ‌evidence‌ ‌of‌ ‌any‌ ‌of‌ ‌the‌ ‌following‌‌ circumstances:‌ ‌ that‌‌is‌‌anchored‌‌on‌‌realistic‌‌assumptions‌‌and‌‌goals‌.‌ ‌ On‌‌the‌‌other‌‌hand,‌‌the‌‌characteristics‌‌of‌‌a‌‌rehabilitation‌‌plan‌‌that‌‌is‌‌ infeasible‌:‌ ‌ a) Actual‌ ‌or‌ ‌imminent‌ ‌danger‌ ‌of‌ ‌dissipation,‌‌loss,‌‌wastage‌‌or‌‌ destruction‌‌of‌‌the‌‌debtor's‌‌assets‌‌or‌‌other‌‌properties;‌ ‌ a. the‌‌absence‌‌of‌‌a‌‌sound‌‌and‌‌workable‌‌business‌‌plan;‌ ‌ b. baseless‌‌and‌‌unexplained‌‌assumptions,‌‌targets‌‌and‌‌goals;‌ ‌ c. speculative‌ ‌capital‌ ‌infusion‌ ‌or‌ ‌complete‌ ‌lack‌ ‌thereof‌ ‌for‌‌ the‌‌execution‌‌of‌‌the‌‌business‌‌plan;‌ ‌ b) Paralyzation‌o ‌ f‌‌the‌‌business‌‌operations‌‌of‌‌the‌‌debtor;‌‌or‌ ‌ c) Gross‌ ‌mismanagement‌ ‌of‌ ‌the‌ ‌debtor,‌ ‌or‌ ‌fraud‌ ‌or‌ ‌other‌‌ wrongful‌‌conduct‌‌on‌‌the‌‌part‌‌of,‌‌or‌‌gross‌‌or‌‌willful‌‌violation‌‌of‌‌ this‌ ‌Act‌ ‌by,‌ ‌existing‌ ‌management‌ ‌of‌ ‌the‌ ‌debtor‌ ‌or‌ ‌the‌ ‌owner,‌‌ partner,‌ ‌director,‌ ‌officer‌ ‌or‌‌representative/s‌‌in‌‌management‌‌of‌‌ the‌‌debtor.‌ ‌ The‌‌‌management‌‌committee‌‌‌may‌‌overrule‌‌or‌‌revoke‌‌the‌‌actions‌‌ of‌ ‌the‌ ‌previous‌ ‌management‌ ‌or‌ ‌the‌ ‌governing‌ ‌body‌ ‌of‌ ‌the‌‌debtor.‌‌ (‌§33‌‌Rule‌‌2,‌‌2013‌‌Rules‌)‌ ‌ vi.‌‌Rehabilitation‌‌plan‌ ‌ The‌‌court‌‌shall‌‌have‌‌a‌‌maximum‌‌period‌‌of‌‌‌one‌‌(1)‌‌year‌‌from‌‌the‌‌ date‌‌of‌‌the‌‌filing‌‌of‌‌the‌‌petition‌t‌ o‌c‌ onfirm‌a‌ ‌‌Rehabilitation‌‌Plan.‌ ‌ If‌ ‌no‌ ‌Rehabilitation‌ ‌Plan‌ ‌is‌ ‌confirmed‌ ‌within‌ ‌the‌ ‌said‌ ‌period,‌ ‌the‌‌ proceedings‌ ‌may,‌ ‌upon‌ ‌motion‌ ‌or‌ ‌motu‌ ‌proprio‌,‌ ‌be‌ converted‌‌ into‌‌one‌‌for‌‌the‌‌liquidation‌o ‌ f‌‌the‌‌debtor.‌ ‌ Feasibility‌ ‌ In‌‌‌Phil.‌‌Asset‌‌Growth‌‌Two,‌‌Inc.,‌‌et‌‌al.‌‌v.‌‌Fastech‌‌Synergy‌‌Phils.,‌‌Inc.,‌‌ et‌ ‌al‌.,‌‌ ‌the‌ ‌Court‌ ‌took‌ ‌note‌ ‌of‌ ‌the‌ ‌characteristics‌ ‌of‌ ‌a‌ ‌feasible‌‌ rehabilitation‌‌plan‌‌as‌‌opposed‌‌to‌‌an‌‌infeasible‌‌rehabilitation‌‌plan.‌ ‌ The‌ ‌specific‌ ‌characteristics‌ ‌of‌ ‌an‌ ‌economically‌ ‌feasible‌‌ rehabilitation‌‌plan‌‌are:‌ ‌ a. The‌ ‌debtor‌ ‌has‌ ‌assets‌ ‌that‌ ‌can‌ ‌generate‌ ‌more‌ ‌cash‌ ‌if‌‌ used‌‌in‌‌its‌‌daily‌‌operations‌‌‌than‌‌if‌‌sold.‌ b. Liquidity‌ ‌issues‌ ‌can‌ ‌be‌ ‌addressed‌ ‌by‌ ‌a‌ ‌practicable‌‌ business‌ ‌plan‌ ‌that‌ ‌will‌ ‌generate‌ ‌enough‌ ‌cash‌ ‌to‌ ‌sustain‌‌ daily‌‌operations.‌ ‌ c. The‌ ‌debtor‌ ‌has‌ ‌a‌ ‌definite‌ ‌source‌ ‌of‌ ‌financing‌ ‌for‌ ‌the‌‌ proper‌ ‌and‌ ‌full‌ ‌implementation‌ ‌of‌ ‌a‌ ‌Rehabilitation‌ ‌Plan‌‌ d. cash‌‌flow‌‌cannot‌‌sustain‌‌daily‌‌operations;‌‌and‌ ‌ e. negative‌ ‌net‌ ‌worth‌ ‌and‌ ‌the‌ ‌assets‌ ‌are‌ ‌near‌ ‌full‌‌ depreciation‌‌or‌‌fully‌‌depreciated.‌ ‌ In‌‌addition‌‌to‌‌the‌‌tests‌‌of‌‌economic‌‌feasibility,‌‌FRIA‌‌emphasizes‌‌on‌‌ rehabilitation‌ ‌that‌ ‌provides‌ ‌for‌ ‌better‌ ‌present‌‌value‌‌recovery‌‌ for‌‌its‌‌creditors.‌‌‌Present‌‌value‌‌of‌‌the‌‌credit‌‌takes‌‌into‌‌account‌‌the‌‌ interest‌‌that‌‌the‌‌amount‌‌of‌‌money‌‌would‌‌have‌‌earned‌‌if‌‌the‌‌creditor‌‌ were‌‌paid‌‌on‌‌time.‌ ‌ BPI‌‌Family‌‌Savings‌‌Bank,‌‌Inc.‌‌v.‌‌St.‌‌Michael‌‌Medical‌‌Center‌‌‌2015‌‌ ‌ WON‌ ‌the‌ ‌CA‌ ‌correctly‌ ‌affirmed‌ ‌SMMCI’s‌ ‌Rehabilitation‌ ‌Plan‌ ‌as‌‌ approved‌‌by‌‌the‌‌RTC.‌ ‌ NO‌.‌ ‌Rehabilitation‌ ‌shall‌ ‌refer‌ ‌to‌ ‌the‌ ‌restoration‌ ‌of‌‌the‌‌debtor‌‌to‌‌a‌‌ condition‌ ‌of‌ ‌successful‌ ‌operation‌ ‌and‌ ‌solvency.‌ ‌Restoration‌‌‌is‌‌the‌‌ central‌ ‌idea‌ ‌behind‌ ‌the‌ ‌remedy‌ ‌of‌ ‌corporate‌ ‌rehabilitation.‌ ‌In‌‌ common‌ ‌parlance,‌ ‌to‌ ‌“restore”‌ ‌means‌ ‌“to‌‌bring‌‌back‌‌to‌‌or‌‌put‌‌back‌‌ into‌‌a‌‌former‌‌or‌‌original‌‌state.”‌ ‌ In‌‌this‌‌case,‌‌it‌‌cannot‌‌be‌‌said‌‌that‌‌the‌‌petitioning‌‌corporation,‌‌SMMCI,‌‌ had‌ ‌been‌ ‌in‌ ‌a‌ ‌position‌ ‌of‌ ‌successful‌ ‌operation‌ ‌and‌ ‌solvency‌ ‌at‌‌the‌‌ time‌ ‌the‌ ‌Rehabilitation‌ ‌Petition‌ ‌was‌ ‌filed.‌ ‌While‌ ‌it‌ ‌had‌ ‌indeed‌‌ “commenced‌ ‌business”‌ ‌through‌ ‌the‌ ‌preparatory‌ ‌act‌ ‌of‌ ‌opening‌ ‌a‌‌ credit‌ ‌line‌ ‌with‌ ‌BPI‌ ‌Family,‌ ‌SMMCI‌ ‌itself‌ ‌admits‌ ‌that‌ ‌it‌ ‌has‌ ‌not‌‌ formally‌ ‌operated‌ ‌nor‌ ‌earned‌ ‌any‌ ‌income‌ ‌since‌ ‌its‌ ‌incorporation.‌‌ This‌‌simply‌‌means‌‌that‌‌‌there‌‌exists‌‌no‌‌viable‌‌business‌‌concern‌‌to‌‌ be‌ ‌restored‌.‌ ‌Perforce,‌ ‌the‌ ‌remedy‌ ‌of‌ ‌corporate‌ ‌rehabilitation‌ ‌is‌‌ improper,‌‌thus‌‌rendering‌‌the‌‌dispositions‌‌of‌‌the‌‌courts‌‌a‌‌quo‌‌infirm.‌ ‌ Aside‌‌from‌‌the‌‌harped‌‌on‌‌merger‌‌of‌‌St.‌‌Michael‌‌Hospital‌‌with‌‌SMMCI,‌‌ the‌‌only‌‌proposed‌‌source‌‌of‌‌revenue‌‌the‌‌Rehabilitation‌‌Plan‌‌suggests‌‌ is‌ ‌the‌ ‌capital‌ ‌which‌ ‌would‌ ‌come‌‌from‌‌SMMCI’s‌‌potential‌‌investors,‌‌ which‌ ‌negotiations‌ ‌are‌ ‌merely‌ ‌pending.‌ ‌As‌ ‌case‌ ‌law‌ ‌intimates,‌‌ nothing‌ ‌short‌ ‌of‌ ‌legally‌ ‌binding‌ ‌investment‌ ‌commitment/s‌‌ from‌ ‌third‌ ‌parties‌ ‌is‌ ‌required‌ ‌to‌ ‌qualify‌ ‌as‌ ‌a‌ ‌material‌ ‌financial‌‌ commitment.‌ ‌SMMCI‌ ‌likewise‌ ‌failed‌ ‌to‌ ‌include‌ ‌any‌ ‌liquidation‌ analysis‌‌‌in‌‌its‌‌Rehabilitation‌‌Plan.‌‌ ‌ vii.‌‌Cram‌‌down‌‌effect‌ ‌ BPI‌‌v.‌‌Sarabia‌‌Manor‌‌Hotel‌‌‌2013‌ ‌ WON‌ ‌the‌ ‌CA‌ ‌correctly‌ ‌affirmed‌ ‌Sarabia’s‌ ‌rehabilitation‌ ‌plan‌ ‌as‌‌ approved‌ ‌by‌‌the‌‌RTC,‌‌with‌‌the‌‌modification‌‌on‌‌the‌‌reinstatement‌‌of‌‌ the‌‌surety‌‌obligations‌‌of‌‌Sarabia’s‌‌stockholders.‌ ‌ YES‌.‌ ‌Section‌ ‌23,‌ ‌Rule‌ ‌4‌ ‌of‌ ‌the‌ ‌Interim‌ ‌Rules‌ ‌of‌ ‌Procedure‌ ‌on‌‌ Corporate‌ ‌Rehabilitation‌ ‌(Interim‌ ‌Rules)‌ ‌states‌ ‌that‌ ‌a‌‌ rehabilitation‌ ‌plan‌‌may‌‌be‌‌approved‌‌‌even‌‌over‌‌the‌‌opposition‌‌of‌‌the‌‌ creditors‌ ‌holding‌ ‌a‌ ‌majority‌ ‌of‌ ‌the‌ ‌corporation’s‌ ‌total‌ ‌liabilities‌ ‌if‌‌ there‌ ‌is‌ ‌a‌ ‌showing‌ ‌that‌ ‌rehabilitation‌ ‌is‌ ‌feasible‌ ‌and‌ ‌the‌‌ opposition‌‌of‌‌the‌‌creditors‌‌is‌‌manifestly‌‌unreasonable‌.‌‌ ‌ Also‌ ‌known‌ ‌as‌ ‌the‌ ‌“cram-down”‌ ‌clause,‌‌it‌‌forces‌‌the‌‌creditors‌‌to‌‌ accept‌ ‌the‌ ‌terms‌ ‌and‌ ‌conditions‌ ‌of‌ ‌the‌ ‌rehabilitation‌ ‌plan,‌‌ preferring‌ ‌long-term‌ ‌viability‌ ‌over‌ ‌immediate‌‌but‌‌incomplete‌‌ recovery‌.‌ ‌ If‌ ‌the‌ ‌results‌ ‌of‌ ‌the‌ ‌financial‌ ‌examination‌ ‌and‌ ‌analysis‌ ‌clearly‌‌ indicate‌ ‌that‌ ‌there‌‌lies‌‌no‌‌reasonable‌‌probability‌‌that‌‌the‌‌distressed‌‌ corporation‌ ‌could‌ ‌be‌ ‌revived‌ ‌and‌ ‌that‌ ‌liquidation‌ ‌would,‌ ‌in‌ ‌fact,‌‌ better‌ ‌subserve‌‌the‌‌interests‌‌of‌‌its‌‌stakeholders,‌‌then‌‌it‌‌may‌‌be‌‌said‌‌ that‌ ‌a‌ ‌rehabilitation‌ ‌would‌ ‌NOT‌ ‌be‌ ‌feasible.‌ ‌In‌ ‌such‌ ‌case,‌ ‌the‌‌ rehabilitation‌ ‌court‌ ‌may‌ ‌convert‌ ‌the‌ ‌proceedings‌ ‌into‌ ‌one‌‌for‌‌ liquidation‌.‌ ‌ Manifest‌‌unreasonableness‌‌of‌‌BPI‌‌’s‌‌opposition‌ ‌ The‌ ‌opposition‌ ‌of‌ ‌a‌ ‌distressed‌ ‌corporation’s‌ ‌majority‌ ‌creditor‌ ‌is‌‌ manifestly‌ ‌unreasonable‌ ‌if‌ ‌it‌ ‌counter-proposes‌ ‌unrealistic‌‌ payment‌ ‌terms‌ ‌and‌ ‌conditions‌ ‌which‌ ‌would,‌‌more‌‌likely‌‌than‌‌ not,‌ ‌impede‌ ‌rather‌ ‌than‌ ‌aid‌ ‌its‌ ‌rehabilitation.‌ ‌The‌‌ unreasonableness‌‌becomes‌‌further‌‌manifest‌‌if‌‌the‌‌rehabilitation‌‌plan,‌‌ in‌ ‌fact,‌ ‌provides‌ ‌for‌ ‌adequate‌ ‌safeguards‌ ‌to‌ ‌fulfill‌ ‌the‌ ‌majority‌‌ creditor’s‌ ‌claims,‌ ‌and‌ ‌yet‌ ‌the‌ ‌latter‌ ‌persists‌ ‌on‌ ‌speculative‌ ‌or‌‌ unfounded‌‌assumptions‌‌that‌‌his‌‌credit‌‌would‌‌remain‌‌unfulfilled.‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 131‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ b) there‌ ‌is‌ ‌no‌ ‌substantial‌ ‌likelihood‌ ‌that‌ ‌the‌ ‌debtor‌ ‌may‌ ‌be‌‌ rehabilitated.‌ ‌ Oppositions‌‌which‌‌push‌‌for‌‌high‌‌interest‌‌rates‌‌are‌‌generally‌‌frowned‌‌ upon‌‌in‌‌rehabilitation‌‌proceedings‌‌given‌‌that‌‌the‌‌inherent‌‌purpose‌‌of‌‌ a‌‌rehabilitation‌‌is‌‌to‌‌find‌‌ways‌‌and‌‌means‌‌to‌‌minimize‌‌the‌‌expenses‌‌ of‌‌the‌‌distressed‌‌corporation‌‌during‌‌the‌‌rehabilitation‌‌period.‌ ‌ Involuntary‌‌Liquidation‌ ‌ Involuntary‌‌Rehabilitation‌ ‌ One‌‌(1)‌‌creditor‌‌enough‌ ‌ ‌ Liquidation‌ ‌ AND‌ ‌that‌ ‌the‌ ‌due‌ ‌and‌ ‌demandable‌ ‌payments‌ ‌thereon‌ ‌have‌ ‌not‌‌ been‌‌made‌‌for‌a ‌ t‌‌least:‌ ‌ sixty‌‌(60)‌‌days‌ ‌ one‌‌hundred‌‌eighty‌‌(180)‌‌days‌‌ i) OR‌ ‌that‌‌the‌‌debtor‌‌has‌‌failed‌‌generally‌‌to‌‌meet‌‌its‌‌liabilities‌‌as‌‌they‌‌ fall‌‌due‌‌AND‌ ‌ has‌ ‌made‌ ‌any‌‌assignment,‌‌gift,‌‌sale,‌‌conveyance‌‌or‌‌transfer‌‌of‌‌ his‌ ‌estate,‌ ‌property,‌‌rights‌‌or‌‌credits‌‌‌with‌‌intent‌‌to‌‌hinder‌‌or‌‌ delay‌‌the‌‌liquidation‌‌or‌‌defraud‌‌his‌‌creditors;‌ ‌ j) has,‌ ‌in‌ ‌contemplation‌ ‌of‌ ‌insolvency,‌ ‌made‌ ‌any‌ ‌payment,‌ ‌gift,‌‌ grant,‌‌sale,‌‌conveyance‌‌or‌‌transfer‌‌of‌‌his‌‌estate,‌‌property,‌‌rights‌‌ or‌‌credits;‌ ‌ Of‌‌Individual‌‌Debtor‌ ‌ Of‌‌Juridical‌‌Debtor‌ In‌ ‌involuntary‌ ‌liquidation‌,‌ ‌the‌ ‌creditors‌ ‌seeking‌ ‌liquidation‌ ‌of‌ ‌an‌‌ insolvent‌‌debtor‌‌must‌‌show‌‌in‌‌the‌‌petition‌‌that:‌ ‌ a) there‌‌is‌‌‌no‌‌genuine‌‌issue‌‌of‌‌fact‌‌or‌‌law‌‌on‌‌the‌‌claim/s‌‌of‌‌the‌‌ petitioner/s,‌‌and‌‌ ‌ that‌ ‌the‌ ‌due‌‌and‌‌demandable‌‌payments‌‌thereon‌‌have‌‌not‌‌been‌‌ made‌‌for‌a ‌ t‌‌least‌‌one‌‌hundred‌‌eighty‌‌(180)‌‌days‌‌o ‌ r‌‌ ‌ that‌‌the‌‌debtor‌‌has‌‌failed‌‌generally‌‌to‌‌meet‌‌its‌‌liabilities‌‌as‌‌they‌‌ fall‌‌due;‌‌and‌ ‌ (‌d-g‌)‌ ‌for‌ ‌the‌ ‌purpose‌‌of‌‌hindering‌‌or‌‌delaying‌‌the‌‌liquidation‌‌ or‌‌of‌‌defrauding‌‌any‌‌creditor‌;‌ ‌ h) has‌ ‌suffered‌ ‌or‌ ‌procured‌ ‌his‌ ‌property‌ ‌to‌ ‌be‌ ‌taken‌ ‌on‌ ‌legal‌‌ process‌‌with‌‌intent‌‌to‌‌‌give‌‌a‌‌preference‌‌to‌‌one‌‌or‌‌more‌‌of‌‌his‌‌ creditors‌‌and‌‌thereby‌‌hinder‌‌or‌‌delay‌‌the‌‌liquidation‌‌or‌‌defraud‌‌ any‌‌one‌‌of‌‌his‌‌creditors;‌ ‌ a‌‌creditor,‌‌other‌‌than‌‌the‌‌ there‌‌is‌‌no‌‌substantial‌‌likelihood‌‌ petitioner,‌‌has‌‌initiated‌‌ that‌‌the‌d ‌ ebtor‌‌may‌‌be‌‌ foreclosure‌‌proceedings‌‌against‌‌ rehabilitated‌ ‌ the‌‌debtor‌‌that‌‌will‌‌prevent‌‌the‌‌ debtor‌‌from‌‌paying‌‌its‌‌debts‌‌as‌‌ they‌‌become‌‌due‌‌or‌‌will‌‌render‌‌it‌‌ insolvent‌ ‌ i.‌‌Types‌ ‌ has‌ ‌confessed‌ ‌or‌ ‌offered‌ ‌to‌ ‌allow‌ ‌judgment‌ ‌in‌ ‌favor‌ ‌of‌ ‌any‌‌ creditor;‌ ‌ g) has‌ ‌wilfully‌ ‌allowed‌ ‌judgment‌ ‌to‌ ‌be‌ ‌taken‌ ‌against‌ ‌him‌ ‌by‌‌ default‌;‌ ‌ At‌‌least‌‌Three‌‌(3)‌‌‌creditors‌ ‌ there‌‌is‌n ‌ o‌‌genuine‌‌issue‌‌of‌‌fact‌‌or‌‌law‌‌on‌‌the‌‌claims‌ ‌ ‌ f) The‌‌following‌‌are‌‌the‌a ‌ cts‌‌of‌‌insolvency‌o ‌ f‌‌the‌‌debtor:‌ ‌ a) about‌ ‌to‌ ‌depart‌ ‌or‌ ‌has‌ ‌departed‌ ‌from‌ ‌PH,‌ ‌with‌ ‌intent‌ ‌to‌‌ defraud‌‌his‌‌creditors;‌ ‌ k) being‌ ‌a‌ ‌merchant‌ ‌or‌ ‌tradesman,‌ ‌the‌ ‌debtor‌ ‌has‌ ‌generally‌‌ defaulted‌‌in‌‌the‌‌payment‌‌of‌‌his‌‌current‌‌obligations‌‌for‌‌a‌‌period‌‌ of‌‌thirty‌‌(30)‌‌days‌;‌ ‌ l) for‌ ‌a‌ ‌period‌ ‌of‌ ‌thirty‌ ‌(30)‌ ‌days,‌ ‌the‌ ‌debtor‌ ‌has‌ ‌failed,‌ ‌after‌‌ demand,‌‌to‌‌pay‌‌any‌‌moneys‌‌deposited‌‌with‌‌him‌‌or‌‌received‌‌by‌‌ him‌‌in‌‌a‌‌fiduciary‌‌capacity‌;‌‌or‌ ‌ m) an‌‌execution‌‌having‌‌been‌‌issued‌‌against‌‌him‌‌on‌‌final‌‌judgment‌‌ for‌ ‌money,‌ ‌the‌ ‌debtor‌ ‌shall‌ ‌have‌ ‌been‌ ‌found‌ ‌to‌ ‌be‌ ‌without‌‌ sufficient‌‌property‌‌subject‌‌to‌‌execution‌‌to‌‌satisfy‌‌the‌‌judgment.‌ ‌ Absent‌‌Individual‌‌Debtor.‌— ‌ ‌‌In‌‌all‌‌cases‌‌where‌‌the‌‌individual‌‌debtor‌‌ ‌ b) being‌‌‌absent‌‌‌from‌‌PH,‌‌with‌‌intent‌‌to‌‌defraud‌‌his‌‌creditors,‌‌he‌‌ remains‌‌absent;‌ ‌ 1. resides‌‌out‌‌of‌‌PH;‌‌or‌‌ ‌ 2. has‌‌departed‌‌therefrom;‌‌or‌‌ ‌ c) conceals‌,‌ ‌or‌ ‌is‌ ‌removing,‌ ‌any‌ ‌of‌ ‌his‌ ‌property‌ ‌to‌ ‌avoid‌ ‌its‌‌ being‌‌attached‌‌or‌‌taken‌‌on‌‌legal‌‌process;‌ ‌ 3. cannot,‌‌after‌‌due‌‌diligence,‌‌be‌‌found‌‌therein;‌‌or‌‌ ‌ 4. conceals‌ ‌himself‌ ‌to‌‌avoid‌‌service‌‌of‌‌the‌‌Order‌‌to‌‌show‌‌cause,‌‌ or‌‌any‌‌other‌‌preliminary‌‌process‌‌or‌‌orders‌‌in‌‌the‌‌matter,‌‌ ‌ d) conceals‌‌himself‌t‌ o‌‌avoid‌‌the‌‌service‌‌of‌‌legal‌‌process;‌ ‌ e) has‌‌allowed‌‌his‌‌property‌‌to‌‌remain‌‌under‌‌‌attachment‌‌‌or‌‌legal‌‌ process‌‌for‌‌three‌‌(3)‌‌days;‌ ‌ then‌‌the‌‌petitioning‌‌creditors,‌‌ ‌ 1. upon‌‌submitting‌‌the‌‌‌affidavits‌‌‌requisite‌‌to‌‌procure‌‌an‌‌Order‌‌of‌‌ publication,‌‌and‌‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 132‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ 2. liquidator‌‌contests‌‌or‌‌disputes‌‌the‌‌claim,‌‌the‌‌court‌‌shall‌‌allow,‌‌ hear‌‌and‌‌resolve‌‌such‌‌contest‌‌‌except‌‌‌when‌‌the‌‌case‌‌is‌‌already‌‌ on‌ ‌appeal‌.‌ ‌In‌ ‌such‌ ‌a‌ ‌case,‌ ‌the‌ ‌suit‌ ‌may‌ ‌proceed‌‌to‌‌judgment,‌‌ and‌ ‌any‌ ‌final‌ ‌and‌ ‌executory‌ ‌judgment‌ ‌therein‌ ‌for‌ ‌a‌ ‌claim‌‌ against‌‌the‌‌debtor‌‌shall‌‌be‌‌filed‌‌and‌‌allowed‌‌in‌‌court;‌‌and‌ ‌ presenting‌‌a‌‌‌bond‌‌‌in‌‌‌double‌‌the‌‌amount‌‌‌of‌‌the‌‌aggregate‌‌sum‌‌ of‌‌their‌‌claims‌‌against‌‌the‌‌individual‌‌debtor,‌‌ ‌ shall‌ ‌be‌ ‌entitled‌ ‌to‌ ‌an‌ ‌Order‌ ‌of‌ ‌the‌ ‌court‌ ‌directing‌ ‌the‌ ‌sheriff‌ ‌of‌ ‌the‌‌ province‌ ‌or‌ ‌city‌ ‌in‌ ‌which‌ ‌the‌ ‌matter‌ ‌is‌ ‌pending‌ ‌to‌ ‌take‌ ‌into‌ ‌his‌‌ custody‌ ‌a‌ ‌sufficient‌ ‌amount‌ ‌of‌‌property‌‌‌of‌‌the‌‌individual‌‌debtor‌‌to‌‌ satisfy‌‌ ‌ 1. the‌‌demands‌‌of‌‌the‌‌petitioning‌‌creditors‌‌and‌‌ ‌ 2. the‌‌costs‌‌of‌‌the‌‌proceedings.‌ ‌ ii.‌‌Conversion‌‌of‌‌rehabilitation‌‌to‌‌liquidation‌‌ proceedings‌ ‌ During‌ ‌the‌ ‌pendency‌ ‌of‌ ‌court-supervised‌ ‌or‌ ‌pre-negotiated‌‌ rehabilitation‌ ‌proceedings,‌ ‌the‌ ‌court‌ ‌may‌ ‌order‌ ‌the‌ ‌conversion‌‌of‌‌ rehabilitation‌ ‌proceedings‌ ‌to‌ ‌liquidation‌ ‌proceedings‌ ‌at‌‌any‌‌other‌‌ time‌ ‌upon‌‌the‌‌recommendation‌‌of‌‌the‌‌rehabilitation‌‌receiver‌‌ that‌ ‌the‌ ‌rehabilitation‌‌of‌‌the‌‌debtor‌‌is‌‌not‌‌feasible.‌‌Thereupon,‌‌the‌‌ court‌‌shall‌‌issue‌‌the‌L ‌ iquidation‌‌Order‌.‌ ‌ e) no‌ ‌foreclosure‌ ‌proceeding‌ ‌shall‌ ‌be‌ ‌allowed‌ ‌for‌ ‌a‌ ‌period‌ ‌of‌‌ 180‌‌days‌.‌ ‌ iv.‌‌Rights‌‌of‌‌secured‌‌creditors‌ ‌ ⭐The‌ ‌Liquidation‌ ‌Order‌ ‌shall‌ ‌NOT‌ ‌affect‌ ‌the‌ ‌right‌ ‌of‌ ‌a‌ ‌secured‌‌ creditor‌‌to‌‌enforce‌‌his‌‌lien‌.‌‌He‌‌may:‌ ‌ a) waive‌ ‌his‌ ‌rights‌ ‌under‌ ‌the‌‌security‌‌or‌‌lien,‌‌‌prove‌‌his‌‌claim‌‌ in‌‌the‌‌liquidation‌‌proceedings‌‌and‌‌share‌‌in‌‌the‌‌distribution‌‌ of‌‌the‌‌assets‌‌of‌‌the‌‌debtor;‌‌or‌ ‌ b) maintain‌‌his‌‌rights‌‌‌under‌‌his‌‌security‌‌or‌‌lien.‌ ‌ If‌‌the‌‌secured‌‌creditor‌‌‌maintains‌‌his‌‌rights‌‌under‌‌the‌‌security‌‌ or‌‌lien:‌ ‌ 1) the‌‌value‌‌of‌‌the‌‌property‌‌may‌‌be‌‌fixed‌‌in‌‌a‌‌manner‌‌agreed‌‌ upon‌‌by‌‌the‌‌creditor‌‌and‌‌the‌‌liquidator.‌‌ ‌ iii.‌‌Liquidation‌‌order‌ ‌ Effects‌ ‌of‌ ‌the‌ ‌Liquidation‌ ‌Order.‌ ‌—‌ ‌Upon‌ ‌the‌ ‌issuance‌ ‌of‌ ‌the‌‌ Liquidation‌‌Order:‌ ‌ 2) the‌ ‌liquidator‌ ‌may‌ ‌sell‌ ‌the‌ ‌property‌ ‌and‌ ‌satisfy‌ ‌the‌ secured‌ ‌creditor's‌ ‌entire‌ ‌claim‌ ‌from‌ ‌the‌ ‌proceeds‌ ‌of‌ ‌the‌‌ sale;‌‌or‌ ‌ c) all‌ ‌contracts‌ ‌of‌ ‌the‌ ‌debtor‌ ‌shall‌ ‌be‌ ‌deemed‌ ‌terminated‌‌ and/or‌‌breached‌,‌‌ ‌ v.‌‌Liquidator‌ ‌ Qualifications‌‌of‌‌the‌‌Liquidator.‌— ‌ ‌‌The‌‌liquidator‌‌shall:‌ ‌ a) be‌‌a‌‌‌citizen‌‌‌of‌‌the‌‌Philippines‌‌or‌‌a‌‌‌resident‌‌‌thereof‌‌for‌‌six‌‌(6)‌‌ months‌‌immediately‌‌preceding‌‌his‌‌nomination;‌ b) be‌ ‌of‌ ‌good‌ ‌moral‌ ‌character‌ ‌and‌ ‌with‌ ‌acknowledged‌ ‌integrity,‌‌ impartiality‌‌and‌‌independence;‌ ‌ 3) the‌‌secured‌‌creditor‌‌may‌‌‌enforce‌‌the‌‌lien‌‌or‌‌‌foreclose‌‌‌on‌‌ the‌‌property‌‌pursuant‌‌to‌‌applicable‌‌laws.‌ ‌ However‌,‌ ‌these‌ ‌rights‌ ‌are‌ ‌subject‌ ‌to‌ ‌the‌ ‌temporary‌ ‌stay‌ ‌of‌‌ foreclosure‌ ‌proceedings‌ ‌for‌ ‌a‌ ‌period‌ ‌of‌ ‌180‌ ‌days‌,‌ ‌upon‌ ‌the‌‌ issuance‌‌of‌‌the‌‌Liquidation‌‌Order.‌‌(M ‌ BTC‌‌v.‌‌S.F.‌‌Naguiat‌)‌ ‌ d) have‌ ‌no‌ ‌conflict‌ ‌of‌ ‌interest‌:‌ ‌Provided‌,‌ ‌that‌ ‌such‌ ‌conflict‌ ‌of‌‌ interest‌ ‌may‌ ‌be‌ ‌waived‌,‌ ‌expressly‌ ‌or‌ ‌impliedly,‌ ‌by‌ ‌a‌ ‌party‌‌ who‌‌may‌‌be‌‌prejudiced‌‌thereby.‌ ‌ Yngson,‌‌Jr.‌‌v.‌‌PNB‌‌‌2012‌ ‌ unless‌‌‌the‌‌liquidator,‌‌within‌‌‌ninety‌‌(90)‌‌days‌‌from‌‌the‌‌date‌‌of‌‌ his‌ ‌assumption‌ ‌of‌ ‌office,‌ ‌declares‌ ‌otherwise‌ ‌and‌ ‌the‌‌ contracting‌‌party‌‌agrees;‌ ‌ WON‌ ‌PNB,‌ ‌as‌ ‌a‌ ‌secured‌ ‌creditor,‌ ‌can‌ ‌foreclose‌ ‌on‌ ‌the‌ ‌mortgaged‌‌ properties‌‌of‌‌a‌‌corporation‌‌under‌‌liquidation‌‌without‌‌the‌‌knowledge‌‌ and‌‌prior‌‌approval‌‌of‌‌the‌‌liquidator‌‌or‌‌the‌‌SEC.‌ ‌ d) no‌ ‌separate‌ ‌action‌ ‌for‌ ‌the‌ ‌collection‌ ‌of‌ ‌an‌ ‌unsecured‌‌ claim‌‌shall‌‌be‌‌allowed‌.‌‌ ‌ YES‌.‌ ‌PNB‌ ‌was‌‌not‌‌barred‌‌from‌‌foreclosing‌‌on‌‌the‌‌mortgages.‌‌Under‌‌ Such‌ ‌actions‌ ‌already‌ ‌pending‌ ‌will‌ ‌be‌ ‌transferred‌ ‌to‌ ‌the‌‌ Liquidator‌ ‌for‌ ‌him‌ ‌to‌ ‌accept‌ ‌and‌ ‌settle‌ ‌or‌ ‌contest.‌ ‌If‌ ‌the‌‌ A‌‌‌preference‌‌‌applies‌‌only‌‌to‌‌claims‌‌which‌‌do‌‌not‌‌attach‌‌to‌‌specific‌‌ properties.‌‌A‌‌‌lien‌‌‌creates‌‌a‌‌charge‌‌on‌‌a‌‌particular‌‌property.‌‌The‌‌‌right‌‌ of‌‌first‌‌preference‌‌as‌‌regards‌‌unpaid‌‌wages‌‌recognized‌‌by‌‌Article‌‌110‌‌ of‌‌the‌‌Labor‌‌Code,‌‌does‌‌‌NOT‌‌‌constitute‌‌a‌‌lien‌‌on‌‌the‌‌property‌‌of‌‌the‌‌ insolvent‌‌debtor‌‌in‌‌favor‌‌of‌‌workers.‌‌It‌‌is‌‌but‌‌a‌‌preference‌‌of‌‌credit‌‌in‌‌ their‌‌favor,‌‌a‌‌preference‌‌in‌‌application.‌‌Consequently,‌‌the‌‌right‌‌of‌‌first‌‌ preference‌ ‌for‌ ‌unpaid‌ ‌wages‌ ‌may‌ ‌not‌ ‌be‌ ‌invoked‌ ‌in‌ ‌this‌ ‌case‌ ‌to‌‌ nullify‌ ‌the‌ ‌foreclosure‌ ‌sales‌‌conducted‌‌pursuant‌‌to‌‌PNB's‌‌right‌‌as‌‌a‌‌ secured‌ ‌creditor‌ ‌to‌ ‌enforce‌ ‌its‌ ‌lien‌ ‌on‌ ‌specific‌ ‌properties‌ ‌of‌ ‌its‌‌ debtor,‌‌ARCAM.‌ ‌ c) have‌ ‌the‌‌requisite‌‌knowledge‌‌of‌‌insolvency‌‌and‌‌other‌‌relevant‌‌ commercial‌‌laws,‌‌rules‌‌and‌‌procedures,‌‌as‌‌well‌‌as‌‌the‌‌relevant‌‌ training‌‌and/or‌‌experience‌‌that‌‌may‌‌be‌‌necessary‌‌to‌‌enable‌‌him‌‌ to‌‌properly‌‌discharge‌‌the‌‌duties‌‌and‌‌obligations‌‌of‌‌a‌‌liquidator;‌‌ and‌ ‌ a) the‌ ‌juridical‌ ‌debtor‌ ‌shall‌ ‌be‌ ‌deemed‌ ‌dissolved‌ ‌and‌ ‌its‌‌ corporate‌‌or‌‌‌juridical‌‌existence‌‌terminated‌;‌ ‌ b) legal‌ ‌title‌ ‌to‌‌and‌‌control‌‌of‌‌all‌‌the‌‌assets‌‌of‌‌the‌‌debtor,‌‌‌except‌‌ those‌ ‌that‌ ‌may‌ ‌be‌ ‌exempt‌ ‌from‌ ‌execution,‌ ‌shall‌ ‌be‌ ‌deemed‌‌ vested‌ ‌in‌ ‌the‌ ‌liquidator‌ ‌or,‌ ‌pending‌ ‌his‌ ‌election‌ ‌or‌‌ appointment,‌w ‌ ith‌‌the‌‌court‌;‌ ‌ unpaid‌ ‌wages,‌ ‌the‌‌Court‌‌has‌‌elucidated‌‌in‌‌the‌‌case‌‌of‌‌‌Development‌‌ Bank‌‌of‌‌the‌‌Philippines‌‌v.‌‌NLRC‌‌that‌‌a‌‌distinction‌‌should‌‌be‌‌made‌‌ between‌‌a‌‌preference‌‌of‌‌credit‌‌and‌‌a‌‌lien.‌‌ ‌ Sec‌‌114‌‌of‌‌RA‌‌10142‌,‌‌the‌‌right‌‌of‌‌a‌‌‌secured‌‌creditor‌‌to‌‌enforce‌‌his‌‌ lien‌‌during‌‌liquidation‌‌proceedings‌‌is‌‌retained.‌ ‌ An‌ ‌individual‌ ‌shall‌ ‌be‌ ‌deemed‌ ‌to‌‌have‌‌a‌‌conflict‌‌of‌‌interest‌‌if‌‌he‌‌is‌‌so‌‌ situated‌ ‌as‌ ‌to‌ ‌be‌ ‌materially‌ ‌influenced‌ ‌in‌ ‌the‌‌exercise‌‌of‌‌his‌‌judgment‌‌ for‌‌or‌‌against‌‌any‌‌party‌‌to‌‌the‌‌proceedings.‌‌ ‌ Without‌‌limiting‌‌the‌‌generality‌‌of‌‌the‌‌foregoing,‌‌an‌‌individual‌‌shall‌‌be‌‌ deemed‌‌to‌‌have‌‌a‌‌conflict‌‌of‌‌interest‌‌if:‌ ‌ a) he‌‌is‌‌a‌‌creditor,‌‌owner,‌‌partner‌‌or‌‌stockholder‌‌of‌‌the‌‌debtor,‌‌or‌‌ of‌‌a‌‌creditor‌‌of‌‌the‌‌debtor;‌ ‌ As‌‌to‌‌petitioner's‌‌argument‌‌on‌‌the‌‌right‌‌of‌‌first‌‌preference‌‌as‌‌regards‌‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 133‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ parties‌ ‌may‌ ‌submit‌ ‌a‌ ‌challenge‌ ‌to‌ ‌a‌ ‌claim‌ ‌or‌ ‌claims‌ ‌to‌ ‌the‌‌ court,‌‌serving‌‌a‌‌certified‌‌copy‌‌on‌‌the‌‌liquidator‌‌and‌‌the‌‌creditor‌‌ holding‌‌the‌‌challenged‌‌claim.‌ ‌ b) he‌‌is‌‌engaged‌‌in‌‌a‌‌line‌‌of‌‌business‌‌which‌‌competes‌‌with‌‌that‌‌of‌‌ the‌‌debtor;‌ ‌ c) he‌ ‌is,‌ ‌or‌ ‌was,‌ ‌within‌ ‌five‌ ‌(5)‌ ‌years‌ ‌from‌ ‌the‌ ‌filing‌ ‌of‌ ‌the‌‌ petition,‌ ‌a‌ ‌director,‌ ‌officer,‌ ‌owner,‌ ‌partner‌ ‌or‌ ‌employee‌‌of‌‌the‌‌ debtor‌ ‌or‌ ‌any‌ ‌of‌ ‌the‌ ‌creditors,‌ ‌or‌ ‌acted‌ ‌as‌ ‌legal‌ ‌counsel‌ ‌or‌‌ auditor‌‌or‌‌accountant‌‌of‌‌the‌‌debtor‌‌or‌‌any‌‌of‌‌the‌‌creditors;‌ ‌ d) he‌ ‌is,‌ ‌or‌ ‌was,‌ ‌within‌ ‌two‌ ‌(2)‌ ‌years‌ ‌from‌ ‌the‌ ‌filing‌ ‌of‌ ‌the‌‌ petition,‌ ‌an‌ ‌underwriter‌ ‌of‌ ‌the‌ ‌outstanding‌ ‌securities‌ ‌of‌ ‌the‌‌ debtor;‌ ‌ e) he‌ ‌is‌ ‌related‌ ‌by‌ ‌consanguinity‌ ‌or‌ ‌affinity‌ ‌within‌ ‌the‌ ‌fourth‌‌ civil‌‌degree‌;‌ ‌ f) he‌ ‌has‌ ‌any‌ ‌other‌ ‌direct‌ ‌or‌ ‌indirect‌ ‌material‌ ‌interest‌ ‌in‌ ‌the‌‌ debtor‌‌or‌‌any‌‌of‌‌the‌‌creditors;‌‌or‌ ‌ g) he‌‌was‌‌the‌‌‌receiver‌‌‌or‌‌member‌‌of‌‌the‌‌management‌‌committee,‌‌ the‌ ‌counsel‌‌or‌‌an‌‌employee‌‌of‌‌either,‌‌when‌‌there‌‌is‌‌a‌‌showing‌‌ that‌‌the‌‌financial‌‌distress‌‌of‌‌the‌‌debtor‌‌was‌‌not‌‌arrested‌‌or‌‌its‌‌ fiscal‌ ‌condition‌ ‌deteriorated‌‌and‌‌resulted‌‌in‌‌its‌‌liquidation‌‌by‌‌ reason‌‌of‌‌his‌‌lack‌‌of‌‌diligence‌‌or‌‌foresight.‌ ‌ and‌ ‌may‌ ‌be‌ ‌subsequently‌ ‌set‌ ‌aside‌ ‌only‌ ‌on‌‌grounds‌‌of‌‌fraud,‌‌ accident,‌‌mistake‌‌or‌‌inexcusable‌‌neglect.‌ ‌ vii.‌‌Liquidation‌‌plan‌ ‌ Within‌ ‌three‌ ‌(3)‌ ‌months‌ ‌from‌ ‌his‌ ‌assumption‌ ‌into‌ ‌office,‌ ‌the‌‌ liquidator‌‌shall‌‌submit‌‌a‌‌Liquidation‌‌Plan‌‌to‌‌the‌‌court.‌‌ ‌ The‌‌Liquidation‌‌Plan‌‌shall,‌‌as‌‌a‌‌minimum,‌ ‌ 1. enumerate‌ ‌all‌ ‌the‌ ‌assets‌ ‌of‌ ‌the‌ ‌debtor‌ ‌not‌ ‌exempt‌ ‌from‌‌ execution,‌‌ ‌ 2. a‌‌list‌‌of‌‌all‌‌creditors‌‌and‌‌their‌‌claims‌‌which‌‌have‌‌been‌‌duly‌‌ proved‌‌as‌‌shown‌‌in‌‌the‌‌final‌‌registry‌‌of‌‌claims,‌‌and‌‌ ‌ have‌ ‌fixed‌ ‌the‌ ‌value‌ ‌of‌ ‌the‌ ‌property‌ ‌subject‌ ‌of‌ ‌their‌‌ security‌ ‌or‌ ‌lien‌ ‌by‌‌agreement‌‌with‌‌the‌‌liquidator‌‌and‌‌ is‌‌admitted‌‌as‌‌a‌‌creditor‌‌for‌‌the‌‌balance,‌ shall‌‌be‌‌considered‌‌as‌u ‌ nsecured‌‌creditors‌.‌ ‌ 2) Right‌ ‌of‌ ‌Set-off.‌ ‌—‌ ‌If‌ ‌the‌ ‌debtor‌ ‌and‌ ‌a‌ ‌creditor‌ ‌are‌‌mutually‌‌ debtor‌ ‌and‌ ‌creditor‌ ‌of‌ ‌each‌ ‌other,‌ ‌one‌ ‌debt‌ ‌shall‌ ‌be‌ ‌set‌ ‌off‌‌ against‌‌the‌‌other,‌‌and‌‌only‌‌the‌‌balance,‌‌if‌‌any,‌‌shall‌‌be‌‌allowed‌‌ in‌‌the‌‌liquidation‌‌proceedings.‌ ‌ 3) Within‌ ‌thirty‌ ‌(30)‌ ‌days‌‌from‌‌the‌‌expiration‌‌of‌‌the‌‌period‌‌for‌‌ filing‌ ‌of‌ ‌applications‌ ‌for‌ ‌recognition‌ ‌of‌ ‌claims,‌ ‌interested‌‌ The‌‌court's‌‌dismissal‌‌of‌‌the‌‌petition‌‌for‌‌suspension‌‌of‌‌payments‌‌on‌‌ the‌ ‌ground‌ ‌of‌ ‌insufficiency‌ ‌in‌‌form‌‌and‌‌substance‌‌resulting‌‌in‌‌the‌‌ non-issuance‌ ‌of‌ ‌a‌ ‌Suspension‌ ‌of‌ ‌Payments‌ ‌Order,‌ ‌and‌ ‌its‌ ‌order‌‌ confirming‌ ‌or‌ ‌disapproving‌ ‌the‌ ‌proposed‌ ‌agreement‌ ‌can‌ ‌only‌ ‌be‌‌ reviewed‌‌through‌‌a‌‌petition‌‌for‌‌certiorari‌‌to‌‌the‌‌CA‌‌under‌‌Rule‌‌ 65‌‌‌of‌‌the‌‌Rules‌‌of‌‌Court‌‌within‌‌fifteen‌‌(15)‌‌days‌‌from‌‌notice‌‌of‌‌the‌‌ decision‌‌or‌‌order.‌ ‌ Motion‌‌for‌‌Reconsideration‌‌in‌‌Liquidation‌‌Proceedings‌ ‌ A‌ ‌party‌ ‌may‌ ‌file‌ ‌a‌ ‌motion‌‌for‌‌reconsideration‌‌of‌‌any‌‌order‌‌issued‌‌ by‌‌the‌‌court‌P ‌ RIOR‌‌to‌‌the‌‌issuance‌‌of‌‌the‌L ‌ iquidation‌‌Order‌.‌‌ ‌ 3. a‌‌proposed‌‌mode‌‌and‌‌schedule‌‌of‌‌liquidation‌‌of‌‌the‌‌assets‌‌ and‌‌payment‌‌of‌‌the‌‌claims.‌‌ ‌ Review‌‌of‌‌Decision‌‌or‌‌Order‌‌in‌‌Liquidation‌‌Proceedings‌ ‌ 4. make‌ ‌provisions‌ ‌for,‌ ‌among‌ ‌others,‌ ‌disputed‌ ‌claims‌ ‌and‌‌ any‌‌action‌‌for‌‌rescission‌‌or‌‌nullity‌‌of‌‌certain‌‌transactions.‌ ‌ Secured‌‌creditors‌‌‌who‌‌have‌‌ ‌ 2. A‌ ‌party‌ ‌may‌ ‌file‌ ‌a‌‌motion‌‌for‌‌reconsideration‌‌of‌‌a‌‌‌Suspension‌‌of‌‌ Payments‌ ‌Order‌,‌ ‌or‌ ‌any‌ ‌order‌ ‌issued‌ ‌by‌ ‌the‌ ‌court‌‌‌PRIOR‌‌‌to‌‌its‌‌ order‌‌confirming‌‌or‌‌disapproving‌‌the‌‌proposed‌‌agreement.‌‌ ‌ 5) The‌‌liquidator‌‌‌shall‌‌resolve‌‌disputed‌‌claims‌‌and‌‌submit‌‌his‌‌ findings‌ ‌thereon‌ ‌to‌ ‌the‌ ‌court‌ ‌for‌ ‌final‌ ‌approval‌.‌ ‌The‌‌ Review‌‌of‌‌Decision‌‌or‌‌Order‌‌in‌‌Suspension‌‌of‌‌Payments‌‌ liquidator‌‌may‌‌disallow‌‌claims.‌ ‌ Proceedings‌ ‌ 1) Within‌‌twenty‌‌(20)‌‌days‌‌from‌‌his‌‌assumption‌‌into‌‌office,‌‌the‌‌ liquidator‌‌shall‌‌establish‌‌a‌‌‌preliminary‌‌registry‌‌of‌‌claims‌‌‌of‌‌ secured‌‌and‌‌unsecured‌‌creditors.‌ ‌ waived‌‌their‌‌security‌‌or‌‌lien,‌‌or‌‌ ‌ An‌‌order‌‌approving‌‌or‌‌disapproving‌‌a‌‌rehabilitation‌‌plan‌‌‌can‌‌only‌‌ be‌ ‌reviewed‌ ‌through‌ ‌a‌ ‌petition‌ ‌for‌ ‌certiorari‌ ‌to‌ ‌the‌ ‌CA‌‌‌under‌‌ Rule‌‌65‌‌of‌‌the‌‌Rules‌‌of‌‌Court‌‌‌within‌‌fifteen‌‌(15)‌‌days‌‌‌from‌‌notice‌‌ of‌‌the‌‌decision‌‌or‌‌order.‌ ‌ 4) Upon‌ ‌the‌ ‌expiration‌ ‌of‌ ‌the‌ ‌thirty‌ ‌(30)-day‌ ‌period,‌ ‌the‌‌ rehabilitation‌‌receiver‌‌shall‌‌submit‌‌to‌‌the‌‌court‌‌the‌‌‌registry‌‌of‌‌ claims‌ ‌containing‌ ‌the‌ ‌undisputed‌ ‌claims‌ ‌that‌ ‌have‌ ‌not‌‌ been‌‌subject‌‌to‌‌challenge‌.‌ ‌ Motion‌‌for‌‌Reconsideration‌‌in‌‌Suspension‌‌of‌‌Payments‌‌ Such‌‌claims‌‌‌shall‌‌become‌‌final‌‌‌upon‌‌the‌‌filing‌‌of‌‌the‌‌register‌‌ Proceedings‌ ‌ vi.‌‌Determination‌‌of‌‌claims‌ ‌ 1. Review‌‌of‌‌Decision‌‌or‌‌Order‌‌on‌‌Rehabilitation‌‌Plan‌ ‌ Remedies‌ ‌ Motion‌‌for‌‌Reconsideration‌ ‌ A‌‌party‌‌may‌‌file‌‌a‌‌motion‌‌for‌‌reconsideration‌‌of‌‌any‌‌order‌‌issued‌‌ by‌‌the‌‌court‌P ‌ RIOR‌‌to‌‌the‌‌approval‌‌of‌‌the‌‌Rehabilitation‌‌Plan‌.‌‌ ‌ The‌‌Liquidation‌‌Order,‌‌and‌‌the‌‌order‌‌approving‌‌or‌‌disapproving‌‌the‌‌ Liquidation‌ ‌Plan‌ ‌can‌ ‌only‌ ‌be‌ ‌reviewed‌ ‌through‌ ‌a‌ ‌petition‌ ‌for‌‌ certiorari‌ ‌to‌ ‌the‌ ‌CA‌‌under‌‌Rule‌‌65‌‌of‌‌the‌‌Rules‌‌of‌‌Court‌‌within‌‌ fifteen‌‌(15)‌‌days‌‌from‌‌notice‌‌of‌‌the‌‌decision‌‌or‌‌order.‌ ‌ NB‌:‌‌ In‌ ‌all‌ ‌Motions‌ ‌for‌ ‌Reconsideration,‌ ‌no‌ ‌relief‌ ‌can‌ ‌be‌‌ extended‌‌to‌‌the‌‌party‌‌aggrieved‌‌by‌‌the‌‌court's‌‌order‌‌on‌‌the‌‌ motion‌ ‌through‌ ‌a‌ ‌special‌ ‌civil‌ ‌action‌ ‌for‌‌certiorari‌‌under‌‌ Rule‌‌65‌‌of‌‌the‌‌Rules‌‌of‌‌Court.‌ ‌ An‌‌order‌‌issued‌‌‌AFTER‌‌‌the‌‌approval‌‌of‌‌the‌‌Rehabilitation‌‌Plan‌‌can‌‌ be‌ ‌reviewed‌ ‌only‌ ‌through‌ ‌a‌ ‌special‌ ‌civil‌ ‌action‌ ‌for‌ ‌certiorari‌‌ Victorio-Aquino‌‌v.‌‌Pacific‌‌Plans‌‌‌2014‌ ‌ under‌‌Rule‌‌65‌o ‌ f‌‌the‌‌Rules‌‌of‌‌Court.‌ ‌ WON‌‌the‌‌CA‌‌correctly‌‌held‌‌that‌‌the‌‌Petition‌‌for‌‌Review‌‌under‌‌Rule‌‌43‌‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 134‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ of‌‌the‌‌Rules‌‌of‌‌Court‌‌is‌‌an‌‌improper‌‌mode‌‌to‌‌question‌‌the‌‌Resolution‌‌ approving‌ ‌the‌ ‌MRP,‌ ‌since‌ ‌the‌ ‌same‌ ‌constitutes‌ ‌merely‌ ‌as‌ ‌an‌‌ interlocutory‌ ‌order‌ ‌and,‌ ‌therefore,‌ ‌a‌ ‌proper‌ ‌subject‌ ‌of‌ ‌a‌ ‌certiorari‌‌ case‌‌under‌‌Rule‌‌65.‌ ‌ Applicable‌ ‌to‌ ‌an‌ ‌act‌ ‌done‌ ‌or‌ ‌practice‌ ‌engaged‌ ‌in‌ ‌and‌ ‌outside‌ ‌of‌ ‌the‌‌ Philippines‌‌if:‌ ‌ 1. NO‌.‌ ‌The‌ ‌approval‌ ‌of‌ ‌the‌ ‌MRP‌ ‌is‌ ‌not‌ ‌merely‌ ‌an‌ ‌interlocutory‌‌ order‌.‌ ‌Here,‌ ‌it‌‌cannot‌‌be‌‌gainsaid‌‌that‌‌the‌‌Resolution‌‌approving‌‌the‌‌ MRP‌‌is‌‌a‌‌final‌‌order‌‌with‌‌respect‌‌to‌‌the‌‌validity‌‌thereof.‌ ‌ Reference:‌‌Miravite,‌‌2019‌ 2. The‌‌act,‌‌practice‌‌or‌‌processing‌‌relates‌‌to‌‌‌personal‌‌data‌‌about‌‌ a‌‌Philippine‌‌citizen‌‌OR‌‌Philippine‌‌resident‌;‌ ‌ 3. The‌ ‌processing‌ ‌of‌ ‌personal‌ ‌data‌ ‌is‌ ‌being‌ ‌done‌ ‌in‌ ‌the‌‌ Philippines;‌‌or‌ ‌ 4. Extraterritorial‌a‌ pplication.‌ ‌ Data‌‌Privacy‌‌Act‌ ‌ RA‌‌No‌‌10173‌‌|‌‌Data‌‌Privacy‌‌Act‌‌of‌‌2012‌ IRR‌‌of‌‌the‌‌Data‌‌Privacy‌‌Act‌‌of‌‌2012‌ ‌ Definition‌‌and‌‌Scope‌ ‌ The‌‌natural‌‌or‌‌juridical‌‌person‌‌‌involved‌‌in‌‌the‌‌processing‌‌of‌‌ personal‌‌data‌‌‌is‌‌found‌‌or‌‌established‌‌in‌‌the‌‌Philippines;‌ ‌ The‌ ‌Act‌ ‌and‌ ‌its‌ ‌Rules‌ ‌SHALL‌ ‌NOT‌ ‌APPLY‌ ‌to‌ ‌the‌ ‌following‌ ‌specified‌‌ information,‌ ‌only‌ ‌to‌ ‌the‌ ‌minimum‌ ‌extent‌ ‌of‌ ‌collection,‌ ‌access,‌ ‌use,‌‌ disclosure‌ ‌or‌ ‌other‌ ‌processing‌ ‌necessary‌ ‌to‌ ‌the‌ ‌purpose,‌ ‌function,‌ ‌or‌‌ activity‌‌concerned‌:‌ ‌ 1. Extraterritorial‌‌Application‌ ‌ Processing‌‌of‌‌Personal‌‌Information‌ ‌ Information‌‌processed‌‌for‌‌purpose‌‌of‌‌allowing‌‌public‌‌access‌‌to‌‌ information‌ ‌that‌ ‌fall‌ ‌within‌ ‌matters‌ ‌of‌ ‌public‌ ‌concern‌,‌‌ pertaining‌‌to:‌ ‌ a. Information‌ ‌about‌ ‌any‌ ‌individual‌ ‌who‌ ‌is‌ ‌or‌ ‌was‌ ‌an‌‌ officer‌ ‌or‌ ‌employee‌ ‌of‌ ‌government‌ ‌that‌ ‌relates‌ ‌to‌‌ his‌‌or‌‌her‌‌position‌‌or‌‌functions;‌ ‌ b. Information‌ ‌about‌ ‌an‌ ‌individual‌ ‌who‌ ‌is‌ ‌or‌ ‌was‌‌ performing‌ ‌a‌ ‌service‌ ‌under‌ ‌contract‌ ‌for‌ ‌a‌‌ government‌‌institution,‌‌but‌‌only‌‌in‌‌so‌‌far‌‌as‌‌it‌‌relates‌‌ to‌‌such‌‌service;‌ ‌ Sensitive‌‌and‌‌privileged‌‌information‌ ‌ Subcontracting‌ ‌ Privileged‌‌communication‌ ‌ Rights‌‌of‌‌Data‌‌Subject‌ ‌ c. Limitation‌‌on‌‌Rights‌ ‌ Information‌ ‌relating‌ ‌to‌ ‌a‌ ‌benefit‌ ‌of‌ ‌a‌ ‌financial‌‌ nature‌ ‌conferred‌ ‌on‌ ‌an‌ ‌individual‌ ‌upon‌ ‌the‌‌ discretion‌‌of‌‌the‌‌government;‌ ‌ Duties‌‌and‌‌Responsibilities‌‌of‌‌PIC‌ ‌ 2. Personal‌ ‌information‌ ‌processed‌ ‌for‌ ‌journalistic‌,‌ ‌artistic‌ ‌or‌‌ literary‌p ‌ urpose;‌ ‌ Security‌‌of‌‌Personal‌‌Information‌ ‌ 3. Personal‌ ‌information‌ ‌that‌ ‌will‌ ‌be‌ ‌processed‌ ‌for‌ ‌research‌‌ purpose;‌ ‌ Principle‌‌of‌‌Accountability‌ ‌ 4. ‌ Definition‌‌and‌‌Scope‌ ‌ Information‌‌necessary‌‌in‌‌order‌‌‌to‌‌carry‌‌out‌‌the‌‌functions‌‌of‌‌ public‌‌authority‌;‌ ‌ 5. Information‌ ‌necessary‌ ‌for‌ ‌banks,‌ ‌other‌ ‌financial‌‌ institutions‌ ‌under‌‌the‌‌jurisdiction‌‌of‌‌the‌‌independent,‌‌central‌‌ monetary‌‌authority‌‌or‌‌BSP;‌ ‌ 6. Personal‌ ‌information‌ ‌originally‌ ‌collected‌‌from‌‌residents‌‌of‌‌ foreign‌ ‌jurisdictions‌ ‌in‌ ‌accordance‌ ‌with‌ ‌the‌ ‌laws‌ ‌of‌ ‌those‌‌ foreign‌ ‌jurisdictions‌ ‌which‌ ‌is‌ ‌being‌ ‌processed‌ ‌in‌ ‌the‌‌ Philippines.‌ ‌ Extraterritorial‌‌Application‌ ‌ 1. The‌ ‌natural‌ ‌or‌ ‌juridical‌ ‌person‌ ‌involved‌ ‌in‌ ‌the‌ ‌processing‌ ‌of‌‌ personal‌‌data‌‌is‌‌found‌‌or‌‌established‌‌in‌‌the‌‌Philippines;‌ ‌ 2. The‌‌act,‌‌practice‌‌or‌‌processing‌‌relates‌‌to‌‌personal‌‌data‌‌about‌‌a‌‌ Philippine‌‌citizen‌‌or‌‌Philippine‌‌resident;‌ ‌ 3. The‌ ‌processing‌ ‌of‌ ‌personal‌ ‌data‌ ‌is‌ ‌being‌ ‌done‌ ‌in‌ ‌the‌‌ Philippines;‌‌or‌ ‌ 4. The‌ ‌act,‌ ‌practice‌ ‌or‌ ‌processing‌ ‌of‌ ‌personal‌ ‌data‌ ‌is‌ ‌done‌ ‌or‌‌ engaged‌‌in‌‌by‌‌an‌‌entity‌‌with‌‌links‌‌to‌‌the‌‌Philippines,‌‌with‌‌due‌‌ consideration‌‌to‌‌international‌‌law‌‌and‌‌comity,‌‌such‌‌as,‌‌but‌‌not‌‌ limited‌‌to,‌‌the‌‌following:‌ ‌ a. Use‌ ‌of‌ ‌equipment‌ ‌located‌ ‌in‌ ‌the‌ ‌country,‌‌or‌‌maintains‌‌an‌‌ office,‌ ‌branch‌ ‌or‌ ‌agency‌ ‌in‌‌the‌‌Philippines‌‌for‌‌processing‌‌ of‌‌personal‌‌data;‌ ‌ b. A‌‌contract‌‌is‌‌entered‌‌in‌‌the‌‌Philippines;‌ ‌ c. A‌‌juridical‌‌entity‌‌unincorporated‌‌in‌‌the‌‌Philippines‌‌but‌‌has‌‌ central‌‌management‌‌and‌‌control‌‌in‌‌the‌‌country;‌ ‌ d. An‌‌entity‌‌that‌‌has‌‌a‌‌branch,‌‌agency,‌‌office‌‌or‌‌subsidiary‌‌in‌‌ the‌‌Philippines‌‌and‌‌the‌‌parent‌‌or‌‌affiliate‌‌of‌‌the‌‌Philippine‌‌ entity‌‌has‌‌access‌‌to‌‌personal‌‌data;‌ ‌ e. An‌‌entity‌‌that‌‌carries‌‌on‌‌business‌‌in‌‌the‌‌Philippines;‌ ‌ f. An‌ ‌entity‌ ‌that‌ ‌collects‌ ‌or‌ ‌holds‌ ‌personal‌ ‌data‌ ‌in‌ ‌the‌‌ Philippines.‌‌(‌§4‌‌Rule‌‌2)‌ ‌ ‌ Processing‌‌of‌‌Personal‌‌Information‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 135‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ General‌‌principles‌ ‌ “‌Personal‌ ‌information‌”‌ ‌refers‌ ‌to‌ ‌any‌ ‌information,‌ ‌whether‌‌ recorded‌ ‌in‌ ‌a‌ ‌material‌ ‌form‌ ‌or‌ ‌not,‌ ‌from‌ ‌which‌‌the‌‌identity‌‌of‌‌an‌‌ individual‌ ‌is‌ ‌apparent‌ ‌or‌ ‌can‌ ‌be‌ ‌reasonably‌ ‌and‌ ‌directly‌‌ ascertained.‌ ‌ The‌‌processing‌‌of‌‌personal‌‌information‌‌shall‌‌be‌‌allowed,‌‌subject‌‌to‌‌ adherence‌‌to‌‌the‌‌principles‌‌of‌‌‌transparency‌,‌‌‌legitimate‌‌purpose‌‌ and‌‌proportionality‌.‌ ‌ a) Transparency‌.‌‌The‌‌data‌‌subject‌‌must‌‌be‌‌aware‌‌of‌‌ ‌ i) ii) f) Criteria‌ ‌for‌ ‌Lawful‌ ‌Processing‌ ‌of‌ ‌Personal‌ ‌Information.‌ ‌—‌ ‌The‌‌ processing‌ ‌of‌ ‌personal‌ ‌information‌ ‌shall‌ ‌be‌ ‌permitted‌ ‌only‌ ‌if‌ ‌not‌‌ otherwise‌ ‌prohibited‌ ‌by‌ ‌law,‌ ‌and‌ ‌when‌ ‌at‌ ‌least‌ ‌one‌ ‌of‌ ‌the‌ ‌following‌‌ conditions‌‌exists:‌ ‌ a) The‌‌data‌‌subject‌‌has‌‌given‌‌his‌‌or‌‌her‌c‌ onsent‌;‌ ‌ b) The‌ ‌processing‌ ‌of‌ ‌personal‌ ‌information‌ ‌is‌ ‌necessary‌ ‌and‌ ‌is‌‌ related‌‌to‌‌the‌‌fulfillment‌‌of‌‌a‌c‌ ontract‌;‌ ‌ including‌‌the‌‌risks‌‌and‌‌safeguards‌‌involved,‌‌ ‌ c) The‌ ‌processing‌ ‌is‌ ‌necessary‌ ‌for‌ ‌compliance‌ ‌with‌ ‌a‌ ‌legal‌‌ obligation‌‌‌to‌‌which‌‌the‌‌PIC‌‌is‌‌subject;‌ ‌ the‌‌identity‌‌of‌‌the‌P ‌ IC‌,‌‌ ‌ iv) his‌‌or‌‌her‌‌rights‌‌as‌‌a‌‌data‌‌subject,‌‌and‌‌ ‌ v) how‌‌these‌‌can‌‌be‌‌exercised.‌‌ ‌ b) Legitimate‌ ‌purpose‌.‌ ‌Shall‌ ‌be‌ ‌compatible‌ ‌with‌ ‌a‌ ‌declared‌‌ and‌ ‌specified‌ ‌purpose‌ ‌which‌ ‌must‌ ‌not‌ ‌be‌ ‌contrary‌ ‌to‌ ‌law,‌‌ morals,‌‌or‌‌public‌‌policy.‌ ‌ c) Proportionality‌.‌ ‌Shall‌ ‌be‌ ‌adequate,‌ ‌relevant,‌ ‌suitable,‌‌ necessary,‌ ‌and‌ ‌not‌ ‌excessive‌ ‌in‌ ‌relation‌ ‌to‌ ‌a‌ ‌declared‌ ‌and‌‌ specified‌‌purpose.‌‌Personal‌‌data‌‌shall‌‌be‌‌processed‌‌only‌‌if‌‌the‌‌ purpose‌‌could‌‌not‌‌reasonably‌‌be‌‌fulfilled‌‌by‌‌other‌‌means.‌ ‌ Personal‌‌information‌‌must,‌‌be:‌ ‌ a) Collected‌‌for‌‌specified‌‌and‌‌legitimate‌‌purposes‌‌determined‌‌ and‌‌declared‌‌before,‌‌or‌‌as‌‌soon‌‌as‌‌reasonably‌‌practicable‌‌after‌‌ collection;‌ ‌ b) Processed‌‌fairly‌‌and‌‌lawfully;‌ ‌ c) Accurate,‌‌relevant‌‌‌and,‌‌kept‌u ‌ p‌‌to‌‌date‌;‌ ‌ d) Adequate‌ ‌and‌ ‌not‌ ‌excessive‌ ‌in‌ ‌relation‌ ‌to‌ ‌the‌ ‌purposes‌ ‌for‌‌ which‌‌they‌‌are‌‌collected‌‌and‌‌processed;‌ ‌ 3) Issued‌ ‌by‌ ‌government‌ ‌agencies‌ ‌peculiar‌ ‌to‌ ‌an‌ ‌individual‌‌ which‌ ‌includes,‌ ‌but‌ ‌not‌ ‌limited‌ ‌to,‌ ‌social‌ ‌security‌ ‌numbers,‌‌ previous‌ ‌or‌ ‌current‌ ‌health‌ ‌records,‌ ‌licenses‌ ‌or‌ ‌its‌ ‌denials,‌‌ suspension‌‌or‌‌revocation,‌‌and‌‌tax‌‌returns;‌‌and‌ ‌ Kept‌‌in‌‌a‌‌form‌‌which‌‌permits‌‌identification‌‌of‌‌data‌‌subjects‌‌for‌‌ no‌‌longer‌‌than‌‌is‌‌necessary.‌ ‌ the‌‌nature,‌‌purpose,‌‌and‌‌extent‌‌of‌‌the‌‌‌processing‌‌‌of‌‌his‌‌ or‌‌her‌‌personal‌‌data,‌‌ ‌ iii) the‌‌disposal‌‌of‌‌such‌‌proceedings,‌‌or‌‌the‌‌‌sentence‌‌‌of‌‌any‌‌court‌‌ in‌‌such‌‌proceedings;‌ ‌ e) Retained‌‌only‌‌for‌‌as‌‌long‌‌as‌‌necessary‌‌for‌‌the‌‌fulfillment‌‌of‌‌ the‌‌purposes‌‌for‌‌which‌‌the‌‌data‌‌was‌‌obtained;‌‌and‌ ‌ d) The‌ ‌processing‌ ‌is‌ ‌necessary‌ ‌to‌ ‌protect‌ ‌vitally‌ ‌important‌‌ interests‌‌‌of‌‌the‌‌data‌‌subject,‌‌including‌‌life‌‌and‌‌health;‌ ‌ 4) Specifically‌ ‌established‌ ‌by‌ ‌an‌ ‌executive‌ ‌order‌ ‌or‌ ‌an‌ ‌act‌ ‌of‌‌ Congress‌‌‌to‌‌be‌‌kept‌‌classified.‌ ‌ GR‌:‌ The‌ ‌processing‌ ‌of‌ ‌sensitive‌ ‌personal‌ ‌and‌ ‌privileged‌‌ information‌‌is‌‌prohibited‌.‌ ‌ EXC‌:‌ ‌in‌‌any‌‌of‌‌the‌‌following‌‌cases:‌ ‌ 1. Consent‌i‌ s‌‌given‌‌by‌‌data‌‌subject;‌ ‌ 2. The‌ ‌processing‌ ‌is‌ ‌provided‌ ‌for‌ ‌by‌ ‌existing‌ ‌laws‌ ‌and‌‌ regulations‌;‌ ‌ 3. The‌‌processing‌‌is‌‌necessary‌‌to‌‌protect‌‌the‌‌life‌‌and‌‌health‌‌of‌‌ the‌‌data‌‌subject‌‌or‌‌another‌‌person,‌‌‌AND‌‌‌the‌‌data‌‌subject‌‌is‌‌not‌‌ legally‌‌or‌‌physically‌‌able‌‌to‌‌express‌‌his‌‌or‌‌her‌‌consent‌‌prior‌‌to‌‌ the‌‌processing;‌ ‌ 4. The‌ ‌processing‌ ‌is‌ ‌necessary‌ ‌to‌ ‌achieve‌ ‌the‌ ‌lawful‌ a ‌ nd‌‌ noncommercial‌ ‌objectives‌ ‌of‌ ‌public‌ ‌organizations‌ ‌and‌‌ their‌‌associations‌‌provided‌‌that:‌ ‌ e) The‌ ‌processing‌ ‌is‌ ‌necessary‌ ‌in‌ ‌order‌ ‌to‌ ‌respond‌ ‌to‌ ‌national‌‌ emergency‌;‌‌or‌ ‌ f) The‌‌processing‌‌is‌‌necessary‌‌for‌‌the‌‌purposes‌‌of‌‌the‌‌legitimate‌‌ interests‌ ‌pursued‌ ‌by‌ ‌the‌ ‌PIC‌ ‌or‌‌by‌‌a‌‌third‌‌party‌‌or‌‌parties‌‌to‌‌ whom‌‌the‌‌data‌‌is‌‌disclosed,‌‌ ‌ except‌ ‌where‌ ‌such‌ ‌interests‌ ‌are‌ ‌overridden‌ ‌by‌ ‌fundamental‌‌ rights‌‌and‌‌freedoms‌o ‌ f‌‌the‌‌data‌‌subject.‌ ‌ Sensitive‌‌and‌‌privileged‌‌information‌ ‌ Privileged‌ ‌information‌ ‌refers‌‌to‌‌any‌‌and‌‌all‌‌forms‌‌of‌‌data‌‌which‌‌ under‌ ‌the‌ ‌Rules‌ ‌of‌ ‌Court‌ ‌and‌ ‌other‌ ‌pertinent‌ ‌laws‌ ‌constitute‌‌ privileged‌‌communication.‌ ‌ Sensitive‌‌personal‌‌information‌r‌ efers‌‌to‌‌personal‌‌information:‌ ‌ 1) About‌‌an‌‌individual’s‌‌‌race‌,‌‌‌ethnic‌‌‌origin,‌‌‌marital‌‌status‌,‌‌‌age‌,‌‌ color‌,‌‌and‌‌religious,‌‌philosophical‌‌or‌‌political‌a ‌ ffiliations‌;‌ ‌ 2) About‌ ‌an‌ ‌individual’s‌ ‌health‌,‌ ‌education‌,‌ ‌genetic‌ ‌or‌ ‌sexual‌‌ life‌ ‌of‌ ‌a‌ ‌person,‌ ‌or‌ ‌to‌ ‌any‌ ‌proceeding‌ ‌for‌ ‌any‌ ‌offense‌‌ committed‌‌or‌‌alleged‌‌to‌‌have‌‌been‌‌committed‌‌by‌‌such‌‌person,‌‌ a. Processing‌ ‌is‌ ‌confined‌ ‌and‌ ‌related‌ ‌to‌ ‌the‌ ‌bona‌ ‌fide‌‌ members‌‌of‌‌these‌‌organizations‌‌or‌‌their‌‌associations;‌ ‌ b. The‌ ‌sensitive‌ ‌personal‌ ‌information‌ ‌are‌ ‌not‌‌ transferred‌‌‌to‌‌third‌‌parties;‌‌and‌ ‌ c. Consent‌ ‌of‌ ‌the‌ ‌data‌ ‌subject‌ ‌was‌ ‌obtained‌ ‌prior‌ ‌to‌‌ processing;‌ ‌ 5. The‌ ‌processing‌ ‌is‌ ‌necessary‌ ‌for‌ ‌the‌ ‌purpose‌ ‌of‌ ‌medical‌‌ treatment‌;‌‌or‌ ‌ 6. The‌ ‌processing‌ ‌concerns‌ ‌sensitive‌ ‌personal‌ ‌information‌ ‌or‌‌ privileged‌‌information‌n ‌ ecessary‌‌for‌‌ ‌ a. the‌ ‌protection‌ ‌of‌ ‌lawful‌ ‌rights‌ ‌and‌ ‌interests‌ ‌of‌‌ natural‌‌or‌‌legal‌‌persons‌‌in‌‌court‌‌proceedings,‌‌or‌‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 136‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ b. the‌‌establishment,‌‌exercise,‌‌or‌‌defense‌‌of‌‌legal‌‌claims,‌‌ or‌‌ ‌ c. when‌ ‌provided‌ ‌to‌ ‌government‌ ‌or‌ ‌public‌ ‌authority‌‌ pursuant‌‌to‌‌a‌‌constitutional‌‌or‌‌statutory‌‌mandate.‌ ‌ Right‌‌to‌‌be‌‌Furnished‌ ‌ 2. Sources‌f‌ rom‌‌which‌‌personal‌‌data‌‌were‌‌obtained;‌ ‌ 3. Names‌‌and‌‌addresses‌‌of‌r‌ ecipients‌o ‌ f‌‌the‌‌personal‌‌data;‌ ‌ 4. Manner‌‌by‌‌which‌‌such‌‌data‌‌were‌‌processed;‌ ‌ 5. Reasons‌‌‌for‌‌the‌‌disclosure‌‌of‌‌the‌‌personal‌‌data‌‌to‌‌recipients,‌‌if‌‌ any;‌ ‌ b) Purposes‌ ‌for‌ ‌which‌ ‌they‌ ‌are‌ ‌being‌ ‌or‌‌will‌‌be‌‌processed,‌‌ including‌ ‌processing‌ ‌for‌ ‌direct‌ ‌marketing,‌ ‌profiling‌ ‌or‌‌ historical,‌‌statistical‌‌or‌‌scientific‌‌purpose;‌ ‌ 6. Information‌ ‌on‌ ‌automated‌‌processes‌‌where‌‌the‌‌data‌‌will,‌‌or‌‌ is‌ ‌likely‌ ‌to,‌ ‌be‌ ‌made‌ ‌as‌ ‌the‌ ‌sole‌ ‌basis‌ ‌for‌ ‌any‌ ‌decision‌ ‌that‌‌ significantly‌‌affects‌‌or‌‌will‌‌affect‌‌the‌‌data‌‌subject;‌ c) Basis‌ ‌of‌ ‌processing,‌ ‌when‌‌‌processing‌‌is‌‌not‌‌based‌‌on‌‌the‌ consent‌‌of‌‌the‌‌data‌‌subject;‌ ‌ 7. Date‌‌‌when‌‌his‌‌or‌‌her‌‌personal‌‌data‌‌concerning‌‌the‌‌data‌‌subject‌‌ were‌‌last‌‌accessed‌‌and‌‌modified;‌‌and‌ ‌ d) Scope‌‌and‌‌method‌‌‌of‌‌the‌‌personal‌‌data‌‌processing;‌ ‌ 8. The‌‌designation,‌‌name‌‌or‌‌identity,‌‌and‌‌address‌‌of‌‌the‌P ‌ IC‌.‌ ‌ The‌ ‌data‌ ‌subject‌ ‌shall‌ ‌be‌ ‌notified‌ ‌and‌ ‌furnished‌‌with‌‌information‌‌ before‌ ‌the‌ ‌entry‌ ‌of‌ ‌his‌ ‌or‌ ‌her‌ ‌personal‌ ‌data‌ ‌into‌ ‌the‌ ‌processing‌‌ system‌‌of‌‌the‌P ‌ IC‌,‌‌or‌‌at‌‌the‌‌next‌‌practical‌‌opportunity:‌ ‌ a) Description‌ ‌of‌ ‌the‌ ‌personal‌ ‌data‌ ‌to‌ ‌be‌ ‌entered‌ ‌into‌ ‌the‌‌ system;‌ ‌ Subcontracting‌ ‌ A‌ ‌PIC‌ ‌may‌ ‌subcontract‌ ‌or‌ ‌outsource‌ ‌the‌ ‌processing‌ ‌of‌ ‌personal‌‌ data:‌ ‌Provided‌,‌ ‌that‌ ‌the‌ ‌PIC‌ ‌shall‌ ‌use‌ ‌contractual‌ ‌or‌ ‌other‌‌ reasonable‌ ‌means‌ ‌to‌‌ensure‌‌that‌‌proper‌‌safeguards‌‌are‌‌in‌‌place,‌‌to‌‌ ensure‌‌the‌‌confidentiality,‌‌integrity‌‌and‌‌availability‌‌of‌‌the‌‌personal‌‌ data‌‌processed.‌ ‌ Privileged‌‌communication‌ ‌ Extension‌ ‌of‌ ‌Privileged‌ ‌Communication.‌ ‌PICs‌ ‌may‌ ‌invoke‌ ‌the‌‌ principle‌‌of‌‌privileged‌‌communication‌‌over‌‌privileged‌‌information‌‌ that‌ ‌they‌ ‌lawfully‌ ‌control‌ ‌or‌ ‌process.‌ ‌Subject‌‌to‌‌existing‌‌laws‌‌and‌‌ regulations,‌ ‌any‌ ‌evidence‌ ‌gathered‌ ‌from‌ ‌privileged‌ ‌information‌‌is‌‌ inadmissible.‌ ‌ e) The‌ ‌recipients‌ ‌or‌ ‌classes‌ ‌of‌ ‌recipients‌ ‌to‌ ‌whom‌ ‌the‌‌ personal‌‌data‌‌are‌‌or‌‌may‌‌be‌‌disclosed;‌ ‌ f) Methods‌‌utilized‌‌for‌‌automated‌‌access;‌ ‌ g) The‌ ‌identity‌ ‌and‌ ‌contact‌ ‌details‌ ‌of‌ ‌the‌ ‌personal‌ ‌data‌‌ controller‌‌‌or‌‌its‌‌representative;‌ ‌ Rights‌‌of‌‌Data‌‌Subject‌ ‌ h) The‌‌period‌‌for‌‌which‌‌the‌‌information‌‌will‌‌be‌s‌ tored‌;‌‌and‌ ‌ The‌ ‌Data‌ ‌Subject‌ ‌is‌ ‌the‌ ‌individual‌ ‌whose‌ ‌personal‌ ‌information‌ ‌is‌‌ processed.‌‌The‌‌data‌‌subject‌‌is‌‌entitled‌‌to‌‌the‌‌following‌‌rights:‌ ‌ i) The‌ ‌existence‌ ‌of‌ ‌their‌‌rights‌‌as‌‌data‌‌subjects,‌‌including‌‌ the‌‌right‌‌to‌‌access,‌‌correction,‌‌and‌‌object‌‌to‌‌the‌‌processing,‌‌ as‌‌well‌‌as‌‌the‌‌right‌‌to‌‌lodge‌‌a‌‌complaint‌‌before‌‌the‌‌NPC.‌ ‌ Right‌‌to‌‌Rectification‌ ‌ The‌‌data‌‌subject‌‌has‌‌the‌‌right‌‌to‌‌dispute‌‌the‌‌inaccuracy‌‌or‌‌error‌‌ in‌ ‌the‌ ‌personal‌ ‌data‌ ‌and‌ ‌have‌ ‌the‌ ‌PIC‌‌‌correct‌‌‌it‌‌immediately‌‌and‌‌ accordingly,‌ ‌unless‌ ‌the‌ ‌request‌ ‌is‌ ‌vexatious‌ ‌or‌ ‌otherwise‌‌ unreasonable.‌‌If‌‌the‌‌personal‌‌data‌‌has‌‌been‌‌corrected,‌‌the‌‌‌PIC‌‌shall‌‌ ensure‌ ‌the‌ ‌accessibility‌ ‌of‌ ‌both‌ ‌the‌ ‌new‌ ‌and‌ ‌the‌ ‌retracted‌‌ information‌ ‌and‌ ‌the‌ ‌simultaneous‌ ‌receipt‌ ‌of‌ ‌the‌ ‌new‌ ‌and‌ ‌the‌‌ retracted‌‌information‌‌by‌‌the‌‌intended‌‌recipients‌‌thereof.‌ ‌ Right‌‌to‌‌Erasure‌‌or‌‌Blocking‌ ‌ 1. To‌‌be‌I‌ nformed‌;‌ ‌ 2. To‌‌be‌F ‌ urnished‌;‌ ‌ Right‌‌to‌‌Object‌ ‌ 3. To‌O ‌ bject‌;‌ ‌ 4. To‌A ‌ ccess‌;‌ ‌ When‌ ‌a‌ ‌data‌ ‌subject‌ ‌objects‌ ‌or‌ ‌withholds‌ ‌consent,‌ ‌the‌ ‌PIC‌ ‌shall‌ ‌NO‌‌ longer‌‌process‌‌the‌‌personal‌‌data,‌u ‌ nless‌:‌ ‌ 5. To‌R ‌ ectification‌;‌ ‌ 1. The‌‌personal‌‌data‌‌is‌‌needed‌‌pursuant‌‌to‌‌a‌s‌ ubpoena‌;‌ ‌ 6. To‌E ‌ rasure‌o ‌ r‌‌Blocking;‌ ‌ 2. The‌‌collection‌‌and‌‌processing‌‌are‌f‌ or‌‌obvious‌‌purposes‌;‌‌or‌ ‌ b) The‌‌personal‌‌data‌‌is‌‌being‌‌‌used‌‌for‌‌purpose‌‌not‌‌authorized‌‌ by‌‌the‌‌data‌‌subject;‌ ‌ 7. To‌D ‌ amages‌;‌ ‌ 3. 8. To‌D ‌ ata‌‌Portability.‌ ‌ The‌‌information‌‌is‌‌being‌‌collected‌‌and‌‌processed‌‌as‌‌a‌‌result‌‌of‌‌ a‌‌‌legal‌‌obligation‌.‌ ‌ c) The‌‌personal‌‌data‌‌is‌‌‌no‌‌longer‌‌necessary‌‌for‌‌the‌‌purposes‌‌for‌‌ which‌‌they‌‌were‌‌collected;‌ ‌ Right‌‌to‌‌be‌‌Informed‌ ‌ This‌‌right‌‌may‌‌be‌‌exercised‌‌upon‌‌discovery‌‌and‌‌substantial‌‌proof‌‌of‌‌any‌‌ of‌‌the‌‌following:‌ ‌ Right‌‌to‌‌Access‌ ‌ The‌‌data‌‌subject‌‌has‌‌the‌‌‌right‌‌to‌‌reasonable‌‌access‌‌to,‌‌‌upon‌‌demand‌,‌‌ The‌‌data‌‌subject‌‌has‌‌a‌‌‌right‌‌to‌‌be‌‌informed‌‌whether‌‌personal‌‌data‌‌ the‌‌following:‌ ‌ pertaining‌‌to‌‌him‌‌or‌‌her‌‌shall‌‌be,‌‌are‌‌being,‌‌or‌‌have‌‌been‌‌processed,‌‌ 1. Contents‌o ‌ f‌‌his‌‌or‌‌her‌‌personal‌‌data‌‌that‌‌were‌‌processed;‌ ‌ including‌‌the‌‌existence‌‌of‌‌automated‌‌decision-making‌‌and‌‌profiling.‌ ‌ a) The‌ ‌personal‌ ‌data‌ ‌is‌ ‌incomplete‌,‌ ‌outdated‌,‌ ‌false‌,‌ ‌or‌‌ unlawfully‌‌obtained;‌ ‌ d) The‌ ‌data‌ ‌subject‌ ‌withdraws‌ ‌consent‌ ‌or‌ ‌objects‌ ‌to‌ ‌the‌‌ processing,‌ ‌and‌ ‌there‌ ‌is‌ ‌no‌ ‌other‌ ‌legal‌ ‌ground‌ ‌or‌ ‌overriding‌‌ legitimate‌‌interest‌‌for‌‌the‌‌processing;‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 137‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ e) The‌ ‌personal‌ ‌data‌ ‌concerns‌ ‌private‌ ‌information‌ ‌that‌ ‌is‌‌ prejudicial‌ ‌to‌ ‌data‌ ‌subject,‌ ‌unless‌ ‌justified‌ ‌by‌ ‌freedom‌ ‌of‌‌ speech,‌‌of‌‌expression,‌‌or‌‌of‌‌the‌‌press‌‌or‌‌otherwise‌‌authorized;‌ ‌ f) The‌‌processing‌‌is‌u ‌ nlawful‌;‌ ‌ g) The‌ ‌PIC‌‌or‌‌personal‌‌information‌‌processor‌‌violated‌‌the‌‌rights‌ of‌‌the‌‌data‌‌subject.‌ ‌ The‌ ‌PIC‌ ‌may‌ ‌notify‌ ‌third‌ ‌parties‌ ‌who‌ ‌have‌ ‌previously‌ ‌received‌ ‌such‌‌ processed‌‌personal‌‌information.‌ ‌ Right‌‌to‌‌Damages‌ ‌ Provided‌ ‌that‌ ‌the‌ ‌personal‌ ‌data‌ ‌shall‌ ‌be‌ ‌held‌ ‌under‌ ‌strict‌‌ confidentiality‌a‌ nd‌‌shall‌‌be‌‌used‌‌only‌‌for‌‌the‌‌declared‌‌purpose.‌‌ ‌ when‌ ‌the‌ ‌data‌ ‌subject‌ ‌is‌ ‌incapacitated‌ ‌or‌ ‌incapable‌ ‌of‌‌ exercising‌‌his‌‌rights.‌ ‌ Right‌‌to‌‌Data‌‌Portability‌ ‌ Where‌ ‌his‌ ‌or‌ ‌her‌ ‌personal‌ ‌data‌ ‌is‌ ‌processed‌ ‌by‌‌electronic‌‌means‌‌ and‌ ‌in‌ ‌a‌ ‌structured‌ ‌and‌ ‌commonly‌ ‌used‌ ‌format,‌ ‌the‌ ‌data‌ ‌subject‌‌ shall‌‌have‌‌the‌‌‌right‌‌to‌‌obtain‌‌from‌‌the‌‌PIC‌‌‌a‌‌copy‌‌of‌‌such‌‌data‌‌in‌‌ an‌ ‌electronic‌ ‌or‌ ‌structured‌ ‌format‌ ‌that‌ ‌is‌ ‌commonly‌ ‌used‌ ‌and‌‌ allows‌‌for‌‌further‌‌use‌‌by‌‌the‌‌data‌‌subject.‌‌ ‌ Limitation‌‌on‌‌Rights‌ ‌ The‌ ‌aforementioned‌ ‌shall‌ ‌not‌ ‌be‌ ‌applicable‌ ‌if‌ ‌the‌ ‌processed‌‌ personal‌‌data‌‌are‌‌ ‌ 1. used‌ ‌only‌ ‌for‌ ‌the‌ ‌needs‌ ‌of‌ ‌scientific‌ ‌and‌ ‌statistical‌‌ research‌‌‌and,‌‌ ‌ 2. on‌‌the‌‌basis‌‌of‌‌such,‌‌‌no‌‌activities‌‌are‌‌carried‌‌out‌‌‌and‌‌ ‌ 3. no‌‌decisions‌‌are‌‌taken‌‌‌regarding‌‌the‌‌data‌‌subject:‌‌ ‌ Each‌‌‌PIC‌‌‌is‌‌‌responsible‌‌‌for‌‌personal‌‌information‌‌under‌‌its‌‌control‌‌ or‌ ‌custody,‌ ‌including‌ ‌information‌ ‌that‌ ‌have‌‌been‌‌transferred‌‌to‌‌a‌‌ third‌‌party‌‌for‌‌processing,‌‌whether‌‌domestically‌‌or‌‌internationally,‌‌ subject‌‌to‌‌cross-border‌‌arrangement‌‌and‌‌cooperation.‌ ‌ The‌‌said‌‌rights‌‌are‌‌also‌‌not‌‌applicable‌‌to‌‌the‌‌processing‌‌of‌‌personal‌‌ data‌ ‌gathered‌ ‌for‌ ‌the‌ ‌purpose‌ ‌of‌‌‌investigations‌‌‌in‌‌relation‌‌to‌‌any‌‌ criminal,‌ ‌administrative‌ ‌or‌ ‌tax‌ ‌liabilities‌ ‌of‌ ‌a‌ ‌data‌ ‌subject.‌ ‌Any‌‌ limitations‌ ‌on‌ ‌the‌ ‌rights‌ ‌of‌ ‌the‌ ‌data‌ ‌subject‌ ‌shall‌ ‌only‌ ‌be‌ ‌to‌ ‌the‌‌ minimum‌‌extent‌‌necessary‌‌to‌‌achieve‌‌the‌‌purpose‌‌of‌‌said‌‌research‌‌ or‌‌investigation.‌ ‌ a) The‌ ‌PIC‌ ‌is‌ ‌accountable‌ ‌for‌ ‌complying‌ ‌with‌ ‌the‌‌ requirements‌‌of‌‌the‌‌Act‌‌and‌‌shall‌‌use‌‌contractual‌‌or‌‌other‌‌ reasonable‌ ‌means‌ ‌to‌ ‌provide‌ ‌a‌ ‌comparable‌ ‌level‌ ‌of‌‌ protection‌‌while‌‌the‌‌information‌‌are‌‌being‌‌processed‌‌by‌‌a‌‌ third‌‌party.‌ ‌ Duties‌‌and‌‌Responsibilities‌‌of‌‌PIC‌ ‌ The‌ ‌data‌ ‌subject‌ ‌shall‌ ‌be‌ ‌indemnified‌ ‌for‌ ‌any‌ ‌damages‌ ‌sustained‌‌ Security‌‌of‌‌Personal‌‌Information‌ ‌ due‌ ‌to‌ ‌such‌ ‌inaccurate,‌ ‌incomplete,‌ ‌outdated,‌ ‌false,‌ ‌unlawfully‌‌ a) The‌‌‌PIC‌‌‌must‌‌implement‌‌reasonable‌‌and‌‌appropriate‌‌measures‌‌ obtained‌ ‌or‌‌unauthorized‌‌use‌‌of‌‌personal‌‌data,‌‌taking‌‌into‌‌account‌‌ intended‌‌for‌‌the‌‌protection‌‌of‌‌personal‌‌information‌‌against‌‌any‌‌ any‌‌violation‌‌of‌‌his‌‌or‌‌her‌‌rights‌‌and‌‌freedoms‌‌as‌‌data‌‌subject.‌ ‌ accidental‌ ‌or‌ ‌unlawful‌ ‌destruction,‌ ‌alteration‌ ‌and‌ ‌disclosure,‌‌ Transmissibility‌ ‌of‌ ‌Rights‌ ‌of‌ ‌the‌ ‌Data‌ ‌Subject‌ ‌—‌ ‌The‌ ‌lawful‌ ‌heirs‌‌ as‌‌well‌‌as‌‌against‌‌any‌‌other‌‌unlawful‌‌processing.‌ ‌ and‌‌assigns‌‌of‌‌the‌‌data‌‌subject‌‌may‌‌invoke‌‌the‌‌rights‌‌of‌‌the‌‌data‌‌subject‌‌ b) The‌ ‌PIC‌ ‌must‌ ‌further‌ ‌ensure‌ ‌that‌ ‌third‌ ‌parties‌ ‌processing‌‌ to‌‌which‌‌he‌‌or‌‌she‌‌is‌‌an‌‌heir‌‌or‌‌an‌‌assignee,‌‌ ‌ personal‌‌information‌‌on‌‌its‌‌behalf‌‌shall‌‌implement‌‌the‌‌security‌‌ 1. at‌‌any‌‌time‌‌after‌‌the‌d ‌ eath‌‌of‌‌the‌‌data‌‌subject,‌‌or‌‌ ‌ measures‌‌required‌‌by‌‌this‌‌provision.‌ ‌ 2. Principle‌‌of‌‌Accountability‌ ‌ c) The‌ ‌employees,‌ ‌agents‌ ‌or‌ ‌representatives‌ ‌of‌ ‌a‌ ‌PIC‌ ‌who‌ ‌are‌‌ involved‌ ‌in‌ ‌the‌ ‌processing‌ ‌of‌ ‌personal‌ ‌information‌ ‌shall‌‌ operate‌ ‌and‌ ‌hold‌ ‌personal‌ ‌information‌ ‌under‌ ‌strict‌‌ confidentiality‌‌if‌‌the‌‌personal‌‌information‌‌are‌‌not‌‌intended‌‌for‌‌ public‌‌disclosure.‌‌ ‌ This‌ ‌obligation‌ ‌shall‌ ‌continue‌ ‌even‌ ‌after‌ ‌leaving‌ ‌the‌‌ public‌ ‌service‌,‌ ‌transfer‌ ‌to‌ ‌another‌ ‌position‌ ‌or‌ ‌upon‌‌ termination‌‌of‌‌employment‌‌or‌‌contractual‌‌relations.‌ ‌ d) The‌ ‌PIC‌ ‌shall‌ ‌promptly‌ ‌notify‌ ‌the‌ ‌NPC‌ ‌and‌ ‌affected‌ ‌data‌‌ subjects‌ ‌when‌ ‌sensitive‌ ‌personal‌ ‌information‌ ‌or‌ ‌other‌‌ information‌ ‌that‌ ‌may‌ ‌be‌ ‌used‌ ‌to‌ ‌enable‌ ‌identity‌ ‌fraud‌ ‌are‌‌ reasonably‌‌believed‌‌to‌‌have‌‌been‌‌acquired‌‌by‌‌an‌‌unauthorized‌‌ person,‌‌and‌‌the‌‌‌PIC‌‌or‌‌the‌‌NPC‌‌believes‌‌that‌‌such‌‌unauthorized‌‌ acquisition‌ ‌is‌ ‌likely‌ ‌to‌ ‌give‌ ‌rise‌ ‌to‌ ‌a‌ ‌real‌ ‌risk‌ ‌of‌ ‌serious‌‌ harm‌‌to‌‌any‌‌affected‌‌data‌‌subject.‌ ‌ b) The‌ ‌PIC‌ ‌shall‌ ‌designate‌ ‌an‌‌individual‌‌or‌‌individuals‌‌who‌‌ are‌‌accountable‌‌for‌‌the‌‌organization’s‌‌compliance‌‌with‌‌the‌‌ Act.‌‌The‌‌identity‌‌of‌‌the‌‌individual(s)‌‌so‌‌designated‌‌shall‌‌be‌‌ made‌‌known‌‌to‌‌any‌‌data‌‌subject‌‌upon‌‌request.‌ ‌ ‌ Philippine‌‌Competition‌‌Act‌ ‌ RA‌‌No‌‌10667‌‌|‌‌Philippine‌‌Competition‌‌Act‌ Rules‌‌and‌‌Regulations‌‌Implementing‌‌the‌‌Philippine‌‌Competition‌‌Act‌ Definition‌‌and‌‌Scope‌‌of‌‌Application‌ ‌ Philippine‌‌Competition‌‌Commission‌‌(PCC)‌ ‌ Nolo‌‌Contendere‌ ‌ Non-Adversarial‌‌Remedies‌ ‌ Prohibited‌‌Acts‌ ‌ Anti-competitive‌‌agreements‌ ‌ Abuse‌‌of‌‌dominant‌‌position‌ ‌ Prohibited‌‌mergers‌‌and‌‌acquisitions‌ ‌ Covered‌‌Transactions‌ ‌ Thresholds‌‌for‌‌Compulsory‌‌Notification‌ ‌ Notifying‌‌entity‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 138‌o ‌ f‌‌‌249‌ ‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ necessary‌‌for‌‌the‌‌adoption‌‌of‌‌any‌‌rule,‌‌ruling,‌‌order,‌‌resolution,‌‌ decision‌‌or‌‌other‌‌acts‌‌of‌‌the‌‌PCC.‌ ‌ Process‌‌Under‌‌Compulsory‌‌Notification‌ ‌ Motu‌‌Proprio‌‌Review‌ ‌ Exceptions‌ ‌ The‌‌Relevant‌‌Market‌ ‌ Control‌‌or‌‌Dominance‌‌of‌‌Market‌ ‌ Anti-Competitive‌‌Conduct‌ ‌ The‌ ‌PCC‌ ‌shall‌ ‌have‌ ‌original‌ ‌and‌ ‌primary‌ ‌jurisdiction‌ ‌over‌ ‌the‌‌ enforcement‌ ‌and‌ ‌implementation‌ ‌of‌ ‌the‌ ‌provisions‌‌of‌‌this‌‌Act,‌‌and‌‌its‌‌ IRR.‌‌The‌‌PCC‌‌shall‌‌exercise‌‌the‌‌following‌‌powers‌‌and‌‌functions:‌ ‌ a) Conduct‌ ‌inquiry,‌ ‌investigate,‌ ‌and‌ ‌hear‌ ‌and‌ ‌decide‌ ‌on‌ ‌cases‌‌ involving‌ ‌any‌ ‌violation‌ ‌of‌ ‌this‌ ‌Act‌ ‌and‌ ‌other‌ ‌existing‌‌ competition‌‌laws‌‌ ‌ i) Forbearance‌‌by‌‌PCC‌ ‌ ii) Definition‌‌and‌‌Scope‌‌of‌‌Application‌ ‌ iii) Domestic‌ ‌—‌ ‌The‌ ‌Act‌ ‌shall‌ ‌be‌ ‌enforceable‌ ‌against‌ ‌ANY‌‌‌person‌‌or‌‌ entity‌‌engaged‌‌in‌‌any‌‌trade,‌‌industry‌‌and‌‌commerce‌‌in‌‌RP.‌‌ ‌ International‌ ‌—‌ ‌It‌ ‌shall‌ ‌likewise‌‌be‌‌applicable‌‌to‌‌‌international‌‌ trade‌ ‌having‌ ‌direct,‌ ‌substantial,‌ ‌and‌ ‌reasonably‌ ‌foreseeable‌‌ effects‌ ‌in‌ ‌trade,‌ ‌industry,‌ ‌or‌ ‌commerce‌‌in‌‌RP,‌‌‌including‌‌those‌‌ that‌‌result‌‌from‌‌acts‌‌done‌‌outside‌‌‌RP.‌ ‌ The‌‌Act‌‌shall‌‌‌NOT‌‌APPLY‌‌‌to‌‌ ‌ 1. the‌‌combinations‌‌or‌‌activities‌‌of‌‌workers‌‌or‌‌employees‌‌nor‌‌ ‌ 2. to‌‌agreements‌‌or‌‌arrangements‌‌with‌‌their‌‌employers‌‌ ‌ 1. The‌ ‌PCC‌ ‌is‌ ‌an‌ ‌independent‌ ‌quasi-judicial‌ ‌body‌ ‌which‌ ‌is‌ ‌an‌‌ attached‌‌agency‌‌to‌‌the‌‌Office‌‌of‌‌the‌‌President.‌ ‌ 2. It‌ ‌is‌ ‌composed‌ ‌of‌ ‌a‌ ‌Chairperson‌ ‌and‌ ‌four‌‌(4)‌‌Commissioners‌‌ all‌ ‌appointed‌ ‌to‌ ‌a‌ ‌term‌ ‌of‌ ‌seven‌ ‌(7)‌ ‌years‌ ‌without‌‌ reappointment.‌ ‌ 3. Three‌ ‌(3)‌ ‌members‌ ‌of‌ ‌the‌ ‌Commission‌ ‌shall‌ ‌constitute‌ ‌a‌‌ quorum‌‌‌and‌‌the‌‌affirmative‌‌vote‌‌of‌‌three‌‌(3)‌‌members‌‌shall‌‌be‌‌ upon‌ ‌receipt‌ ‌of‌ ‌a‌ ‌verified‌ ‌complaint‌ ‌from‌ ‌an‌‌ interested‌‌party‌‌or‌‌ ‌ upon‌‌referral‌b ‌ y‌‌the‌‌concerned‌‌regulatory‌‌agency,‌‌ ‌ and‌‌institute‌‌the‌‌appropriate‌‌civil‌‌or‌‌criminal‌‌proceedings;‌ ‌ b) Review‌‌proposed‌‌mergers‌‌and‌‌acquisitions‌;‌ ‌ c) xxxx‌ ‌ d) ⭐Upon‌ ‌finding,‌ ‌based‌‌on‌‌substantial‌‌evidence,‌‌that‌‌an‌‌entity‌‌ has‌ ‌entered‌ ‌into‌ ‌an‌ ‌anti-competitive‌ ‌agreement‌‌or‌‌has‌‌abused‌‌ its‌ ‌dominant‌ ‌position‌ ‌after‌ ‌due‌ ‌notice‌ ‌and‌ ‌hearing,‌ ‌stop‌ ‌or‌‌ redress‌ ‌the‌ ‌same,‌ ‌by‌ ‌applying‌ ‌remedies,‌ ‌such‌ ‌as,‌ ‌but‌ ‌not‌‌ limited‌‌to,‌‌ ‌ i) when‌ ‌such‌ ‌combinations,‌ ‌activities,‌ ‌agreements,‌ ‌or‌ ‌arrangements‌‌ are‌ ‌designed‌ ‌solely‌ ‌to‌ ‌facilitate‌‌collective‌‌bargaining‌‌‌in‌‌respect‌‌of‌‌ conditions‌‌of‌‌employment.‌ ‌ Philippine‌‌Competition‌‌Commission‌‌(PCC)‌ ‌ motu‌‌proprio‌‌‌or‌‌ ‌ issuance‌‌of‌‌injunctions‌,‌‌ ‌ ii) requirement‌‌of‌d ‌ ivestment‌,‌‌and‌ ‌ iii) disgorgement‌o ‌ f‌‌excess‌‌profits;‌ ‌ e) Conduct‌ ‌administrative‌ ‌proceedings,‌ ‌impose‌ ‌sanctions,‌ ‌fines‌‌ or‌ ‌penalties‌ ‌for‌‌any‌‌noncompliance‌‌with‌‌or‌‌breach‌‌of‌‌this‌‌Act‌‌ and‌‌its‌‌IRR‌‌and‌‌punish‌‌for‌‌contempt‌;‌ ‌ f) Issue‌ ‌subpoena‌ ‌duces‌ ‌tecum‌ ‌and‌ ‌subpoena‌ ‌ad‌‌ testificandum‌,‌ ‌summon‌ ‌witnesses,‌ ‌administer‌ ‌oaths,‌ ‌and‌‌ issue‌‌interim‌‌orders‌‌such‌‌as‌‌show‌‌cause‌‌orders‌‌and‌‌cease‌‌and‌‌ desist‌‌orders‌‌after‌‌due‌‌notice‌‌and‌‌hearing;‌ ‌ g) Upon‌ ‌order‌ ‌of‌ ‌the‌ ‌court,‌ ‌undertake‌ ‌inspections‌ ‌of‌ ‌business‌‌ premises‌ ‌and‌ ‌other‌‌offices,‌‌land‌‌and‌‌vehicles,‌‌as‌‌used‌‌by‌‌the‌‌ entity;‌ ‌ h) Issue‌‌‌adjustment‌‌or‌‌divestiture‌‌orders‌‌including‌‌orders‌‌for‌‌ corporate‌‌reorganization‌‌or‌‌divestment.‌ ‌ Nolo‌‌Contendere‌ ‌ An‌ ‌entity‌ ‌charged‌ ‌in‌ ‌a‌ ‌criminal‌ ‌proceeding‌ ‌pursuant‌ ‌to‌ ‌Section‌‌ 14(a)‌‌and‌‌14(b)‌‌of‌‌this‌‌Act‌‌may‌‌enter‌‌a‌‌plea‌‌of‌‌‌Nolo‌‌Contendere‌,‌‌in‌‌ which‌‌he‌‌ ‌ 1. does‌‌not‌‌accept‌‌nor‌‌deny‌‌responsibility‌‌for‌‌the‌‌charges‌‌ ‌ 2. but‌‌agrees‌‌to‌‌accept‌‌punishment‌‌as‌‌if‌‌he‌‌had‌‌pleaded‌‌guilty.‌ ‌ The‌ ‌plea‌ ‌cannot‌ ‌be‌ ‌used‌ ‌against‌ ‌the‌ ‌defendant‌ ‌entity‌ ‌to‌ ‌prove‌‌ liability‌ ‌in‌ ‌a‌ ‌civil‌ ‌suit‌ ‌arising‌ ‌from‌ ‌the‌ ‌criminal‌ ‌action‌ ‌nor‌ ‌in‌‌ another‌‌cause‌‌of‌‌action:‌‌ ‌ Provided‌,‌ ‌That‌ ‌a‌ ‌plea‌‌of‌‌‌Nolo‌‌Contendere‌‌may‌‌be‌‌entered‌‌‌only‌‌up‌‌ to‌ ‌arraignment‌ ‌and‌ ‌subsequently‌,‌ ‌only‌ ‌with‌ ‌the‌‌permission‌‌of‌‌ the‌‌court‌‌which‌‌shall‌‌accept‌‌it‌‌only‌‌after‌‌weighing‌‌its‌‌effect‌‌on‌‌the‌‌ parties,‌‌the‌‌public‌‌and‌‌the‌‌administration‌‌of‌‌justice.‌ ‌ Non-Adversarial‌‌Remedies‌ ‌ The‌ ‌PCC‌ ‌shall‌ ‌encourage‌‌voluntary‌‌compliance‌‌by‌‌making‌‌available‌‌to‌‌ the‌ ‌parties‌ ‌concerned‌ ‌the‌ ‌following‌ ‌and‌ ‌other‌ ‌analogous‌‌ non-adversarial‌ ‌administrative‌ ‌remedies,‌ ‌BEFORE‌ ‌the‌ ‌institution‌ ‌of‌‌ administrative,‌‌civil‌‌or‌‌criminal‌‌action:‌ ‌ a) Binding‌‌Ruling.‌‌‌—‌‌Where‌‌no‌‌prior‌‌complaint‌‌or‌‌investigation‌‌ has‌‌been‌‌initiated‌,‌‌any‌‌entity‌‌that‌‌is‌‌in‌‌‌DOUBT‌‌‌as‌‌to‌‌whether‌‌a‌‌ contemplated‌‌act,‌‌course‌‌of‌‌conduct,‌‌agreement,‌‌or‌‌decision,‌‌is‌‌ in‌‌compliance‌‌with,‌‌is‌‌exempt‌‌from,‌‌or‌‌is‌‌in‌‌violation‌‌of‌‌any‌‌of‌‌ the‌ ‌provisions‌ ‌of‌ ‌this‌ ‌Act,‌ ‌other‌ ‌competition‌ ‌laws,‌ ‌or‌ ‌IRRs‌‌ thereof,‌ ‌may‌ ‌request‌ ‌the‌ ‌PCC,‌ ‌in‌ ‌writing,‌ ‌to‌ ‌render‌ ‌a‌ ‌binding‌‌ ruling‌‌thereon.‌ ‌ In‌‌the‌‌event‌‌of‌‌an‌‌adverse‌‌binding‌‌ruling,‌‌the‌‌applicant‌‌shall‌‌be‌‌ provided‌ ‌with‌ ‌a‌ ‌reasonable‌ ‌period,‌ ‌which‌ ‌in‌‌no‌‌case‌‌shall‌‌be‌‌ more‌‌than‌‌‌ninety‌‌(90)‌‌days‌,‌‌to‌‌abide‌‌by‌‌the‌‌ruling‌‌of‌‌the‌‌PCC‌‌ and‌ ‌shall‌ ‌not‌ ‌be‌ ‌subject‌ ‌to‌ ‌administrative,‌ ‌civil,‌ ‌or‌ ‌criminal‌‌ action‌‌‌unless‌‌‌the‌‌applicant‌‌fails‌‌to‌‌comply‌‌with‌‌the‌‌provisions‌‌ of‌‌this‌‌Act;‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 139‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ b) Show‌ ‌Cause‌ ‌Order.‌ ‌—‌ ‌Upon‌ ‌preliminary‌ ‌findings‌ ‌motu‌‌ proprio‌‌or‌‌on‌‌written‌‌complaint‌‌under‌‌oath,‌‌the‌‌PCC‌‌shall‌‌issue‌‌ and‌‌serve‌‌upon‌‌such‌‌entity‌‌or‌‌entities‌‌ ‌ 1. a‌ ‌written‌ ‌description‌ ‌of‌ ‌its‌ ‌business‌ ‌conduct‌‌ complained‌‌of,‌‌ ‌ 2. a‌‌statement‌‌of‌‌the‌‌facts,‌‌data,‌‌and‌‌information‌‌together‌‌ with‌‌a‌‌summary‌‌of‌‌the‌‌evidence‌‌thereof,‌‌ ‌ 3. 1) Restricting‌ ‌competition‌ ‌as‌ ‌to‌‌price,‌‌or‌‌components‌‌ thereof,‌‌or‌‌other‌‌terms‌‌of‌‌trade;‌‌—‌p ‌ rice‌‌fixing‌ 2) Fixing‌ ‌the‌ ‌price‌ ‌at‌ ‌an‌ ‌auction‌ ‌or‌ ‌in‌ ‌any‌ ‌form‌ ‌of‌‌ bidding,‌‌including‌‌cover‌‌bidding,‌‌bid‌‌suppression,‌‌bid‌‌ rotation‌ ‌and‌ ‌market‌ ‌allocation,‌ ‌and‌ ‌other‌ ‌analogous‌‌ practices‌‌of‌b ‌ id‌‌manipulation‌.‌‌—‌‌bid‌‌rigging‌ ‌ b) Object‌‌and‌‌Effect‌‌Prohibition‌‌(“SLC‌‌Test”)‌ ‌ with‌ ‌an‌ ‌order‌ ‌requiring‌ ‌the‌ ‌said‌ ‌entity‌ ‌or‌ ‌entities‌ ‌to‌‌ show‌ ‌cause‌ ‌why‌ ‌no‌ ‌order‌ ‌shall‌ ‌issue‌ ‌requiring‌‌such‌‌ person‌‌or‌‌persons‌‌to‌‌cease‌‌and‌‌desist;‌ ‌ Not‌‌per‌‌se‌‌prohibited.‌‌The‌‌following‌‌agreements,‌‌between‌‌or‌‌ among‌ ‌competitors,‌ ‌which‌ ‌have‌ ‌the‌ ‌object‌ ‌or‌ ‌effect‌ ‌of‌‌ substantially‌ ‌preventing,‌ ‌restricting,‌ ‌or‌ ‌lessening‌‌ competition‌s‌ hall‌‌be‌‌prohibited‌:‌ ‌ c) Consent‌ ‌Order.‌ ‌—‌‌At‌‌any‌‌time‌‌prior‌‌to‌‌the‌‌conclusion‌‌by‌‌the‌‌ PCC‌ ‌of‌ ‌its‌ ‌inquiry,‌ ‌any‌ ‌entity‌ ‌under‌ ‌inquiry‌ ‌may,‌ ‌without‌ ‌in‌‌ any‌ ‌manner‌ ‌admitting‌ ‌a‌ ‌violation‌ ‌of‌ ‌this‌ ‌Act‌ ‌or‌‌any‌‌other‌‌ competition‌‌laws,‌‌submit‌‌to‌‌the‌‌PCC‌‌a‌‌written‌‌proposal‌‌for‌‌the‌‌ entry‌‌of‌‌a‌‌consent‌‌order.‌ ‌ 1) Output‌‌limitation‌‌or‌‌restriction‌‌—‌‌‌Setting,‌‌limiting,‌‌ or‌ ‌controlling‌ ‌production,‌ ‌markets,‌ ‌technical‌‌ development,‌‌or‌‌investment;‌ ‌ Anti-competitive‌‌agreements‌ ‌ ACA‌ ‌ Parties‌ ‌ Penalty‌ ‌ Agreement‌ ‌ Admin‌ ‌ Criminal‌ Per‌‌se‌‌ prohibited‌‌(a)‌ ‌ Competitors‌ Horizontal‌ ‌ ✔‌ ‌ ✔‌ ‌ Not‌‌per‌‌se‌‌ prohibited‌‌(b)‌ ‌ Competitors‌ Horizontal‌ ‌ ✔‌ ‌ ✔‌ ‌ ✔‌ ‌ ✘‌ ‌ Competitors‌‌ Other‌‌ Horizontal‌‌ or‌‌ agreements‌‌(c)‌ ‌ &‌‌Vertical‌ ‌ otherwise‌ ‌ Admin‌:‌ Fine‌‌of‌‌up‌‌to‌‌P100M‌‌for‌‌1st‌‌offense;‌ ‌ Fine‌‌of‌‌P100M‌‌-‌‌250M‌‌for‌‌2nd‌‌offense.‌ ‌ 2) Market‌‌sharing‌‌or‌‌allocation‌‌—‌‌‌Dividing‌‌or‌‌sharing‌‌ Criminal‌:‌ Fine‌‌of‌‌P50M‌‌-‌‌250M‌‌+‌‌2-7‌‌years‌‌imprisonment.‌ ‌ the‌‌market,‌‌whether‌‌by‌‌volume‌‌of‌‌sales‌‌or‌‌purchases,‌‌ territory,‌ ‌type‌‌of‌‌goods‌‌or‌‌services,‌‌buyers‌‌or‌‌sellers,‌‌ Abuse‌‌of‌‌dominant‌‌position‌ ‌ or‌‌any‌‌other‌‌means.‌ ‌ "‌Dominant‌ ‌position‌"‌ ‌refers‌ ‌to‌ ‌a‌ ‌position‌ ‌of‌ ‌economic‌‌strength‌‌ Mere‌ ‌existence‌ ‌of‌ ‌agreement‌ ‌NOT‌ ‌enough.‌ ‌It‌ ‌must‌ ‌also‌ ‌be‌‌ that‌‌an‌‌entity‌‌or‌‌entities‌‌hold‌‌which‌‌makes‌‌it‌‌capable‌‌of‌‌controlling‌‌ shown‌ ‌that‌ ‌such‌ ‌an‌ ‌agreement‌ ‌substantially‌ ‌prevents,‌ ‌lessens‌‌ the‌‌relevant‌‌market‌‌independently‌‌from‌‌any‌‌or‌‌a‌‌combination‌‌of‌‌the‌‌ or‌‌restricts‌‌competition‌.‌ ‌ following:‌‌competitors,‌‌customers,‌‌suppliers,‌‌or‌‌consumers.‌ ‌ d) Inadmissibility‌‌of‌‌Evidence‌‌in‌‌Criminal‌‌Proceedings.‌–‌‌The‌ request‌ ‌for‌ ‌a‌ ‌binding‌ ‌ruling,‌ ‌the‌ ‌show‌ ‌cause‌ ‌order,‌ ‌or‌ ‌the‌‌ proposal‌ ‌for‌ ‌consent‌ ‌order‌ ‌shall‌ ‌not‌ ‌be‌ ‌admissible‌ ‌as‌‌ evidence‌ ‌in‌ ‌any‌ ‌criminal‌ ‌proceedings‌ ‌arising‌ ‌from‌ ‌the‌ ‌same‌‌ act‌ ‌subject‌ ‌of‌‌the‌‌binding‌‌ruling,‌‌show‌‌cause‌‌order‌‌or‌‌consent‌‌ order‌‌against‌‌such‌‌entity‌‌or‌‌entities,‌‌their‌‌officers,‌‌employees,‌‌ and‌‌agents.‌ ‌ Prohibited‌‌Acts‌ ‌ independently‌ ‌of‌ ‌each‌ ‌other,‌ shall‌ ‌not‌ ‌be‌ ‌considered‌‌ competitors‌.‌ ‌ c) Agreements‌ ‌other‌ ‌than‌ ‌those‌ ‌specified‌ ‌above,‌ ‌which‌ ‌have‌‌the‌‌ It‌‌shall‌‌be‌‌‌prohibited‌‌‌for‌‌one‌‌or‌‌more‌‌entities‌‌to‌‌abuse‌‌their‌‌dominant‌‌ object‌ ‌or‌ ‌effect‌ ‌of‌ ‌substantially‌ ‌preventing,‌ ‌restricting,‌ ‌or‌‌ position‌ ‌by‌ ‌engaging‌ ‌in‌ ‌conduct‌ ‌that‌ ‌would‌ substantially‌ ‌prevent,‌‌ lessening‌‌competition‌‌shall‌‌also‌‌be‌‌prohibited‌.‌‌ ‌ restrict,‌‌or‌‌lessen‌‌competition‌,‌‌including:‌ ‌ Provided‌,‌‌that‌‌those‌‌which‌‌contribute‌‌ ‌ "‌Agreement‌"‌ ‌refers‌ ‌to‌ ‌any‌ ‌type‌‌or‌‌form‌‌of‌‌contract,‌‌arrangement,‌‌ understanding,‌ ‌collective‌ ‌recommendation,‌ ‌or‌ ‌concerted‌ ‌action,‌‌ whether‌‌formal‌‌or‌‌informal,‌‌explicit‌‌or‌‌tacit,‌‌written,‌‌or‌‌oral.‌ ‌ a) Per‌‌Se‌‌Prohibition‌ ‌ 1. to‌ ‌improving‌ ‌the‌ ‌production‌ ‌or‌‌distribution‌‌of‌‌goods‌‌ and‌‌services‌‌or‌‌ ‌ 2. to‌‌promoting‌‌technical‌‌or‌‌economic‌‌progress,‌‌ ‌ Mere‌‌existence‌‌of‌‌an‌‌agreement,‌‌once‌‌proven,‌‌is‌‌punishable.‌‌All‌‌ defenses‌‌are‌‌precluded.‌ ‌ while‌‌allowing‌‌consumers‌‌a‌‌fair‌‌share‌‌of‌‌the‌‌resulting‌‌benefits,‌‌ may‌‌not‌‌necessarily‌‌be‌‌deemed‌‌a‌‌violation‌‌‌of‌‌the‌‌Act.‌ ‌ The‌‌following‌‌agreements,‌‌between‌‌or‌‌among‌‌competitors,‌‌are‌‌ per‌‌se‌‌‌prohibited‌:‌ ‌ d) Entities‌ ‌that‌ ‌control,‌ ‌are‌ ‌controlled‌ ‌by,‌ ‌or‌ ‌are‌ ‌under‌‌common‌‌ control‌‌with‌‌another‌‌entity‌‌or‌‌entities,‌‌have‌‌common‌‌economic‌‌ interests,‌ ‌and‌ ‌are‌ ‌not‌ ‌otherwise‌ ‌able‌ ‌to‌ ‌decide‌ ‌or‌ ‌act‌‌ 1) Predatory‌ ‌Pricing‌ ‌—‌ ‌Selling‌ ‌goods‌ ‌or‌ ‌services‌ ‌below‌ ‌cost‌‌ with‌ ‌the‌ ‌object‌ ‌of‌ ‌driving‌ ‌competition‌ ‌out‌ ‌of‌ ‌the‌ ‌relevant‌‌ market.‌‌ ‌ 2) Imposing‌ ‌barriers‌ ‌to‌ ‌entry‌ ‌—‌ ‌or‌ ‌committing‌ ‌acts‌ ‌that‌‌ prevent‌ ‌competitors‌ ‌from‌ ‌growing‌ ‌within‌‌the‌‌market‌‌in‌‌an‌‌ anti-competitive‌‌manner,‌‌ ‌ except‌‌‌those‌‌that‌‌develop‌‌in‌‌the‌‌market‌‌as‌‌a‌‌result‌‌of‌‌or‌‌arising‌‌ from‌‌ ‌ 1. a‌‌superior‌‌product‌‌or‌‌process,‌‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 140‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ 2. business‌‌acumen,‌‌or‌‌ ‌ 3. legal‌‌rights‌‌or‌‌laws;‌ ‌ where‌ ‌the‌ ‌object‌ ‌or‌ ‌effect‌ ‌of‌ ‌the‌ ‌restrictions‌ ‌is‌ ‌to‌ ‌prevent,‌‌ restrict‌‌or‌‌lessen‌‌competition‌‌substantially:‌‌ ‌ Provided‌,‌ ‌that‌ ‌the‌ ‌following‌ ‌shall‌ ‌not‌ ‌be‌ ‌prohibited‌ ‌or‌‌ rendered‌‌unlawful‌:‌ ‌ 3) Commercial‌ ‌Tying‌ ‌—‌ ‌Making‌ ‌a‌ ‌transaction‌ ‌subject‌ ‌to‌‌ acceptance‌ ‌by‌ ‌the‌‌other‌‌parties‌‌of‌‌other‌‌obligations‌‌which,‌‌by‌‌ their‌ ‌nature‌ ‌or‌ ‌according‌ ‌to‌ ‌commercial‌ ‌usage,‌ ‌have‌ ‌no‌‌ connection‌‌with‌‌the‌‌transaction‌;‌ ‌ 4) Price‌ ‌Discrimination‌ ‌—‌ ‌Setting‌ ‌prices‌ ‌or‌ ‌other‌ t‌ erms‌ ‌or‌‌ conditions‌ ‌that‌ ‌discriminate‌ ‌unreasonably‌ b ‌ etween‌‌ customers‌‌or‌‌sellers‌‌of‌‌the‌‌same‌‌goods‌‌or‌‌services:‌ ‌ Provided‌,‌ ‌that‌ ‌the‌ ‌following‌ ‌shall‌ ‌be‌‌considered‌‌‌permissible‌‌ price‌‌differentials‌:‌ ‌ a) Socialized‌ ‌pricing‌ ‌for‌ ‌the‌‌less‌‌fortunate‌‌sector‌‌of‌‌the‌‌ economy;‌ ‌ b) Price‌ ‌differentials‌ ‌which‌ ‌reasonably‌ ‌or‌‌ approximately‌ ‌reflect‌ ‌differences‌ ‌in‌ ‌the‌ ‌cost‌ ‌of‌‌ manufacture,‌ ‌sale,‌ ‌or‌ ‌delivery‌ ‌resulting‌ ‌from‌‌ differing‌‌methods,‌‌technical‌‌conditions,‌‌or‌‌quantities;‌ ‌ c) Price‌‌differential‌‌or‌‌terms‌‌of‌‌sale‌‌offered‌‌in‌‌response‌‌ to‌ ‌the‌ ‌competitive‌ ‌price‌ ‌of‌ ‌payments,‌ ‌services,‌ ‌or‌‌ changes‌‌in‌‌the‌‌facilities‌‌furnished‌‌by‌‌a‌‌competitor;‌‌and‌ ‌ 1) Permissible‌‌franchising‌;‌ ‌ 2) Agreements‌ ‌protecting‌ ‌intellectual‌‌property‌‌rights‌,‌‌ confidential‌‌information,‌‌or‌‌trade‌‌secrets;‌ 7) Abuse‌‌of‌‌Monopsony‌‌Buying‌‌Power‌‌‌—‌‌‌Directly‌‌or‌‌indirectly‌‌ imposing‌ ‌unfairly‌ ‌low‌ ‌purchase‌ ‌prices‌ ‌for‌ ‌the‌ ‌goods‌ ‌or‌‌ services‌‌of,‌‌among‌‌others,‌‌marginalized‌‌agricultural‌‌producers,‌‌ fisherfolk,‌ ‌micro-,‌ ‌small-,‌ ‌medium-scaled‌ ‌enterprises,‌ ‌and‌‌ other‌‌marginalized‌‌service‌‌providers‌‌and‌‌producers;‌ ‌ 8) Excessive‌ ‌Pricing‌ ‌—‌ ‌Directly‌ ‌or‌ ‌indirectly‌ ‌imposing‌ ‌unfair‌‌ purchase‌ ‌or‌ ‌selling‌ ‌price‌ ‌on‌ ‌their‌ ‌competitors,‌ ‌customers,‌‌ suppliers,‌‌or‌‌consumers,‌‌ ‌ Provided‌‌‌that‌‌prices‌‌that‌‌develop‌‌in‌‌the‌‌market‌‌as‌‌a‌‌result‌‌of‌‌or‌‌ due‌ ‌to‌ ‌a‌ ‌superior‌ ‌product‌ ‌or‌‌process,‌‌‌business‌‌acumen‌‌or‌‌ legal‌ ‌rights‌ ‌or‌ ‌laws‌ ‌shall‌‌‌not‌‌be‌‌considered‌‌unfair‌‌prices‌;‌‌ and‌ ‌ 9) Output‌ ‌Restriction‌ ‌—‌ ‌Limiting‌ ‌production,‌ ‌markets,‌ ‌or‌‌ technical‌‌development‌‌‌to‌‌the‌‌prejudice‌‌of‌‌consumers,‌‌ ‌ Provided‌,‌‌that‌‌limitations‌‌that‌‌develop‌‌in‌‌the‌‌market‌‌as‌‌a‌‌result‌‌ of‌ ‌or‌ ‌due‌ ‌to‌ ‌a‌ ‌superior‌ ‌product‌ ‌or‌ ‌process,‌ ‌business‌‌ acumen‌,‌‌or‌‌legal‌‌rights‌‌‌or‌‌laws‌‌shall‌n ‌ ot‌‌be‌‌a‌‌violation‌.‌ ‌ a) fixing‌‌prices,‌‌or‌ ‌ b) giving‌ ‌preferential‌ ‌discounts‌ ‌or‌ ‌rebate‌ ‌upon‌ ‌such‌‌ price,‌‌or‌ ‌ c) imposing‌ ‌conditions‌ ‌not‌ ‌to‌ ‌deal‌ ‌with‌ ‌competing‌‌ entities,‌ ‌ Prohibited‌‌mergers‌‌and‌‌acquisitions‌ ‌ Merger‌ ‌or‌ ‌acquisition‌ ‌agreements‌ ‌that‌ ‌substantially‌ ‌prevent,‌‌ restrict,‌‌or‌‌lessen‌‌competition‌‌in‌‌the‌‌Philippines‌‌‌in‌‌the‌‌relevant‌‌ market‌ ‌or‌ ‌in‌ ‌the‌ ‌market‌ ‌for‌ ‌goods‌ ‌or‌ ‌services‌,‌ ‌as‌ ‌may‌ ‌be‌‌ determined‌‌by‌‌the‌‌PCC,‌‌shall‌‌be‌p ‌ rohibited‌.‌ ‌ 6) Tying‌‌and‌‌Bundling‌‌‌—‌‌‌Making‌‌supply‌‌of‌‌particular‌‌goods‌‌or‌‌ If‌ ‌within‌ ‌the‌‌relevant‌‌periods,‌‌the‌‌PCC‌‌determines‌‌that‌‌such‌‌agreement‌‌ services‌ ‌dependent‌ ‌upon‌ ‌the‌ ‌purchase‌ ‌of‌ ‌other‌‌goods‌‌or‌‌ is‌p ‌ rohibited‌‌and‌‌does‌‌not‌‌qualify‌‌for‌‌exemption,‌‌the‌‌PCC‌‌may:‌ ‌ services‌ ‌from‌ ‌the‌ ‌supplier‌ ‌which‌ ‌have‌ ‌no‌ ‌direct‌ ‌connection‌‌ with‌‌the‌‌main‌‌goods‌‌or‌‌services‌‌to‌‌be‌‌supplied;‌ ‌ a) Prohibit‌‌the‌‌implementation‌‌of‌‌the‌‌agreement;‌ ‌ d) Price‌ ‌changes‌ ‌in‌ ‌response‌ ‌to‌ ‌changing‌ ‌market‌‌ conditions‌,‌ ‌marketability‌ ‌of‌ ‌goods‌ ‌or‌ ‌services,‌ ‌or‌‌ volume.‌ ‌ 5) Exclusive‌ ‌Dealings‌ ‌—‌ ‌Imposing‌ ‌restrictions‌ ‌on‌ ‌the‌ ‌lease‌‌ or‌ ‌contract‌ ‌for‌‌sale‌‌or‌‌trade‌‌of‌‌goods‌‌or‌‌services‌‌concerning‌‌ where,‌ ‌to‌ ‌whom,‌ ‌or‌ ‌in‌ ‌what‌ ‌forms‌ ‌goods‌ ‌or‌ ‌services‌‌may‌‌be‌‌ sold‌‌or‌‌traded,‌‌such‌‌as:‌ ‌ "‌Conduct‌"‌ ‌refers‌ ‌to‌ ‌any‌ ‌type‌ ‌or‌ ‌form‌ ‌of‌ ‌undertaking,‌ ‌collective‌‌ recommendation,‌ ‌independent‌ ‌or‌ ‌concerted‌ ‌action‌ ‌or‌ ‌practice,‌‌ whether‌‌formal‌‌or‌‌informal.‌ ‌ Any‌ ‌conduct‌ ‌which‌ ‌contributes‌ ‌to‌ ‌improving‌ ‌production‌ ‌or‌‌ distribution‌ ‌of‌ ‌goods‌ ‌or‌ ‌services‌ ‌within‌ ‌the‌ ‌relevant‌ ‌market,‌ ‌or‌‌ promoting‌ ‌technical‌ ‌and‌ ‌economic‌ ‌progress,‌ ‌while‌ ‌allowing‌‌ consumers‌‌a‌‌fair‌‌share‌‌of‌‌the‌‌resulting‌‌benefit‌‌may‌‌not‌‌necessarily‌‌ be‌‌considered‌‌an‌‌abuse‌‌of‌‌dominant‌‌position‌.‌ ‌ b) Prohibit‌‌the‌‌implementation‌‌of‌‌the‌‌agreement‌‌unless‌‌and‌‌until‌‌ it‌‌is‌‌modified‌‌by‌‌changes‌‌specified‌‌by‌‌the‌‌PCC.‌ ‌ c) Prohibit‌‌the‌‌implementation‌‌of‌‌the‌‌agreement‌‌unless‌‌and‌‌until‌‌ the‌ ‌pertinent‌ ‌party‌ ‌or‌ ‌parties‌ ‌enter‌ ‌into‌ ‌legally‌ ‌enforceable‌‌ agreements‌‌specified‌‌by‌‌the‌‌PCC.‌ ‌ Covered‌‌Transactions‌ ‌ Thresholds‌‌for‌‌Compulsory‌‌Notification‌ ‌ As‌‌per‌‌‌PCC‌‌Resolution‌‌No.‌‌02-2020‌,‌‌effective‌‌‌01‌‌March‌‌2020‌,‌‌parties‌ to‌‌a‌‌merger‌‌or‌‌acquisition‌‌are‌R ‌ EQUIRED‌t‌ o‌‌provide‌‌notification‌‌when:‌ ‌ a) SIZE‌ ‌OF‌ ‌PARTY.‌ ‌The‌ ‌aggregate‌ ‌annual‌‌gross‌‌revenues‌‌in,‌‌into‌‌ or‌‌from‌‌the‌‌Philippines,‌‌or‌‌value‌‌of‌‌the‌‌assets‌‌in‌‌the‌‌Philippines‌‌of‌‌ the‌ ‌ultimate‌ ‌parent‌ ‌entity‌ ‌of‌ ‌at‌ ‌least‌ ‌one‌ ‌of‌ ‌the‌ ‌acquiring‌ ‌or‌‌ acquired‌ ‌entities,‌ ‌including‌ ‌that‌ ‌of‌ ‌all‌ ‌entities‌ ‌that‌ ‌the‌ ‌ultimate‌‌ parent‌‌entity‌‌controls,‌‌directly‌‌or‌‌indirectly,‌e ‌ xceeds‌P ‌ hp6B‌;‌‌AND‌ ‌ b) SIZE‌ ‌OF‌ ‌TRANSACTION.‌ ‌The‌ ‌value‌ ‌of‌ ‌the‌ ‌transaction‌‌‌exceeds‌‌ Php2.4B‌:‌ ‌ PH‌ ‌ Aggregate‌‌value‌‌of‌‌ the‌‌assets‌‌in‌‌PH‌‌of‌ ‌ ‌ Gross‌‌revenues‌‌generated‌‌ [1]‌‌by‌‌assets‌‌acquired‌‌[2]‌ ‌ IN‌ ‌ One‌‌being‌‌acquired‌ ‌ OR‌ ‌ [1‌‌and‌‌2]‌‌IN‌‌PH‌ ‌ OUT‌ ‌ Acquiring‌‌entity‌ ‌ AND‌ ‌ [1]‌‌IN‌‌or‌‌INTO;‌‌[2]‌‌OUT‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 141‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ IN‌‌and‌‌ Acquiring‌‌entity‌ ‌ OUT‌ ‌ AND‌ ‌ [1]‌‌IN‌‌or‌‌INTO;‌‌[2]‌‌IN‌‌and‌‌ OUT‌‌collectively‌ ‌ With‌‌respect‌‌to‌‌a‌‌proposed‌a ‌ cquisition‌o ‌ f‌‌ ‌ 1. voting‌‌shares‌‌of‌‌a‌‌corporation‌‌or‌ ‌ 2. an‌‌interest‌‌in‌‌a‌‌non-corporate‌‌entity‌ ‌ Notifying‌‌entity‌ ‌ a) Parties‌‌to‌‌a‌‌merger‌‌or‌‌acquisition‌‌that‌‌satisfy‌‌the‌‌thresholds‌‌are‌‌ required‌‌to‌‌notify‌‌the‌‌PCC‌‌before‌‌the‌‌execution‌‌of‌‌the‌‌definitive‌‌ agreements‌‌relating‌‌to‌‌the‌‌transaction.‌ ‌ "‌Acquisition‌"‌‌refers‌‌to‌‌the‌‌purchase‌‌or‌‌transfer‌‌of‌‌securities‌‌or‌‌ assets,‌ ‌through‌ ‌contract‌ ‌or‌ ‌other‌ ‌means,‌ ‌for‌ ‌the‌ ‌purpose‌ ‌of‌‌ obtaining‌‌control‌b ‌ y:‌ ‌ 1) If‌‌the‌‌‌aggregate‌‌value‌‌of‌‌the‌‌assets‌‌‌in‌‌PH‌‌that‌‌are‌‌owned‌‌by,‌‌ OR‌‌ ‌ 1) One‌‌(1)‌‌entity‌‌of‌‌the‌‌whole‌‌or‌‌part‌‌of‌‌another;‌ ‌ 2) the‌‌‌gross‌‌revenues‌‌from‌‌sales‌i‌ n,‌‌into,‌‌or‌‌from‌P ‌ H‌‌of‌‌ ‌ 2) Two‌‌(2)‌‌or‌‌more‌‌entities‌‌over‌‌another;‌‌or‌ ‌ the‌ ‌corporation‌ ‌or‌ ‌non-corporate‌ ‌entity‌ ‌or‌ ‌by‌ ‌entities‌ ‌it‌ ‌controls,‌‌ other‌ ‌than‌ ‌assets‌‌that‌‌are‌‌shares‌‌of‌‌any‌‌of‌‌those‌‌corporations,‌‌ exceed‌P ‌ hp2.4B‌;‌‌AND‌ ‌ 3) One‌‌(1)‌‌or‌‌more‌‌entities‌‌over‌‌one‌‌(1)‌‌or‌‌more‌‌entities‌ ‌ "‌Control‌"‌ ‌refers‌ ‌to‌ ‌the‌ ‌ability‌ ‌to‌ ‌substantially‌ ‌influence‌ ‌or‌‌ direct‌‌the‌‌actions‌‌or‌‌decisions‌‌of‌‌an‌‌entity,‌‌whether‌‌by‌‌contract,‌‌ agency‌‌or‌‌otherwise.‌ ‌ 3) If‌‌as‌‌a‌‌result‌‌of‌‌the‌‌proposed‌‌acquisition‌ ‌ A. of‌ ‌the‌ ‌voting‌ ‌shares‌ ‌of‌ ‌a‌ ‌corporation‌,‌ ‌the‌ ‌entity‌‌would‌‌ own‌‌voting‌‌shares‌‌of‌‌the‌‌corporation‌‌that,‌‌in‌‌the‌‌aggregate,‌‌ carry‌ ‌more‌ ‌than‌ ‌the‌ ‌following‌ ‌percentages‌ ‌of‌ ‌the‌ ‌votes‌‌ attached‌‌to‌‌all‌‌the‌‌corporation's‌‌outstanding‌‌voting‌‌shares:‌ ‌ a. Thirty-five‌‌percent‌‌(3 ‌ 5%‌),‌‌or‌ ‌ b. Fifty‌ ‌percent‌ ‌(‌50%‌),‌ ‌if‌ ‌the‌ ‌entity‌ ‌or‌‌entities‌‌already‌‌ own‌ ‌more‌ ‌than‌ ‌the‌ ‌percentage‌ ‌set‌ ‌out‌ ‌above,‌ ‌as‌ ‌the‌‌ case‌‌may‌‌be,‌‌before‌‌the‌‌proposed‌‌acquisition;‌‌or‌ ‌ Thirty-five‌‌percent‌‌(3 ‌ 5%‌),‌‌or‌ ‌ b. Fifty‌‌percent‌‌(‌50%‌),‌‌if‌‌the‌‌entity‌‌or‌‌entities‌‌acquiring‌‌ the‌ ‌interest‌ ‌are‌ ‌already‌ ‌entitled‌ ‌to‌ ‌receive‌ ‌more‌‌than‌‌ the‌ ‌percentage‌ ‌set‌ ‌out‌ ‌immediately‌ ‌above‌ ‌before‌ ‌the‌‌ proposed‌‌acquisition.‌ ‌ Within‌ ‌thirty‌ ‌(30)‌ days‌ ‌from‌ ‌commencing‌ ‌Phase‌ ‌I‌ ‌review,‌ ‌the‌‌ Commission‌‌shall,‌‌if‌‌necessary,‌‌inform‌‌the‌‌parties‌‌of‌‌the‌‌need‌‌for‌‌a‌‌ more‌ ‌comprehensive‌ ‌and‌ ‌detailed‌ ‌analysis‌ ‌of‌ ‌the‌ ‌merger‌ ‌or‌‌ acquisition‌‌under‌‌a‌‌Phase‌‌II‌‌review.‌ ‌ STEP‌‌4‌‌PHASE‌‌II‌‌Review‌ ‌ The‌ ‌issuance‌ ‌of‌ ‌the‌ ‌request‌ ‌under‌ ‌PHASE‌ ‌I‌ ‌has‌ ‌the‌ ‌effect‌ ‌of‌‌ extending‌ ‌the‌ ‌period‌ ‌within‌ ‌which‌ ‌the‌ ‌agreement‌ ‌may‌ ‌not‌ ‌be‌‌ consummated‌‌for‌‌an‌‌additional‌‌‌sixty‌‌(60)‌‌days.‌‌ ‌ The‌‌additional‌‌sixty‌‌(60)‌‌day‌‌period‌‌shall‌‌begin‌‌on‌‌the‌‌day‌‌after‌‌the‌‌ request‌‌for‌‌information‌‌is‌‌received‌‌by‌‌the‌‌parties;‌ ‌ Provided‌,‌ ‌that,‌ ‌in‌ ‌no‌ ‌case‌ ‌shall‌ ‌the‌ ‌total‌ ‌period‌ ‌for‌ ‌review‌‌by‌‌the‌‌ PCC‌ ‌of‌ ‌the‌ ‌subject‌ ‌agreement‌ ‌exceed‌ ‌ninety‌ ‌(90)‌ ‌days‌ ‌from‌ ‌the‌‌ time‌‌the‌‌initial‌‌notification‌‌by‌‌the‌‌parties‌‌is‌‌deemed‌‌complete.‌ ‌ b) "‌Ultimate‌‌parent‌‌entity‌"‌‌is‌‌the‌‌juridical‌‌entity‌‌that,‌‌directly‌‌or‌‌ indirectly,‌ ‌controls‌ ‌a‌ ‌party‌ ‌to‌ ‌the‌ ‌transaction,‌ ‌and‌ ‌is‌ ‌not‌‌ STEP‌‌5‌‌Decision‌ ‌ controlled‌‌by‌‌any‌‌other‌‌entity.‌ ‌ Process‌‌Under‌‌Compulsory‌‌Notification‌ ‌ Parties‌ ‌to‌ ‌the‌‌merger‌‌or‌‌acquisition‌‌agreement‌‌that‌‌are‌‌required‌‌to‌‌ notify‌ ‌are‌ ‌prohibited‌ ‌from‌ ‌consummating‌ ‌their‌ ‌agreement‌ ‌until‌‌ thirty‌ ‌(30)‌ ‌days‌ ‌(‌waiting‌ ‌period‌)‌‌after‌‌providing‌‌notification‌‌to‌‌ the‌‌PCC.‌ ‌ B. of‌ ‌an‌ ‌interest‌ ‌in‌ ‌a‌ ‌non-corporate‌ ‌entity‌,‌ ‌the‌ ‌entity‌‌ STEP‌‌1‌‌Submission‌‌of‌‌the‌‌Notification‌‌Form‌ ‌ would‌ ‌hold‌ ‌an‌ ‌aggregate‌ ‌interest‌ ‌in‌ ‌the‌ ‌non-corporate‌‌ Submit‌ ‌a‌ ‌notification‌ ‌form‌ ‌to‌ ‌the‌ ‌Merger‌ ‌and‌ ‌Acquisition‌ ‌Office‌‌ entity‌ ‌that‌ ‌entitles‌ ‌the‌ ‌entity‌ ‌or‌ ‌entities‌ ‌to‌ ‌receive‌ ‌more‌‌ (MAO)‌ ‌supposedly‌ ‌within‌ ‌30‌ ‌days‌ ‌after‌ ‌the‌ ‌signing‌ ‌of‌ ‌the‌‌ than‌ ‌the‌ ‌following‌ ‌percentages‌ ‌of‌ ‌the‌ ‌profits‌ ‌of‌ ‌the‌‌ agreement.‌ ‌ non-corporate‌‌entity‌‌or‌‌assets‌‌of‌‌that‌‌non-corporate‌‌entity‌‌ STEP‌2 ‌ ‌‌Determination‌‌whether‌‌Notification‌‌has‌‌been‌‌Completed‌ on‌‌its‌‌dissolution:‌ ‌ a. The‌ ‌waiting‌ ‌period‌ ‌shall‌ ‌commence‌ ‌only‌ ‌upon‌ ‌the‌ ‌MAO’s‌‌ determination‌‌that‌‌the‌‌notification‌‌has‌‌been‌‌completed.‌ ‌ MAO‌‌shall‌‌determine‌‌within‌‌fifteen‌‌(15)‌‌days‌‌whether‌‌the‌‌Form‌‌ and‌ ‌other‌ ‌relevant‌ ‌requirements‌ ‌have‌ ‌been‌ ‌completed‌ ‌and‌ ‌shall‌‌ issue‌ ‌a‌ ‌notice‌ ‌to‌ ‌the‌ ‌parties‌ ‌that‌ ‌the‌ ‌notification‌ ‌is‌ ‌sufficient‌ ‌for‌‌ purposes‌‌of‌‌commencing‌‌Phase‌‌I‌‌review.‌ ‌ STEP‌‌3‌‌PHASE‌‌I‌‌Review‌ ‌ When‌ ‌the‌ ‌above‌ ‌periods‌ ‌have‌ ‌expired‌ ‌and‌ ‌no‌ ‌decision‌ ‌has‌ ‌been‌‌ promulgated‌‌for‌‌whatever‌‌reason,‌‌the‌‌merger‌‌or‌‌acquisition‌‌shall‌‌be‌‌ deemed‌ ‌approved‌ ‌and‌ ‌the‌ ‌parties‌ ‌may‌‌proceed‌‌to‌‌implement‌‌or‌‌ consummate‌‌it.‌ ‌ Merger‌ ‌or‌ ‌acquisition‌ ‌agreements‌ ‌that‌ ‌have‌ ‌received‌ ‌a‌ ‌favorable‌‌ ruling‌‌from‌‌the‌‌PCC,‌‌‌except‌‌‌when‌‌such‌‌ruling‌‌was‌‌obtained‌‌on‌‌the‌‌ basis‌‌of‌‌fraud‌‌or‌‌false‌‌material‌‌information,‌‌may‌‌not‌‌be‌‌challenged‌‌ under‌‌the‌‌Act‌‌or‌‌these‌‌Rules.‌ ‌ Motu‌‌Proprio‌‌Review‌ ‌ The‌ ‌following‌ ‌are‌‌the‌‌grounds‌‌which‌‌may‌‌trigger‌‌‌motu‌‌proprio‌‌review‌‌ by‌‌the‌‌PCC:‌ ‌ 1. Preliminary‌ ‌considerations‌ ‌that‌ ‌the‌ ‌customers‌ ‌may‌ ‌be‌‌ adversely‌‌affected;‌ ‌ 2. Possibilities‌ ‌for‌ ‌foreclosure‌ ‌such‌ ‌that‌ ‌certain‌ ‌competitions‌‌ may‌‌be‌‌hindered;‌ ‌ 3. Existence‌‌of‌‌high‌‌degree‌‌of‌‌market‌‌concentration;‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 142‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ 4. Merger‌‌happens‌‌in‌‌a‌‌critical‌‌industry;‌ ‌ 5. Third‌‌party‌‌complaint.‌ ‌ Exceptions‌ ‌ When‌‌the‌‌parties‌‌establish‌‌either‌‌of‌‌the‌‌following:‌ ‌ neighboring‌ ‌areas‌‌because‌‌the‌‌‌conditions‌‌of‌‌competition‌‌are‌‌ different‌‌in‌‌those‌‌area.‌ ‌ Control‌‌or‌‌Dominance‌‌of‌‌Market‌ ‌ "‌Control‌"‌ ‌refers‌ ‌to‌ ‌the‌‌ability‌‌to‌‌substantially‌‌influence‌‌or‌‌direct‌‌ the‌‌actions‌‌or‌‌decisions‌‌of‌‌an‌‌entity,‌‌whether‌‌by‌‌contract,‌‌agency‌‌or‌‌ otherwise.‌ ‌ a) The‌‌concentration‌‌has‌‌brought‌‌about‌‌or‌‌is‌‌likely‌‌to‌‌bring‌‌about‌‌ gains‌ ‌in‌ ‌efficiencies‌ ‌that‌ ‌are‌ ‌greater‌ ‌than‌ ‌the‌ ‌effects‌ ‌of‌‌ any‌ ‌limitation‌ ‌on‌ ‌competition‌ ‌that‌ ‌result‌ ‌or‌ ‌are‌ ‌likely‌ ‌to‌‌ In‌ ‌determining‌ ‌the‌ ‌control‌ ‌of‌ ‌an‌ ‌entity,‌ ‌the‌ ‌PCC‌ ‌may‌ ‌consider‌ ‌the‌‌ following:‌ ‌ result‌‌from‌‌the‌‌merger‌‌or‌‌acquisition‌‌agreement;‌‌or‌ ‌ b) A‌ ‌party‌ ‌to‌ ‌the‌ ‌merger‌ ‌or‌ ‌acquisition‌ ‌agreement‌ ‌is‌ ‌faced‌ ‌with‌‌ actual‌ ‌or‌ ‌imminent‌ ‌financial‌ ‌failure‌,‌ ‌and‌ ‌the‌ ‌agreement‌‌ represents‌ ‌the‌ ‌least‌ ‌anti-competitive‌ ‌arrangement‌ ‌among‌‌ the‌‌known‌‌alternative‌‌uses‌‌for‌‌the‌‌failing‌‌entity's‌‌assets.‌ ‌ a) Control‌‌is‌‌‌presumed‌‌‌to‌‌exist‌‌when‌‌the‌‌parent‌‌owns‌‌directly‌‌or‌‌ indirectly,‌‌through‌‌subsidiaries,‌‌‌more‌‌than‌‌one‌‌half‌‌(1/2)‌‌of‌‌ the‌‌voting‌‌power‌‌of‌‌an‌‌entity,‌‌ ‌ unless‌ ‌in‌ ‌exceptional‌ ‌circumstances,‌ ‌it‌ ‌can‌ ‌clearly‌ ‌be‌‌ demonstrated‌‌that‌‌such‌‌ownership‌‌does‌‌not‌‌constitute‌‌control.‌ ‌ The‌‌‌burden‌‌of‌‌proof‌‌‌lies‌‌with‌‌the‌‌parties‌‌seeking‌‌the‌‌exemption.‌ ‌ The‌‌Relevant‌‌Market‌ ‌ b) Control‌‌also‌‌exists‌‌‌even‌‌when‌‌an‌‌entity‌‌owns‌‌one‌‌half‌‌(1/2)‌‌ or‌‌less‌o ‌ f‌‌the‌‌voting‌‌power‌‌of‌‌another‌‌entity‌‌when:‌ ‌ 1) There‌ ‌is‌ ‌power‌ ‌over‌ ‌more‌ ‌than‌ ‌one‌ ‌half‌ ‌(1/2)‌‌of‌‌the‌‌ voting‌ ‌rights‌ ‌by‌ ‌virtue‌ ‌of‌ ‌an‌ ‌agreement‌ ‌with‌‌ investors‌;‌ ‌ "‌Market‌"‌‌refers‌‌to‌‌ ‌ 1. 2. the‌ ‌group‌ ‌of‌ ‌goods‌ ‌or‌ ‌services‌ ‌that‌ ‌are‌ ‌sufficiently‌‌ interchangeable‌‌or‌‌substitutable‌‌‌and‌‌the‌‌object‌‌of‌‌competition,‌‌ and‌‌ ‌ 2) There‌ ‌is‌ ‌power‌ ‌to‌ ‌direct‌ ‌or‌ ‌govern‌ ‌the‌ ‌financial‌ ‌and‌‌ operating‌ ‌policies‌ ‌of‌ ‌the‌ ‌entity‌ ‌under‌ ‌a‌ ‌statute‌ ‌or‌‌ agreement‌;‌ ‌ the‌‌geographic‌‌area‌‌‌where‌‌said‌‌goods‌‌or‌‌services‌‌are‌‌offered.‌ ‌ "‌Relevant‌‌market‌"‌‌refers‌‌to‌‌the‌‌market‌‌in‌‌which‌‌a‌‌particular‌‌good‌‌or‌‌ service‌ ‌is‌ ‌sold‌ ‌and‌ ‌which‌ ‌is‌ ‌a‌ ‌combination‌ ‌of‌ ‌the‌ ‌relevant‌ ‌product‌‌ market‌‌and‌‌the‌‌relevant‌‌geographic‌‌market,‌‌defined‌‌as‌‌follows:‌ ‌ one‌‌entity‌‌(‌single‌‌‌dominance)‌‌or‌‌of‌‌ ‌ 2. two‌‌or‌‌more‌‌entities‌‌(c‌ ollective‌‌‌dominance).‌ ‌ In‌‌determining‌‌‌whether‌‌an‌‌entity‌‌has‌‌a‌‌market‌‌dominant‌‌position‌,‌‌ the‌ ‌PCC‌ ‌shall‌ ‌consider‌ ‌the‌ ‌following‌ ‌illustrative‌ ‌and‌ ‌non-exhaustive‌‌ criteria,‌‌as‌‌may‌‌be‌‌appropriate:‌ ‌ a) The‌‌‌share‌‌‌of‌‌the‌‌entity‌‌in‌‌the‌‌relevant‌‌market‌‌and‌‌its‌‌‌ability‌‌to‌‌ fix‌ ‌prices‌ ‌unilaterally‌ ‌or‌ ‌to‌ ‌restrict‌ ‌supply‌ ‌in‌ ‌the‌ ‌relevant‌‌ market;‌ ‌ b) The‌‌share‌‌of‌‌other‌‌market‌‌participants‌‌in‌‌the‌‌relevant‌‌market;‌ ‌ c) The‌‌existence‌‌of‌‌barriers‌‌to‌‌entry‌‌and‌‌the‌‌elements‌‌which‌‌could‌‌ foreseeably‌ ‌alter‌ ‌both‌ ‌the‌ ‌said‌ ‌barriers‌ ‌and‌ ‌the‌ ‌supply‌ ‌from‌‌ competitors;‌ ‌ d) The‌‌existence‌‌and‌‌power‌‌of‌‌its‌‌competitors;‌ ‌ e) Among‌‌others.‌ ‌ There‌ ‌shall‌ ‌be‌ ‌a‌ ‌rebuttable‌ ‌presumption‌ ‌of‌ ‌market‌ ‌dominant‌‌ position‌‌if‌‌the‌‌market‌‌share‌‌of‌‌an‌‌entity‌‌in‌‌the‌‌relevant‌‌market‌‌is‌‌at‌‌ least‌‌fifty‌‌percent‌‌(50%)‌,‌‌ ‌ unless‌‌‌a‌‌new‌‌market‌‌share‌‌threshold‌‌is‌‌determined‌‌by‌‌the‌‌PCC‌‌for‌‌ that‌‌particular‌‌sector.‌ ‌ Anti-Competitive‌‌Conduct‌ ‌ 3) There‌‌is‌‌‌power‌‌to‌‌appoint‌‌or‌‌remove‌‌the‌‌majority‌‌ of‌‌the‌‌members‌‌of‌‌the‌‌board‌‌of‌‌directors‌‌or‌‌equivalent‌‌ In‌ ‌determining‌‌‌whether‌‌an‌‌anti-competitive‌‌agreement‌‌or‌‌conduct‌‌ governing‌‌body;‌ ‌ substantially‌‌prevents,‌‌restricts,‌‌or‌‌lessens‌‌competition‌,‌‌the‌‌PCC,‌‌in‌‌ appropriate‌‌cases,‌‌shall,‌‌inter‌‌alia:‌ ‌ 4) There‌ ‌is‌ ‌power‌ ‌to‌ ‌cast‌ ‌the‌ ‌majority‌ ‌votes‌ ‌at‌‌ meetings‌ ‌of‌ ‌the‌ ‌board‌ ‌of‌ ‌directors‌ ‌or‌ ‌equivalent‌‌ a) Define‌ ‌the‌ ‌relevant‌ ‌market‌ ‌allegedly‌ ‌affected‌ ‌by‌ ‌the‌‌ governing‌‌body;‌ ‌ anti-competitive‌‌agreement‌‌or‌‌conduct;‌ ‌ 1) a‌‌‌relevant‌‌product‌‌market‌‌‌comprises‌‌all‌‌those‌‌goods‌‌and/or‌‌ services‌ ‌which‌ ‌are‌ ‌regarded‌ ‌as‌ ‌interchangeable‌ ‌or‌‌ substitutable‌ ‌by‌ ‌the‌ ‌consumer‌‌or‌‌the‌‌customer,‌‌by‌‌reason‌‌of‌‌ the‌ ‌goods‌ ‌and/or‌ ‌services'‌ ‌characteristics,‌ ‌their‌ ‌prices,‌ ‌and‌‌ their‌‌intended‌‌use;‌‌and‌ ‌ 2) the‌‌‌relevant‌‌geographic‌‌market‌‌comprises‌‌the‌‌area‌‌in‌‌which‌ the‌ ‌entity‌ ‌concerned‌ ‌is‌ ‌involved‌‌in‌‌the‌‌supply‌‌and‌‌demand‌‌of‌‌ goods‌‌and‌‌services,‌‌in‌‌which‌‌the‌‌conditions‌‌of‌‌competition‌‌are‌‌ sufficiently‌‌homogenous‌‌and‌‌which‌‌can‌‌be‌‌distinguished‌‌from‌‌ 1. 5) There‌‌exists‌‌ownership‌‌over‌‌or‌‌the‌‌right‌‌to‌‌use‌‌all‌‌or‌‌a‌‌ significant‌‌part‌‌of‌‌the‌‌assets‌‌of‌‌the‌‌entity;‌‌or‌ ‌ b) Determine‌‌if‌‌there‌‌is‌‌ ‌ i) 6) There‌ ‌exist‌ ‌rights‌ ‌or‌ ‌contracts‌ ‌which‌ ‌confer‌‌decisive‌‌ influence‌‌on‌‌the‌‌decisions‌‌of‌‌the‌‌entity.‌ ‌ Dominance‌c‌ an‌‌exist‌‌on‌‌the‌‌part‌‌of‌‌ ‌ ii) actual‌ ‌or‌ ‌potential‌ ‌adverse‌ ‌impact‌ ‌on‌‌competition‌‌ in‌‌the‌‌relevant‌‌market‌‌caused‌‌by‌‌the‌‌alleged‌‌agreement‌‌ or‌‌conduct,‌‌and‌‌ ‌ if‌‌such‌‌impact‌‌is‌‌substantial‌‌and‌‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 143‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ iii) outweighs‌‌the‌‌actual‌‌or‌‌potential‌‌‌efficiency‌‌gains‌‌that‌‌ result‌‌from‌‌the‌‌agreement‌‌or‌‌conduct;‌ c) Adopt‌ ‌a‌ ‌broad‌ ‌and‌ ‌forward-looking‌ ‌perspective,‌ ‌recognizing‌‌ future‌ ‌market‌ ‌developments,‌ ‌any‌‌overriding‌‌need‌‌to‌‌make‌‌the‌‌ goods‌‌or‌‌services‌‌available‌‌to‌‌consumers,‌‌the‌‌requirements‌‌of‌‌ large‌ ‌investments‌ ‌in‌ ‌infrastructure,‌ ‌the‌ ‌requirements‌ ‌of‌ ‌law,‌‌ and‌ ‌the‌ ‌need‌ ‌of‌ ‌our‌ ‌economy‌ ‌to‌ ‌respond‌ ‌to‌ ‌international‌‌ competition,‌ ‌but‌ ‌also‌ ‌taking‌ ‌account‌ ‌of‌ ‌past‌ ‌behavior‌ ‌of‌ ‌the‌‌ parties‌‌involved‌‌and‌‌prevailing‌‌market‌‌conditions;‌ ‌ d) Balance‌‌the‌‌need‌‌to‌‌ensure‌‌that‌‌competition‌‌is‌‌not‌‌prevented‌‌or‌‌ substantially‌‌restricted‌‌and‌‌the‌‌risk‌‌that‌‌competition‌‌efficiency,‌‌ productivity,‌ ‌innovation,‌ ‌or‌ ‌development‌ ‌of‌ ‌priority‌ ‌areas‌ ‌or‌‌ industries‌‌in‌‌the‌‌general‌‌interest‌‌of‌‌the‌‌country‌‌may‌‌be‌‌deterred‌‌ by‌‌overzealous‌‌or‌‌undue‌‌intervention;‌‌and‌ ‌ e) Assess‌‌the‌‌totality‌‌of‌‌evidence‌‌on‌‌whether‌‌it‌‌is‌‌more‌‌likely‌‌than‌‌ not‌‌that‌‌the‌‌entity‌‌has‌‌engaged‌‌in‌‌anti-competitive‌‌agreement‌‌or‌‌ conduct,‌‌including‌‌whether‌‌the‌‌entity's‌‌conduct‌‌was‌‌done‌‌with‌‌ a‌ ‌reasonable‌ ‌commercial‌ ‌purpose,‌ ‌such‌ ‌as‌‌but‌‌not‌‌limited‌‌to,‌‌ phasing‌ ‌out‌ ‌of‌ ‌a‌ ‌product‌ ‌or‌ ‌closure‌ ‌of‌ ‌a‌ ‌business,‌ ‌or‌ ‌as‌ ‌a‌‌ reasonable‌ ‌commercial‌ ‌response‌ ‌to‌ ‌the‌ ‌market‌ ‌entry‌ ‌or‌‌ conduct‌‌of‌‌a‌‌competitor.‌ ‌ d) Forbearance‌‌is‌‌justified‌‌in‌‌economic‌‌terms;‌ ‌ Provided‌,‌ ‌that‌ ‌forbearance‌ ‌will‌ ‌be‌ ‌granted‌ ‌for‌ ‌a‌ ‌maximum‌‌period‌‌of‌‌ ONE‌ ‌YEAR‌.‌ ‌Any‌ ‌extension‌ ‌to‌ ‌the‌ ‌period‌ ‌will‌ ‌have‌ ‌to‌ ‌be‌ ‌expressly‌‌ approved‌‌by‌‌the‌‌PCC.‌‌‌Any‌‌extension‌‌of‌‌the‌‌duration‌‌of‌‌an‌‌exemption‌‌ shall‌‌not‌‌be‌‌longer‌‌than‌‌one‌‌year‌.‌ ‌ b) clear‌‌and‌‌convincing‌‌proof‌‌‌of‌‌said‌‌grounds‌‌relied‌‌upon‌‌ in‌‌the‌‌complaint‌‌sufficient‌‌to‌‌overcome‌‌the‌‌burden‌‌of‌‌ proof‌‌borne‌‌by‌‌the‌‌complainant.‌ ‌ Public‌‌Hearing.‌— ‌ ‌‌ c. a) A‌ ‌public‌ ‌hearing‌ ‌shall‌ ‌be‌ ‌held‌ ‌to‌‌assist‌‌the‌‌PCC‌‌in‌‌making‌‌its‌‌ determination.‌ ‌ Concomitantly,‌ ‌employees‌ ‌of‌ ‌a‌ ‌corporation‌ ‌have‌ ‌no‌ ‌cause‌ ‌of‌‌ action‌‌for‌‌labor-related‌‌claims‌‌against‌‌another‌‌unaffiliated‌‌ corporation,‌‌which‌‌does‌‌not‌‌exercise‌‌control‌‌over‌‌them.‌ ‌ c) In‌ ‌the‌ ‌event‌ ‌that‌ ‌the‌ ‌basis‌ ‌for‌ ‌the‌ ‌issuance‌ ‌of‌ ‌the‌ ‌exemption‌‌ order‌ ‌ceases‌‌to‌‌be‌‌valid,‌‌the‌‌order‌‌‌may‌‌be‌‌withdrawn‌‌by‌‌the‌‌ PCC.‌ ‌ ‌ Reference:‌‌Sundiang‌‌&‌‌Aquino,‌‌2019‌ ‌ Survey‌‌of‌‌Latest‌‌Jurisprudence‌ ‌ 1. Separate‌‌Personality‌‌Rule‌ ‌ The‌‌PCC,‌‌‌motu‌‌proprio‌‌or‌‌‌upon‌‌application‌,‌‌‌prior‌‌‌to‌‌its‌‌initiation‌‌of‌‌ an‌‌inquiry‌,‌‌may‌‌forbear‌‌from‌‌applying‌‌the‌‌provisions‌‌of‌‌the‌‌Act‌‌or‌‌these‌‌ Rules,‌‌for‌‌a‌‌limited‌‌time,‌‌in‌‌whole‌‌or‌‌in‌‌part,‌‌in‌‌all‌‌or‌‌specific‌‌cases,‌‌on‌‌ an‌‌entity‌‌or‌‌group‌‌of‌‌entities,‌‌if‌‌in‌‌its‌‌determination:‌ ‌ a) Enforcement‌ ‌is‌ ‌not‌ ‌necessary‌ ‌to‌ ‌the‌ ‌attainment‌ ‌of‌ ‌the‌ ‌policy‌‌ objectives‌‌of‌‌this‌‌Act;‌ ‌ b) Forbearance‌ ‌will‌ ‌neither‌ ‌impede‌ ‌competition‌ ‌in‌ ‌the‌ ‌market‌‌ where‌ ‌the‌ ‌entity‌ ‌or‌ ‌group‌ ‌of‌ ‌entities‌ ‌seeking‌ ‌exemption‌‌ operates‌‌nor‌‌in‌‌related‌‌markets;‌ ‌ c) Forbearance‌ ‌is‌ ‌consistent‌ ‌with‌ ‌public‌ ‌interest‌ ‌and‌‌the‌‌benefit‌‌ and‌‌welfare‌‌of‌‌the‌‌consumers;‌‌and‌ ‌ a. Geraldo‌‌v.‌‌The‌‌Bill‌‌Sender‌‌‌2018‌‌cf‌ ‌ As‌ ‌a‌ ‌general‌ ‌rule,‌ ‌a‌‌corporate‌‌officer‌‌cannot‌‌be‌‌held‌‌liable‌‌for‌‌ acts‌‌done‌‌in‌‌his‌‌official‌‌capacity‌‌because‌‌a‌‌corporation,‌‌by‌‌ legal‌ ‌fiction,‌ ‌has‌ ‌a‌ ‌personality‌ ‌separate‌‌and‌‌distinct‌‌from‌‌ its‌‌officers,‌‌stockholders,‌‌and‌‌members.‌ ‌ In‌ ‌illegal‌ ‌dismissal‌ ‌cases,‌ ‌corporate‌ ‌officers‌ ‌may‌ ‌be‌ ‌held‌‌ solidarily‌ ‌liable‌ ‌with‌ ‌the‌ ‌corporation‌ ‌if‌ ‌the‌ ‌termination‌‌ was‌‌done‌‌with‌‌malice‌‌or‌‌bad‌‌faith.‌ ‌ b. Kho,‌‌Sr‌‌v.‌‌Magbanua‌‌2 ‌ 019‌ ‌ A‌ ‌finding‌ ‌of‌ ‌personal‌ ‌liability‌ ‌against‌ ‌a‌ ‌director,‌ ‌trustee,‌ ‌or‌‌a‌‌ corporate‌‌officer‌‌requires‌‌the‌‌concurrence‌‌of‌‌these‌‌two‌‌(2)‌‌ requisites,‌‌namely:‌ Maricalum‌‌Mining‌‌Corp.‌‌v.‌‌Florentino‌‌‌2018‌‌✔‌ ‌ A‌‌subsidiary‌‌company's‌‌separate‌‌corporate‌‌personality‌‌may‌‌be‌‌ disregarded‌ ‌only‌ ‌when‌ ‌the‌ ‌evidence‌ ‌shows‌ ‌that‌ ‌such‌‌ separate‌ ‌personality‌ ‌was‌ ‌being‌ ‌used‌ ‌by‌ ‌its‌ ‌parent‌ ‌or‌‌ holding‌ ‌corporation‌ ‌to‌ ‌perpetrate‌ ‌a‌ ‌fraud‌ ‌or‌ ‌evade‌ ‌an‌‌ existing‌‌obligation.‌‌ ‌ b) The‌ ‌PCC’s‌ ‌order‌ ‌exempting‌ ‌the‌ ‌relevant‌ ‌entity,‌ ‌or‌ ‌group‌ ‌of‌‌ entities‌‌under‌‌this‌‌Rule‌‌‌shall‌‌be‌‌made‌‌public.‌‌Conditions‌‌may‌‌ be‌‌attached‌‌to‌‌the‌‌forbearance‌‌if‌‌the‌‌PCC‌‌deems‌‌it‌‌appropriate‌‌to‌‌ ensure‌‌the‌‌long-term‌‌interests‌‌of‌‌consumers.‌ ‌ Corporation‌‌Law‌ ‌ Forbearance‌‌by‌‌PCC‌ ‌ a) a‌ ‌clear‌ ‌allegation‌ ‌in‌ ‌the‌ ‌complaint‌ ‌of‌ ‌gross‌‌ negligence,‌ ‌bad‌ ‌faith‌ ‌or‌ ‌malice,‌ ‌fraud,‌ ‌or‌ ‌any‌ ‌of‌ ‌the‌‌ enumerated‌‌exceptional‌‌instances;‌‌and‌ ‌ d. Freyssinet‌‌Philippines‌‌v.‌‌Lapuz‌‌‌2019‌ ‌ It‌ ‌is‌ ‌well‌ ‌settled‌ ‌that‌ ‌the‌ ‌mere‌ ‌ownership‌ ‌by‌ ‌a‌ ‌single‌‌ stockholder‌ ‌or‌ ‌by‌ ‌another‌ ‌corporation‌‌of‌‌all‌‌or‌‌nearly‌‌all‌‌ of‌ ‌the‌ ‌capital‌ ‌stock‌ ‌of‌ ‌a‌ ‌corporation‌ ‌is‌ ‌not‌ ‌of‌ ‌itself‌‌ sufficient‌ ‌ground‌ ‌for‌ ‌disregarding‌ ‌the‌ ‌separate‌ ‌corporate‌‌ personality.‌ ‌Neither‌ ‌is‌ ‌the‌ ‌existence‌ ‌of‌ ‌interlocking‌‌ directors,‌ ‌corporate‌ ‌officers,‌ ‌and‌ ‌shareholders‌ ‌enough‌‌ justification‌ ‌to‌ ‌pierce‌ ‌the‌ ‌veil‌ ‌of‌ ‌corporate‌ ‌fiction‌ ‌in‌ ‌the‌‌ absence‌‌of‌‌fraud‌‌or‌‌other‌‌public‌‌policy‌‌considerations.‌ ‌ It‌‌must‌‌be‌‌shown‌‌that‌‌the‌‌separate‌‌and‌‌distinct‌‌personalities‌‌of‌‌ the‌‌corporations‌‌are‌‌set‌‌up‌‌to‌‌justify‌‌a‌‌wrong,‌‌protect‌‌fraud,‌‌ or‌ ‌perpetrate‌‌a‌‌deception.‌‌Hence,‌‌the‌‌wrongdoing‌‌must‌‌be‌‌ clearly‌ ‌and‌ ‌convincingly‌ ‌established‌ ‌by‌ ‌substantial‌‌ evidence;‌‌it‌‌cannot‌‌be‌‌presumed.‌ ‌ 2. Piercing‌‌the‌‌Veil‌‌of‌‌Corporate‌‌Fiction‌ ‌ a. Marc‌‌II‌‌Marketing‌‌v.‌‌Joson‌‌‌2011‌ ‌ As‌‌a‌‌rule,‌‌a‌‌corporation‌‌has‌‌a‌‌personality‌‌separate‌‌and‌‌distinct‌ from‌ ‌its‌ ‌officers,‌ ‌stockholders‌ ‌and‌ ‌members‌ ‌such‌ ‌that‌‌ corporate‌‌officers‌‌are‌‌not‌‌personally‌‌liable‌‌for‌‌their‌‌official‌‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 144‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ acts‌ ‌unless‌ ‌it‌ ‌is‌ ‌shown‌ ‌that‌ ‌they‌ ‌have‌ ‌exceeded‌ ‌their‌‌ authority.‌ ‌ ‌ However,‌‌this‌‌corporate‌‌veil‌‌can‌‌be‌‌pierced‌‌when‌‌the‌‌notion‌‌of‌‌ the‌ ‌legal‌ ‌entity‌ ‌is‌ ‌used‌‌as‌‌a‌‌means‌‌to‌‌perpetrate‌‌fraud,‌‌an‌‌ illegal‌ ‌act,‌ ‌as‌ ‌a‌ ‌vehicle‌ ‌for‌ ‌the‌ ‌evasion‌ ‌of‌ ‌an‌ ‌existing‌‌ obligation,‌ ‌and‌ ‌to‌ ‌confuse‌ ‌legitimate‌ ‌issues.‌ ‌Under‌ ‌the‌‌ Labor‌ ‌Code,‌ ‌for‌ ‌instance,‌ ‌when‌ ‌a‌ ‌corporation‌ ‌violates‌ ‌a‌‌ provision‌‌declared‌‌to‌‌be‌‌penal‌‌in‌‌nature,‌‌the‌‌penalty‌‌shall‌‌ be‌ ‌imposed‌ ‌upon‌ ‌the‌ ‌guilty‌ ‌officer‌ ‌or‌ ‌officers‌ ‌of‌ ‌the‌‌ corporation.‌ ‌ The‌ ‌word‌‌salle‌‌only‌‌means‌‌"room"‌‌in‌‌French.‌‌The‌‌word‌‌la,‌‌on‌‌ the‌‌other‌‌hand,‌‌is‌‌a‌‌definite‌‌article‌‌("the")‌‌used‌‌to‌‌modify‌‌salle.‌‌ Thus,‌ ‌since‌ ‌salle‌ ‌is‌ ‌nothing‌ ‌more‌ ‌than‌ ‌a‌‌room,‌‌the‌‌use‌‌of‌‌the‌‌ term‌ ‌is‌ ‌actually‌ ‌suggestive.‌ ‌Thus,‌ ‌the‌ ‌phrase‌ ‌"De‌ ‌La‌ ‌Salle"‌ ‌is‌‌ not‌‌merely‌‌a‌‌generic‌‌term.‌ In‌ ‌contrast,‌ ‌the‌ ‌word‌ ‌"Lyceum",‌ ‌as‌ ‌held‌ ‌in‌ Lyceum‌ ‌of‌ ‌the‌‌ Philippines‌ ‌v.‌ ‌CA‌ ‌generally‌ ‌refers‌ ‌to‌ ‌a‌ ‌school‌‌or‌‌institution‌‌of‌‌ learning.‌‌It‌‌is‌‌as‌‌generic‌‌in‌‌character‌‌as‌‌the‌‌word‌‌"university."‌ ‌ 5. Corporate‌‌Power‌ ‌ Ago‌‌Realty‌‌&‌‌Development‌‌Corp.‌‌v.‌‌Ago‌‌‌2019‌‌✔‌ ‌ While‌‌the‌‌ostensible‌‌reason‌‌for‌‌Binswanger’s‌‌establishment‌‌is‌‌ to‌ ‌continue‌ ‌CBB’s‌ ‌business‌ ‌operations‌‌in‌‌the‌‌Philippines,‌‌ which‌ ‌by‌‌itself‌‌is‌‌not‌‌illegal,‌‌the‌‌close‌‌proximity‌‌between‌‌ CBB’s‌ ‌disestablishment‌ ‌and‌ ‌Binswanger’s‌ ‌coming‌ ‌into‌‌ existence‌ ‌points‌ ‌to‌ ‌an‌ ‌unstated‌ ‌but‌ ‌urgent‌ ‌consideration‌‌ which‌ ‌was‌ ‌to‌ ‌evade‌ ‌CBB’s‌‌unfulfilled‌‌financial‌‌obligation‌‌ to‌‌Livesey‌‌under‌‌the‌‌compromise‌‌agreement.‌ ‌ One‌‌of‌‌the‌‌powers‌‌expressly‌‌granted‌‌by‌‌law‌‌to‌‌corporations‌‌is‌‌ the‌‌power‌‌to‌‌sue.‌‌As‌‌with‌‌other‌‌corporate‌‌powers,‌‌the‌‌power‌‌to‌‌ sue‌ ‌is‌ ‌lodged‌ ‌in‌ ‌the‌ ‌board‌ ‌of‌ ‌directors,‌ ‌acting‌ ‌as‌ ‌a‌ ‌collegial‌‌ body.‌ ‌Thus,‌ ‌in‌ ‌the‌ ‌absence‌ ‌of‌ ‌any‌ ‌clear‌ ‌authority‌ ‌from‌ ‌the‌‌ board,‌‌charter,‌‌or‌‌by-laws,‌‌no‌‌suit‌‌may‌‌be‌‌maintained‌‌on‌‌behalf‌‌ of‌ ‌the‌ ‌corporation.‌ ‌A‌ ‌case‌‌instituted‌‌by‌‌a‌‌corporation‌‌without‌‌ authority‌‌from‌‌its‌‌board‌‌of‌‌directors‌‌is‌‌subject‌‌to‌‌dismissal‌‌on‌‌ the‌‌ground‌‌of‌‌failure‌‌to‌‌state‌‌a‌‌cause‌‌of‌‌action.‌ ‌ Terp‌‌Construction‌‌Corp.‌‌v.‌‌Banco‌‌Filipino‌‌Savings‌‌and‌‌ Mortgage‌‌Bank‌‌‌2019‌‌Leonen,‌‌J✔‌ ‌ 6. Outstanding‌‌Capital‌‌Stocks‌ ‌ Que‌‌Villongco‌‌v.‌‌Que‌‌Yabut‌‌2 ‌ 018‌ ‌ For‌‌stock‌‌corporations,‌‌the‌‌quorum‌‌is‌‌based‌‌on‌‌the‌‌number‌‌of‌‌ outstanding‌ ‌voting‌ ‌stocks‌.‌ ‌The‌‌distinction‌‌of‌‌undisputed‌‌or‌‌ disputed‌‌shares‌‌of‌‌stocks‌‌is‌‌not‌‌provided‌‌for‌‌in‌‌the‌‌law‌‌or‌‌the‌‌ jurisprudence.‌ ‌Ubi‌ ‌lex‌ ‌non‌ ‌distinguit‌ ‌nec‌ ‌nos‌ ‌distinguere‌‌ debemus.‌ ‌ Apparent‌‌authority‌‌‌is‌‌ascertained‌‌through:‌ ‌ 1. the‌ ‌general‌ ‌manner‌ ‌by‌ ‌which‌ ‌the‌ ‌corporation‌ ‌holds‌‌ out‌‌an‌‌officer‌‌or‌‌agent‌‌as‌‌having‌‌power‌‌to‌‌act,‌‌or‌‌ ‌ 2. the‌‌acquiescence‌‌in‌‌his‌‌acts‌‌of‌‌a‌‌particular‌‌nature,‌‌with‌‌ actual‌ ‌or‌ ‌constructive‌ ‌knowledge‌ ‌thereof,‌ ‌whether‌‌ within‌‌or‌‌without‌‌the‌‌scope‌‌of‌‌his‌‌ordinary‌‌powers.‌ ‌ 4. Corporate‌‌Name‌‌(also‌‌applicable‌‌in‌‌IPL)‌ ‌ De‌ ‌La‌ ‌Salle‌ ‌Montessori‌ ‌International‌ ‌of‌ ‌Malolos‌ ‌v.‌ ‌De‌ ‌La‌‌ Salle‌‌Brothers‌‌‌2018‌‌cf‌‌Lyceum‌‌v.‌‌CA‌ ‌ Rich‌‌v.‌‌Paloma‌‌III‌‌‌2018‌‌✔‌ ‌ A‌ ‌corporation‌ ‌which‌ ‌has‌ ‌already‌ ‌been‌ ‌dissolved,‌ ‌be‌ ‌it‌‌ voluntarily‌ ‌or‌‌involuntarily,‌‌retains‌‌no‌‌juridical‌‌personality‌‌to‌‌ conduct‌‌its‌‌business‌‌‌save‌‌for‌‌those‌‌directed‌‌towards‌‌corporate‌‌ liquidation‌.‌ ‌ 9. Vigilance‌‌Over‌‌Goods‌ ‌ Tan‌‌v.‌‌Great‌‌Harvest‌‌Enterprises‌‌‌2019‌‌Leonen,‌‌J‌c‌ f‌‌De‌‌ Guzman‌‌v.‌‌CA‌ ‌ Petitioner's‌ ‌reliance‌ ‌on‌ ‌De‌ ‌Guzman‌‌v.‌‌CA‌‌is‌‌misplaced.‌‌There,‌‌ the‌ ‌common‌ ‌carrier‌ ‌was‌ ‌absolved‌ ‌of‌ ‌liability‌ ‌because‌ ‌the‌‌ goods‌‌were‌‌stolen‌‌by‌‌robbers‌‌who‌‌used‌‌"‌grave‌‌or‌‌irresistible‌‌ threat,‌ ‌violence,‌ ‌or‌ ‌force‌"‌ ‌to‌ ‌hijack‌ ‌the‌ ‌goods.‌ ‌De‌ ‌Guzman‌‌ viewed‌‌the‌‌armed‌‌hijack‌‌as‌‌a‌‌fortuitous‌‌event.‌ ‌ In‌‌contrast‌‌to‌‌‌De‌‌Guzman‌,‌‌the‌‌loss‌‌of‌‌the‌‌soya‌‌beans‌‌here‌‌was‌‌ not‌ ‌attended‌ ‌by‌ ‌grave‌ ‌or‌‌irresistible‌‌threat,‌‌violence,‌‌or‌‌force.‌‌ Instead,‌‌it‌‌was‌‌brought‌‌about‌‌by‌‌petitioner's‌‌failure‌‌to‌‌exercise‌‌ extraordinary‌ ‌diligence‌ ‌when‌ ‌she‌ ‌neglected‌ ‌vetting‌ ‌her‌‌driver‌‌ or‌ ‌providing‌ ‌security‌ ‌for‌ ‌the‌ ‌cargo‌ ‌and‌ ‌failing‌ ‌to‌ ‌take‌ ‌out‌‌ insurance‌‌on‌‌the‌‌shipment's‌‌value.‌ ‌ 10. Common‌‌Carrier‌ ‌ Unitrans‌ ‌International‌‌Forwarders‌‌v.‌‌Insurance‌‌Company‌‌ of‌‌North‌‌America‌‌‌2019‌ ‌ 7. Merger‌ ‌ Here,‌ ‌respondent‌ ‌relied‌ ‌on‌ ‌Escalona's‌ ‌apparent‌ ‌authority‌ ‌to‌‌ promise‌ ‌interest‌ ‌payments‌ ‌over‌ ‌and‌ ‌above‌ ‌the‌ ‌guaranteed‌‌ 8.5%,‌ ‌considering‌ ‌that‌ ‌Escalona‌ ‌was‌ ‌petitioner's‌ ‌then‌ ‌senior‌‌ vice‌‌president.‌ ‌ 8. Dissolution‌ ‌ Transportation‌‌Law‌ ‌ b. Livesey‌‌v.‌‌Binswanger‌‌Philippines‌‌‌2014‌ ‌ 3. Doctrine‌‌of‌‌Apparent‌‌Authority‌ ‌ corporations‌‌may‌‌be‌‌prosecuted‌‌by‌‌or‌‌against‌‌the‌‌surviving‌‌or‌‌ consolidated‌‌corporation.‌ ‌ Sps‌‌Ong‌‌v.‌‌BPI‌‌Family‌‌Savings‌‌‌2018‌ ‌ In‌ ‌handling‌ ‌the‌ ‌subject‌ ‌shipment‌ ‌and‌ ‌making‌‌sure‌‌that‌‌it‌‌was‌‌ The‌‌surviving‌‌or‌‌consolidated‌‌corporation‌‌shall‌‌be‌‌responsible‌‌ delivered‌‌to‌‌the‌‌consignee's‌‌premises‌‌in‌‌good‌‌condition‌‌as‌‌the‌‌ and‌ ‌liable‌ ‌for‌ ‌all‌ ‌the‌ ‌liabilities‌ ‌and‌ ‌obligations‌ ‌of‌‌each‌‌of‌‌the‌‌ delivery/forwarding‌ ‌agent,‌ ‌Unitrans‌ ‌was‌ ‌acting‌ ‌as‌ ‌a‌ ‌freight‌‌ constituent‌ ‌corporations‌ ‌in‌ ‌the‌ ‌same‌ ‌manner‌ ‌as‌ ‌if‌ ‌such‌‌ forwarding‌ ‌entity‌ ‌and‌ ‌an‌ ‌accredited‌ ‌non-vessel‌ ‌operating‌‌ surviving‌‌or‌‌consolidated‌‌corporation‌‌had‌‌itself‌‌incurred‌‌such‌‌ common‌‌carrier.‌ ‌ liabilities‌ ‌or‌ ‌obligations;‌ ‌and‌ ‌any‌ ‌pending‌ ‌claim,‌ ‌action,‌ ‌or‌‌ Insurance‌ ‌ proceeding‌ ‌brought‌ ‌by‌ ‌or‌ ‌against‌ ‌any‌ ‌of‌ ‌such‌ ‌constituent‌‌ 11. Insurance‌‌Claim;‌‌Proof‌‌of‌‌Loss‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 145‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ agent‌ ‌acting‌ ‌within‌ ‌the‌ ‌general‌ ‌scope‌ ‌of‌ ‌his‌ ‌authority‌ ‌even‌‌ though,‌‌in‌‌the‌‌particular‌‌case,‌‌the‌‌agent‌‌is‌‌secretly‌‌abusing‌‌his‌‌ authority‌ ‌and‌ ‌attempting‌ ‌to‌ ‌perpetrate‌ ‌a‌ ‌fraud‌ ‌upon‌ ‌his‌‌ principal‌‌or‌‌some‌‌other‌‌person,‌‌for‌‌his‌‌own‌‌ultimate‌‌benefit.‌ ‌ IPAMS‌‌v.‌‌Country‌‌Bankers‌‌Insurance‌‌‌2018‌ ‌ When‌‌the‌‌insurer‌‌recognizes‌‌his‌‌liability‌‌to‌‌pay‌‌the‌‌claim,‌‌there‌‌ is‌‌waiver‌‌‌by‌‌the‌‌insurer‌‌of‌‌any‌‌defect‌‌in‌‌the‌‌proof‌‌of‌‌loss.‌ ‌ The‌ ‌argument‌ ‌of‌ ‌Country‌ ‌Bankers‌ ‌on‌ ‌the‌ ‌lack‌ ‌of‌ ‌official‌‌ receipts‌‌was‌‌a‌‌mere‌‌afterthought‌‌to‌‌evade‌‌its‌‌obligation‌‌to‌‌pay‌‌ the‌‌claims‌‌presented‌‌by‌‌petitioner‌‌IPAMS.‌ ‌ Banco‌‌Filipino‌‌Savings‌‌v.‌‌BSP‌‌‌2018‌‌Leonen,‌‌J‌ ‌ 12. Mercantile‌‌Insurance‌‌v.‌‌DMCI-Laing‌‌Construction‌‌‌2019‌ ‌ Since‌‌the‌‌surety‌‌is‌‌a‌‌solidary‌‌debtor,‌‌it‌‌is‌‌not‌‌necessary‌‌that‌‌the‌‌ original‌ ‌debtor‌ ‌first‌ ‌failed‌ ‌to‌ ‌pay‌ ‌before‌ ‌the‌ ‌surety‌ ‌could‌ ‌be‌‌ made‌‌liable;‌‌it‌‌is‌‌enough‌‌that‌‌a‌‌demand‌‌for‌‌payment‌‌is‌‌made‌‌by‌‌ FRIA‌ ‌ the‌‌creditor‌‌for‌‌the‌‌surety's‌‌liability‌‌to‌‌attach.‌‌ ‌ 16. The‌ ‌requirement‌ ‌of‌ ‌"first‌ ‌demand"‌ ‌in‌ ‌this‌ ‌case‌ ‌should‌ ‌be‌‌ understood‌ ‌in‌ ‌light‌ ‌of‌ ‌Article‌ ‌1169,‌ ‌wherein‌ ‌the‌ ‌obligee‌ ‌is‌‌ deemed‌ ‌to‌ ‌be‌ ‌in‌ ‌delay‌ ‌upon‌ ‌judicial‌ ‌or‌ ‌extrajudicial‌ ‌demand.‌‌ Clearly,‌‌Mercantile's‌‌liability‌‌became‌‌due‌‌upon‌‌its‌‌receipt‌‌of‌‌the‌‌ First‌‌Call.‌ ‌ Intellectual‌‌Property‌‌Law‌ ‌ Respondent,‌‌in‌‌using‌‌a‌‌trademark‌‌of‌‌petitioner‌‌as‌‌its‌‌corporate‌‌ name‌‌or‌‌trade‌‌name,‌‌may‌‌be‌‌held‌‌liable‌‌for‌‌unfair‌‌competition.‌ ‌ Here,‌ ‌PNB-IFL‌ ‌clearly‌ ‌failed‌‌to‌‌exercise‌‌the‌‌required‌‌degree‌‌of‌‌ caution‌‌in‌‌readily‌‌accepting‌‌the‌‌collateral‌‌‌offered‌‌by‌‌PPI.‌ ‌ 20. Planters‌‌Development‌‌Bank‌‌v.‌‌Lubiya‌‌Agro‌‌Industrial‌‌‌2018‌ ‌ Commencement‌‌Order‌ ‌ As‌ ‌a‌ ‌GR‌,‌ ‌personal‌ ‌notice‌ ‌to‌ ‌the‌ ‌mortgagor‌ ‌in‌ ‌an‌ ‌extrajudicial‌‌ foreclosure‌ ‌proceeding‌ ‌is‌ ‌NOT‌ ‌necessary.‌ ‌Act‌ ‌3135‌ ‌only‌‌ requires‌‌posting‌‌of‌‌the‌‌notice‌‌+‌‌publication‌‌of‌‌said‌‌notice.‌ ‌ LBP‌‌v.‌‌Polillo‌‌Paradise‌‌Island‌‌Corp.‌‌‌2019‌‌✔‌ ‌ The‌ ‌FRIA‌ ‌provides‌ ‌that‌ ‌the‌ ‌effects‌ ‌of‌ ‌the‌ ‌Commencement‌‌ Order‌ ‌shall‌ ‌be‌ ‌reckoned‌ ‌from‌ ‌the‌ ‌date‌ ‌of‌ ‌the‌ ‌filing‌ ‌of‌ ‌the‌‌ petition‌ ‌for‌ ‌corporate‌ ‌rehabilitation,‌ ‌be‌ ‌it‌ ‌voluntary‌ ‌or‌‌ involuntary.‌ ‌ The‌ ‌only‌ ‌exception‌ ‌is‌ ‌if‌ ‌the‌ ‌parties‌ ‌expressly‌ ‌stipulated‌ ‌the‌‌ requirement‌‌of‌‌personal‌‌notice.‌ ‌ 21. Tabuada‌‌v.‌‌Tabuada‌‌‌2018‌ ‌ A‌ ‌person‌ ‌constituting‌ ‌a‌ ‌mortgage‌ ‌should‌ ‌be‌ ‌the‌ ‌owner‌ ‌of‌‌the‌‌ mortgaged‌‌property,‌‌or‌‌should‌‌have‌‌the‌‌right‌‌of‌‌free‌‌disposal‌‌of‌‌ it,‌ ‌or‌ ‌in‌ ‌the‌ ‌absence‌ ‌thereof,‌ ‌such‌ ‌person‌ ‌should‌ ‌be‌ ‌legally‌‌ authorized‌ ‌for‌ ‌the‌ ‌purpose.‌ ‌Otherwise,‌ ‌the‌ ‌mortgage‌ ‌shall‌ ‌be‌ ‌ null‌‌and‌‌void‌.‌ ‌ Allied‌‌Banking‌‌Corp.‌‌v.‌‌Equitable‌‌PCI‌‌Bank,‌‌Inc.‌‌‌2018‌‌✔‌ ‌ The‌ ‌effects‌ ‌of‌ ‌such‌‌commencement‌‌order‌‌shall‌‌retroact‌‌to‌‌the‌‌ date‌‌that‌‌the‌‌petition‌‌was‌‌filed,‌‌and‌‌‌render‌‌void‌‌any‌‌attempt‌‌to‌‌ collect‌‌on‌‌or‌‌enforce‌‌a‌‌claim‌‌against‌‌the‌‌debtor‌‌or‌‌to‌‌set‌‌off‌‌any‌‌ debt‌‌by‌‌the‌‌debtor's‌‌creditors,‌‌after‌‌the‌‌commencement‌‌date.‌ ‌ 22. Sps‌‌Bautista‌‌v.‌‌Premiere‌‌Development‌‌Bank‌‌‌2018‌ ‌ The‌ ‌publication‌ ‌and‌ ‌posting‌‌of‌‌the‌‌notice‌‌of‌‌the‌‌‌rescheduled‌‌ extrajudicial‌‌foreclosure‌‌sale‌‌are‌‌mandatory‌‌and‌‌jurisdictional.‌‌ The‌ ‌ensuing‌ ‌sale‌ ‌held‌ ‌without‌ ‌the‌ ‌publication‌ ‌and‌ ‌posting‌‌of‌‌ the‌‌notice‌‌is‌‌v‌ oid‌‌ab‌‌initio‌.‌ ‌ Real‌‌Estate‌‌Mortgage‌ ‌ 18. Villalon‌‌v.‌‌Rural‌‌Bank‌‌of‌‌Agoo‌‌2 ‌ 019‌ ‌ The‌ ‌first‌ ‌mortgagee‌ ‌has‌ ‌superior‌ ‌right‌ ‌over‌ ‌the‌ ‌second‌‌ mortgagee‌ ‌even‌ ‌if‌ ‌the‌ ‌latter‌ ‌has‌ ‌foreclosed‌ ‌the‌ ‌mortgaged‌‌ property‌ ‌ahead‌ ‌of‌ ‌the‌ ‌first.‌ ‌A‌ ‌second‌ ‌mortgagee‌ ‌of‌ ‌an‌‌ unregistered‌‌land‌‌has‌‌to‌‌wait‌‌until‌‌after‌‌the‌‌debtor’s‌‌obligation‌‌ CRIMINAL‌‌LAW‌ ‌ to‌‌the‌‌first‌‌has‌‌been‌‌fully‌‌satisfied.‌ ‌ Banking‌‌Law‌ ‌ 14. Diligence‌‌Required‌‌of‌‌Banks‌ ‌ Citystate‌‌Savings‌‌Bank‌‌v.‌‌Tobias‌‌2 ‌ 018‌ ‌ A‌‌banking‌‌corporation‌‌is‌‌liable‌‌to‌‌innocent‌‌third‌‌persons‌‌where‌‌ the‌ ‌representation‌ ‌is‌‌made‌‌in‌‌the‌‌course‌‌of‌‌its‌‌business‌‌by‌‌an‌ A‌‌bank‌‌which‌‌has‌‌been‌‌ordered‌‌closed‌‌by‌‌the‌‌Bangko‌‌Sentral‌‌is‌‌ placed‌‌under‌‌the‌‌receivership‌‌of‌‌the‌‌PDIC.‌‌As‌‌a‌‌consequence‌‌of‌‌ the‌ ‌receivership,‌ ‌the‌ ‌closed‌ ‌bank‌ ‌may‌ ‌sue‌ ‌and‌ ‌be‌ ‌sued‌ ‌only‌‌ through‌ ‌its‌ ‌receiver,‌ ‌the‌ ‌PDIC.‌ ‌Any‌ ‌action‌ ‌filed‌ ‌by‌ ‌the‌ ‌closed‌‌ bank‌‌without‌‌its‌‌receiver‌‌may‌‌be‌‌dismissed‌.‌ ‌ 17. Effect‌‌of‌‌Commencement‌‌Order‌ ‌ Asia‌‌Pacific‌‌Resources‌‌International‌‌Holdings,‌‌Ltd.‌‌v.‌‌ Paperone,‌‌Inc.‌‌‌2018‌‌✔‌ ‌ While‌ ‌there‌ ‌is‌ ‌confusion‌ ‌of‌ ‌goods‌ ‌when‌ ‌the‌ ‌products‌ ‌are‌‌ competing,‌ ‌confusion‌ ‌of‌ ‌business‌ ‌exists‌ ‌when‌ ‌the‌ ‌products‌ are‌‌non-competing‌‌but‌‌related‌‌enough‌‌to‌‌produce‌‌confusion‌‌of‌‌ affiliation.‌ ‌ In‌‌this‌‌case,‌‌PPI's‌‌act‌‌of‌‌mortgaging‌‌the‌‌uncovered‌‌parking‌‌area‌‌ –‌ ‌by‌ ‌amending‌ ‌the‌ ‌approved‌ ‌project‌ ‌plan‌ ‌and‌ ‌master‌ ‌deed‌‌ without‌ ‌the‌ ‌affirmative‌‌vote‌‌of‌‌two-thirds‌‌of‌‌the‌‌voting‌‌power‌‌ of‌‌CCI‌‌or‌‌a‌‌simple‌‌majority‌‌of‌‌the‌‌registered‌‌unit‌‌owners‌‌under‌‌ Sec.‌ ‌4‌ ‌of‌ ‌the‌ ‌Condominium‌ ‌Act‌ ‌–‌ ‌constitutes‌ ‌unsound‌ ‌real‌‌ estate‌‌business‌‌practice.‌ ‌ 15. Closure‌‌of‌‌Banks‌ ‌ Surety‌ ‌ 13. Unfair‌‌Competition‌ ‌ Section‌‌18‌‌of‌‌P.D.‌‌No.‌‌957‌‌prohibits‌‌the‌‌mortgage‌‌of‌‌a‌‌portion‌‌of‌‌ the‌ ‌common‌ ‌areas‌ ‌of‌ ‌the‌ ‌condominium‌ ‌project‌ ‌without‌ ‌the‌‌ approval‌‌of‌‌the‌‌HLURB.‌ ‌ END‌‌OF‌‌COMMERCIAL‌‌LAW‌ ‌ I.‌‌PRINCIPLES‌‌OF‌‌CRIMINAL‌‌LAW‌ ‌ 19. Concorde‌‌Condominium‌‌v.‌‌PNB‌‌‌2018‌ ‌ ‌ A.‌‌General‌‌principles‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 146‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ 1.‌‌Mala‌‌in‌‌se‌‌and‌‌mala‌‌prohibita‌ ‌ 4.‌‌Penalties‌ ‌ 2.‌‌Scope‌‌and‌‌characteristics‌ ‌ a.‌‌Imposable‌‌penalties‌ ‌ 3.‌‌Pro‌‌reo‌‌principle‌ ‌ b.‌‌Classification‌ ‌ 4.‌‌Interpretation‌‌of‌‌penal‌‌laws‌ ‌ c.‌‌Duration‌‌and‌‌effects‌ ‌ 5.‌‌Retroactive‌‌effect‌‌of‌‌penal‌‌laws‌ ‌ d.‌‌Application‌ ‌ B.‌‌Felonies‌ ‌ i.‌‌Subsidiary‌‌imprisonment‌ ‌ 1.‌‌Criminal‌‌liabilities‌ ‌ ii.‌‌Indeterminate‌‌Sentence‌‌Law‌ ‌ a.‌‌Classification‌‌of‌‌felonies‌ ‌ e.‌‌Graduation‌‌of‌‌penalties‌ ‌ b.‌‌Aberratio‌‌ictus,‌‌error‌‌in‌‌personae,‌‌and‌‌praeter‌‌ f.‌‌Accessory‌‌penalties‌ ‌ intentionem‌ ‌ 5.‌‌Execution‌‌and‌‌service‌ ‌ c.‌‌Impossible‌‌crimes‌ ‌ a.‌‌Three-fold‌‌rule‌ ‌ d.‌‌Stages‌‌of‌‌execution‌ ‌ b.‌‌Probation‌‌Law‌ ‌ e.‌‌Continuing‌‌crimes‌ ‌ c.‌‌Juvenile‌‌Justice‌‌and‌‌Welfare‌‌Act‌ ‌ f.‌‌Complex‌‌crimes‌‌and‌‌composite‌‌crimes‌ ‌ d.‌‌Republic‌‌Act‌‌No.‌‌10951‌ ‌ 2.‌‌Circumstances‌‌affecting‌‌criminal‌‌liability‌ ‌ 6.‌‌Extinction‌‌of‌‌criminal‌‌liability‌ ‌ a.‌‌Justifying‌ ‌ 7.‌‌Civil‌‌liability‌‌in‌‌criminal‌‌cases‌ ‌ b.‌‌Exempting‌ ‌ c.‌‌Mitigating‌ ‌ A.‌‌General‌‌principles‌ ‌ d.‌‌Aggravating‌‌ ‌ 1.‌‌Mala‌‌in‌‌se‌‌and‌‌mala‌‌prohibita‌ ‌ e.‌‌Alternative‌‌circumstances‌ ‌ f.‌‌Absolutory‌‌causes‌ ‌ 3.‌‌Persons‌‌liable‌‌and‌‌degree‌‌of‌‌participation‌ ‌ a.‌‌Principals,‌‌accomplices,‌‌and‌‌accessories‌ ‌ b.‌‌Conspiracy‌‌and‌‌proposal‌ ‌ c.‌‌Multiple‌‌offenders‌ ‌ prohibitum‌.‌‌"An‌‌act‌‌which‌‌is‌‌declared‌‌malum‌‌prohibitum‌,‌‌‌malice‌‌or‌‌ criminal‌‌intent‌‌is‌‌completely‌‌immaterial.‌"‌ ‌ Hence,‌ ‌"‌intent‌ ‌to‌ ‌commit‌ ‌the‌ ‌crime‌‌and‌‌intent‌‌to‌‌perpetrate‌‌the‌‌ act‌ ‌must‌ ‌be‌ ‌distinguished.‌ ‌A‌ ‌person‌ ‌may‌ ‌not‌ ‌have‌ ‌consciously‌‌ intended‌ ‌to‌ ‌commit‌ ‌a‌ ‌crime;‌ ‌but‌ ‌he‌‌did‌‌intend‌‌to‌‌commit‌‌an‌‌act‌,‌ and‌ ‌that‌ ‌act‌‌is,‌‌by‌‌the‌‌very‌‌nature‌‌of‌‌things,‌‌the‌‌crime‌‌itself‌."‌‌When‌‌ an‌ ‌act‌ ‌is‌ ‌prohibited‌ ‌by‌ ‌a‌ ‌special‌ ‌law,‌ ‌it‌ ‌is‌ ‌considered‌ ‌injurious‌ ‌to‌‌ public‌‌welfare,‌‌and‌‌the‌‌performance‌‌of‌‌the‌‌prohibited‌‌act‌‌is‌‌the‌‌crime‌‌ itself.‌ ‌ Volition‌,‌‌or‌‌intent‌‌to‌‌commit‌‌the‌‌act,‌‌is‌‌different‌‌from‌‌criminal‌‌intent.‌‌ Volition‌ ‌or‌ ‌voluntariness‌ ‌refers‌‌to‌‌knowledge‌‌of‌‌the‌‌act‌‌being‌‌done.‌‌ On‌‌the‌‌other‌‌hand,‌‌‌criminal‌‌intent‌‌refers‌‌to‌‌the‌‌state‌‌of‌‌mind‌‌beyond‌‌ voluntariness.‌‌It‌‌is‌‌this‌‌intent‌‌that‌‌is‌‌being‌‌punished‌‌by‌‌crimes‌mala‌‌ in‌‌se‌.‌ ‌ Garcia‌‌v.‌‌CA‌ ‌ The‌ ‌acts‌ ‌prohibited‌ ‌in‌ ‌Section‌ ‌27(b)‌ ‌of‌ ‌the‌ ‌Omnibus‌‌Election‌‌Code‌‌ are‌ ‌mala‌ ‌in‌ ‌se‌.‌ ‌Given‌ ‌the‌ ‌volume‌ ‌of‌ ‌votes‌ ‌to‌ ‌be‌ ‌counted‌ ‌and‌‌ canvassed‌ ‌within‌ ‌a‌ ‌limited‌ ‌amount‌ ‌of‌ ‌time,‌ ‌errors‌ ‌and‌‌ miscalculations‌‌are‌‌bound‌‌to‌‌happen.‌‌And‌‌it‌‌could‌‌not‌‌be‌‌the‌‌intent‌‌of‌‌ the‌‌law‌‌to‌‌punish‌‌unintentional‌‌election‌‌canvass‌‌errors.‌ ‌ Criminal‌ ‌intent‌ ‌is‌‌‌presumed‌‌‌to‌‌exist‌‌on‌‌the‌‌part‌‌of‌‌the‌‌person‌‌who‌‌ executes‌ ‌an‌ ‌act‌ ‌which‌ ‌the‌ ‌law‌ ‌punishes,‌ ‌unless‌ ‌the‌ ‌contrary‌ ‌shall‌‌ appear.‌ ‌Thus,‌ ‌whoever‌ ‌invokes‌ ‌good‌ ‌faith‌ ‌as‌ ‌a‌ ‌defense‌ ‌has‌ ‌the‌ burden‌‌of‌‌proving‌‌its‌‌existence.‌ ‌ People‌‌v.‌‌Comia‌ ‌ Crimes‌ ‌mala‌ ‌in‌ ‌se‌ ‌are‌ ‌inherently‌ ‌immoral‌ ‌and‌ ‌involve‌ ‌intent‌ ‌to‌‌ commit‌‌a‌‌crime.‌‌Good‌‌faith‌‌is‌‌a‌‌defense‌‌in‌‌‌mala‌‌in‌‌se‌‌crimes,‌‌but‌‌is‌‌ not‌ ‌a‌ ‌defense‌ ‌in‌ ‌mala‌‌prohibita‌‌crimes,‌‌where‌‌what‌‌is‌‌required‌‌is‌‌ merely‌ ‌the‌ ‌intent‌ ‌to‌ ‌perpetrate‌ ‌the‌ ‌act‌.‌ ‌Although‌ ‌most‌ ‌crimes‌‌ punished‌ ‌under‌ ‌special‌ ‌penal‌ ‌laws‌ ‌are‌ ‌mala‌ ‌prohibita‌,‌ ‌there‌ ‌are‌‌ also‌‌those‌‌that‌‌are‌‌‌mala‌‌in‌‌se‌.‌ ‌ The‌ ‌act‌ ‌of‌ ‌transporting‌ ‌a‌ ‌prohibited‌ ‌drug‌ ‌is‌ ‌a‌ ‌"‌malum‌‌ prohibitum‌"‌‌because‌‌it‌‌is‌‌punished‌‌as‌‌an‌‌offense‌‌under‌‌a‌‌special‌‌law.‌‌ It‌ ‌is‌ ‌a‌ ‌wrong‌ ‌because‌ ‌it‌ ‌is‌ ‌prohibited‌ ‌by‌ ‌law.‌ ‌Without‌ ‌the‌ ‌law‌‌ punishing‌‌the‌‌act,‌‌it‌‌cannot‌‌be‌‌considered‌‌a‌‌wrong.‌‌As‌‌such,‌‌the‌‌mere‌‌ commission‌‌of‌‌said‌‌act‌‌is‌‌what‌‌constitutes‌‌the‌‌offense‌‌punished‌‌and‌‌ suffices‌ ‌to‌ ‌validly‌ ‌charge‌ ‌and‌ ‌convict‌ ‌an‌ ‌individual‌ ‌caught‌‌ committing‌‌the‌‌act‌‌so‌‌punished,‌‌regardless‌‌of‌‌criminal‌‌intent‌.‌ ‌ Matalam‌‌v.‌‌People‌‌‌2016‌‌Leonen,‌‌J‌ ‌ The‌‌general‌‌rule‌‌is‌‌that‌‌acts‌‌punished‌‌under‌‌a‌‌special‌‌law‌‌are‌‌‌malum‌‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 147‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ 2.‌‌Scope‌‌and‌‌characteristics‌ ‌ a.‌‌Generality‌ ‌ Penal‌ ‌laws‌ ‌apply‌ ‌to‌ ‌ALL‌‌PERSONS‌‌who‌‌commit‌‌crimes‌‌within‌‌the‌‌ territory.‌e‌ xc‌‌ ‌ 1. Under‌‌Vienna‌‌Convention‌‌on‌‌diplomatic‌‌relations;‌ ‌ 2. In‌ ‌certain‌ ‌exempting‌ ‌circumstances‌ ‌under‌ ‌the‌ ‌RPC‌ ‌and‌‌ special‌‌laws;‌ ‌ 3. Legal‌ ‌pluralism‌ ‌in‌ ‌certain‌ ‌areas/culture,‌ ‌i.e.‌ ‌the‌ ‌Muslim‌‌ Code‌‌and‌‌IPRA.‌ ‌ b.‌‌Territoriality‌ ‌ Penal‌‌laws‌‌apply‌‌to‌‌all‌‌offenses‌‌committed‌‌within‌‌the‌‌PH‌‌territory.‌ exc‌‌ c.‌‌Prospectivity‌ ‌ 5.‌‌Retroactive‌‌effect‌‌of‌‌penal‌‌laws‌ ‌ Penal‌‌laws‌‌do‌‌not‌‌have‌‌retroactive‌‌effect‌ ‌ exc‌i‌ f‌‌the‌‌provisions‌‌are‌‌favorable‌‌to‌‌the‌‌accused‌‌who‌‌is‌‌not‌‌a‌‌ habitual‌‌offender‌ ‌ a. If‌‌the‌‌offender‌‌is‌‌a‌‌habitual‌‌delinquent;‌ ‌ exc‌‌to‌‌the‌‌exc‌t‌ he‌‌law‌‌itself‌‌provides‌‌against‌‌such‌‌retroactive‌‌effect.‌ ‌ b. The‌‌new‌‌or‌‌amendatory‌‌law‌‌is‌‌not‌‌favorable‌‌to‌‌him;‌‌or‌ ‌ c. Retrospective‌‌application‌‌is‌‌expressly‌‌proscribed.‌ ‌ Hernan‌‌v.‌‌Sandiganbayan‌‌‌2017‌‌En‌‌Banc‌ ‌ For‌‌as‌‌long‌‌as‌‌the‌‌penal‌‌law‌‌is‌‌favorable‌‌to‌‌the‌‌accused,‌‌it‌‌shall‌‌find‌‌ application‌‌regardless‌‌of‌‌whether‌‌its‌‌effectivity‌‌comes‌‌after‌‌the‌‌time‌‌ when‌ ‌the‌ ‌judgment‌ ‌of‌ ‌conviction‌ ‌is‌ ‌rendered‌ ‌and‌‌even‌‌if‌‌service‌‌of‌‌ sentence‌ ‌has‌ ‌already‌ ‌begun.‌ ‌The‌ ‌accused‌ ‌shall‌ ‌be‌ ‌entitled‌ ‌to‌ ‌the‌‌ benefits‌‌of‌‌the‌‌new‌‌law‌‌warranting‌‌him‌‌to‌‌serve‌‌a‌‌lesser‌‌sentence,‌‌or‌‌ to‌‌his‌‌release,‌‌if‌‌he‌‌has‌‌already‌‌begun‌‌serving‌‌his‌‌previous‌‌sentence,‌‌ and‌ ‌said‌ ‌service‌ ‌already‌ ‌accomplishes‌ ‌the‌ ‌term‌ ‌of‌ ‌the‌ ‌modified‌ sentence.‌ ‌ 1. Extraterritoriality‌‌under‌‌the‌‌RPC‌‌and‌‌SPLs‌ ‌ 2. Transnational‌‌crimes‌‌under‌‌UNTOC‌‌and‌‌domestic‌‌law,‌‌ ‌ 3. ‌ ro‌‌reo‌‌‌principle‌ ‌ Universal‌ ‌jurisdiction‌ ‌in‌ ‌jus‌ ‌cogens‌ ‌crimes‌ ‌and‌ ‌under‌‌ 3.‌P UNCLOS,‌‌and‌‌ ‌ ⭐‌Intestate‌‌Estate‌‌of‌‌Gonzales‌‌v.‌‌People‌‌‌2010‌ ‌ Erga‌ ‌omnes‌ ‌crimes‌ ‌under‌ ‌international‌ ‌criminal‌ ‌tribunal‌‌ The‌ ‌fundamental‌ ‌principle‌ ‌in‌ ‌applying‌ ‌and‌ ‌in‌ ‌interpreting‌ ‌criminal‌ jurisdiction.‌ ‌ laws‌ ‌is‌ ‌to‌ ‌resolve‌ ‌all‌ ‌doubts‌ ‌in‌ ‌favor‌ ‌of‌ ‌the‌‌accused.‌‌‌In‌‌dubio‌‌pro‌‌ 4. People‌‌v.‌‌Tulin‌‌‌re‌‌extraterritoriality‌‌and‌‌universal‌‌jurisdiction‌ ‌ The‌ ‌attack‌ ‌on‌ ‌and‌ ‌seizure‌ ‌of‌ ‌"M/T‌ ‌Tabangao''‌ ‌and‌ ‌its‌ ‌cargo‌ ‌were‌‌ committed‌‌in‌‌Philippine‌‌waters,‌‌although‌‌the‌‌captive‌‌vessel‌‌was‌‌later‌‌ brought‌ ‌by‌ ‌the‌ ‌pirates‌ ‌to‌ ‌Singapore‌ ‌where‌ ‌its‌‌cargo‌‌was‌‌off-loaded,‌‌ transferred,‌ ‌and‌ ‌sold.‌ ‌And‌ ‌such‌ ‌transfer‌ ‌was‌ ‌done‌ ‌under‌‌ accused-appellant‌ ‌Hiong's‌ ‌direct‌ ‌supervision.‌ ‌Although‌ ‌PD‌ ‌No.‌‌532‌‌ requires‌ ‌that‌ ‌the‌ ‌attack‌ ‌and‌ ‌seizure‌ ‌of‌ ‌the‌ ‌vessel‌ ‌and‌ ‌its‌ ‌cargo‌ ‌be‌‌ committed‌‌in‌‌Philippine‌‌waters,‌‌the‌‌disposition‌‌by‌‌the‌‌pirates‌‌of‌‌the‌‌ vessel‌‌and‌‌its‌‌cargo‌‌is‌‌still‌‌deemed‌‌part‌‌of‌‌the‌‌act‌‌of‌‌piracy,‌‌hence,‌‌the‌‌ same‌‌need‌‌not‌‌be‌‌committed‌‌in‌‌Philippine‌‌waters‌.‌ ‌ ‌ Moreover,‌ ‌piracy‌ ‌falls‌ ‌under‌ ‌Title‌ ‌One‌ ‌of‌ ‌Book‌ ‌Two‌‌of‌‌the‌‌Revised‌‌ Penal‌‌Code.‌‌As‌‌such,‌‌it‌‌is‌‌an‌‌exception‌‌to‌‌the‌‌rule‌‌on‌‌territoriality‌‌ in‌‌criminal‌‌law.‌‌It‌‌is‌‌likewise,‌‌well-settled‌‌that‌‌regardless‌‌of‌‌the‌‌law‌‌ penalizing‌‌the‌‌same,‌‌‌piracy‌‌is‌‌a‌‌reprehensible‌‌crime‌‌against‌‌the‌‌ whole‌‌world‌‌‌(‌People‌‌v.‌‌Lol-lo‌).‌ ‌ The‌ ‌general‌ ‌rule‌ ‌is‌ ‌that‌ ‌penal‌ ‌laws‌ ‌shall‌ ‌have‌ ‌a‌ ‌retroactive‌ ‌effect‌‌ insofar‌‌as‌‌they‌‌favor‌‌the‌‌person‌‌guilty‌‌of‌‌a‌‌felony‌‌‌except‌ ‌ reo‌.‌‌When‌‌in‌‌doubt,‌‌rule‌‌for‌‌the‌‌accused.‌ ‌ Intimately‌ ‌related‌ ‌to‌ ‌the‌ ‌in‌ ‌dubio‌ ‌pro‌ ‌reo‌ ‌principle‌ ‌is‌ ‌the‌ ‌rule‌ ‌of‌‌ lenity.‌ ‌The‌ ‌rule‌ ‌applies‌ ‌when‌ ‌the‌ ‌court‌‌is‌‌faced‌‌with‌‌two‌‌possible‌‌ interpretations‌ ‌of‌ ‌a‌ ‌penal‌ ‌statute,‌ ‌one‌ ‌that‌ ‌is‌ ‌prejudicial‌ ‌to‌ ‌the‌‌ accused‌ ‌and‌ ‌another‌ ‌that‌ ‌is‌ ‌favorable‌ ‌to‌ ‌him.‌ ‌The‌‌rule‌‌calls‌‌for‌‌the‌‌ adoption‌ ‌of‌ ‌an‌ ‌interpretation‌ ‌which‌ ‌is‌ ‌more‌ ‌lenient‌ ‌to‌ ‌the‌‌ accused‌.‌ ‌ Lenity‌ ‌becomes‌ ‌all‌ ‌the‌ ‌more‌ ‌appropriate‌ ‌when‌ ‌this‌ ‌case‌ ‌is‌‌viewed‌‌ through‌ ‌the‌ ‌lens‌ ‌of‌ ‌the‌ ‌basic‌ ‌purpose‌ ‌of‌ ‌Article‌ ‌332‌ ‌of‌ ‌the‌ ‌RPC‌ ‌to‌‌ preserve‌‌family‌‌harmony‌‌by‌‌providing‌‌an‌‌absolutory‌‌cause‌.‌ ‌ 4.‌‌Interpretation‌‌of‌‌penal‌‌laws‌ ‌ a. Penal‌‌laws‌‌are‌‌‌strictly‌‌construed‌‌against‌‌the‌‌Government‌‌and‌‌ liberally‌‌in‌‌favor‌o ‌ f‌‌the‌‌accused;‌ ‌ b. The‌‌Spanish‌‌text‌‌is‌‌controlling.‌ ‌ People‌‌v.‌‌Sarcia‌ ‌ Sec‌‌68‌‌of‌‌RA‌‌9344‌‌allows‌‌the‌‌retroactive‌‌application‌‌of‌‌the‌‌Act‌‌to‌‌ those‌ ‌who‌‌have‌‌been‌‌convicted‌‌and‌‌are‌‌serving‌‌sentence‌‌at‌‌the‌‌time‌‌ of‌ ‌the‌‌effectivity‌‌of‌‌this‌‌said‌‌Act,‌‌and‌‌who‌‌were‌‌below‌‌the‌‌age‌‌of‌‌18‌‌ years‌‌at‌‌the‌‌time‌‌of‌‌the‌‌commission‌‌of‌‌the‌‌offense.‌‌ ‌ B.‌‌Felonies‌ ‌ 1.‌‌Criminal‌‌liabilities‌ ‌ Modes‌‌of‌‌committing‌‌crimes‌ ‌ 1. Dolo.‌D ‌ eceit‌‌or‌‌criminal‌‌intent.‌‌ ‌ Act‌‌performed‌‌with‌‌deliberate‌‌intent.‌ ‌ There‌ ‌must‌ ‌be‌ ‌a‌ ‌confluence‌ ‌of‌ ‌both‌ ‌an‌ ‌evil‌ ‌act‌ ‌and‌ ‌an‌ ‌evil‌‌ intent.‌A ‌ ctum‌‌non‌‌facit‌‌reum,‌‌nisi‌‌mens‌‌sit‌‌rea.‌ ‌ 2. Culpa.‌F ‌ ault.‌‌ ‌ Wrongful‌ ‌acts‌ ‌result‌ ‌from‌ ‌imprudence,‌ ‌negligence,‌ ‌lack‌ ‌of‌‌ foresight,‌‌or‌‌lack‌‌of‌‌skill.‌ ‌ Requisites‌‌of‌D ‌ olo‌ ‌ 1. Freedom;‌ ‌ 2. Intelligence;‌ ‌ 3. Intent.‌ ‌ For‌‌‌culpa‌,‌‌‌instead‌‌of‌‌intent,‌‌‌accused‌‌is‌‌imprudent,‌‌negligent‌‌or‌‌ lacks‌‌foresight‌‌or‌‌skill‌w ‌ hile‌‌doing‌‌the‌‌act‌.‌ ‌ ⭐‌Sevilla‌‌v.‌‌People‌‌‌2014‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 148‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ Quasi-offenses‌ ‌under‌ ‌Article‌ ‌365‌ ‌of‌ ‌the‌ ‌RPC‌ ‌are‌ ‌distinct‌ ‌and‌‌ separate‌‌crimes‌‌and‌‌‌not‌‌a‌‌mere‌‌modality‌‌in‌‌the‌‌commission‌‌of‌‌a‌‌ crime.‌‌Thus,‌‌the‌‌proper‌‌designation‌‌of‌‌the‌‌felony‌‌should‌‌be‌‌‌reckless‌‌ imprudence‌ ‌resulting‌ ‌to‌ ‌falsification‌ ‌of‌ ‌public‌ ‌documents‌ ‌and‌‌ not‌‌falsification‌‌of‌‌public‌‌documents‌‌through‌‌reckless‌‌imprudence.‌ ‌ Reckless‌‌imprudence‌‌resulting‌‌to‌‌falsification‌‌of‌‌public‌‌documents‌‌is‌‌ an‌ ‌offense‌ ‌that‌ ‌is‌ ‌necessarily‌ ‌included‌ ‌in‌ ‌the‌ ‌willful‌ ‌act‌ ‌of‌‌ falsification‌‌of‌‌public‌‌documents,‌‌the‌‌latter‌‌being‌‌the‌‌greater‌‌offense.‌‌ As‌ ‌such,‌ ‌he‌ ‌can‌ ‌be‌ ‌convicted‌ ‌of‌ ‌reckless‌ ‌imprudence‌ ‌resulting‌ ‌to‌‌ falsification‌ ‌of‌ ‌public‌ ‌documents‌ ‌notwithstanding‌ ‌that‌ ‌the‌‌ Information‌ ‌only‌ ‌charged‌ ‌the‌ ‌willful‌ ‌act‌ ‌of‌ ‌falsification‌ ‌of‌ ‌public‌‌ documents.‌ ‌ People‌‌v.‌‌Pugay‌ ‌ The‌‌next‌‌question‌‌to‌‌be‌‌determined‌‌is‌‌the‌‌criminal‌‌responsibility‌‌of‌‌ the‌‌accused‌‌‌Pugay‌.‌‌Having‌‌taken‌‌the‌‌can‌‌from‌‌under‌‌the‌‌engine‌‌of‌‌the‌‌ ferris‌‌wheel‌‌and‌‌holding‌‌it‌‌before‌‌pouring‌‌its‌‌contents‌‌on‌‌the‌‌body‌‌of‌‌ the‌‌deceased,‌‌this‌‌accused‌‌knew‌‌that‌‌the‌‌can‌‌contained‌‌gasoline.‌‌The‌‌ stinging‌ ‌smell‌ ‌of‌ ‌this‌ ‌flammable‌ ‌liquid‌ ‌could‌ ‌not‌‌have‌‌escaped‌‌his‌‌ notice‌‌even‌‌before‌‌pouring‌‌the‌‌same.‌‌Clearly,‌‌he‌‌failed‌‌to‌‌exercise‌‌all‌‌ the‌ ‌diligence‌ ‌necessary‌ ‌to‌ ‌avoid‌ ‌every‌ ‌undesirable‌ ‌consequence‌‌ arising‌‌from‌‌any‌‌act‌‌that‌‌may‌‌be‌‌committed‌‌by‌‌his‌‌companions‌‌who‌‌ at‌ ‌the‌ ‌time‌ ‌were‌ ‌making‌ ‌fun‌ ‌of‌ ‌the‌ ‌deceased.‌ ‌Thus,‌ ‌the‌ ‌accused‌ ‌is‌‌ only‌ ‌guilty‌ ‌of‌ h ‌ omicide‌ ‌through‌ ‌reckless‌ ‌imprudence‌‌ defined‌ ‌in‌ ‌Article‌ ‌365‌ ‌of‌ ‌the‌ ‌RPC.‌ ‌(should‌ ‌have‌ ‌been‌ ‌reckless‌‌ imprudence‌‌resulting‌‌to‌‌homicide‌)‌ ‌ Proximate‌‌cause‌‌ ‌ NOT‌‌efficient‌‌intervening‌‌causes‌ ‌ 1. Weak‌‌or‌‌diseased‌‌physical‌‌condition‌‌of‌‌victim;‌ ‌ 2. Nervousness‌‌or‌‌temperament‌‌of‌‌victim;‌ ‌ 3. Causes‌ ‌inherent‌ ‌in‌ ‌the‌ ‌victim,‌ ‌i.e.‌ ‌victim‌ ‌not‌‌knowing‌‌how‌‌to‌‌ swim‌;‌ ‌ 4. Neglect‌‌of‌‌victim‌‌or‌‌third‌‌person;‌ ‌ 5. Erroneous‌‌or‌‌unskillful‌‌treatment;‌ ‌ 6. Delay‌‌in‌‌the‌‌medical‌‌treatment‌‌of‌‌victim.‌ ‌ Death‌ ‌of‌ ‌victim‌ ‌is‌ ‌presumed‌ ‌to‌ ‌be‌ ‌the‌ ‌natural‌ ‌consequence‌ ‌of‌‌ physical‌‌injuries‌‌inflicted‌ ‌ 1. The‌‌victim‌‌was‌‌in‌‌normal‌‌health;‌ ‌ 2. Death‌‌may‌‌be‌‌expected‌‌from‌‌the‌‌injuries‌‌inflicted;‌ ‌ 3. Death‌‌ensued‌‌within‌‌a‌‌reasonable‌‌time.‌ ‌ Novicio‌‌v.‌‌People‌ ‌ If‌ ‌the‌ ‌victim‌ ‌dies‌ ‌as‌ ‌a‌ ‌result‌ ‌of‌ ‌a‌ ‌deliberate‌ ‌act‌ ‌of‌ ‌the‌‌malefactors,‌‌ intent‌ ‌to‌ ‌kill‌‌is‌‌presumed.‌‌It‌‌is‌‌petitioner's‌‌postulation‌‌that‌‌the‌‌lone‌‌ gunshot‌ ‌wound‌ ‌of‌ ‌Mario‌ ‌does‌ ‌not‌ ‌establish‌‌intent‌‌to‌‌kill.‌‌However,‌‌ the‌ ‌number‌‌of‌‌wounds‌‌inflicted‌‌is‌‌not‌‌the‌‌sole‌‌consideration‌‌in‌‌ proving‌‌intent‌‌to‌‌kill‌.‌ ‌ This‌ ‌Court‌ ‌has‌ ‌repeatedly‌ ‌held‌ ‌that‌ if‌ ‌the‌ ‌victim's‌ ‌wound‌ ‌would‌‌ normally‌ ‌cause‌ ‌death,‌ ‌then‌ ‌the‌ ‌last‌ ‌act‌ ‌necessary‌ ‌to‌ ‌produce‌‌ homicide‌ ‌would‌ ‌have‌ ‌been‌ ‌performed‌ ‌and‌ ‌death‌ ‌would‌ ‌have‌‌ resulted‌ ‌were‌ ‌it‌ ‌not‌ ‌for‌ ‌the‌ ‌timely‌ ‌medical‌ ‌attention‌ ‌given‌‌to‌‌ the‌‌victim‌.‌ ‌ Kinds‌‌of‌‌criminal‌‌intent‌ ‌ 1. General‌.‌‌Presumed‌‌from‌‌the‌‌commission‌‌of‌‌a‌‌felony‌‌by‌d ‌ olo.‌ ‌ 2. Specific.‌‌‌Must‌‌be‌‌proven‌‌by‌‌direct‌‌or‌‌circumstantial‌‌evidence.‌ ‌ Motive‌‌is‌‌the‌‌‌reason‌‌or‌‌compelling‌‌force‌‌why‌‌the‌‌accused‌‌committed‌‌ Dinamling‌‌v.‌‌People‌‌‌2015‌ ‌ As‌ ‌to‌ ‌the‌ ‌alleged‌ ‌miscarriage‌ ‌or‌ ‌incomplete‌ ‌abortion,‌ ‌the‌ ‌allegedly‌‌ exculpatory‌‌testimony‌‌of‌‌Dr.‌‌Diaz,‌‌or‌‌even‌‌the‌‌complete‌‌disregard‌‌of‌‌ any‌ ‌evidence‌ ‌surrounding‌ ‌such‌ ‌fact‌ ‌does‌ ‌not‌ ‌lead‌ ‌to‌ ‌petitioner‌‌ Dinamling's‌ ‌acquittal.‌ ‌The‌ ‌fact‌ ‌of‌ ‌AAA's‌ ‌miscarriage‌ ‌or‌ ‌incomplete‌‌ abortion‌‌is‌‌not‌‌essential‌‌to‌‌proving‌‌the‌‌elements‌‌of‌‌the‌‌crime,‌‌unless‌‌ it‌ ‌is‌ ‌alleged‌ ‌to‌ ‌have‌ ‌caused‌ ‌mental‌ ‌or‌ ‌emotional‌‌suffering.‌‌It‌‌is‌‌not‌‌ among‌ ‌the‌ ‌crime's‌ ‌elements.‌ ‌In‌ ‌fact,‌ ‌it‌‌is‌‌not‌‌abortion‌‌but‌‌the‌‌mere‌‌ fact‌‌of‌‌pregnancy‌‌of‌‌the‌‌victim‌‌at‌‌the‌‌time‌‌of‌‌commission‌‌which‌‌is‌‌an‌‌ aggravating‌‌circumstance,‌‌not‌‌an‌‌element,‌‌of‌‌the‌‌offense.‌‌ ‌ That‌ ‌cause,‌ ‌which,‌ ‌in‌ ‌natural‌ ‌and‌ ‌continuous‌ ‌sequence,‌‌ unbroken‌ ‌by‌ ‌any‌ ‌efficient‌ ‌intervening‌ ‌cause,‌ ‌produces‌ ‌the‌‌ Gelig‌‌v.‌‌People‌‌‌2010‌ ‌ injury,‌‌and‌‌without‌‌which‌‌the‌‌result‌‌would‌‌not‌‌have‌‌occurred.‌ ‌ The‌‌prosecution's‌‌success‌‌in‌‌proving‌‌that‌‌Lydia‌‌committed‌‌the‌‌crime‌‌ of‌ ‌direct‌ ‌assault‌ ‌does‌ ‌not‌ ‌necessarily‌ ‌mean‌ ‌that‌ ‌the‌ ‌same‌‌physical‌‌ The‌ ‌felony‌ ‌is‌ ‌NOT‌ ‌the‌ ‌proximate‌ ‌cause‌ ‌of‌ ‌the‌ ‌resulting‌ ‌injury‌‌ force‌ ‌she‌ ‌employed‌ ‌on‌ ‌Gemma‌ ‌also‌ ‌resulted‌ ‌in‌ ‌the‌ ‌crime‌ ‌of‌‌ when:‌ ‌ unintentional‌‌abortion.‌ ‌ a. There‌‌is‌‌an‌‌active‌‌force‌‌that‌‌‌intervened‌‌‌between‌‌the‌‌felony‌‌and‌‌ It‌ ‌is‌ ‌worth‌ ‌stressing‌ ‌that‌ ‌Gemma‌ ‌was‌ ‌admitted‌ ‌and‌ ‌confined‌ ‌in‌ ‌a‌‌ the‌ ‌injury,‌ ‌and‌ ‌the‌ ‌active‌ ‌force‌ ‌is‌ ‌a‌ ‌distinct‌ ‌act‌ ‌or‌ ‌fact‌‌ hospital‌ ‌for‌ ‌incomplete‌‌abortion‌‌on‌‌August‌‌28,‌‌1981,‌‌which‌‌was‌‌42‌‌ absolutely‌‌foreign‌‌from‌‌the‌‌act‌‌of‌‌the‌‌accused.‌ ‌ days‌ ‌after‌ ‌the‌ ‌July‌ ‌17,‌ ‌1981‌ ‌incident.‌ ‌This‌ ‌interval‌ ‌of‌ ‌time‌ ‌is‌‌too‌‌ b. The‌ ‌injury‌ ‌is‌ ‌due‌ ‌to‌ ‌the‌ ‌intentional‌ ‌act‌ ‌of‌ ‌the‌ ‌victim.‌‌ lengthy‌ ‌to‌ ‌prove‌ ‌that‌ ‌the‌ ‌discharge‌ ‌of‌ ‌the‌ ‌fetus‌ ‌from‌ ‌the‌‌womb‌‌of‌‌ Gemma‌‌was‌‌a‌‌direct‌‌outcome‌‌of‌‌the‌‌assault.‌ ‌ Contributory‌‌negligence.‌ the‌‌acts‌‌complained‌‌of.‌‌‌Criminal‌‌intent‌‌is‌‌the‌‌‌purpose‌‌‌of‌‌the‌‌accused‌‌ in‌‌adopting‌‌the‌‌particular‌‌means‌‌to‌‌achieve‌‌his‌‌objective.‌ ‌ However,‌‌motive‌‌may‌‌be‌‌inquired‌‌into‌‌in‌‌some‌‌instances:‌ ‌ a. Where‌‌the‌‌identity‌‌of‌‌offender‌‌is‌‌in‌‌question;‌ ‌ b. To‌ ‌determine‌ ‌voluntariness‌ ‌of‌ ‌the‌ ‌act,‌ ‌or‌ ‌whether‌ ‌it‌ ‌was‌‌ intentionally‌‌done;‌ ‌ c. To‌‌determine‌‌the‌‌aggressor‌‌when‌‌self-defense‌‌is‌‌invoked;‌ ‌ d. To‌ ‌determine‌ ‌specific‌ ‌nature‌ ‌of‌ ‌the‌ ‌crime,‌ ‌i.e.‌ ‌murder‌ ‌in‌‌ furtherance‌‌of‌‌rebellion.‌ ‌ Serrano‌‌v.‌‌People‌‌‌2010‌ ‌ Intent‌‌to‌‌kill‌‌is‌‌a‌‌state‌‌of‌‌mind‌‌that‌‌the‌‌courts‌‌can‌‌discern‌‌only‌‌ through‌ ‌external‌ ‌manifestations‌,‌ ‌i.e.,‌ ‌acts‌ ‌and‌ ‌conduct‌ ‌of‌ ‌the‌‌ accused‌‌at‌‌the‌‌time‌‌of‌‌the‌‌assault‌‌and‌‌immediately‌‌thereafter.‌‌ ‌ In‌ ‌Rivera‌ ‌v.‌ ‌People,‌ ‌the‌ ‌Court‌ ‌considered‌ ‌the‌ ‌following‌ ‌factors‌ ‌to‌‌ determine‌‌the‌‌presence‌‌of‌‌an‌‌intent‌‌to‌‌kill‌:‌‌ ‌ 1) the‌‌means‌‌used‌‌by‌‌the‌‌malefactors;‌ ‌ 2) the‌‌‌nature,‌‌location,‌‌and‌‌number‌‌of‌‌wounds‌‌sustained‌‌by‌‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 149‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ the‌‌victim;‌ ‌ 3. 3) the‌ ‌conduct‌ ‌of‌ ‌the‌ ‌malefactors‌ ‌before,‌ ‌at‌ ‌the‌ ‌time,‌ ‌or‌‌ immediately‌‌after‌‌the‌‌killing‌‌of‌‌the‌‌victim;‌‌and‌ ‌ 4) the‌ ‌circumstances‌ ‌under‌ ‌which‌ ‌the‌ ‌crime‌‌was‌‌committed‌‌ and‌‌the‌‌motives‌o ‌ f‌‌the‌‌accused.‌‌ ‌ Here,‌‌the‌‌petitioner‌‌used‌‌a‌‌knife‌‌in‌‌his‌‌assault.‌‌The‌‌petitioner‌‌stabbed‌‌ the‌ ‌victim‌ ‌in‌ ‌the‌ ‌abdomen‌ ‌while‌ ‌the‌ ‌latter‌ ‌was‌ ‌held‌ ‌by‌ ‌Gener‌ ‌and‌‌ Orieta.‌ ‌Immediately‌ ‌after‌ ‌the‌ ‌stabbing,‌ ‌the‌ ‌petitioner,‌ ‌Gener‌ ‌and‌‌ Orieta‌ ‌beat‌ ‌and‌ ‌stoned‌ ‌the‌ ‌victim‌ ‌until‌ ‌he‌ ‌fell‌ ‌into‌ ‌a‌ ‌creek.‌ ‌A‌‌ reasonable‌‌inference‌‌can‌‌be‌‌made‌‌that‌‌‌the‌‌victim‌‌was‌‌left‌‌for‌‌dead‌‌ when‌‌he‌‌fell‌‌into‌‌the‌‌creek‌.‌ ‌ Under‌ ‌these‌ ‌circumstances,‌ ‌we‌ ‌are‌ ‌convinced‌ ‌that‌ ‌the‌‌petitioner,‌‌in‌‌ stabbing,‌‌beating‌‌and‌‌stoning‌‌the‌‌victim,‌i‌ ntended‌‌to‌‌kill‌h ‌ im.‌ ‌ The‌‌mistake‌‌of‌‌fact‌‌was‌‌‌NOT‌‌due‌‌to‌‌negligence,‌‌bad‌‌faith‌‌or‌‌ 1. unlawful‌ ‌intent‌ of‌ ‌the‌ ‌accused.‌ ‌The‌ ‌accused‌ ‌must‌ ‌have‌ ‌no‌‌ opportunity‌‌to‌‌verify‌‌his‌‌mistake.‌ ‌ 2. Mode‌‌of‌‌commission‌‌‌—‌‌Intentional‌‌and‌‌culpable;‌ ‌ 3. Their‌‌nature‌‌—‌‌Mala‌‌in‌‌se‌‌‌and‌‌mala‌‌prohibita;‌ ‌ Yapyuco‌‌v.‌‌Sandiganbayan‌‌‌2012‌ ‌ In‌ ‌the‌ ‌context‌ ‌of‌ ‌criminal‌ ‌law,‌ ‌a‌ ‌“‌mistake‌ ‌of‌ ‌fact‌”‌ ‌is‌ ‌a‌‌ misapprehension‌‌of‌‌a‌‌fact‌‌which,‌‌if‌‌true,‌‌would‌‌have‌‌justified‌‌the‌‌act‌‌ or‌ ‌omission‌ ‌which‌ ‌is‌ ‌the‌ ‌subject‌ ‌of‌ ‌the‌ ‌prosecution.‌ ‌Generally,‌ ‌a‌‌ reasonable‌‌mistake‌‌of‌‌fact‌‌is‌‌a‌‌defense‌‌to‌‌a‌‌charge‌‌of‌‌crime‌‌where‌‌it‌‌ negates‌‌the‌‌intent‌‌component‌‌of‌‌the‌‌crime.‌ ‌ 4. The‌ ‌law‌ ‌punishing‌ ‌them‌ ‌—‌ ‌Felonies,‌ ‌offenses‌ ‌and‌‌ infractions.‌ ‌ b.‌A ‌ berratio‌‌ictus‌,‌‌error‌‌in‌p ‌ ersonae‌,‌‌and‌p ‌ raeter‌‌intentionem‌ ‌ Accused‌‌is‌‌‌still‌‌liable‌‌‌under‌‌the‌‌following‌‌circumstances:‌ ‌ 1. Praeter‌ ‌intentionem.‌ ‌—‌ ‌Injury‌ ‌caused‌ ‌is‌ ‌greater‌ ‌than‌ ‌what‌ A‌‌proper‌‌invocation‌‌of‌‌this‌‌defense‌‌requires‌‌ ‌ was‌‌intended;‌ ‌ a) that‌‌the‌‌mistake‌‌be‌h ‌ onest‌‌and‌‌reasonable‌;‌ ‌ Any‌‌person‌‌may‌‌be‌‌held‌‌liable‌‌for‌‌an‌‌intentional‌‌felony‌‌although‌‌the‌‌ b) that‌‌it‌‌be‌‌a‌‌matter‌‌of‌f‌ act‌;‌‌and‌ ‌ Rivera,‌‌et‌‌al‌‌v.‌‌People‌‌ ‌ Intent‌ ‌to‌ ‌kill‌‌is‌‌a‌‌‌specific‌‌intent‌‌which‌‌the‌‌prosecution‌‌must‌‌prove‌‌ by‌‌direct‌‌or‌‌circumstantial‌‌evidence,‌‌while‌‌general‌‌criminal‌‌intent‌‌ is‌‌presumed‌‌from‌‌the‌‌commission‌‌of‌‌a‌‌felony‌‌by‌d ‌ olo‌.‌ ‌ In‌‌the‌‌present‌‌case,‌‌the‌‌prosecution‌‌mustered‌‌the‌‌requisite‌‌quantum‌‌ of‌‌evidence‌‌to‌‌prove‌‌the‌‌intent‌‌of‌‌petitioners‌‌to‌‌kill‌‌Ruben.‌‌Esmeraldo‌‌ and‌‌Ismael‌‌pummeled‌‌the‌‌victim‌‌with‌‌fist‌‌blows.‌‌Even‌‌as‌‌Ruben‌‌fell‌‌ to‌ ‌the‌ ‌ground,‌ ‌unable‌ ‌to‌ ‌defend‌ ‌himself‌ ‌against‌ ‌the‌ ‌sudden‌ ‌and‌‌ sustained‌ ‌assault‌ ‌of‌ ‌petitioners,‌ ‌Edgardo‌‌hit‌‌him‌‌three‌‌times‌‌with‌‌a‌‌ hollow‌ ‌block.‌ ‌Edgardo‌ ‌tried‌ ‌to‌ ‌hit‌ ‌Ruben‌ ‌on‌ ‌the‌ ‌head,‌ ‌missed,‌ ‌but‌‌ still‌‌managed‌‌to‌‌hit‌‌the‌‌victim‌‌only‌‌in‌‌the‌‌parietal‌‌area,‌‌resulting‌‌in‌‌a‌‌ lacerated‌‌wound‌‌and‌‌cerebral‌‌contusions.‌ ‌ That‌ ‌the‌ ‌head‌ ‌wounds‌ ‌sustained‌ ‌by‌ ‌the‌ ‌victim‌ ‌were‌ ‌merely‌‌ superficial‌ ‌and‌ ‌could‌ ‌not‌ ‌have‌ ‌produced‌ ‌his‌ ‌death‌ ‌does‌ ‌not‌ ‌negate‌‌ petitioners'‌‌criminal‌‌liability‌‌for‌a ‌ ttempted‌‌murder‌.‌ ‌ Mistake‌‌of‌‌fact‌ ‌ There‌‌is‌‌N ‌ O‌‌liability‌‌‌for‌‌mistake‌‌of‌‌fact.‌‌The‌‌requisites‌‌are:‌ ‌ 1. The‌‌act‌‌done‌‌‌would‌‌have‌‌been‌‌lawful‌‌had‌‌the‌‌act‌‌been‌‌as‌‌the‌‌ accused‌‌believed‌‌them‌‌to‌‌be;‌‌ ‌ 2. The‌‌intention‌i‌ n‌‌performing‌‌the‌‌act‌‌should‌‌be‌l‌ awful‌;‌‌and‌ ‌ Gravity‌‌‌—‌‌grave,‌‌less‌‌grave,‌‌light;‌ ‌ wrong‌‌done‌‌is‌‌not‌‌intended‌‌by‌‌him,‌‌if:‌‌ ‌ c) that‌ ‌it‌‌negates‌‌the‌‌culpability‌‌required‌‌to‌‌commit‌‌the‌‌crime‌‌ or‌ ‌the‌ ‌existence‌ ‌of‌ ‌the‌ ‌mental‌ ‌state‌ ‌which‌ ‌the‌ ‌statute‌‌ prescribes‌‌with‌‌respect‌‌to‌‌an‌‌element‌‌of‌‌the‌‌offense.‌ ‌ a. he‌‌has‌‌committed‌‌an‌i‌ ntentional‌‌felony‌;‌‌ ‌ b. the‌‌wrong‌‌done‌‌or‌‌injury‌‌caused‌‌is‌‌the‌‌‌direct,‌‌natural‌‌or‌‌ logical‌‌consequence‌o ‌ f‌‌the‌‌felony‌‌committed;‌O ‌ R‌ ‌ People‌‌v.‌‌Gervero‌‌‌2018‌ ‌ if‌ ‌the‌ ‌intentional‌ ‌felony‌ ‌committed‌ ‌is‌ ‌the‌ ‌proximate‌‌ cause‌‌‌of‌‌the‌‌injury‌‌or‌‌damage‌‌incurred‌‌by‌‌the‌‌victim.‌ ‌ As‌‌early‌‌as‌‌in‌‌the‌‌case‌‌of‌‌‌People‌‌v.‌‌Oanis‌‌and‌‌Galanta‌,‌‌the‌‌Court‌‌has‌‌ ruled‌ ‌that‌ ‌mistake‌ ‌of‌ ‌fact‌ ‌applies‌ ‌only‌ ‌when‌ ‌the‌ ‌mistake‌ ‌is‌‌ committed‌‌without‌‌fault‌‌or‌‌carelessness.‌ ‌ a.‌‌Classification‌‌of‌‌felonies‌ ‌ Article‌‌3.‌‌Definitions.‌‌—‌‌Acts‌‌and‌‌omissions‌‌punishable‌‌by‌‌law‌‌are‌‌ felonies‌‌(‌delitos‌).‌ ‌ Felonies‌‌are‌‌committed‌‌not‌‌only‌‌by‌‌means‌‌of‌‌‌deceit‌‌‌(‌dolo‌)‌‌but‌‌also‌‌ by‌‌means‌‌of‌f‌ ault‌‌(‌culpa‌).‌ ‌ There‌‌is‌‌‌deceit‌‌‌when‌‌the‌‌act‌‌is‌‌performed‌‌with‌‌deliberate‌‌intent‌‌and‌‌ there‌ ‌is‌ ‌fault‌ ‌when‌ ‌the‌ ‌wrongful‌ ‌act‌ ‌results‌ ‌from‌ ‌imprudence,‌‌ negligence,‌‌lack‌‌of‌‌foresight,‌‌or‌‌lack‌‌of‌‌skill.‌ ‌ Elements‌‌of‌‌felonies‌ ‌ 1. There‌‌must‌‌be‌‌an‌‌act‌‌or‌‌omission;‌ ‌ 2. Such‌‌must‌‌be‌‌punishable‌‌by‌‌the‌‌RPC;‌‌and‌ ‌ 3. Such‌‌is‌‌performed‌‌or‌‌incurred‌‌by‌‌means‌‌of‌d ‌ olo‌o ‌ r‌‌culpa‌.‌ ‌ 2. Aberratio‌‌ictus.‌‌—‌M ‌ iscarriage‌‌of‌‌the‌‌blow;‌ ‌ 3. Error‌‌in‌‌personae.‌‌—‌M ‌ istake‌‌in‌‌identity.‌ ‌ ‌ Definition‌ ‌ Effect‌‌as‌‌to‌‌penalty‌ ‌ Lack‌‌of‌‌intent‌‌to‌‌ Praeter‌‌ commit‌‌so‌‌grave‌‌a‌‌ Mitigating‌‌circumstance‌ ‌ intentionem‌ ‌ wrong‌ ‌ Aberratio‌‌ ictus‌ ‌ Mistake‌‌in‌‌blow;‌‌ Art‌‌48‌‌on‌‌complex‌‌crime‌‌may‌‌ at‌‌least‌‌2‌‌victims‌ ‌ apply‌ ‌ Error‌‌in‌‌ personae‌ ‌ Art‌‌49‌‌applies‌‌—‌‌if‌‌the‌‌penalty‌‌ Mistake‌‌in‌‌ for‌‌the‌‌crime‌‌intended‌‌be‌‌ identity;‌‌only‌‌one‌‌ different‌‌from‌‌that‌‌committed,‌‌ victim‌ ‌ the‌l‌ esser‌‌penalty‌‌shall‌‌be‌‌ imposed‌‌in‌‌its‌‌MAX‌‌period‌ ‌ People‌‌v.‌‌Pugay‌,‌‌supra‌r‌ e‌‌praeter‌‌intentionem‌ ‌ According‌‌to‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 150‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ As‌‌for‌‌‌Samson‌,‌‌there‌‌is‌‌adequate‌‌evidence‌‌showing‌‌that‌‌his‌‌act‌‌was‌‌ merely‌‌a‌‌part‌‌of‌‌their‌‌fun-making‌‌that‌‌evening.‌‌His‌‌act,‌‌however,‌‌does‌‌ not‌‌relieve‌‌him‌‌of‌‌criminal‌‌responsibility.‌‌Burning‌‌the‌‌clothes‌‌of‌‌the‌‌ victim‌ ‌would‌ ‌cause‌ ‌at‌‌the‌‌very‌‌least‌‌some‌‌kind‌‌of‌‌physical‌‌injuries‌‌ on‌‌his‌‌person,‌‌a‌‌felony‌‌defined‌‌in‌‌the‌‌RPC.‌‌‌If‌‌his‌‌act‌‌resulted‌‌into‌‌a‌‌ graver‌ ‌offense,‌‌as‌‌what‌‌took‌‌place‌‌in‌‌the‌‌instant‌‌case,‌‌he‌‌must‌‌ be‌‌held‌‌responsible‌‌therefor‌.‌ ‌ Article‌‌4‌‌of‌‌the‌‌RPC‌‌provides‌‌that‌‌criminal‌‌liability‌‌shall‌‌be‌‌incurred‌ by‌‌any‌‌person‌‌committing‌‌a‌‌felony‌‌although‌‌the‌‌wrongful‌‌act‌‌done‌‌be‌‌ different‌‌from‌‌that‌‌which‌‌he‌‌intended.‌ ‌ As‌ ‌no‌ ‌sufficient‌ ‌evidence‌ ‌appears‌ ‌in‌ ‌the‌ ‌record‌ ‌establishing‌ ‌any‌‌ qualifying‌ ‌circumstances,‌ ‌Samson‌ ‌is‌ ‌only‌ ‌guilty‌ ‌of‌ ‌the‌ ‌crime‌ ‌of‌‌ homicide‌d ‌ efined‌‌and‌‌penalized‌‌in‌‌Article‌‌249‌‌of‌‌the‌‌RPC.‌ ‌ People‌‌v.‌‌Umawid‌‌‌2014‌r‌ e‌‌aberratio‌‌ictus‌ ‌ Maureen’s‌‌death‌‌is‌‌a‌‌case‌‌of‌‌aberratio‌‌ictus‌,‌‌given‌‌that‌‌the‌‌fatal‌‌blow‌‌ therefor‌ ‌was‌ ‌only‌ ‌delivered‌ ‌by‌ ‌mistake‌ ‌as‌ ‌it‌ ‌was‌ ‌actually‌ ‌Vicente‌‌ who‌ ‌was‌ ‌Umawid’s‌ ‌intended‌ ‌target.‌ ‌In‌ ‌this‌‌regard,‌‌Umawid’s‌‌single‌‌ deed‌ ‌actually‌ ‌resulted‌ ‌in‌ ‌the:‌ ‌(a)‌ ‌Attempted‌ ‌Murder‌ ‌of‌‌Vicente;‌‌and‌‌ (b)‌ ‌Consummated‌ ‌Murder‌ ‌of‌ ‌Maureen.‌ ‌This‌ ‌may‌ ‌be‌ ‌classified‌ ‌as‌ ‌a‌‌ species‌ ‌of‌ ‌complex‌ ‌crime‌ ‌defined‌ ‌under‌ ‌Article‌ ‌48‌ ‌of‌ ‌the‌ ‌RPC,‌‌ particularly,‌ ‌a‌ ‌delito‌ ‌compuesto‌,‌ ‌or‌ ‌a‌ ‌compound‌ ‌crime‌ ‌where‌ ‌a‌‌ single‌‌act‌‌produces‌‌two‌‌(2)‌‌or‌‌more‌‌grave‌‌or‌‌less‌‌grave‌‌felonies.‌ ‌ 1) legal‌‌impossibility,‌‌or‌ ‌ 2) physical‌‌impossibility‌‌of‌‌accomplishing‌‌the‌‌intended‌‌act‌‌in‌‌ order‌‌to‌‌qualify‌‌the‌‌act‌‌as‌‌an‌‌impossible‌‌crime.‌ ‌ which‌w ‌ ould‌‌produce‌‌the‌‌felony‌‌‌as‌‌a‌‌consequence‌‌ ‌ 3. but‌‌which,‌‌nevertheless,‌d ‌ o‌‌not‌‌produce‌‌‌it‌‌ ‌ 4. by‌ ‌reason‌ ‌of‌ ‌causes‌ ‌independent‌ ‌of‌ ‌the‌ ‌will‌ ‌of‌ ‌the‌‌ Legal‌‌impossibility‌‌‌would‌‌apply‌‌to‌‌those‌‌circumstances‌‌where‌‌ ‌ 1) the‌ ‌motive,‌ ‌desire‌ ‌and‌ ‌expectation‌ ‌is‌ ‌to‌ ‌perform‌ ‌an‌ ‌act‌ ‌in‌‌ violation‌‌of‌‌the‌‌law;‌‌ ‌ perpetrator.‌ ‌ There‌‌is‌‌an‌a ‌ ttempt‌w ‌ hen‌‌ ‌ 1. 2) there‌‌is‌‌intention‌‌to‌‌perform‌‌the‌‌physical‌‌act;‌‌ ‌ The‌ ‌offender‌ ‌commences‌ ‌the‌ ‌commission‌ ‌of‌ ‌the‌ ‌felony‌‌ directly‌‌by‌‌overt‌‌acts;‌ ‌ 3) there‌‌is‌‌a‌‌performance‌‌of‌‌the‌‌intended‌‌physical‌‌act;‌‌and‌ ‌ 4) the‌ ‌consequence‌ ‌resulting‌ ‌from‌ ‌the‌ ‌intended‌ ‌act‌ ‌does‌ ‌not‌‌ amount‌‌to‌‌a‌‌crime.‌ ‌ On‌ ‌the‌ ‌other‌ ‌hand,‌ ‌factual‌ ‌impossibility‌ ‌occurs‌ ‌when‌ ‌extraneous‌‌ circumstances‌ ‌unknown‌ ‌to‌ ‌the‌ ‌actor‌ ‌or‌ ‌beyond‌ ‌his‌‌control‌‌prevent‌‌ the‌ ‌consummation‌ ‌of‌ ‌the‌ ‌intended‌ ‌crime.‌ ‌One‌ ‌example‌ ‌is‌ ‌the‌ ‌man‌‌ who‌‌puts‌‌his‌‌hand‌‌in‌‌the‌‌coat‌‌pocket‌‌of‌‌another‌‌with‌‌the‌‌intention‌‌to‌‌ steal‌ ‌the‌ ‌latter's‌ ‌wallet‌ ‌and‌ ‌finds‌ ‌the‌ ‌pocket‌‌empty.‌‌The‌‌case‌‌at‌‌bar‌‌ belongs‌‌to‌‌this‌‌category.‌ ‌ a. That‌‌there‌‌be‌e ‌ xternal‌‌acts‌;‌ ‌ b. Such‌ ‌external‌ ‌acts‌ ‌have‌ ‌direct‌ ‌connection‌ ‌with‌ ‌the‌‌ crime‌‌intended‌‌to‌‌be‌‌committed.‌ ‌ 2. He‌‌‌does‌‌NOT‌‌perform‌‌all‌‌the‌‌acts‌‌of‌‌execution‌‌which‌‌should‌‌ produce‌‌the‌‌felony;‌ ‌ 3. The‌‌offender's‌‌act‌‌be‌‌‌NOT‌‌stopped‌‌by‌‌his‌‌own‌‌spontaneous‌‌ desistance‌;‌ ‌ d.‌‌Stages‌‌of‌‌execution‌ ‌ 4. The‌‌non-performance‌‌of‌‌all‌‌acts‌‌of‌‌execution‌‌was‌‌due‌‌to‌‌cause‌‌ or‌‌accident‌‌other‌‌than‌‌his‌‌spontaneous‌‌desistance‌.‌ ‌ ‌ Frustrated‌ ‌ has‌‌performed‌‌all‌‌the‌‌acts‌‌ of‌‌execution‌‌which‌ should‌‌produce‌‌the‌‌ felony‌‌as‌‌a‌‌consequence‌ ‌ c.‌‌Impossible‌‌crimes‌ ‌ 1. 2. The‌ ‌act‌ ‌performed‌ ‌would‌ ‌be‌ ‌an‌ ‌offense‌ ‌against‌ ‌persons‌ ‌or‌‌ property;‌ ‌ 2. Act‌‌done‌‌with‌e ‌ vil‌‌intent‌;‌ ‌ 3. Its‌ ‌accomplishment‌ ‌is‌ ‌inherently‌ ‌impossible‌,‌ ‌or‌ ‌that‌ ‌the‌‌ reason‌‌for‌‌ non-accomplishment‌ ‌ means‌‌employed‌‌is‌‌either‌i‌ nadequate‌‌or‌‌ineffectual;‌ ‌ 4. The‌‌act‌‌performed‌‌should‌‌not‌‌constitute‌‌a‌‌violation‌‌of‌‌another‌‌ ‌There‌‌is‌N ‌ O‌‌attempted‌‌or‌‌frustrated‌‌impossible‌‌crime.‌ ‌ Intod‌‌v.‌‌CA‌‌and‌‌People‌ ‌ There‌‌must‌‌be‌‌either‌‌ ‌ ✘‌ ‌ merely‌‌ commences‌ ‌ cause‌‌or‌‌accident‌‌ some‌‌cause‌‌ other‌‌than‌‌the‌‌ independent‌‌of‌‌the‌‌ offender's‌‌own‌‌ will‌‌of‌‌the‌‌ spontaneous‌‌ perpetrator‌ ‌ desistance‌ ‌ Subjective‌‌and‌‌Objective‌‌Phases‌ ‌ provision‌‌of‌‌the‌‌RPC.‌ ‌ NB:‌‌ ✔‌ ‌ Attempted‌ ‌ A‌ ‌felony‌ ‌is‌ ‌consummated‌ ‌when‌ ‌all‌ ‌the‌ ‌elements‌ ‌necessary‌ ‌for‌ ‌its‌‌ execution‌‌and‌‌accomplishment‌‌are‌‌present;‌‌ ‌ It‌‌is‌‌frustrated‌w ‌ hen‌‌ ‌ 1. Each‌‌felony‌‌under‌‌the‌‌RPC‌‌has‌‌ ‌ 1. a‌ ‌"‌subjective‌ ‌phase‌,"‌ ‌or‌ ‌that‌ ‌portion‌ ‌of‌ ‌the‌ ‌acts‌‌ constituting‌ ‌the‌ ‌crime‌ ‌included‌ ‌between‌ ‌the‌ ‌act‌ ‌which‌‌ begins‌ ‌the‌ ‌commission‌ ‌of‌ ‌the‌ ‌crime‌ ‌and‌ ‌the‌ ‌last‌ ‌act‌‌ the‌‌offender‌‌performs‌a ‌ ll‌‌the‌‌acts‌‌of‌‌execution‌‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 151‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ performed‌ ‌by‌ ‌the‌ ‌offender‌ ‌which,‌ ‌with‌‌prior‌‌acts,‌‌should‌‌ result‌‌in‌‌the‌‌consummated‌‌crime.‌‌ ‌ 2. When‌‌felonies‌‌do‌‌not‌‌have‌‌stages‌ ‌ 1. If‌‌punished‌‌under‌‌SPL;‌ ‌ After‌ ‌that‌ ‌point‌ ‌has‌ ‌been‌ ‌breached,‌ ‌the‌ ‌subjective‌ ‌phase‌‌ 2. By‌‌omission;‌ ‌ ends‌‌and‌‌the‌o ‌ bjective‌‌phase‌‌‌begins.‌ ‌ 3. Formal‌‌crimes,‌‌e.g.‌‌physical‌‌injuries.‌ ‌ It‌ ‌has‌ ‌been‌ ‌held‌‌that‌‌if‌‌the‌‌offender‌‌never‌‌passes‌‌the‌‌subjective‌ phase‌‌‌of‌‌the‌‌offense,‌‌the‌‌crime‌‌is‌‌merely‌a ‌ ttempted‌.‌ ‌ On‌ ‌the‌‌other‌‌hand,‌‌the‌‌‌subjective‌‌phase‌‌is‌‌completely‌‌passed‌‌in‌‌ case‌‌of‌‌‌frustrated‌‌‌crimes,‌‌for‌‌in‌‌such‌‌instances,‌‌"subjectively‌‌the‌‌ crime‌‌is‌‌complete."‌ ‌ The‌ ‌determination‌ ‌of‌ ‌whether‌ ‌a‌ ‌crime‌ ‌is‌ ‌frustrated‌ ‌or‌‌ consummated‌‌‌necessitates‌‌an‌‌initial‌‌concession‌‌that‌‌all‌‌of‌‌the‌‌acts‌‌ of‌‌execution‌‌have‌‌been‌‌performed‌‌by‌‌the‌‌offender.‌‌ ‌ The‌ ‌critical‌ ‌distinction‌ ‌instead‌ ‌is‌ ‌whether‌ ‌the‌‌felony‌‌itself‌‌was‌‌ actually‌ ‌produced‌ ‌by‌‌the‌‌acts‌‌of‌‌execution.‌‌The‌‌determination‌‌of‌‌ whether‌ ‌the‌ ‌felony‌ ‌was‌ ‌"‌produced‌"‌ ‌after‌‌all‌‌the‌‌acts‌‌of‌‌execution‌‌ had‌ ‌been‌ ‌performed‌ ‌hinges‌ ‌on‌ ‌the‌ ‌particular‌ ‌statutory‌‌ definition‌‌of‌‌the‌‌felony‌.‌ ‌ How‌‌to‌‌determine‌‌the‌‌stage‌‌of‌‌the‌‌crime‌ ‌ Felonies‌‌without‌‌f rustrated‌‌stage‌ ‌ 1. Theft;‌ ‌ 2. Rape.‌ ‌ Article‌‌7.‌‌When‌‌light‌‌felonies‌‌are‌‌punishable.‌‌‌—‌‌Light‌‌felonies‌‌are‌‌ punishable‌ ‌only‌ ‌when‌ ‌they‌ ‌have‌ ‌been‌ ‌consummated‌,‌ ‌with‌ ‌the‌‌ exception‌‌of‌‌those‌‌committed‌‌against‌‌person‌‌or‌‌property.‌ ‌ GR‌:‌‌ Light‌‌felonies‌‌are‌‌punishable‌o ‌ nly‌w ‌ hen‌c‌ onsummated‌.‌ ‌ EXC‌:‌‌ ‌Those‌ ‌committed‌ ‌against‌ ‌persons‌ ‌or‌ ‌property‌,‌ ‌even‌ ‌if‌‌ Is‌‌there‌‌a‌‌frustrated‌‌stage‌‌in‌‌theft?‌ ‌ 2. Elements‌‌constituting‌‌the‌‌felony;‌ ‌ NO.‌‌‌Theft‌‌cannot‌‌have‌‌a‌‌frustrated‌‌stage‌.‌‌Theft‌‌can‌‌only‌‌be‌‌ a. Formal‌ ‌Crimes‌ ‌—‌ ‌Consummated‌ ‌in‌ ‌one‌ ‌instant,‌ ‌no‌‌ attempt.‌ ‌e.g.‌ ‌slander,‌ ‌false‌ ‌testimony,‌ ‌sale‌ ‌of‌ ‌prohibited‌‌ drugs.‌ ‌ b. Crimes‌‌consummated‌‌by‌‌mere‌‌attempt‌‌or‌‌proposal‌‌or‌ by‌ ‌overt‌ ‌act‌ ‌e.g.‌ ‌Flight‌ ‌to‌ ‌enemy’s‌ ‌country‌ ‌(121),‌‌ corruption‌‌of‌‌minors‌‌(340),‌‌Treason.‌ ‌ c. Felony‌‌by‌‌omission‌‌‌no‌‌attempted‌‌stage‌ ‌ d. Crimes‌‌requiring‌‌the‌‌intervention‌‌of‌‌two‌‌person‌‌to‌‌commit‌‌ e. It‌ ‌would‌ ‌be‌ ‌too‌ ‌strained‌ ‌to‌ ‌construe‌ ‌petitioner's‌ ‌act‌ ‌of‌ ‌pressing‌ ‌a‌‌ chemical-soaked‌ ‌cloth‌ ‌in‌ ‌the‌ ‌mouth‌ ‌of‌ ‌Malou‌ ‌which‌ ‌would‌ ‌induce‌‌ her‌ ‌to‌ ‌sleep‌ ‌as‌ ‌an‌‌overt‌‌act‌‌that‌‌will‌‌logically‌‌and‌‌necessarily‌‌ripen‌‌ into‌ ‌rape.‌ ‌As‌ ‌it‌ ‌were,‌ ‌petitioner‌ ‌did‌ ‌not‌ ‌commence‌ ‌at‌ ‌all‌ ‌the‌‌ performance‌ ‌of‌ ‌any‌ ‌act‌ ‌indicative‌ ‌of‌ ‌an‌ ‌intent‌ ‌or‌ ‌attempt‌ ‌to‌ ‌rape‌‌ Malou.‌ ‌ Rivera‌‌v.‌‌People‌‌‌supra‌ ‌ An‌ ‌essential‌ ‌element‌ ‌of‌ ‌murder‌ ‌and‌ ‌homicide,‌ ‌whether‌ ‌in‌ ‌their‌‌ consummated,‌ ‌frustrated‌ ‌or‌ ‌attempted‌ ‌stage,‌ ‌is‌ ‌intent‌ ‌of‌ ‌the‌‌ offenders‌ ‌to‌ ‌kill‌ ‌the‌ ‌victim‌ ‌immediately‌ ‌before‌ ‌or‌ ‌simultaneously‌‌ with‌‌the‌‌infliction‌‌of‌‌injuries.‌ ‌ attempted‌ ‌or‌ ‌frustrated.‌ e.g.‌ ‌Slight‌ ‌physical‌ ‌injuries‌ ‌and‌‌ People‌‌v.‌‌Gonzalez‌ ‌ maltreatment‌ ‌(266);‌ ‌Art‌ ‌309,‌ ‌nos.‌ ‌7‌ ‌and‌ ‌8;‌ ‌Alteration‌ ‌of‌‌ The‌ ‌(‌specific‌ ‌criminal‌ ‌intent‌)‌ ‌intent‌ ‌to‌ ‌kill‌ ‌determines‌ ‌whether‌‌the‌‌ boundary‌ ‌marks‌ ‌(313);‌ ‌Malicious‌ ‌mischief‌ ‌(328‌‌and‌‌329,‌‌no.‌‌ crime‌ ‌committed‌ ‌is‌ ‌physical‌ ‌injuries‌ ‌or‌ ‌homicide.‌ ‌Such‌ ‌intent‌ ‌is‌‌ 3).‌ ‌ made‌ ‌manifest‌ ‌by‌ ‌the‌ ‌acts‌ ‌of‌ ‌the‌ ‌accused‌ ‌which‌ ‌are‌ ‌undoubtedly‌‌ intended‌‌to‌‌kill‌‌the‌‌victim.‌ ‌ Valenzuela‌‌v.‌‌People‌⭐‌‌and‌C ‌ anceran‌‌v.‌‌People‌‌‌2015‌ ‌ For‌ ‌evident‌ ‌lack‌ ‌of‌ ‌criminal‌ ‌intent‌ ‌to‌ ‌kill‌ ‌the‌ ‌complainant,‌ ‌the‌‌ 1. Nature‌‌of‌‌the‌‌offense;‌ ‌ 3. Manner‌‌of‌‌committing‌‌same‌‌—‌ ‌ perpetrator,‌‌leading‌‌directly‌‌to‌‌its‌‌realization‌‌and‌‌consummation.‌ ‌ attempted‌‌or‌‌consummated.‌ ‌ People‌‌v.‌‌Aca-ac‌‌⭐ ‌ ‌‌ Necessarily,‌‌rape‌‌is‌‌attempted‌‌if‌‌there‌‌is‌‌no‌‌penetration‌‌of‌‌the‌‌female‌‌ organ‌ ‌because‌ ‌not‌ ‌all‌‌acts‌‌of‌‌execution‌‌were‌‌performed.‌‌Taking‌‌into‌‌ account‌‌the‌‌nature,‌‌elements‌‌and‌‌manner‌‌of‌‌execution‌‌of‌‌the‌‌crime‌‌of‌‌ rape‌‌and‌‌jurisprudence‌‌on‌‌the‌‌matter,‌‌it‌‌is‌‌hardly‌‌conceivable‌‌how‌‌the‌‌ frustrated‌‌stage‌‌of‌‌rape‌‌can‌‌ever‌‌be‌‌committed.‌‌ ‌ As‌‌this‌‌Court‌‌explained‌‌in‌‌‌People‌‌v.‌‌Orita‌,‌‌rape‌‌is‌‌either‌‌attempted‌‌or‌‌ consummated.‌T ‌ here‌‌can‌‌be‌‌no‌‌frustrated‌‌rape‌.‌ ‌ them‌ ‌are‌ ‌consummated‌‌by‌‌mere‌‌agreement‌‌‌e.g.‌‌betting‌‌ Baleros‌‌v.‌‌People‌ ‌ in‌‌sport‌‌contests‌‌(197),‌‌corruption‌‌of‌‌public‌‌officer‌‌(212)‌ ‌ The‌ ‌attempt‌ ‌which‌ ‌the‌ ‌Penal‌ ‌Code‌ ‌punishes‌ ‌is‌ ‌that‌ ‌which‌ ‌has‌ ‌a‌‌ logical‌‌connection‌‌to‌‌a‌‌particular,‌‌concrete‌‌offense‌;‌‌that‌‌which‌‌is‌‌ Material‌‌crimes.‌‌‌There‌‌are‌‌THREE‌‌stages‌‌of‌‌execution.‌ ‌ the‌ ‌beginning‌ ‌of‌ ‌the‌ ‌execution‌ ‌of‌ ‌the‌ ‌offense‌ ‌by‌ ‌overt‌ ‌acts‌ ‌of‌ ‌the‌‌ information‌‌for‌‌attempted‌‌homicide‌‌must‌‌fail.‌‌Considering‌‌the‌‌nature‌‌ and‌ ‌location‌ ‌of‌ ‌their‌ ‌injuries‌ ‌and‌ ‌the‌ ‌number‌ ‌of‌ ‌days‌ ‌required‌ ‌for‌‌ their‌ ‌treatment,‌ ‌we‌ ‌find‌ ‌that‌ ‌the‌ ‌crime‌ ‌committed‌ ‌for‌ ‌the‌ ‌injuries‌‌ sustained‌‌by‌‌the‌‌children‌‌are‌‌two‌‌counts‌‌of‌‌‌slight‌‌physical‌‌injuries‌‌ under‌‌Art.‌‌266.‌ ‌ People‌‌v.‌‌Labiaga‌‌‌2013‌ ‌ Appellant‌ ‌should‌ ‌be‌ ‌convicted‌ ‌of‌ ‌attempted‌ ‌murder,‌ ‌and‌ ‌not‌‌ frustrated‌‌murder.‌ ‌ In‌ ‌frustrated‌ ‌murder‌,‌ ‌there‌ ‌must‌ ‌be‌ ‌evidence‌ ‌showing‌ ‌that‌ ‌the‌‌ wound‌ ‌would‌ ‌have‌ ‌been‌ ‌fatal‌ ‌were‌ ‌it‌ ‌not‌ ‌for‌ ‌timely‌ ‌medical‌‌ intervention.‌ ‌If‌ ‌the‌ ‌evidence‌ ‌fails‌ ‌to‌ ‌convince‌ ‌the‌ ‌court‌ ‌that‌ ‌the‌‌ wound‌ ‌sustained‌ ‌would‌ ‌have‌ ‌caused‌ ‌the‌ ‌victim’s‌ ‌death‌ ‌without‌‌ timely‌ ‌medical‌ ‌attention,‌ ‌the‌ ‌accused‌ ‌should‌ ‌be‌ ‌convicted‌ ‌of‌‌ attempted‌‌murder‌‌and‌‌not‌‌frustrated‌‌murder.‌ ‌ In‌ ‌the‌ ‌instant‌ ‌case,‌ ‌it‌ ‌does‌ ‌not‌ ‌appear‌ ‌that‌ ‌the‌‌wound‌‌sustained‌‌by‌‌ Gregorio‌‌Conde‌‌was‌‌mortal.‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 152‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ Velasco‌‌v.‌‌People‌ ‌ Having‌ ‌commenced‌ ‌the‌ ‌criminal‌ ‌act‌ ‌by‌ ‌overt‌ ‌acts‌ ‌but‌ ‌failing‌ ‌to‌‌ perform‌ ‌all‌ ‌acts‌ ‌of‌ ‌execution‌ ‌as‌ ‌to‌ ‌produce‌ ‌the‌‌felony‌‌by‌‌reason‌‌of‌‌ some‌ ‌cause‌ ‌other‌ ‌than‌‌his‌‌own‌‌desistance,‌‌petitioner‌‌committed‌‌an‌‌ attempted‌ ‌felony.‌ ‌Petitioner‌ ‌already‌ ‌commenced‌ ‌his‌ ‌attack‌ ‌with‌ ‌a‌‌ manifest‌ ‌intent‌‌to‌‌kill‌‌by‌‌shooting‌‌private‌‌complainant‌‌seven‌‌times,‌‌ but‌ ‌failed‌ ‌to‌ ‌perform‌ ‌all‌ ‌the‌ ‌acts‌ ‌of‌ ‌execution‌ ‌by‌ ‌reason‌ ‌of‌ ‌causes‌‌ independent‌‌of‌‌his‌‌will,‌‌that‌‌is,‌‌‌poor‌‌aim‌‌and‌‌the‌‌swiftness‌‌of‌‌the‌‌ latter.‌‌Private‌‌complainant‌‌sustained‌‌a‌‌wound‌‌on‌‌the‌‌left‌‌arm‌‌that‌‌is‌‌ not‌ ‌sufficient‌ ‌to‌ ‌cause‌‌his‌‌death.‌‌The‌‌settled‌‌rule‌‌is‌‌that‌‌‌where‌‌the‌‌ wound‌ ‌inflicted‌ ‌on‌ ‌the‌ ‌victim‌ ‌is‌ ‌not‌ ‌sufficient‌ ‌to‌ ‌cause‌ ‌his‌‌ death,‌‌the‌‌crime‌‌is‌‌only‌‌attempted‌‌murder,‌‌since‌‌the‌‌accused‌‌did‌‌ not‌ ‌perform‌ ‌all‌ ‌the‌‌acts‌‌of‌‌execution‌‌that‌‌would‌‌have‌‌brought‌‌about‌‌ death.‌ ‌ e.‌‌Continuing‌‌crimes‌ ‌ Continuous‌‌crimes‌‌or‌‌delito‌‌continuado‌ ‌ 1. 2. 3. 1. Kidnapping‌‌with‌‌homicide;‌ ‌ 2. The‌ ‌term‌ ‌of‌ ‌prescription‌‌commences‌‌to‌‌run‌‌from‌‌the‌‌date‌‌the‌‌ crime‌‌ended;‌ ‌ Rebellion‌.‌‌—‌‌a‌‌rebel‌‌may‌‌be‌‌arrested‌‌at‌‌any‌‌time‌‌without‌‌need‌‌ of‌‌a‌‌warrant‌‌as‌‌he‌‌is‌‌deemed‌‌to‌‌be‌‌in‌‌the‌‌act‌‌of‌‌committing‌‌the‌‌ offense‌‌at‌‌any‌‌time.‌ ‌ the‌‌‌penalty‌‌for‌‌the‌‌most‌‌serious‌‌crime‌‌shall‌‌be‌‌imposed,‌‌the‌‌same‌‌ to‌‌be‌‌applied‌‌‌in‌‌its‌‌maximum‌p ‌ eriod‌.‌ ‌ Delito‌‌continuado‌‌distinguished‌‌f rom‌‌Continuing‌‌crime‌ ‌ Delito‌‌continuado‌ ‌ Continuing‌‌crime‌ ‌ A‌ ‌single‌ ‌crime‌ ‌produced‌ ‌by‌‌ several‌‌acts‌‌performed‌‌separately‌‌ during‌ ‌a‌ ‌period‌ ‌of‌ ‌time‌ ‌under‌ ‌a‌‌ single‌‌criminal‌‌intent‌‌in‌‌violation‌‌ of‌‌a‌‌single‌‌penal‌‌provision.‌ ‌ One‌ ‌which‌ ‌is‌ ‌consummated‌ ‌in‌‌ one‌ ‌place‌ ‌but‌ ‌by‌ ‌reason‌ ‌of‌ ‌the‌‌ nature‌ ‌of‌ ‌the‌ ‌offense,‌ ‌the‌‌ violation‌ ‌of‌ ‌the‌ ‌law‌ ‌is‌ ‌deemed‌‌ continuing.‌ ‌ 1. (‌Compound‌‌crime‌‌‌or‌‌‌delito‌‌compuesto‌)‌‌When‌‌a‌‌single‌‌act‌‌ constitutes‌‌two‌‌or‌‌more‌‌grave‌‌or‌‌less‌‌grave‌‌felonies,‌‌or‌‌ ‌ 2. (‌Complex‌ ‌crime‌ ‌proper‌ ‌or‌ ‌delito‌ ‌complejo‌)‌ ‌when‌ ‌an‌‌ offense‌‌is‌‌a‌‌necessary‌‌means‌‌for‌‌committing‌‌the‌‌other,‌‌ ‌ 2. Consists‌ ‌in‌ ‌the‌ ‌successive‌ ‌execution‌ ‌by‌ ‌the‌ ‌same‌ ‌individual‌ ‌of‌‌ different‌ ‌criminal‌ ‌acts‌ ‌upon‌ ‌any‌ ‌of‌ ‌which‌ ‌no‌ ‌conviction‌ ‌has‌ ‌yet‌‌ been‌‌declared.‌ ‌ Special‌‌complex‌‌crimes;‌ ‌ 3. Continued,‌‌continuous‌‌or‌‌continuing‌‌crimes.‌ ‌ b. Real‌ ‌or‌‌‌material‌‌—‌‌There‌‌are‌‌different‌‌crimes‌‌in‌‌law‌‌as‌‌well‌‌ as‌ ‌in‌ ‌the‌ ‌conscience‌ ‌of‌ ‌the‌ ‌offender.‌ ‌They‌ ‌are‌ ‌thus‌‌ SEPARATELY‌p ‌ unished.‌ ‌ Special‌‌f rom‌‌ordinary‌ ‌ 4. Special‌‌complex‌‌crimes‌‌are‌‌those‌‌specifically‌‌designated‌‌by‌‌law‌‌to‌‌ be‌‌penalized‌‌as‌‌one‌‌felony,‌‌although‌‌composed‌‌of‌‌many‌‌crimes.‌ ‌ 5. May‌ ‌consist‌ ‌of‌‌crimes‌‌punished‌‌under‌‌SPLs,‌‌whereas‌‌the‌‌complex‌‌ 1) Compound‌‌crime.‌R ‌ equisites:‌ a. Only‌‌a‌s‌ ingle‌‌act‌‌‌is‌‌performed;‌ ‌ b. It‌‌produces‌ ‌ i. ii. ‌or‌ ‌habitual‌‌ 2‌‌or‌‌more‌‌grave‌‌felonies,‌‌or‌ ‌ one‌‌or‌‌more‌‌grave‌‌and‌‌one‌‌or‌‌more‌‌less‌‌grave‌‌felonies,‌‌ or‌ ‌ 2‌‌or‌‌more‌‌less‌‌grave‌‌felonies.‌ ‌ 2) Complex‌‌crime‌‌proper.‌‌‌Requisites:‌ ‌ a. At‌‌least‌‌2‌‌offenses‌‌are‌‌committed;‌ ‌ b. One‌‌or‌‌some‌‌of‌‌the‌‌offenses‌‌must‌‌be‌‌‌necessary‌‌to‌‌commit‌‌ If‌‌there‌‌has‌‌been‌‌a‌‌conviction‌‌for‌‌one‌‌or‌‌some‌‌of‌‌them,‌‌the‌‌rules‌‌on‌‌ recidivism,‌ ‌quasi-recidivism,‌ ‌reiteracion,‌ delinquency‌‌may‌‌instead‌‌be‌‌applied.‌ ‌ 3. 2. iii. Plurality‌‌of‌‌crimes‌ ‌ 1. Delito‌‌complejo.‌ ‌ Kinds‌‌of‌‌ordinary‌‌complex‌‌crimes‌ ‌ According‌‌to‌‌‌Guevarra‌,‌‌in‌‌appearance,‌‌a‌‌‌delito‌‌continuado‌‌consists‌‌ from‌‌one‌‌criminal‌‌intent‌‌or‌‌resolution.‌ ‌ Delito‌‌compuesto;‌ ‌ crime‌‌in‌‌Art‌‌48‌‌contemplates‌‌of‌‌felonies‌‌punished‌‌under‌‌the‌‌RPC.‌ ‌ f.‌‌Complex‌‌crimes‌‌and‌‌composite‌‌crimes‌ ‌ Article‌‌48.‌‌Penalty‌‌for‌‌complex‌‌crimes.‌— ‌ ‌‌ ‌ Padilla‌ ‌views‌‌such‌‌offense‌‌as‌‌consisting‌‌of‌‌a‌‌series‌‌of‌‌acts‌‌arising‌‌ ii. 3. BP‌‌22.‌‌—‌‌Thus,‌‌venue‌‌may‌‌be‌‌had‌‌either‌‌at‌‌the‌‌place‌‌where‌‌the‌‌ check‌‌was‌‌issued,‌‌drawn,‌‌or‌‌dishonored.‌ ‌ 4. Complex‌‌crime;‌ ‌ i. Examples‌‌and‌‌Effects‌‌of‌‌Continuing‌‌crimes‌ ‌ For‌ ‌delito‌ ‌continuado‌ ‌to‌ ‌exist‌ ‌there‌ ‌should‌‌be‌‌a‌‌plurality‌‌of‌‌acts‌‌ performed‌ ‌during‌ ‌a‌ ‌period‌ ‌of‌ ‌time;‌ ‌unity‌ ‌of‌ ‌penal‌ ‌provision‌‌ violated;‌‌and‌‌unity‌‌of‌‌criminal‌‌intent‌‌or‌‌purpose,‌‌which‌‌means‌‌that‌‌ two‌ ‌or‌ ‌more‌‌violations‌‌of‌‌the‌‌same‌‌penal‌‌provisions‌‌are‌‌united‌‌in‌‌ one‌‌and‌‌the‌‌‌same‌‌intent‌‌or‌‌resolution‌‌leading‌‌to‌‌the‌‌perpetration‌‌ of‌‌the‌‌same‌‌criminal‌‌purpose‌‌or‌‌aim.‌ ‌ of‌ ‌several‌ ‌crimes‌ ‌but‌ ‌in‌ ‌reality‌ ‌there‌ ‌is‌ ‌only‌ ‌one‌ ‌crime‌ ‌in‌ ‌the‌‌ mind‌‌of‌‌the‌‌perpetrator‌.‌ ‌ 1. To‌ ‌determine‌ ‌the‌ ‌proper‌ ‌venue,‌‌ Its‌‌purpose‌‌is‌‌to‌‌treat‌‌several‌‌acts‌‌ validity‌ ‌of‌ ‌arrest‌ ‌and‌ ‌the‌‌ as‌‌one‌‌crime‌ ‌ commencement‌‌of‌‌the‌‌running‌‌of‌‌ prescription.‌ ‌ the‌‌other;‌ ‌ c. All‌ ‌of‌ ‌the‌ ‌offenses‌ ‌must‌ ‌be‌ ‌punished‌ ‌under‌ ‌the‌ ‌same‌‌ statute.‌ ‌ There‌‌are‌t‌ wo‌‌kinds‌ ‌ a. Formal‌‌or‌‌‌ideal‌‌—‌‌‌Multiple‌‌crimes‌‌committed‌‌from‌‌the‌‌same‌‌ criminal‌‌intent‌‌are‌‌punished‌‌with‌O ‌ NE‌‌penalty:‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 153‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ Rules‌ ‌to‌ ‌determine‌ ‌the‌ ‌crime/s‌ ‌to‌ ‌be‌ ‌charged‌ ‌if‌ ‌two‌ ‌or‌‌ more‌‌are‌‌committed‌ ‌ 6. 7. Foreknowledge‌‌Rule.‌‌‌—‌‌Where‌‌the‌‌accused‌‌repetitively‌‌performed‌‌ one‌ ‌element‌‌of‌‌a‌‌crime‌‌(or‌‌component‌‌of‌‌a‌‌complex‌‌crime)‌‌over‌‌a‌‌ period‌ ‌of‌ ‌time‌ ‌on‌ ‌a‌ ‌more‌ ‌or‌ ‌less‌ ‌regular‌ ‌basis,‌ ‌having‌‌ foreknowledge‌‌of‌‌its‌‌occurrence.‌ ‌ In‌ ‌People‌ ‌v.‌ ‌Lawas‌,‌ ‌the‌ ‌Court‌ ‌was‌ ‌"‌forced‌"‌ ‌to‌‌find‌‌all‌‌the‌‌accused‌‌ guilty‌ ‌of‌ ‌only‌ ‌one‌ ‌offense‌ ‌of‌ ‌multiple‌ ‌homicide.‌ ‌However,‌ ‌as‌ ‌this‌‌ Court‌‌held‌‌in‌‌‌People‌‌v.‌‌Remollino‌,‌‌the‌‌Lawas‌‌doctrine‌‌is‌‌more‌‌of‌‌ an‌e ‌ xception‌t‌ han‌‌the‌‌general‌‌rule‌.‌ ‌ Doctrine‌ ‌of‌ ‌Absorption.‌ ‌—‌ ‌If‌ ‌one‌‌of‌‌the‌‌offense‌‌is‌‌an‌‌element‌‌of‌‌ Here,‌ ‌conspiracy‌ ‌is‌ ‌very‌‌much‌‌evident‌‌from‌‌the‌‌actuations‌‌of‌‌the‌‌ appellants‌ ‌and‌ ‌their‌ ‌co-accused.‌ ‌Collective‌ ‌responsibility‌ ‌replaced‌‌ individual‌ ‌responsibility.‌ The‌ ‌Lawas‌ ‌doctrine,‌ ‌premised‌ ‌on‌ ‌the‌ impossibility‌ ‌of‌ ‌determining‌ ‌who‌ ‌killed‌ ‌whom,‌ ‌cannot‌ ‌be‌‌ applied‌.‌ ‌ another,‌ ‌the‌ ‌former‌ ‌is‌ ‌deemed‌ ‌absorbed‌ ‌by‌ ‌the‌ ‌latter‌ ‌and‌‌there‌‌is‌‌ only‌‌one‌‌crime.‌‌ ‌ 8. and‌‌individual‌‌acts‌‌which‌‌‌cannot‌‌give‌‌rise‌‌to‌‌a‌‌complex‌‌ crime‌.‌ ‌ Single‌ ‌Impulse‌ ‌Doctrine.‌ ‌—‌ ‌If‌ ‌the‌ ‌act‌ ‌or‌ ‌acts‌ ‌complained‌ ‌of‌‌ resulted‌ ‌from‌ ‌a‌ ‌single‌ ‌criminal‌ ‌impulse,‌ ‌it‌ ‌constitutes‌ ‌a‌ ‌single‌‌ offense.‌ ‌ People‌‌v.‌‌Orias‌‌‌2010‌ ‌ Orias‌‌should‌‌be‌‌convicted‌‌of‌‌three‌‌(3)‌‌counts‌‌of‌‌murder‌‌and‌‌ NOT‌‌of‌‌the‌‌complex‌‌crime‌‌‌of‌‌multiple‌‌murder‌ ‌ The‌ ‌three‌ ‌(3)‌ ‌crimes‌ ‌of‌ ‌murder‌ ‌did‌‌not‌‌result‌‌from‌‌a‌‌single‌‌act‌‌but‌‌ from‌ ‌several‌ ‌individual‌ ‌and‌ ‌distinct‌ ‌acts.‌ ‌Deeply‌ ‌rooted‌ ‌is‌ ‌the‌‌ doctrine‌ ‌that‌ ‌when‌ ‌various‌ ‌victims‌ ‌expire‌ ‌from‌ ‌separate‌ ‌shots,‌‌ such‌‌acts‌‌constitute‌‌separate‌‌and‌‌distinct‌‌crimes‌.‌ ‌ In‌ ‌the‌ ‌instant,‌ ‌the‌ ‌acts‌ ‌of‌ ‌Orias‌ ‌and‌ ‌Elarcosa‌ ‌demonstrate‌ ‌the‌‌ existence‌ ‌of‌ ‌conspiracy‌,‌ ‌thereby‌ ‌imputing‌ ‌collective‌ ‌criminal‌‌ responsibility‌‌‌upon‌‌them,‌‌as‌‌the‌‌act‌‌of‌‌one‌‌is‌‌the‌‌act‌‌of‌‌all.‌ ‌ Evidently,‌ ‌there‌ ‌is‌ ‌in‌ ‌this‌ ‌case‌ ‌no‌‌complex‌‌crime‌‌proper.‌‌And‌‌the‌‌ circumstances‌ ‌present‌ ‌in‌‌this‌‌case‌‌do‌‌not‌‌fit‌‌exactly‌‌the‌‌description‌‌ of‌‌a‌‌compound‌‌crime.‌‌ ‌ ⭐As‌ ‌held‌ ‌in‌ ‌People‌ ‌v.‌ ‌Valdez‌,‌ ‌each‌ ‌act‌ ‌by‌ ‌each‌‌gunman‌‌ pulling‌ ‌the‌‌trigger‌‌of‌‌their‌‌respective‌‌firearms,‌‌aiming‌‌each‌‌ particular‌‌moment‌‌at‌‌different‌‌persons‌‌‌constitute‌‌distinct‌‌ People‌‌v.‌‌Garcia‌ ‌ The‌‌crime‌‌of‌‌‌forcible‌‌abduction‌‌with‌‌rape‌‌is‌‌a‌‌complex‌‌crime‌‌that‌ occurs‌ ‌when‌ ‌there‌ ‌is‌ ‌carnal‌ ‌knowledge‌ ‌with‌ ‌the‌ ‌abducted‌ ‌woman‌‌ under‌‌the‌‌following‌‌circumstances:‌‌ ‌ 1) by‌‌using‌‌force‌‌or‌‌intimidation;‌ ‌ 2) when‌ ‌the‌ ‌woman‌ ‌is‌ ‌deprived‌ ‌of‌ ‌reason‌ ‌or‌ ‌otherwise‌‌ unconscious;‌‌and‌ ‌ 3) when‌ ‌the‌ ‌woman‌ ‌is‌ ‌under‌ ‌twelve‌ ‌years‌ ‌of‌ ‌age‌ ‌or‌ ‌is‌‌ demented.‌‌ ‌ The‌ ‌current‌ ‌rule‌ ‌is‌ ‌where‌ ‌several‌‌killings‌‌on‌‌the‌‌same‌‌occasion‌‌ were‌ ‌perpetrated,‌ ‌but‌‌not‌‌involving‌‌prisoners‌,‌‌a‌‌different‌‌rule‌‌ may‌ ‌be‌‌applied,‌‌that‌‌is‌‌to‌‌say,‌‌the‌‌killings‌‌would‌‌be‌‌treated‌‌as‌‌ separate‌‌offenses‌.‌ ‌ Garcia‌‌is‌‌guilty‌‌of‌‌the‌‌complex‌‌crime‌‌of‌‌forcible‌‌abduction‌‌with‌‌rape.‌‌ He‌ ‌should‌ ‌also‌ ‌be‌ ‌held‌ ‌liable‌ ‌for‌ ‌the‌ ‌other‌ ‌three‌ ‌counts‌ ‌of‌ ‌rape‌‌ committed‌‌by‌‌his‌‌three‌‌co-accused,‌‌considering‌‌the‌‌clear‌‌conspiracy‌‌ among‌‌them.‌‌ ‌ Thus,‌‌appellants‌‌are‌‌liable‌‌for‌‌the‌ ‌separate‌‌crimes‌ ‌of‌‌two‌‌(2)‌‌ counts‌‌of‌‌murder‌‌and‌‌seven‌‌(7)‌‌counts‌‌of‌‌attempted‌‌murder.‌ ‌ However,‌‌as‌‌correctly‌‌held‌‌by‌‌the‌‌trial‌‌court,‌‌‌there‌‌can‌‌only‌‌be‌‌‌ONE‌‌ complex‌ ‌crime‌ ‌of‌ ‌forcible‌ ‌abduction‌ ‌with‌ ‌rape‌.‌ ‌The‌ ‌crime‌ ‌of‌‌ forcible‌ ‌abduction‌ ‌was‌ ‌only‌ ‌necessary‌ ‌for‌ ‌the‌ ‌first‌ ‌rape.‌ ‌Thus,‌ ‌the‌‌ subsequent‌ ‌acts‌ ‌of‌ ‌rape‌ ‌can‌ ‌no‌ ‌longer‌ ‌be‌ ‌considered‌ ‌as‌ ‌separate‌‌ complex‌ ‌crimes‌ ‌of‌ ‌forcible‌ ‌abduction‌ ‌with‌ ‌rape.‌ ‌They‌ ‌should‌ ‌be‌‌ detached‌ ‌from‌ ‌and‌ ‌considered‌ ‌independently‌ ‌of‌ ‌the‌ ‌forcible‌‌ abduction.‌ ‌Therefore,‌ ‌Garcia‌ ‌should‌ ‌be‌ ‌convicted‌ ‌of‌ ‌one‌ ‌complex‌‌ crime‌‌of‌‌forcible‌‌abduction‌‌with‌‌rape‌‌and‌‌three‌‌‌separate‌‌‌acts‌‌of‌‌ rape‌.‌ ‌ As‌‌to‌‌penalty‌ ‌ Applying‌‌the‌‌‌Indeterminate‌‌Sentence‌‌Law‌‌in‌‌the‌‌case‌‌of‌‌attempted‌‌ murder,‌‌ ‌ 1. the‌ ‌maximum‌ ‌shall‌ ‌be‌ ‌taken‌ ‌from‌ ‌the‌ ‌medium‌ ‌period‌ ‌of‌‌ prision‌‌mayor,‌‌which‌‌is‌‌8‌‌years‌‌and‌‌1‌‌day‌‌to‌‌10‌‌years,‌‌ ‌ 2. while‌ ‌the‌ ‌minimum‌ ‌shall‌ ‌be‌ ‌taken‌ ‌from‌ ‌the‌ ‌penalty‌ ‌next‌‌ lower‌ ‌in‌ ‌degree,‌ ‌i.e.,‌ ‌prision‌ ‌correccional‌,‌ ‌in‌ ‌any‌ ‌of‌ ‌its‌‌ periods,‌‌the‌‌range‌‌of‌‌which‌‌is‌‌6‌‌months‌‌and‌‌1‌‌day‌‌to‌‌6‌‌years.‌‌ People‌‌v.‌‌Nelmida‌‌‌2012‌‌En‌‌Banc‌ ‌ Appellants‌ ‌and‌ ‌their‌ ‌co-accused‌ ‌simultaneous‌ ‌act‌ ‌of‌ ‌riddling‌ ‌the‌‌ vehicle‌ ‌boarded‌ ‌by‌ ‌Mayor‌ ‌Tawan-tawan‌ ‌and‌ ‌his‌ ‌group‌ ‌with‌‌bullets‌‌ discharged‌ ‌from‌ ‌their‌ ‌firearms‌ ‌when‌ ‌the‌ ‌said‌ ‌vehicle‌ ‌passed‌ ‌by,‌‌ resulted‌‌in‌‌the‌‌death‌‌of‌‌two‌‌security‌‌escorts‌‌of‌‌Mayor‌‌Tawan-tawan.‌ ‌ and‌‌robbery‌‌with‌‌intimidation‌‌or‌‌violence‌‌under‌‌Article‌‌294.‌‌ ‌ Napolis‌‌v.‌‌CA‌‌‌cited‌‌in‌‌‌Fransdilla‌‌v.‌‌People‌‌‌2015‌ ‌ The‌ ‌complex‌ ‌crime‌ ‌of‌ ‌robbery‌ ‌in‌‌an‌‌inhabited‌‌house‌‌by‌‌armed‌‌ persons‌ ‌and‌ ‌robbery‌ ‌with‌ ‌violence‌ ‌against‌ ‌or‌ ‌intimidation‌ ‌of‌‌ persons‌ ‌was‌ ‌committed‌ ‌when‌ ‌the‌ ‌accused,‌ ‌who‌ ‌held‌ ‌firearms,‌‌ entered‌‌the‌‌residential‌‌house‌‌of‌‌the‌‌victims‌‌and‌‌inflicted‌‌injury‌‌upon‌‌ the‌ ‌victims‌ ‌in‌ ‌the‌ ‌process‌ ‌of‌ ‌committing‌ ‌the‌ ‌robbery.‌ ‌Hence,‌ ‌the‌‌ penalty‌ ‌is‌ ‌that‌ ‌imposed‌ ‌for‌ ‌the‌ ‌robbery‌ ‌in‌ ‌an‌ ‌inhabited‌ ‌house,‌ ‌the‌‌ more‌‌serious‌‌crime.‌‌Citing‌‌‌Napolis‌‌v.‌‌CA‌,‌‌the‌‌CA‌‌correctly‌‌ruled‌‌that‌‌ all‌ ‌the‌ ‌accused,‌ ‌including‌ ‌Fransdilla,‌ ‌were‌ ‌guilty‌‌of‌‌committing‌‌the‌‌ complex‌ ‌crime‌ ‌of‌ ‌robbery‌ ‌in‌ ‌an‌ ‌inhabited‌‌house‌‌under‌‌Article‌‌299,‌‌ Santiago‌‌v.‌‌Garchitorena‌ ‌ The‌‌32‌‌Amended‌‌Informations‌‌reproduced‌‌verbatim‌‌the‌‌allegation‌‌of‌‌ the‌ ‌original‌ ‌information,‌ ‌except‌ ‌that‌ ‌instead‌ ‌of‌ ‌the‌‌word‌‌"aliens"‌‌in‌‌ the‌ ‌original‌ ‌information‌ ‌each‌ ‌amended‌‌information‌‌states‌‌the‌‌name‌‌ of‌ ‌the‌ ‌individual‌ ‌whose‌ ‌stay‌ ‌was‌ ‌legalized.‌ ‌The‌ ‌32‌ ‌Amended‌‌ Informations‌ ‌aver‌ ‌that‌ ‌the‌ ‌offenses‌ ‌were‌ ‌committed‌ ‌on‌ ‌the‌ ‌same‌‌ period‌‌of‌‌time.‌‌The‌‌strong‌‌probability‌‌even‌‌exists‌‌that‌‌the‌‌approval‌‌of‌‌ the‌ ‌application‌ ‌for‌ ‌the‌ ‌legalization‌ ‌of‌ ‌the‌ ‌stay‌ ‌of‌ ‌the‌ ‌32‌‌aliens‌‌was‌‌ done‌ ‌by‌ ‌a‌ ‌single‌ ‌stroke‌ ‌of‌ ‌the‌ ‌pen,‌ ‌as‌ ‌when‌ ‌the‌ ‌approval‌ ‌was‌‌ embodied‌‌in‌‌the‌‌same‌‌document.‌ ‌ 9. Political‌‌Offense‌‌Doctrine‌‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 154‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ a. Common‌ ‌crimes,‌ ‌perpetrated‌ ‌in‌ ‌furtherance‌ ‌of‌ ‌a‌‌political‌ offense,‌ ‌are‌ ‌divested‌ ‌of‌ ‌their‌ ‌character‌ ‌as‌ ‌“common”‌‌ offenses‌ ‌and‌‌assume‌‌the‌‌political‌‌complexion‌‌of‌‌the‌‌main‌‌ crime‌ ‌of‌ ‌which‌ ‌they‌ ‌are‌ ‌mere‌ ‌ingredients,‌ ‌and,‌‌ consequently,‌ ‌cannot‌ ‌be‌ ‌punished‌ ‌separately‌ ‌from‌ ‌the‌‌ principal‌ ‌offense,‌ ‌or‌ ‌complexed‌ ‌with‌ ‌the‌ ‌same,‌ ‌to‌ ‌justify‌‌ the‌‌imposition‌‌of‌‌a‌‌graver‌‌penalty.‌ ‌ b. When‌‌a‌‌killing‌‌is‌‌committed‌‌‌in‌‌furtherance‌‌of‌‌rebellion‌,‌‌ 2. 1. 2. 3. Component‌ ‌crimes‌ ‌in‌ ‌a‌ ‌special‌ ‌complex‌ ‌crime‌ ‌have‌ ‌no‌‌ attempted‌ ‌or‌‌frustrated‌‌stages‌‌because‌‌the‌‌intention‌‌of‌‌the‌‌ offenders‌‌is‌‌to‌‌commit‌‌the‌‌principal‌‌crime‌‌which‌‌is‌‌to‌‌rob‌‌but‌‌ in‌ ‌the‌ ‌process‌ ‌of‌ ‌committing‌‌the‌‌said‌‌crime,‌‌another‌‌crime‌‌is‌‌ committed.‌ ‌ e. 4. NB:‌‌Complexing‌‌is‌‌‘legally‌‌impossible’‌‌because‌‌the‌‌provisions‌‌ expressly‌‌state‌‌that‌‌the‌‌penalty‌‌for‌‌such‌‌felonies‌‌is‌‌‌in‌‌addition‌‌ to‌‌‌those‌‌imposed‌‌on‌‌the‌‌other‌‌felonies‌‌committed.‌ ‌ Rules‌‌on‌‌Robbery‌‌and‌‌Homicide‌ ‌ 1. If‌ ‌homicide‌ ‌was‌ ‌consummated‌,‌ ‌the‌ ‌case‌ ‌will‌ ‌be‌ ‌a‌ ‌special‌‌ complex‌ ‌crime‌ ‌of‌ ‌either‌ ‌Art‌ ‌294,‌ ‌wherein‌ ‌robbery‌ ‌was‌‌ consummated,‌‌or‌‌Art‌‌297,‌‌wherein‌‌it‌‌was‌‌merely‌‌attempted‌‌or‌‌ frustrated.‌ ‌ 2. If‌ ‌the‌ ‌homide‌ ‌was‌ ‌not‌ ‌consummated‌,‌ ‌but‌ ‌was‌ ‌a‌ ‌necessary‌‌ Special‌‌complex‌‌crimes;‌ ‌ a. Art‌‌266-B‌‌Rape‌‌with‌‌homicide;‌ ‌ b. Art‌‌267‌‌Kidnapping‌‌with‌‌homicide‌‌and/or‌‌rape;‌ ‌ c. Art‌ ‌294‌ ‌Robbery‌ ‌with‌ ‌homicide‌ ‌or‌ ‌rape‌ ‌or‌‌ intentional‌‌mutilation‌‌or‌‌arson‌;‌ ‌ d. Art‌ ‌297‌ ‌Attempted‌ ‌or‌ ‌frustrated‌ ‌robbery‌ ‌with‌‌ homicide;‌ ‌ e. 5. Art‌‌320‌‌Destructive‌‌arson.‌ ‌ When‌‌the‌‌crimes‌‌involved‌c‌ annot‌‌be‌‌legally‌‌complexed‌:‌ ‌ Art‌‌275‌‌‌Abandonment‌‌of‌‌persons‌‌in‌‌danger‌‌and‌‌Art‌‌ 276-278‌ ‌crimes‌ ‌against‌ ‌minors‌ ‌with‌ ‌any‌ ‌other‌‌ felony.‌ ‌ Where‌ ‌the‌ ‌two‌ ‌offenses‌ ‌resulting‌ ‌from‌ ‌a‌ ‌single‌ ‌act‌ ‌are‌‌ specifically‌‌punished‌‌as‌‌a‌‌single‌‌crime‌‌(Art‌‌265‌‌par‌‌2).‌ ‌ Art‌ ‌312‌ ‌Usurpation‌ ‌of‌ ‌real‌ ‌rights‌ ‌with‌ ‌serious‌‌ physical‌‌injuries;‌ ‌ absorption‌‌o‌ f‌‌one‌‌crime‌‌by‌‌the‌‌other;‌ ‌ Special‌‌Complexing‌ ‌ 1. d. Thus,‌ ‌there‌ ‌can‌ ‌be‌ ‌NO‌ ‌complex‌ ‌crime‌ ‌of‌ ‌estafa‌‌ When‌ ‌the‌ ‌crimes‌ ‌involved‌ ‌are‌ ‌subject‌ ‌to‌ ‌the‌ ‌rule‌ ‌of‌‌ Art‌ ‌235‌ ‌Maltreatment‌ ‌of‌ ‌prisoners‌ ‌with‌ ‌serious‌‌ physical‌‌injuries;‌ ‌ There‌‌can‌‌be‌‌no‌‌complexing‌‌wherein‌‌two‌‌felonies‌‌have‌‌ through‌‌falsification‌‌of‌‌a‌‌private‌‌document‌‌as‌‌both‌‌ crimes‌ ‌require‌ ‌damage‌ ‌as‌ ‌an‌‌element‌‌which‌‌is‌‌used‌‌ for‌‌one‌‌renders‌‌the‌‌other‌‌incomplete.‌ ‌ Ocampo‌‌v.‌‌Abando‌‌2 ‌ 014‌‌En‌‌Banc‌ ‌ As‌ ‌held‌ ‌in‌ ‌the‌ ‌case‌ ‌of‌ ‌Prosecutor‌ ‌of‌ ‌Zamboanga‌ ‌v.‌ ‌CA‌,‌ ‌if‌ ‌during‌‌ trial,‌ ‌petitioners‌ ‌are‌ ‌able‌ ‌to‌ ‌show‌ ‌that‌ ‌the‌ ‌alleged‌ ‌murders‌ ‌were‌‌ indeed‌ ‌committed‌ ‌in‌ ‌furtherance‌ ‌of‌ ‌rebellion,‌ ‌the‌ ‌trial‌ ‌court‌ ‌shall‌‌ dismiss‌‌the‌‌murder‌‌charges‌‌upon‌‌the‌‌filing‌‌of‌‌the‌‌Information‌‌ for‌ ‌simple‌‌rebellion‌,‌‌as‌‌long‌‌as‌‌petitioners‌‌would‌‌not‌‌be‌‌placed‌‌in‌‌ double‌‌jeopardy.‌ ‌ c. a‌ ‌common‌ ‌element‌ ‌and‌ ‌such‌ ‌element‌ ‌is‌ ‌used‌ ‌to‌‌ complete‌ ‌the‌ ‌requirements‌ ‌for‌ ‌integrating‌ ‌one‌‌crime,‌‌ the‌ ‌other‌ ‌crime‌ ‌would‌ ‌be‌ ‌incomplete‌‌in‌‌that‌‌element‌‌ and‌‌consequently,‌‌non-existent.‌ ‌ b. Art‌ ‌210‌ ‌Bribery‌ ‌with‌ ‌infidelity‌ ‌in‌ ‌the‌ ‌custody‌ ‌of‌‌ prisoners;‌ ‌ doctrine‌‌of‌‌common‌‌elements‌;‌ ‌ in‌ ‌the‌ ‌trial‌ ‌court,‌ ‌it‌ ‌becomes‌ ‌crucial‌ ‌for‌ ‌the‌ ‌court‌ ‌to‌‌ determine‌ ‌whether‌ ‌the‌ ‌act‌ ‌of‌ ‌killing‌ ‌was‌ ‌done‌ ‌in‌‌ furtherance‌ ‌of‌ ‌a‌ ‌political‌ ‌end,‌ ‌and‌ ‌for‌ ‌the‌ ‌political‌‌ motive‌‌of‌‌the‌‌act‌‌to‌‌be‌‌conclusively‌‌demonstrated.‌ ‌ NO‌.‌ ‌The‌ ‌political‌ ‌offense‌ ‌doctrine‌ ‌is‌ ‌not‌ ‌a‌ ‌ground‌ ‌to‌ ‌dismiss‌ ‌the‌‌ charge‌ ‌against‌‌petitioners‌‌prior‌‌to‌‌a‌‌determination‌‌by‌‌the‌‌trial‌‌court‌‌ that‌‌the‌‌murders‌‌were‌‌committed‌‌in‌‌furtherance‌‌of‌‌rebellion.‌ ‌ b. When‌ ‌the‌ ‌crime‌ ‌subject‌ ‌of‌ ‌the‌ ‌case‌ ‌are‌ ‌covered‌ ‌by‌ ‌the‌‌ a. Art‌‌129‌‌‌Search‌‌warrants‌‌maliciously‌‌obtained‌‌and‌‌ abuse‌‌in‌‌the‌‌service‌‌of‌‌those‌‌legally‌‌obtained‌‌‌with‌‌ perjury;‌ ‌ Inapplicability‌‌of‌‌Art‌‌48‌ ‌ When‌‌the‌‌political‌‌offense‌‌doctrine‌‌is‌‌asserted‌‌as‌‌a‌‌defense‌‌ Whether‌‌the‌‌murder‌‌charges‌‌against‌‌petitioners‌‌should‌‌be‌‌dismissed‌‌ under‌‌the‌‌political‌‌offense‌‌doctrine.‌ ‌ a. robbery‌‌with‌‌homicide‌‌where‌‌the‌‌penalty‌‌imposed‌‌is‌‌‌reclusion‌‌ perpetua‌,‌ ‌the‌ ‌awards‌ ‌for‌‌civil‌‌indemnity,‌‌moral‌‌damages,‌‌and‌‌ exemplary‌ ‌damages‌ ‌are‌ ‌now‌ ‌uniformly‌ ‌pegged‌ ‌at‌ ‌P75K.‌ ‌The‌‌ award‌‌of‌‌‌temperate‌‌damages‌‌‌is‌‌also‌‌increased‌‌to‌‌P50K.‌ ‌ the‌ ‌killing‌ ‌is‌ ‌not‌ ‌homicide‌ ‌or‌ ‌murder.‌ ‌Rather,‌ ‌the‌ ‌killing‌‌ assumes‌‌the‌‌political‌‌complexion‌‌of‌‌rebellion.‌ ‌ c. As‌ ‌held‌ ‌in‌ ‌People‌ ‌v.‌ ‌Jugueta‌,‌‌in‌‌special‌‌complex‌‌crimes‌‌like‌‌ means‌‌to‌‌commit‌‌any‌‌stage‌‌of‌‌the‌‌robbery,‌A ‌ rt‌‌48‌‌applies‌.‌ ‌ 3. If‌‌the‌‌homicide‌‌was‌‌‌neither‌‌consummated‌‌nor‌‌necessary‌‌to‌‌ robbery‌,‌‌these‌‌felonies‌‌are‌s‌ eparate‌‌and‌‌distinct‌‌offenses.‌ ‌ People‌‌v.‌‌Dillatan‌‌‌2018‌ ‌ The‌ ‌component‌ ‌crimes‌ ‌in‌ ‌a‌ ‌special‌ ‌complex‌ ‌crime‌ ‌have‌ ‌no‌‌ attempted‌‌or‌‌frustrated‌‌stages‌.‌ ‌ Thus,‌ ‌as‌‌in‌‌the‌‌present‌‌case‌‌where,‌‌aside‌‌from‌‌the‌‌killing‌‌of‌‌Homer,‌‌ the‌ ‌Spouses‌ ‌Acob,‌ ‌on‌ ‌the‌ ‌occasion‌ ‌of‌ ‌the‌ ‌same‌ ‌robbery,‌ ‌also‌‌ sustained‌‌injuries,‌‌regardless‌‌of‌‌the‌‌severity,‌‌the‌‌crime‌‌committed‌‌is‌‌ still‌‌robbery‌‌with‌‌homicide‌‌as‌‌the‌‌injuries‌‌sustained‌‌by‌‌the‌‌Spouses‌‌ Acob‌ ‌are‌ ‌subsumed‌ ‌under‌ ‌the‌ ‌generic‌ ‌term‌ ‌"homicide"‌ ‌and,‌‌ thus,‌‌become‌‌‌part‌‌and‌‌parcel‌‌of‌‌the‌‌s ‌ pecial‌‌complex‌‌crime‌‌of‌‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 155‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ robbery‌‌with‌‌homicide.‌ ‌ People‌‌v.‌‌Aspili‌ ‌ Neither‌ ‌in‌ ‌law‌ ‌nor‌ ‌in‌ ‌jurisprudence‌ ‌is‌ ‌there‌ ‌an‌ ‌aggravating‌‌ circumstance‌ ‌as‌ ‌robbery‌ ‌in‌ ‌band.‌ ‌More‌ ‌importantly,‌ ‌the‌ ‌evidence‌‌ shows‌‌that‌‌what‌‌was‌‌committed‌‌is‌‌the‌‌s ‌ pecial‌‌complex‌‌crime‌‌of‌‌ robbery‌‌with‌‌homicide‌‌aggravated‌‌by‌‌rape‌.‌ ‌ The‌ ‌original‌ ‌design‌ ‌of‌ ‌the‌ ‌malefactors‌ ‌was‌ ‌to‌ ‌commit‌ ‌robbery‌ ‌in‌‌ order‌ ‌to‌ ‌facilitate‌ ‌their‌ ‌escape‌‌from‌‌the‌‌penal‌‌colony.‌‌Their‌‌original‌‌ intent‌‌did‌‌not‌‌comprehend‌‌the‌‌commission‌‌of‌‌rape.‌‌Hence,‌‌the‌‌rape‌‌is‌‌ deemed‌ ‌to‌ ‌aggravate‌ ‌the‌ ‌crime‌ ‌but‌ ‌damages‌ ‌or‌ ‌indemnification‌ ‌for‌‌ the‌ ‌victim‌ ‌may‌ ‌be‌ ‌awarded.‌ ‌Instead‌ ‌of‌ ‌ignominy,‌ ‌it‌ ‌is‌ ‌the‌ ‌rape‌‌ itself‌‌that‌‌aggravates‌‌the‌‌crime.‌ ‌ With‌‌respect‌‌to‌‌the‌‌deaths‌‌of‌‌Daisy‌‌Gonzales‌‌and‌‌Yolanda‌‌Argue,‌‌the‌‌ appellants‌ ‌are‌ ‌clearly‌ ‌liable‌ ‌therefor‌ ‌since,‌ ‌as‌ ‌held‌ ‌by‌‌this‌‌Court‌‌in‌‌ People‌ ‌v.‌ ‌Mangulabnan‌,‌ ‌it‌ ‌is‌ ‌immaterial‌ ‌that‌ ‌the‌ ‌death‌ ‌of‌ ‌a‌‌ person‌ ‌supervened‌ ‌by‌ ‌mere‌ ‌accident,‌ ‌provided‌ ‌that‌ ‌the‌‌ homicide‌‌is‌‌produced‌‌by‌‌reason‌‌or‌‌on‌‌occasion‌‌of‌‌the‌‌robbery‌.‌ ‌ People‌‌v.‌‌Pulusan‌ ‌ A‌‌conviction‌‌for‌‌‌highway‌‌robbery‌‌‌requires‌‌proof‌‌that‌‌the‌‌accused‌‌ were‌ ‌organized‌ ‌for‌ ‌the‌ ‌purpose‌ ‌of‌ ‌committing‌ ‌robbery‌‌ indiscriminately‌.‌‌There‌‌is‌‌no‌‌such‌‌proof‌‌in‌‌this‌‌case.‌‌The‌‌trial‌‌court‌‌ thus‌ ‌correctly‌ ‌found‌ ‌Pulusan‌ ‌and‌ ‌Rodriguez‌ ‌guilty‌ ‌of‌ ‌the‌ ‌crime‌ ‌of‌‌ robbery‌ ‌with‌ ‌homicide‌ ‌aggravated‌ ‌by‌ ‌rape‌ ‌under‌ ‌Article‌‌ 294(1).‌ ‌ We‌‌must‌‌state‌‌that‌‌regardless‌‌of‌‌the‌‌number‌‌of‌‌homicides‌‌committed‌‌ on‌ ‌the‌ ‌occasion‌ ‌of‌ ‌a‌ ‌robbery,‌ ‌the‌ ‌crime‌ ‌is‌ ‌still‌ ‌robbery‌ ‌with‌‌ homicide.‌‌‌In‌‌this‌‌special‌‌complex‌‌crime,‌‌the‌‌number‌‌of‌‌persons‌‌ killed‌ ‌is‌ ‌immaterial‌ ‌and‌ ‌does‌ ‌not‌ ‌increase‌ ‌the‌ ‌penalty‌‌ prescribed‌ ‌in‌ ‌Art.‌ ‌294.‌ ‌There‌ ‌is‌ ‌NO‌ ‌crime‌ ‌of‌ ‌robbery‌ ‌with‌‌ multiple‌‌homicide.‌‌‌Moreover,‌‌whenever‌‌the‌‌special‌‌complex‌‌crime‌‌ of‌ ‌robbery‌ ‌with‌ ‌homicide‌ ‌is‌ ‌proven‌ ‌to‌ ‌have‌ ‌been‌ ‌committed,‌ ‌all‌‌ those‌ ‌who‌ ‌took‌ ‌part‌ ‌in‌ ‌the‌ ‌robbery‌ ‌are‌ ‌liable‌ ‌as‌ ‌principals‌‌ therein‌ ‌although‌ ‌they‌ ‌did‌ ‌not‌ ‌actually‌ ‌take‌ ‌part‌ ‌in‌ ‌the‌‌ homicide‌.‌ ‌ 2.‌‌Circumstances‌‌affecting‌‌criminal‌‌liability‌ ‌ 7. challenge‌ ‌to‌ ‌fight‌ ‌must‌ ‌be‌ ‌accepted.‌ ‌However‌,‌ ‌if‌ ‌the‌ ‌aggression‌‌ occurred‌ ‌ahead‌ ‌of‌ ‌the‌ ‌agreed‌ ‌time‌ ‌and‌ ‌place‌ ‌of‌ ‌the‌ ‌fight,‌ ‌it‌ ‌is‌‌ unlawful.‌ ‌ a.‌‌Justifying‌‌circumstances‌ ‌ ★ DO‌‌NOT‌‌incur‌‌criminal‌‌liability.‌ ‌ Self-defense‌ ‌ 8. Second‌.‌ ‌Reasonable‌ ‌necessity‌ ‌of‌ ‌the‌ ‌means‌ ‌employed‌ ‌to‌‌ prevent‌‌or‌‌repel‌‌it.‌ Third‌.‌‌‌Lack‌‌of‌‌sufficient‌‌provocation‌ ‌on‌‌the‌‌part‌‌of‌‌the‌‌person‌‌ defending‌‌himself.‌ ‌ 1. There‌‌is‌‌‌unlawful‌‌aggression‌‌when‌‌the‌‌peril‌‌to‌‌one’s‌‌life,‌‌limb‌‌or‌‌ right‌‌is‌‌either‌a ‌ ctual‌‌or‌‌imminent‌.‌ ‌ 2. A‌‌slap‌‌on‌‌the‌‌face‌‌is‌‌unlawful‌‌aggression.‌ ‌ 3. A‌ ‌strong‌ ‌retaliation‌ ‌for‌ ‌an‌ ‌injury‌ ‌or‌ ‌threat‌ ‌may‌ ‌amount‌ ‌to‌ ‌an‌‌ unlawful‌‌aggression.‌ ‌ 4. The‌ ‌killing‌‌of‌‌the‌‌deceased‌‌by‌‌the‌‌defendant‌‌be‌‌‌simultaneous‌‌with‌‌ A‌ ‌public‌ ‌officer‌ ‌exceeding‌ ‌his‌ ‌authority‌ ‌may‌ ‌become‌‌an‌‌unlawful‌‌ aggressor.‌ ‌ 6. 9. The‌ ‌person‌ ‌defending‌ ‌himself‌ ‌cannot‌ ‌be‌ ‌expected‌‌to‌‌think‌‌clearly‌‌ so‌‌as‌‌‌to‌‌control‌‌his‌‌blow.‌ ‌ 10. The‌ ‌measure‌ ‌of‌ ‌rational‌‌necessity‌‌is‌‌to‌‌be‌‌found‌‌in‌‌the‌‌situation‌‌ as‌ ‌it‌ ‌appeared‌ ‌to‌ ‌the‌ ‌person‌ ‌defending‌ ‌at‌ ‌the‌‌time‌‌when‌‌the‌‌blow‌‌ was‌‌struck.‌ ‌ 11. Whether‌‌the‌‌means‌‌employed‌‌is‌‌reasonable,‌‌will‌‌depend‌‌upon‌ ‌ a. When‌ ‌the‌ ‌aggressor‌ ‌flees,‌ ‌unlawful‌ ‌aggression‌ ‌no‌ ‌longer‌ ‌exists.‌‌ However‌,‌‌if‌‌the‌‌purpose‌‌of‌‌the‌‌retreat‌‌was‌‌for‌‌the‌‌aggressor‌‌to‌‌‌take‌‌ a‌ ‌more‌ ‌advantageous‌ ‌position‌ ‌to‌ ‌insure‌ ‌the‌ ‌success‌ ‌of‌‌the‌‌attack‌‌ already‌ ‌begun‌ ‌by‌ ‌him,‌‌the‌‌unlawful‌‌aggression‌‌is‌‌considered‌still‌‌ continuing‌,‌‌and‌‌the‌‌one‌‌making‌‌a‌‌defense‌‌has‌‌a‌‌right‌‌to‌‌pursue‌‌him‌ in‌‌his‌‌retreat‌‌and‌‌to‌‌disable‌‌him.‌ ‌ The‌ ‌nature‌ ‌and‌ ‌quality‌ ‌of‌ ‌the‌ ‌weapon‌ ‌used‌ ‌by‌ ‌the‌ ‌aggressor;‌‌ What‌‌the‌‌law‌‌requires‌‌is‌r‌ ational‌‌equivalence.‌ ‌ b. His‌‌physical‌‌condition,‌‌character,‌‌size‌‌and‌‌other‌‌circumstances,‌‌ and‌‌those‌‌of‌‌the‌‌person‌‌defending‌‌himself;‌ ‌ c. the‌‌attack‌‌made‌‌by‌‌the‌‌former,‌‌or‌‌at‌‌least‌‌both‌‌acts‌‌succeeded‌‌each‌‌ other‌‌‌without‌‌appreciable‌‌interval‌‌of‌‌time.‌‌The‌‌accused‌‌must‌‌have‌‌ no‌‌time‌‌nor‌‌occasion‌‌for‌‌deliberation‌‌and‌‌cool‌‌thinking‌.‌ ‌ 5. A‌ ‌mere‌ ‌threatening‌ ‌or‌ ‌intimidating‌ ‌attitude,‌ ‌not‌ ‌preceded‌ ‌by‌ ‌an‌‌ outward‌ ‌and‌ ‌material‌ ‌aggression,‌ ‌is‌ ‌not‌ ‌unlawful‌ ‌aggression‌,‌‌ because‌‌it‌‌is‌‌required‌‌that‌‌the‌‌act‌‌be‌‌‌offensive‌‌and‌‌positively‌‌strong‌,‌‌ showing‌‌the‌‌wrongful‌‌intent‌‌of‌‌the‌‌aggressor‌‌to‌‌cause‌‌injury.‌ ‌ Anyone‌‌who‌‌acts‌‌in‌‌defense‌‌of‌‌his‌‌person‌‌or‌‌rights,‌‌provided‌‌that‌‌the‌‌ following‌‌circumstances‌‌concur;‌ ‌ First‌.‌‌Unlawful‌‌aggression‌.‌‌⭐‌ ‌ No‌ ‌unlawful‌ ‌aggression‌ ‌when‌ ‌there‌ ‌is‌ ‌agreement‌ ‌to‌ ‌fight.‌ ‌The‌‌ And‌‌also‌‌the‌‌place‌‌and‌‌occasion‌‌of‌‌the‌‌assault.‌ ‌ 12. If‌‌the‌‌provocation‌‌by‌‌the‌‌person‌‌defending‌‌himself‌‌is‌‌‌not‌‌‌proximate‌‌ and‌‌immediate‌‌to‌‌the‌‌aggression,‌‌there‌‌is‌‌self-defense.‌ ‌ People‌‌v.‌‌Antonio‌ ‌ As‌‌testified‌‌by‌‌accused-appellant‌‌himself,‌‌‌the‌‌deceased‌‌who‌‌was‌‌at‌‌ that‌‌time‌‌very‌‌drunk‌‌tried‌‌to‌‌hit‌‌him‌‌but‌‌missed‌‌and‌‌fell‌‌on‌‌the‌‌ ground.‌‌At‌‌that‌‌point,‌‌unlawful‌‌aggression‌‌ceased‌‌and‌‌it‌‌was‌‌no‌‌ longer‌ ‌necessary‌ ‌for‌ ‌him‌ ‌to‌ ‌stab‌ ‌the‌ ‌deceased.‌ ‌It‌ ‌was‌‌ accused-appellant,‌ ‌therefore,‌ ‌who‌ ‌became‌ ‌the‌ ‌aggressor‌ ‌when‌ ‌he,‌‌ despite‌‌the‌‌condition‌‌of‌‌the‌‌deceased,‌‌proceeded‌‌to‌‌stab‌‌the‌‌latter‌‌at‌‌ the‌ ‌back.‌ ‌His‌ ‌act‌ ‌can‌ ‌no‌ ‌longer‌ ‌be‌ ‌interpreted‌ ‌as‌ ‌an‌ ‌act‌ ‌of‌‌ self-preservation‌ ‌but‌ ‌a‌ ‌perverse‌ ‌desire‌ ‌to‌ ‌kill.‌ ‌Hence,‌ ‌he‌ ‌cannot‌‌ successfully‌‌claim‌‌the‌‌benefit‌‌of‌‌self-defense.‌‌ ‌ People‌‌v.‌‌Rubiso‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 156‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ Unlawful‌ ‌aggression‌ ‌is‌ ‌a‌ ‌condition‌ ‌sine‌ ‌qua‌ ‌non‌ ‌for‌ ‌the‌‌ justifying‌ ‌circumstance‌ ‌of‌ ‌self-defense.‌ ‌It‌ ‌contemplates‌ ‌an‌ ‌actual,‌‌ sudden‌ ‌and‌ ‌unexpected‌ ‌attack,‌‌or‌‌imminent‌‌danger‌‌thereof,‌‌and‌‌‌not‌‌ merely‌ ‌a‌ ‌threatening‌ ‌or‌ ‌intimidating‌ ‌attitude‌.‌ ‌The‌ ‌person‌‌ defending‌‌himself‌‌‌must‌‌have‌‌been‌‌attacked‌‌with‌‌actual‌‌physical‌‌ force‌‌or‌‌with‌‌actual‌‌use‌‌of‌‌weapon‌.‌ ‌ It‌ ‌is‌ ‌axiomatic‌ ‌that‌ ‌the‌ ‌mere‌ ‌thrusting‌ ‌of‌ ‌one’s‌ ‌hand‌ ‌into‌ ‌his‌‌ pocket‌ ‌as‌ ‌if‌ ‌for‌ ‌the‌ ‌purpose‌ ‌of‌ ‌drawing‌ ‌a‌ ‌weapon‌ ‌is‌ ‌NOT‌‌ unlawful‌‌aggression.‌‌Even‌‌the‌‌cocking‌‌of‌‌a‌‌rifle‌‌without‌‌aiming‌‌the‌‌ firearm‌ ‌at‌ ‌any‌ ‌particular‌ ‌target‌ ‌is‌ ‌NOT‌ ‌sufficient‌ ‌to‌ ‌conclude‌ ‌that‌‌ one’s‌‌life‌‌was‌‌in‌‌imminent‌‌danger.‌‌ ‌ The‌ ‌location‌ ‌and‌ ‌presence‌ ‌of‌ ‌gunshot‌ ‌wounds‌ ‌on‌ ‌the‌ ‌body‌ ‌of‌ ‌the‌‌ victim‌‌eloquently‌‌refute‌‌appellant’s‌‌allegation‌‌of‌‌self-defense.‌‌It‌‌is‌‌an‌‌ oft‌‌repeated‌‌rule‌‌that‌‌‌the‌‌presence‌‌of‌‌a‌‌large‌‌number‌‌of‌‌wounds,‌‌ their‌‌location‌‌and‌‌their‌‌seriousness‌‌would‌‌‌negate‌‌‌self-defense‌.‌‌ Instead,‌‌they‌‌indicate‌‌a‌‌determined‌‌effort‌‌to‌‌kill.‌ ‌ People‌‌v.‌‌Lansang‌ ‌ The‌ ‌justifying‌ ‌circumstance‌ ‌of‌ ‌defense‌ ‌of‌ ‌a‌ ‌relative‌ ‌can‌ ‌only‌ ‌be‌‌ raised‌ ‌where‌ ‌there‌ ‌is‌ ‌a‌ ‌concurrence‌ ‌of‌ ‌the‌ ‌requisites‌ ‌of‌ ‌unlawful‌‌ aggression,‌‌reasonable‌‌necessity‌‌of‌‌the‌‌means‌‌employed‌‌to‌‌repel‌‌the‌‌ aggression‌‌and‌‌that‌‌‌the‌‌person‌‌making‌‌the‌‌defense‌‌had‌‌no‌‌part‌‌in‌‌ the‌‌provocation‌.‌ ‌ Defense‌‌of‌‌relatives‌ ‌ Any‌ ‌one‌ ‌who‌ ‌acts‌ ‌in‌ ‌defense‌ ‌of‌ ‌the‌ ‌person‌ ‌or‌‌rights‌‌of‌‌his‌‌spouse,‌‌ ascendants,‌ ‌descendants,‌ ‌or‌ ‌legitimate,‌ ‌natural‌ ‌or‌ ‌adopted‌ ‌brothers‌‌ or‌ ‌sisters,‌ ‌or‌ ‌his‌‌relatives‌‌by‌‌affinity‌‌in‌‌the‌‌same‌‌degrees‌‌and‌‌those‌‌ consanguinity‌ ‌within‌ ‌the‌ f‌ ourth‌ ‌civil‌ ‌degree‌,‌ ‌provided‌‌that‌‌the‌‌ first‌ ‌and‌ ‌second‌ ‌requisites‌ ‌prescribed‌ ‌in‌ ‌the‌ ‌next‌ ‌preceding‌‌ circumstance‌ ‌are‌ ‌present,‌ ‌and‌ ‌the‌ ‌further‌ ‌requisite,‌ ‌in‌ ‌case‌ ‌the‌‌ revocation‌ ‌was‌ ‌given‌ ‌by‌ ‌the‌ ‌person‌ ‌attacked,‌ ‌that‌ ‌the‌ ‌one‌ ‌making‌‌ defense‌‌had‌‌no‌‌part‌‌therein.‌ ‌ Requisites:‌ ‌ 1) Unlawful‌‌aggression;‌ ‌ 2) Reasonable‌ ‌necessity‌ ‌of‌ ‌the‌ ‌means‌ ‌employed‌ ‌to‌ ‌prevent‌ ‌or‌‌ 3) In‌ ‌case‌ ‌the‌ ‌provocation‌ ‌was‌‌given‌‌by‌‌the‌‌person‌‌attacked,‌‌the‌‌ 2) Reasonable‌ ‌necessity‌ ‌of‌ ‌the‌ ‌means‌ ‌employed‌ ‌to‌ ‌prevent‌ ‌or‌‌ one‌‌making‌‌the‌‌defense‌‌had‌‌no‌‌part‌‌therein.‌ ‌ 13. Relatives‌‌that‌‌can‌‌be‌‌defended:‌(‌ SADS4C)‌ ‌ a. S‌pouse;‌ ‌ b. A‌scendants;‌ ‌ c. D‌escendants;‌ ‌ d. Legitimate,‌‌natural‌‌or‌‌adopted‌‌‌Siblings‌,‌‌or‌‌relatives‌‌by‌‌‌affinity‌‌ 3) Accused‌ ‌must‌ ‌not‌ ‌be‌ ‌induced‌ ‌by‌ ‌revenge,‌ ‌resentment‌ ‌or‌‌ other‌‌evil‌‌motive‌.‌ ‌ 15. Any‌‌person‌‌‌not‌‌included‌‌in‌‌the‌‌enumeration‌‌of‌‌relatives‌‌that‌‌can‌‌be‌‌ defended‌‌‌is‌‌considered‌‌a‌s‌ tranger.‌ ‌ in‌‌the‌‌same‌‌degrees;‌ ‌ e. repel‌‌it;‌ ‌ Relatives‌‌by‌C ‌ onsanguinity‌‌‌within‌‌the‌‌4th‌‌civil‌‌degree.‌(‌ 4C)‌ ‌ 14. The‌‌fact‌‌that‌‌the‌‌relative‌‌defended‌‌gave‌‌provocation‌‌is‌i‌ mmaterial.‌ ‌ ⭐‌Carungcong‌‌v.‌‌People‌‌‌2010‌ ‌ Article‌ ‌332‌ ‌provides‌ ‌for‌ ‌an‌ ‌absolutory‌ ‌cause‌ ‌in‌ ‌the‌ ‌crimes‌ ‌of‌‌ theft,‌‌estafa‌‌and‌‌malicious‌‌mischief.‌‌It‌‌limits‌‌the‌‌responsibility‌‌of‌‌the‌‌ offender‌ ‌to‌ ‌civil‌ ‌liability‌ ‌and‌ ‌frees‌ ‌him‌ ‌from‌ ‌criminal‌ ‌liability‌ ‌by‌‌ virtue‌‌of‌‌his‌‌relationship‌‌to‌‌the‌‌offended‌‌party.‌ The‌ ‌continuing‌ ‌affinity‌ ‌view‌ ‌maintains‌ ‌that‌ ‌the‌ ‌relationship‌ ‌by‌‌ affinity‌ ‌between‌ ‌the‌ ‌surviving‌ ‌spouse‌ ‌and‌ ‌the‌ ‌kindred‌ ‌of‌ ‌the‌‌ deceased‌ ‌spouse‌ c ‌ ontinues‌ ‌even‌ ‌after‌ ‌the‌ ‌death‌ ‌of‌ ‌the‌ ‌deceased‌‌ spouse,‌‌regardless‌‌of‌‌whether‌‌the‌‌marriage‌‌produced‌‌children‌‌or‌‌not.‌‌ This‌‌is‌‌more‌‌consistent‌‌with‌‌the‌‌language‌‌and‌‌spirit‌‌of‌‌Article‌‌332(1)‌‌ of‌‌the‌‌RPC.‌‌The‌‌fundamental‌‌principle‌‌in‌‌applying‌‌and‌‌in‌‌interpreting‌ criminal‌ ‌laws‌ ‌is‌ ‌to‌ ‌resolve‌ ‌all‌ ‌doubts‌ ‌in‌ ‌favor‌ ‌of‌ ‌the‌ ‌accused.‌ ‌In‌‌ dubio‌‌pro‌‌reo‌.‌‌When‌‌in‌‌doubt,‌‌rule‌‌for‌‌the‌‌accused.‌ ‌ Defense‌‌of‌‌strangers‌ ‌ Anyone‌ ‌who‌ ‌acts‌ ‌in‌ ‌defense‌ ‌of‌ ‌the‌ ‌person‌ ‌or‌ ‌rights‌ ‌of‌ ‌a‌ ‌stranger,‌‌ provided‌ ‌that‌ ‌the‌ ‌first‌ ‌and‌ ‌second‌ ‌requisites‌ ‌mentioned‌‌in‌‌the‌‌first‌‌ circumstance‌ ‌of‌ ‌this‌ ‌Article‌ ‌are‌ ‌present‌ ‌and‌ ‌that‌ ‌the‌ ‌person‌‌ defending‌ ‌be‌‌not‌‌induced‌‌by‌‌revenge,‌‌resentment,‌‌or‌‌other‌‌evil‌‌ motive‌.‌ ‌ Requisites:‌ ‌ 1) Unlawful‌‌aggression;‌ ‌ repel‌‌it;‌ ‌ Fulfillment‌‌of‌‌duty‌ ‌ Any‌ ‌person‌ ‌who‌ ‌acts‌ ‌in‌ ‌the‌ ‌fulfillment‌ ‌of‌ ‌a‌ ‌duty‌ ‌or‌ ‌in‌ ‌the‌ ‌lawful‌ exercise‌‌of‌‌a‌‌right‌‌or‌‌office.‌ ‌ Requisites:‌ ‌ 1. The‌ ‌accused‌ ‌acted‌ ‌in‌ ‌the‌ ‌performance‌ ‌of‌‌a‌‌duty‌‌‌OR‌‌in‌‌the‌‌ lawful‌‌exercise‌‌of‌‌a‌‌right‌‌or‌‌office‌;‌ ‌ 2. The‌‌injury‌‌caused‌‌or‌‌the‌‌offense‌‌committed‌‌be‌‌the‌‌‌necessary‌‌ consequence‌ ‌of‌ ‌the‌ ‌due‌ ‌performance‌ ‌of‌ ‌duty‌ ‌or‌ ‌the‌‌lawful‌‌ exercise‌‌of‌‌such‌‌right‌‌or‌‌office.‌ ‌ Cabanlig‌‌v.‌‌Sandiganbayan‌ ‌ Self-defense‌ ‌and‌ ‌fulfillment‌ ‌of‌ ‌duty‌ ‌operate‌ ‌on‌ ‌different‌ ‌principles.‌‌ Self-defense‌‌is‌‌based‌‌on‌‌the‌‌principle‌‌of‌‌self-preservation‌‌from‌ mortal‌ ‌harm,‌ ‌while‌ ‌fulfillment‌ ‌of‌ ‌duty‌ ‌is‌ ‌premised‌ ‌on‌ ‌the‌ ‌due‌‌ performance‌‌of‌‌duty‌.‌ ‌ A‌ ‌policeman‌ ‌in‌ ‌the‌ ‌performance‌ ‌of‌ ‌duty‌ ‌is‌ ‌justified‌ ‌in‌ ‌using‌ ‌such‌‌ force‌ ‌as‌ ‌is‌ ‌reasonably‌ ‌necessary‌ ‌to‌ ‌secure‌ ‌and‌ ‌detain‌ ‌the‌‌ offender,‌ ‌overcome‌ ‌his‌ ‌resistance,‌ ‌prevent‌ ‌his‌ ‌escape,‌‌ recapture‌ ‌him‌ ‌if‌ ‌he‌ ‌escapes,‌ ‌and‌ ‌protect‌ ‌himself‌ ‌from‌ ‌bodily‌‌ harm‌.‌ ‌Unlike‌ ‌in‌ ‌self-defense‌ ‌where‌ ‌unlawful‌ ‌aggression‌ ‌is‌ ‌an‌‌ element,‌ ‌in‌ ‌performance‌ ‌of‌ ‌duty,‌ ‌unlawful‌‌aggression‌‌from‌‌the‌‌ victim‌‌is‌‌NOT‌‌a‌‌requisite‌.‌ ‌ Fulfillment‌‌of‌‌Duty‌‌was‌‌Complete,‌‌Killing‌‌was‌‌Justified‌ In‌‌this‌‌case,‌‌Valino‌‌was‌‌committing‌‌an‌‌offense‌‌in‌‌the‌‌presence‌‌of‌‌the‌‌ policemen‌ ‌when‌ ‌Valino‌ ‌grabbed‌ ‌the‌ ‌M16‌ ‌Armalite‌ ‌from‌ ‌Mercado‌‌ and‌‌jumped‌‌from‌‌the‌‌jeep‌‌to‌‌escape.‌‌The‌‌policemen‌‌would‌‌have‌‌been‌‌ justified‌ ‌in‌ ‌shooting‌ ‌Valino‌ ‌if‌ ‌the‌ ‌use‌ ‌of‌ ‌force‌ ‌was‌ ‌absolutely‌‌ necessary‌‌to‌‌prevent‌‌his‌‌escape.‌‌The‌‌policemen‌‌had‌‌the‌‌duty‌‌not‌‌only‌‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 157‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ to‌‌recapture‌‌Valino‌‌but‌‌also‌‌to‌‌recover‌‌the‌‌loose‌‌firearm.‌‌ ‌ The‌ ‌duty‌ ‌to‌ ‌issue‌ ‌a‌ ‌warning‌ ‌is‌ ‌not‌‌absolutely‌‌mandated‌‌at‌‌all‌‌ times‌ ‌and‌ ‌at‌ ‌all‌ ‌cost‌,‌ ‌to‌ ‌the‌‌detriment‌‌of‌‌the‌‌life‌‌of‌‌law‌‌enforcers.‌‌ The‌ ‌directive‌ ‌to‌ ‌issue‌ ‌a‌ ‌warning‌ ‌contemplates‌ ‌a‌ ‌situation‌‌ where‌‌several‌‌options‌‌are‌‌still‌‌available‌‌to‌‌the‌‌law‌‌enforcers‌.‌‌In‌‌ exceptional‌ ‌circumstances‌ ‌such‌ ‌as‌‌this‌‌case,‌‌where‌‌the‌‌threat‌‌to‌‌the‌‌ life‌ ‌of‌ ‌a‌ ‌law‌ ‌enforcer‌ ‌is‌ ‌already‌ ‌imminent,‌ ‌and‌ ‌there‌ ‌is‌ ‌no‌ ‌other‌‌ option‌ ‌but‌ ‌to‌ ‌use‌ ‌force‌ ‌to‌ ‌subdue‌ ‌the‌ ‌offender,‌ ‌the‌ ‌law‌ ‌enforcer's‌‌ failure‌‌to‌‌issue‌‌a‌‌warning‌‌is‌‌excusable‌.‌ ‌ Avoidance‌‌of‌‌a‌‌greater‌‌evil‌ ‌ Any‌ ‌person‌ ‌who,‌ ‌in‌ ‌order‌ ‌to‌ ‌avoid‌ ‌an‌ ‌evil‌ ‌or‌ ‌injury,‌ ‌does‌ ‌not‌ ‌act‌‌ which‌ ‌causes‌ ‌damage‌ ‌to‌ ‌another,‌ ‌provided‌ ‌that‌ ‌the‌ ‌following‌‌ requisites‌‌are‌‌present;‌ ‌ First‌.‌‌That‌‌the‌‌evil‌‌sought‌‌to‌‌be‌‌avoided‌a ‌ ctually‌‌exists‌;‌ ‌ Second‌.‌‌That‌‌the‌‌injury‌‌feared‌b ‌ e‌‌greater‌‌‌than‌‌that‌‌done‌‌to‌‌avoid‌‌it;‌ ‌ Third‌.‌‌That‌‌there‌‌be‌‌‌no‌‌other‌‌practical‌‌and‌‌less‌‌harmful‌‌means‌‌of‌‌ preventing‌‌it.‌ ‌ 16. The‌ ‌greater‌ ‌evil‌ ‌should‌ ‌not‌ ‌be‌‌brought‌‌about‌‌by‌‌the‌‌negligence‌‌or‌‌ imprudence‌‌of‌‌the‌‌actor;‌‌nor‌‌must‌‌it‌‌result‌‌from‌‌a‌‌violation‌‌of‌‌law.‌ ‌ 17. Only‌‌criminal‌‌liability‌‌is‌‌excused,‌n ‌ ot‌‌civil‌‌liability‌.‌ ‌ Obedience‌‌to‌‌a‌‌lawful‌‌order‌ ‌ Any‌ ‌person‌ ‌who‌ ‌acts‌ ‌in‌‌obedience‌‌to‌‌an‌‌order‌‌issued‌‌by‌‌a‌‌superior‌‌ for‌‌some‌‌lawful‌‌purpose.‌ ‌ Requisites:‌ ‌ 1) That‌‌an‌‌order‌‌has‌‌been‌‌issued‌‌‌by‌‌a‌‌superior;‌ ‌ 2) Such‌‌order‌‌must‌‌be‌f‌ or‌‌some‌‌lawful‌‌purpose‌;‌ ‌ 3) The‌‌‌means‌‌used‌‌by‌‌the‌‌subordinate‌‌to‌‌carry‌‌out‌‌said‌‌order‌‌is‌‌ lawful‌.‌ ‌ 18. The‌‌subordinate‌‌is‌‌‌not‌‌liable‌‌‌for‌‌carrying‌‌out‌‌an‌‌illegal‌‌order‌‌of‌‌his‌‌ Balunueco‌‌v.‌‌CA‌ ‌ In‌‌the‌‌case‌‌at‌‌bar,‌‌Ricardo‌‌utterly‌‌failed‌‌to‌‌adduce‌‌sufficient‌‌proof‌‌of‌‌ the‌‌existence‌‌of‌‌a‌‌positively‌‌strong‌‌act‌‌of‌‌real‌‌aggression‌‌on‌‌the‌‌part‌‌ of‌‌the‌‌deceased‌‌Senando.‌ ‌ First‌,‌ ‌the‌ ‌fact‌ ‌that‌ ‌three‌ ‌(3)‌ ‌of‌ ‌the‌ ‌assailants‌ ‌suffered‌ ‌non-fatal‌‌ injuries‌ ‌bolsters‌ ‌the‌ ‌fact‌ ‌that‌ ‌Senando‌ ‌tried‌ ‌vainly‌ ‌to‌ ‌ward‌ ‌off‌ ‌the‌‌ assaults‌ ‌of‌ ‌his‌‌assailants.‌‌‌Second‌,‌‌Ricardo‌‌failed‌‌to‌‌present‌‌himself‌‌ to‌‌the‌‌authorities.‌‌The‌‌natural‌‌impulse‌‌of‌‌any‌‌person‌‌who‌‌has‌‌killed‌‌ someone‌‌in‌‌defense‌‌of‌‌his‌‌person‌‌or‌‌relative‌‌is‌‌to‌‌bring‌‌himself‌‌to‌‌the‌‌ authorities‌‌and‌‌try‌‌to‌‌dispel‌‌any‌‌suspicion‌‌of‌‌guilt‌‌that‌‌the‌‌authorities‌‌ might‌ ‌have‌ ‌against‌ ‌him.‌ ‌Third‌,‌ ‌petitioner‌ ‌had‌ ‌a‌ ‌rather‌ ‌erratic‌‌ recollection‌‌of‌‌people‌‌and‌‌events.‌ Manaban‌‌v.‌‌CA‌ ‌ In‌ ‌this‌ ‌case,‌ ‌there‌ ‌was‌ ‌no‌ ‌unlawful‌‌aggression‌‌on‌‌the‌‌part‌‌of‌‌the‌‌ victim.‌‌‌First‌,‌‌Bautista‌‌was‌‌shot‌‌at‌‌the‌‌back‌‌as‌‌evidenced‌‌by‌‌the‌‌point‌ of‌ ‌entry‌ ‌of‌ ‌the‌‌bullet.‌‌‌Second‌,‌‌when‌‌Bautista‌‌was‌‌shot,‌‌his‌‌gun‌‌was‌‌ still‌ ‌inside‌ ‌a‌ ‌locked‌ ‌holster‌ ‌and‌ ‌tucked‌ ‌in‌ ‌his‌ ‌right‌ ‌waist.‌ ‌Third‌,‌‌ when‌ ‌Bautista‌ ‌turned‌ ‌his‌ ‌back‌ ‌at‌ ‌Manaban,‌ ‌Manaban‌ ‌was‌ ‌already‌‌ pointing‌‌his‌‌service‌‌firearm‌‌at‌‌Bautista.‌‌ ‌ Aggression‌ ‌presupposes‌ ‌that‌ ‌the‌ ‌person‌ ‌attacked‌‌must‌‌face‌‌a‌‌ real‌ ‌threat‌ ‌to‌ ‌his‌ ‌life‌ ‌and‌ ‌the‌ ‌peril‌ ‌sought‌ ‌to‌ ‌be‌ ‌avoided‌ ‌is‌‌ imminent‌‌and‌‌actual,‌‌not‌‌imaginary‌.‌‌ ‌ 1. An‌ ‌imbecile‌‌or‌‌an‌‌insane‌ ‌person,‌‌unless‌‌the‌‌latter‌‌has‌‌acted‌‌ during‌‌a‌‌lucid‌‌interval.‌ ‌ 2. A‌‌person‌‌under‌‌15‌‌years‌‌‌of‌‌age.‌ ‌ 3. A‌‌person‌‌‌over‌‌15‌‌years‌‌of‌‌age‌‌and‌‌under‌‌18‌,‌‌unless‌‌he‌‌has‌‌ acted‌ ‌with‌ ‌discernment,‌ ‌in‌ ‌which‌ ‌case,‌ ‌such‌ ‌minor‌ ‌shall‌ ‌be‌‌ proceeded‌‌against‌‌in‌‌accordance‌‌with‌‌the‌‌provisions‌‌of‌‌Art.‌‌80‌‌of‌‌ this‌‌Code.‌ ‌ 4. Any‌ ‌person‌ ‌who,‌ ‌while‌ ‌performing‌ ‌a‌ ‌lawful‌ ‌act‌ ‌with‌ ‌due‌ ‌care,‌‌ causes‌‌an‌‌injury‌‌by‌‌mere‌‌‌accident‌‌‌without‌‌fault‌‌or‌‌intention‌‌of‌‌ causing‌‌it.‌ ‌ 5. Any‌ ‌person‌ ‌who‌ ‌act‌ ‌under‌ ‌the‌ ‌compulsion‌ ‌of‌ ‌irresistible‌‌ force‌.‌ ‌ 6. Any‌‌person‌‌who‌‌acts‌‌under‌‌the‌‌impulse‌‌of‌‌an‌‌‌uncontrollable‌‌ fear‌‌‌of‌‌an‌‌equal‌‌or‌‌greater‌‌injury.‌ ‌ 7. Any‌ ‌person‌ ‌who‌ ‌fails‌ ‌to‌ ‌perform‌ ‌an‌ ‌act‌ ‌required‌ ‌by‌‌law,‌‌when‌‌ prevented‌‌by‌‌some‌l‌ awful‌‌insuperable‌‌cause‌.‌ ‌ Imbecility‌‌or‌‌Insanity‌ ‌ 1. An‌ ‌imbecile‌ ‌is‌ ‌one‌ ‌who,‌ ‌while‌ ‌advanced‌ ‌in‌ ‌age,‌ ‌has‌ ‌a‌ ‌mental‌‌ development‌‌comparable‌‌to‌‌that‌‌of‌‌children‌‌2-7‌‌years‌‌of‌‌age.‌ ‌ 2. To‌ ‌constitute‌ ‌insanity‌,‌ ‌there‌ ‌must‌ ‌be‌ ‌complete‌ ‌deprivation‌ ‌of‌‌ intelligence‌‌‌or‌‌that‌‌there‌‌be‌‌‌total‌‌deprivation‌‌of‌‌the‌‌freedom‌‌of‌‌ the‌ ‌will‌.‌ ‌During‌ ‌the‌ ‌lucid‌ ‌interval‌,‌ ‌the‌ ‌insane‌ ‌acts‌ ‌with‌‌ intelligence.‌ ‌ Masipequiña‌‌v.‌‌CA‌ ‌ The‌‌rule‌‌is‌‌that‌‌‌the‌‌reasonable‌‌necessity‌‌of‌‌the‌‌means‌‌employed‌‌ to‌ ‌repel‌ ‌or‌ ‌prevent‌ ‌the‌ ‌attack‌ ‌depends‌ ‌upon‌ ‌the‌ ‌imminent‌‌ danger‌ ‌of‌ ‌injury‌,‌ ‌NOT‌ ‌on‌ ‌the‌ ‌harm‌ ‌actually‌ ‌done‌ ‌to‌ ‌the‌‌ accused‌.‌ ‌ 3. Thus,‌‌that‌‌Masipequiñ a‌‌escaped‌‌serious‌‌injuries‌‌does‌‌not‌‌necessarily‌‌ imply‌ ‌that‌ ‌the‌ ‌means‌‌he‌‌used‌‌to‌‌repel‌‌the‌‌attack‌‌were‌‌unreasonable‌‌ and‌‌excessive.‌ ‌ People‌‌v.‌‌Rafanan‌‌‌on‌‌insanity‌ ‌ b.‌‌Exempting‌‌circumstances‌ ‌ the‌‌following‌‌are‌e ‌ xempt‌f‌ rom‌‌criminal‌‌liability:‌ ‌ superior,‌ ‌if‌ ‌he‌ ‌is‌ ‌not‌‌aware‌‌of‌‌the‌‌illegality‌‌of‌‌the‌‌order‌‌‌and‌‌‌he‌‌is‌‌ not‌‌negligent‌.‌ ‌ Thus,‌ ‌epilepsy,‌ ‌somnambulism,‌ ‌and‌ ‌malignant‌ ‌malaria‌ ‌are‌ ‌valid‌‌ defenses.‌‌Feeblemindedness‌‌and‌‌pedophilia,‌‌on‌‌the‌‌other‌‌hand,‌‌are‌‌ NOT.‌ ‌ In‌‌order‌‌that‌‌the‌‌exempting‌‌circumstance‌‌of‌‌‌INSANITY‌‌‌may‌‌be‌‌taken‌‌ into‌ ‌account,‌ ‌it‌ ‌is‌‌necessary‌‌that‌‌there‌‌be‌‌a‌‌complete‌‌deprivation‌‌of‌‌ intelligence‌‌in‌‌committing‌‌the‌‌act,‌‌that‌‌is,‌‌ ‌ 1. that‌‌the‌‌accused‌‌be‌‌deprived‌‌of‌‌reason;‌‌ ‌ 2. that‌‌there‌‌be‌‌no‌‌responsibility‌‌for‌‌his‌‌own‌‌acts;‌‌ ‌ 3. that‌‌he‌‌acts‌‌without‌‌the‌‌least‌‌discernment;‌‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 158‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ 4. that‌‌there‌‌be‌‌a‌‌complete‌‌absence‌‌of‌‌the‌‌power‌‌to‌‌discern,‌‌or‌‌ that‌‌there‌‌be‌‌a‌‌total‌‌deprivation‌‌of‌‌freedom‌‌of‌‌the‌‌will.‌ ‌ Where‌ ‌the‌ ‌accused‌ ‌failed‌ ‌to‌ ‌show‌ ‌complete‌ ‌impairment‌ ‌or‌ ‌loss‌ ‌of‌‌ intelligence,‌ ‌the‌ ‌Court‌ ‌has‌ ‌recognized‌ ‌at‌ ‌most‌ ‌a‌‌‌mitigating‌,‌‌not‌‌an‌‌ exempting,‌‌circumstance‌‌in‌‌accord‌‌with‌‌Article‌‌13(9)‌‌of‌‌the‌‌RPC.‌ ‌ In‌ ‌previous‌ ‌cases‌ ‌where‌ ‌schizophrenia‌ ‌was‌ ‌interposed‌ ‌as‌ ‌an‌‌ exempting‌‌circumstance,‌‌it‌‌has‌‌mostly‌‌been‌‌‌rejected‌‌‌by‌‌the‌‌Court.‌‌In‌‌ each‌ ‌of‌ ‌these‌ ‌cases,‌ ‌the‌ ‌evidence‌ ‌presented‌ ‌tended‌ ‌to‌ ‌show‌ ‌that‌ ‌if‌‌ there‌ ‌was‌ ‌impairment‌‌of‌‌the‌‌mental‌‌faculties,‌‌such‌‌impairment‌‌was‌‌ not‌ ‌so‌ ‌complete‌ ‌as‌ ‌to‌ ‌deprive‌ ‌the‌ ‌accused‌ ‌of‌ ‌intelligence‌ ‌or‌ ‌the‌‌ consciousness‌ ‌of‌ ‌his‌ ‌acts.‌ ‌Accordingly,‌ ‌we‌ ‌must‌ ‌reject‌ ‌the‌‌insanity‌‌ defense‌‌of‌‌Rafanan.‌ ‌ Minority‌ ‌ RA‌‌9344‌‌as‌‌amended‌‌by‌‌RA‌‌10360‌ ‌ 4. A‌ ‌child‌ ‌above‌ ‌15,‌ ‌but‌ ‌below‌ ‌18,‌ ‌must‌ ‌have‌ ‌acted‌ ‌without‌‌ discernment‌‌‌to‌‌be‌‌exempt.‌ ‌ 5. Periods‌‌of‌c‌ riminal‌‌responsibility‌ ‌ 10. It‌‌is‌‌intrinsically‌‌contradictory‌‌‌to‌‌negligence.‌ ‌ 11. The‌‌following‌r‌ equisites‌m ‌ ust‌‌concur:‌ ‌ b) that‌‌the‌‌injury‌‌is‌‌caused‌‌by‌‌mere‌‌accident‌;‌‌and‌ ‌ commission‌‌of‌‌the‌‌offense‌‌is‌‌below‌‌18‌‌years‌‌old‌‌but‌‌not‌‌less‌‌than‌‌ 15‌‌years‌‌and‌‌1‌‌day‌‌old.‌ ‌ Discernment‌ ‌means‌ ‌the‌ ‌capacity‌ ‌of‌ ‌the‌ ‌child‌ ‌at‌ ‌the‌ ‌time‌ ‌of‌ ‌the‌‌ commission‌ ‌of‌ ‌the‌ ‌offense‌ ‌to‌ ‌understand‌ ‌the‌ ‌differences‌‌between‌‌ right‌‌and‌‌wrong‌‌and‌‌the‌‌consequences‌‌of‌‌the‌‌wrongful‌‌act.‌ ‌ Intent‌ ‌refers‌‌to‌‌the‌‌‌desired‌‌act‌‌of‌‌the‌‌person‌‌while‌‌‌discernment‌‌ relates‌ ‌to‌ ‌the‌ ‌moral‌‌significance‌‌that‌‌a‌‌person‌‌ascribes‌‌to‌‌the‌‌said‌‌ act.‌ ‌ The‌‌priest‌‌fails‌‌to‌‌do‌‌so;‌ ‌ c. His‌ ‌failure‌ ‌was‌ ‌due‌ ‌to‌ ‌a‌ ‌lawful‌ ‌cause,‌ ‌privileged‌‌ communication‌‌between‌‌him‌‌and‌‌a‌‌penitent.‌ ‌ Review‌‌of‌‌Justifying‌‌and‌‌Exempting‌‌Circumstances‌ M‌‌=‌‌Mitigating‌ ‌ ‌ Civil‌‌ If‌‌not‌‌ Liability‌ complete‌ Requisites‌ ‌ Justifying‌ ‌ c) that‌ ‌there‌ ‌was‌ ‌no‌ ‌fault‌ ‌or‌ ‌intent‌ ‌on‌ ‌his‌ ‌part‌ ‌to‌ ‌cause‌ ‌the‌‌ injury.‌ ‌ Irresistible‌‌force‌ ‌ 12. The‌ ‌force‌ ‌must‌ ‌be‌ ‌irresistible‌ ‌to‌ ‌reduce‌ ‌the‌ ‌actor‌ ‌to‌ ‌a‌ ‌mere‌‌ instrument‌‌‌who‌‌acts‌‌not‌‌only‌‌without‌‌will‌‌but‌‌against‌‌his‌‌will.‌ ‌ Self-defense‌ ‌ ✘‌ ‌ 1. Unlawful‌‌aggression‌;‌ ‌ 2. Reasonable‌‌necessity‌‌of‌‌the‌‌ means‌‌employed‌‌to‌‌prevent‌‌or‌‌ repel‌‌it;‌ ‌ 3. Lack‌‌of‌‌sufficient‌‌provocation‌‌ on‌‌the‌‌part‌‌of‌‌the‌‌person‌‌ defending‌‌himself;‌ ‌ M‌ ‌ Uncontrollable‌‌fear‌ ‌ 14. Duress‌ ‌as‌ ‌a‌ ‌valid‌ ‌defense‌ ‌should‌ ‌be‌ ‌based‌ ‌on‌ ‌real,‌‌imminent,‌‌or‌‌ A‌‌‌child‌‌in‌‌conflict‌‌with‌‌the‌‌law‌‌‌(CCL)‌‌is‌‌one‌‌who‌‌at‌‌the‌‌time‌‌of‌‌the‌‌ b. a) that‌‌the‌‌accused‌‌was‌‌performing‌‌a‌l‌ awful‌‌act‌‌with‌‌due‌‌care‌;‌ ‌ d) Mitigated‌ ‌responsibility‌ ‌15‌ ‌years‌ ‌and‌ ‌1‌ ‌day‌ ‌to‌‌18‌‌years,‌‌with‌‌ discernment;‌‌over‌‌70‌‌years‌‌or‌s‌ enility.‌ ‌ 8. An‌ ‌accident‌ ‌is‌ ‌something‌ ‌that‌ ‌happens‌ ‌outside‌ ‌the‌ ‌sway‌ ‌of‌ ‌our‌‌ will,‌‌and‌‌although‌‌it‌‌comes‌‌about‌‌through‌‌some‌‌act‌‌of‌‌our‌‌will,‌‌lies‌‌ beyond‌‌the‌‌bounds‌‌of‌‌humanly‌‌foreseeable‌‌consequences.‌ ‌ c) Full‌‌responsibility‌‌‌18‌‌years‌‌-‌‌70‌‌years;‌ ‌ b) Conditional‌‌responsibility‌‌‌15‌‌years‌‌and‌‌1‌‌day‌‌-‌‌18‌‌years;‌ ‌ 7. 9. 13. This‌‌presupposes‌‌that‌‌a‌‌person‌‌is‌‌compelled‌‌to‌‌commit‌‌a‌‌crime‌‌by‌‌ another,‌ ‌but‌ ‌the‌ ‌compulsion‌ ‌is‌ ‌by‌ ‌means‌ ‌of‌ ‌intimidation‌ ‌or‌‌ threat‌,‌‌‌not‌‌force‌‌or‌‌violence.‌‌If‌‌force‌‌or‌‌violence‌‌is‌‌employed,‌‌the‌‌ applicable‌‌defense‌‌is‌i‌ rresistible‌‌force‌.‌ ‌ a) Absolute‌‌irresponsibility‌‌‌15‌‌years‌‌and‌‌below;‌ ‌ 6. Accident‌ ‌ reasonable‌ ‌fear‌ ‌for‌ ‌one’s‌ ‌life‌ ‌or‌ ‌limb‌ ‌and‌ ‌should‌ ‌NOT‌ ‌be‌‌ speculative,‌‌fanciful,‌o ‌ r‌‌remote‌‌fear.‌ ‌ 1. Unlawful‌‌aggression;‌ ‌ Defense‌‌of‌‌ relatives‌ ‌ ✘‌ ‌ M‌ ‌ 2. Reasonable‌‌necessity‌‌of‌‌the‌‌ means‌‌employed‌‌to‌‌prevent‌‌or‌‌ repel‌‌it;‌ ‌ 3. In‌‌case‌‌the‌‌provocation‌‌was‌‌ given‌‌by‌‌the‌‌person‌‌attacked,‌‌ the‌‌one‌‌making‌‌a‌‌defense‌‌had‌‌ no‌‌part‌‌therein.‌ ‌ 15. The‌ ‌compulsion‌ ‌must‌ ‌be‌ ‌of‌ ‌such‌ ‌a‌ ‌character‌ ‌as‌ ‌to‌ ‌leave‌ ‌no‌‌ opportunity‌ ‌to‌ ‌the‌ ‌accused‌ ‌for‌ ‌escape‌ ‌or‌ ‌self-defense‌ ‌in‌ ‌equal‌‌ combat.‌ ‌ 1. Unlawful‌‌aggression;‌ ‌ Insuperable‌‌cause‌ 16. Confessant‌ ‌reveals‌ ‌to‌ ‌a‌ ‌priest‌ ‌of‌ ‌his‌ ‌plan‌ ‌to‌ ‌rebel‌ ‌against‌ ‌the‌‌ government.‌‌Under‌‌Art‌‌116,‌‌it‌‌is‌‌required‌‌that‌‌anyone‌‌who‌‌knows‌‌of‌‌ such‌ ‌conspiracy‌ ‌must‌ ‌report‌ ‌the‌ ‌same.‌ ‌However,‌ ‌due‌ ‌to‌‌ penitent-priest‌ ‌privileged‌ ‌communication,‌ ‌the‌ ‌priest‌ ‌can‌ ‌not‌ ‌be‌‌ compelled‌‌to‌‌report‌‌such‌‌information.‌ ‌ a. Defense‌‌of‌‌ strangers‌ ‌ ✘‌ ‌ M‌ ‌ 2. Reasonable‌‌necessity‌‌of‌‌the‌‌ means‌‌employed‌‌to‌‌prevent‌‌or‌‌ repel‌‌it;‌ ‌ 3. The‌‌person‌‌defending‌‌be‌n ‌ ot‌‌ induced‌‌by‌‌revenge,‌‌ resentment‌‌or‌‌other‌‌evil‌‌ motive.‌ ‌ The‌‌act‌‌of‌‌reporting‌‌is‌‌required‌‌under‌‌law;‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 159‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ 1. Avoidance‌‌of‌ greater‌‌evil‌ ‌ or‌‌State‌‌of‌‌ necessity‌ ‌ ✔‌ ‌ 2. M‌ ‌ 3. 1. Fulfillment‌‌ of‌‌duty‌ ‌ Obedience‌‌ to‌‌a‌‌lawful‌‌ order‌ ‌ ✘‌ ‌ ✘‌ ‌ The‌‌evil‌‌sought‌‌to‌‌be‌‌avoided‌‌ actually‌‌exists;‌ ‌ The‌‌injury‌‌feared‌‌be‌‌greater‌‌ than‌‌that‌‌done‌‌to‌‌avoid‌‌it;‌ ‌ The‌‌accused‌‌acted‌‌in‌‌the‌‌ performance‌‌of‌‌a‌‌duty‌‌or‌‌in‌‌the‌‌ lawful‌‌exercise‌‌of‌‌such‌‌right‌‌or‌‌ office;‌ ‌ offense‌‌committed‌‌be‌‌the‌‌ necessary‌‌consequence‌‌of‌‌the‌‌ due‌‌‌performance‌‌of‌‌duty‌‌or‌‌ lawful‌‌exercise‌‌of‌‌such‌‌right‌‌or‌‌ office.‌ ‌ 1. An‌‌order‌‌has‌‌been‌‌issued‌‌by‌‌a‌‌ superior;‌ ‌ 2. Such‌‌order‌‌must‌‌be‌‌for‌‌a‌l‌ awful‌‌ purpose;‌ ‌ 3. 1. Minority‌ ‌ ✔‌‌ ‌ Accident‌ ‌ If‌‌above‌‌15‌‌but‌‌below‌‌18,‌‌ conditionally‌‌exempt‌.‌ ‌ 3. Exemption‌‌applies‌‌only‌‌if‌‌it‌‌be‌‌ shown‌‌that‌‌the‌‌minor‌‌acted‌‌ without‌‌discernment.‌ ‌ 1. A‌‌person‌‌is‌‌performing‌‌a‌‌ lawful‌‌act;‌ ‌ 2. With‌‌due‌‌care;‌ ‌ M‌ ‌ 3. He‌‌causes‌‌an‌‌accident‌‌to‌‌ another‌‌by‌‌mere‌‌accident;‌ ‌ 4. Compulsion‌‌ of‌‌an‌‌ irresistible‌‌ force‌ ‌ 1. ✔‌ ‌ M‌ ‌ 2. Insane‌‌‌is‌‌only‌‌exempt‌‌‌if‌‌he‌‌ The‌‌compulsion‌‌is‌‌by‌m ‌ eans‌‌ of‌‌physical‌‌force;‌ ‌ ✘‌ ‌ 2. Such‌‌force‌‌must‌‌be‌i‌ rresistible‌;‌ ‌ 3. Such‌‌force‌m ‌ ust‌‌come‌‌from‌‌a‌‌ third‌‌person.‌ ‌ 1. The‌‌threat‌‌which‌‌causes‌‌the‌‌ fear‌‌is‌‌‌of‌‌an‌‌evil‌g ‌ reater‌‌than‌‌ or‌‌at‌‌least‌‌equal‌‌to‌,‌‌that‌‌which‌‌ he‌‌is‌‌required‌‌to‌‌commit;‌ ‌ The‌‌means‌‌used‌‌by‌‌the‌‌ subordinate‌‌to‌‌carry‌‌out‌‌said‌‌ order‌‌is‌l‌ awful.‌ Imbecile‌‌is‌e‌ xempt‌‌in‌A ‌ LL‌‌ cases;‌ ‌ Without‌‌fault‌‌or‌‌intention‌‌of‌‌ causing‌‌it.‌ ‌ have‌‌succumbed‌‌to‌‌it.‌ ‌ Insuperable‌‌ cause‌ ‌ Impulse‌‌of‌‌ an‌‌ uncontrollable‌‌ 1. b) the‌‌fear‌‌must‌‌be‌‌real‌‌and‌‌ imminent;‌ ‌ M‌ ‌ fear‌ ‌ 2. M‌ ‌ 1. If‌‌15‌‌and‌‌below,‌a‌ bsolutely‌‌ That‌‌it‌‌promises‌‌an‌e‌ vil‌‌‌of‌‌ such‌‌gravity‌‌‌and‌‌imminence‌‌ that‌‌the‌‌ordinary‌‌man‌‌would‌‌ 2. A‌‌person‌‌fails‌‌to‌‌perform‌‌such‌‌ act;‌ ‌ 3. His‌‌failure‌‌to‌‌perform‌‌such‌‌act‌‌ was‌‌due‌‌to‌‌some‌‌lawful‌‌or‌‌ insuperable‌‌cause.‌ ‌ Incomplete‌ ‌Defense‌.‌ ‌Those‌ ‌mentioned‌ ‌in‌ ‌the‌ ‌preceding‌‌ Mitigating‌ ‌responsibility.‌ ‌That‌ ‌the‌ ‌offender‌ ‌is‌ ‌under‌‌ eighteen‌‌year‌‌of‌‌age‌‌or‌‌over‌‌seventy‌‌years.‌‌ ‌ 3. Praeter‌ ‌intentionem.‌ ‌That‌ ‌the‌ ‌offender‌ ‌had‌ ‌no‌ ‌intention‌ ‌to‌‌ commit‌‌so‌‌grave‌‌a‌‌wrong‌‌as‌‌that‌‌committed.‌ ‌ 4. Provocation.‌ ‌That‌ ‌sufficient‌‌provocation‌‌or‌‌threat‌‌on‌‌the‌‌part‌‌ of‌‌the‌‌offended‌‌party‌‌immediately‌‌preceded‌‌the‌‌act.‌ ‌ Immediate‌ ‌vindication‌ ‌of‌ ‌a‌ ‌grave‌ ‌offense.‌ ‌That‌ ‌the‌ ‌act‌‌ was‌ ‌committed‌ ‌in‌ ‌the‌ ‌immediate‌‌vindication‌‌of‌‌a‌‌grave‌‌offense‌‌ to‌ ‌the‌ ‌one‌ ‌committing‌ ‌the‌ ‌felony,‌ ‌his‌ ‌spouse,‌ ‌ascendants,‌ ‌or‌‌ relatives‌‌by‌‌affinity‌‌within‌‌the‌‌same‌‌degrees.‌ ‌ 6. Passion‌ ‌or‌ ‌obfuscation.‌ ‌That‌ ‌of‌ ‌having‌ ‌acted‌ ‌upon‌ ‌an‌‌ impulse‌ ‌so‌ ‌powerful‌ ‌as‌ ‌naturally‌ ‌to‌ ‌have‌ ‌produced‌ ‌passion‌ ‌or‌ obfuscation.‌ ‌ 7. Voluntary‌ ‌surrender.‌ ‌That‌ ‌the‌ ‌offender‌ ‌had‌ ‌voluntarily‌‌ surrendered‌‌himself‌‌to‌‌a‌‌person‌‌in‌‌authority‌‌or‌‌his‌‌agents,‌‌or‌‌ ‌ Plea‌ ‌of‌ ‌guilty.‌ ‌That‌ ‌he‌ ‌had‌ ‌voluntarily‌ ‌confessed‌ ‌his‌ ‌guilt‌‌ c) the‌‌fear‌‌of‌‌an‌‌injury‌‌is‌‌ greater‌‌than‌‌or‌‌at‌‌least‌‌ equal‌‌to‌‌that‌‌done.‌ ‌ 2. ✘‌ ‌ An‌‌act‌‌is‌‌required‌‌by‌‌law‌‌to‌‌be‌‌ done;‌ ‌ chapter,‌‌when‌‌all‌‌the‌‌requisites‌‌necessary‌‌to‌‌justify‌‌or‌‌to‌‌exempt‌‌ from‌‌criminal‌‌liability‌‌in‌‌the‌‌respective‌‌cases‌‌are‌‌not‌‌attendant.‌ ‌ a) existence‌‌of‌‌an‌‌ uncontrollable‌‌fear;‌ ‌ ✔‌ ‌ ✘‌ ‌ 1. c.‌‌Mitigating‌‌circumstances‌ ‌ 5. acted‌‌not‌‌during‌‌a‌‌lucid‌‌ interval.‌ ‌ ✔‌‌ ‌ ✘‌ ‌ M‌ ‌ 2. The‌‌injury‌‌caused‌‌or‌‌the‌‌ M‌ ‌ 2. There‌‌be‌‌no‌‌other‌‌practical‌‌and‌‌ less‌‌harmful‌‌means‌‌of‌‌ preventing‌‌it.‌ ‌ Exempting‌ ‌ Imbecility‌‌ or‌‌insanity‌ ‌ exempt;‌ ‌ before‌‌the‌‌court‌‌prior‌‌to‌‌the‌‌presentation‌‌of‌‌the‌‌evidence‌‌for‌‌the‌‌ prosecution.‌ ‌ 8. Deaf‌ ‌and‌ ‌Dumb,‌ ‌Blind.‌ ‌That‌‌the‌‌offender‌‌is‌‌deaf‌‌and‌‌dumb,‌‌ blind‌ ‌or‌ ‌otherwise‌ ‌suffering‌ ‌some‌ ‌physical‌ ‌defect‌ ‌which‌ ‌thus‌‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 160‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ restricts‌ ‌his‌ ‌means‌ ‌of‌ ‌action,‌‌defense,‌‌or‌‌communications‌‌with‌‌ his‌‌fellow‌‌beings.‌ ‌ 9. 3. Illness.‌ ‌Such‌ ‌illness‌ ‌of‌ ‌the‌ ‌offender‌ ‌as‌ ‌would‌ ‌diminish‌ ‌the‌‌ exercise‌ ‌of‌ ‌the‌ ‌will-power‌ ‌of‌ ‌the‌ ‌offender‌ ‌without‌ ‌however‌‌ depriving‌‌him‌‌of‌‌the‌‌consciousness‌‌of‌‌his‌‌acts.‌ ‌ 4. 1. Ordinary‌ ‌or‌ ‌Generic‌ ‌mitigating‌‌are‌‌those‌‌enumerated‌‌in‌‌Art‌‌13.‌‌ For‌ ‌incomplete‌ ‌defense‌ ‌however,‌ ‌in‌ ‌Subsection‌ ‌1,‌ ‌it‌ ‌becomes‌‌ privileged‌‌‌when‌‌majority‌‌of‌‌the‌‌requisites‌‌are‌‌present.‌‌‌(Art‌‌69)‌ ‌ a. It‌ ‌is‌ ‌susceptible‌ ‌to‌ ‌being‌ ‌offset‌ ‌by‌ ‌any‌ ‌aggravating‌‌ circumstance.‌ ‌ b. If‌ ‌not‌ ‌offset,‌ ‌produces‌ ‌only‌ ‌the‌ ‌effect‌ ‌of‌ ‌applying‌ ‌the‌‌ penalty‌ ‌provided‌ ‌by‌ ‌law‌ ‌in‌‌its‌‌‌minimum‌‌period,‌‌in‌‌case‌‌ of‌‌divisible‌‌penalty.‌ ‌ 5. b. 8. d. Art‌‌268(3).‌‌Voluntary‌‌release‌‌of‌‌person‌‌illegally‌‌detained‌‌ within‌‌3‌‌days;‌ ‌ e. Art‌ ‌333(3).‌ ‌Abandonment‌ ‌without‌ ‌justification‌ ‌of‌ ‌the‌‌ spouse‌‌who‌‌committed‌‌adultery.‌ ‌ It‌ ‌is‌ ‌the‌ ‌intention‌ ‌of‌ ‌the‌ ‌offender‌ ‌at‌ ‌the‌ ‌moment‌ ‌when‌ ‌he‌ ‌is‌‌ Any‌ ‌unjust‌ ‌or‌ ‌improper‌ ‌conduct‌ ‌or‌ ‌act‌ ‌by‌ ‌the‌ ‌offended‌ ‌party,‌‌ capable‌‌of‌‌exciting,‌‌inciting,‌‌or‌‌irritating‌‌anyone.‌ ‌ As‌ ‌to‌ ‌whether‌ ‌a‌ ‌provocation‌ ‌is‌ ‌sufficient‌ ‌depends‌ ‌upon‌ ‌the‌ ‌act‌‌ constituting‌ ‌the‌ ‌provocation,‌ ‌the‌ ‌social‌ ‌standing‌ ‌of‌ ‌the‌ ‌person‌‌ provoked,‌‌the‌‌place‌‌and‌‌time‌‌when‌‌the‌‌provocation‌‌is‌‌made.‌ ‌ As‌‌an‌‌element‌‌of‌‌self-defense,‌‌it‌‌pertains‌‌to‌‌its‌‌‌absence‌‌on‌‌the‌‌part‌‌ of‌ ‌the‌ ‌person‌ ‌defending‌ ‌himself;‌ ‌whereas‌ ‌as‌ ‌a‌ ‌mitigating‌‌ circumstance,‌‌it‌‌pertains‌‌to‌‌its‌‌‌presence‌‌on‌‌the‌‌part‌‌of‌‌the‌‌offended‌‌ party.‌ ‌ 9. the‌‌‌social‌‌standing‌‌of‌‌the‌‌person,‌‌the‌‌‌place‌,‌‌the‌‌‌time‌‌when‌‌the‌‌insult‌‌ was‌‌made.‌ ‌ 13. It‌ ‌is‌ ‌incompatible‌ ‌with‌ ‌passion‌ ‌or‌ ‌obfuscation‌.‌ ‌They‌ ‌cannot‌‌ Provocation‌ ‌ Art‌‌69‌.‌‌Not‌‌all,‌‌but‌‌a‌‌majority‌‌of‌‌the‌‌requisites‌‌of‌‌justifying‌‌ circumstances‌‌and‌‌no‌‌aggravating.‌ ‌ 12. Whether‌‌the‌‌personal‌‌offense‌‌is‌‌grave‌‌must‌‌be‌‌decided‌‌considering‌‌ The‌ ‌trial‌ ‌court‌ ‌gave‌ ‌all‌ ‌of‌ ‌the‌ ‌accused‌ ‌the‌ ‌benefit‌ ‌of‌ ‌the‌‌mitigating‌‌ circumstance‌ ‌that‌ ‌the‌ ‌offenders‌ ‌had‌ ‌no‌ ‌intention‌ ‌to‌ ‌commit‌ ‌so‌‌ grave‌‌a‌‌wrong‌.‌‌‌The‌‌estimation‌‌of‌‌this‌‌circumstance‌‌was‌‌proper,‌‌ and‌‌its‌‌allowance‌‌was‌‌not‌‌inconsistent‌‌with‌‌the‌‌finding‌‌that‌‌the‌‌ crime‌‌was‌‌murder.‌ ‌ Art‌ ‌68.‌ ‌When‌ ‌the‌ ‌offender‌ ‌is‌ ‌a‌ ‌minor‌ ‌and‌ ‌his‌ ‌case‌ ‌falls‌‌ Art‌ ‌64(5).‌ ‌When‌ ‌there‌ ‌are‌ ‌2‌ ‌or‌ ‌more‌ ‌mitigating‌‌ The‌ ‌only‌ ‌instance‌ ‌it‌ ‌becomes‌ ‌privileged‌ ‌mitigating‌ ‌is‌ ‌when‌ ‌a‌‌ People‌‌v.‌‌Enriquez‌ ‌ or‌‌exempting‌‌circumstances‌‌are‌‌present.‌ ‌ c. 11. A‌ ‌lapse‌ ‌of‌ ‌time‌ ‌is‌ ‌allowed‌ ‌between‌ ‌the‌ ‌grave‌ ‌offense‌ ‌and‌ ‌the‌‌ vindication.‌ ‌ committing‌‌the‌‌crime‌‌which‌‌is‌‌considered.‌ ‌ 6. aggravating‌ ‌circumstance.‌ ‌It‌ ‌has‌ ‌the‌ ‌effect‌ ‌of‌ ‌imposing‌ ‌upon‌ ‌the‌‌ offender‌ ‌the‌ ‌penalty‌ ‌lower‌ ‌by‌ ‌one‌ ‌or‌ ‌two‌ ‌degrees‌ ‌than‌ ‌that‌‌ 7. provided‌‌by‌‌law.‌ ‌ under‌‌the‌‌JJWA,‌‌particularly‌‌those‌‌above‌‌15‌‌but‌‌below‌‌18,‌‌ and‌‌acts‌‌WITH‌‌discernment.‌ ‌ from‌‌criminal‌‌liability‌‌are‌‌not‌‌attendant.‌ ‌ Praeter‌‌intentionem‌ ‌ 2. Privileged‌ ‌mitigating‌ ‌are‌ ‌those‌ ‌that‌ ‌cannot‌ ‌be‌ ‌offset‌ ‌by‌ ‌any‌‌ a. When‌ ‌all‌ ‌the‌ ‌requisites‌ ‌necessary‌ ‌to‌ ‌justify‌ ‌the‌ ‌act‌ ‌or‌ ‌to‌ ‌exempt‌‌ majority‌ ‌of‌ ‌the‌ ‌requisites‌ ‌in‌ ‌self-defense,‌ ‌defense‌ ‌of‌ ‌relatives‌ ‌or‌‌ strangers‌‌is‌‌present.‌ ‌ 10. Analogous‌.‌ ‌And,‌ ‌finally,‌ ‌any‌ ‌other‌ ‌circumstances‌‌of‌‌a‌‌similar‌‌ nature‌‌and‌‌analogous‌‌to‌‌those‌‌above‌‌mentioned.‌ ‌ Privileged‌‌and‌‌ordinary‌ ‌ Immediate‌‌vindication‌‌of‌‌a‌‌grave‌‌offense‌ ‌ Incomplete‌‌defense‌ ‌ It‌‌must‌‌be‌‌‌immediate‌‌to‌‌the‌‌commission‌‌of‌‌the‌‌crime‌‌such‌‌that‌‌the‌‌ accused‌ ‌had‌ ‌no‌ ‌time‌ ‌to‌ ‌regain‌ ‌his‌ ‌reason‌ ‌and‌ ‌to‌ ‌exercise‌‌ self-control.‌ ‌ 10. It‌ ‌should‌ ‌not‌ ‌be‌ ‌offensive‌ ‌and‌ ‌positively‌‌strong‌‌as‌‌it‌‌may‌‌then‌‌be‌‌ considered‌ ‌as‌ ‌an‌ ‌unlawful‌ ‌aggression‌ ‌that‌ ‌may‌ ‌give‌ ‌rise‌ ‌to‌‌ self-defense.‌ ‌ co-exist,‌ ‌except‌ ‌when‌ ‌there‌ ‌are‌ ‌other‌ ‌facts,‌ ‌although‌ ‌closely‌‌ connected.‌ ‌In‌ ‌other‌ ‌words,‌ ‌the‌‌cause‌‌for‌‌each‌‌arose‌‌from‌‌different‌‌ sets‌‌of‌‌facts.‌ ‌ ‌ Provocation‌ ‌ Made‌‌towards‌ ‌ offender‌ ‌ Vindication‌ ‌ Also‌‌against‌‌offender’s‌‌ relatives‌ ‌ Offender‌ ‌must‌‌ An‌ ‌offense‌ ‌need‌ ‌not‌‌ A‌‌grave‌‌offense‌ ‌ have‌‌done‌ ‌ be‌‌grave‌ ‌ Time‌‌lapse‌ ‌ Immediately‌‌ preceded‌‌the‌‌act‌ ‌ Proximate‌ ‌ Passion‌‌or‌‌obfuscation‌ ‌ 14. Mitigating‌ ‌only‌ ‌when‌ ‌the‌ ‌same‌ ‌arose‌ ‌from‌‌‌lawful‌‌sentiments‌,‌‌and‌‌ NOT‌‌in‌‌a‌‌spirit‌‌of‌‌lawlessness‌‌or‌‌revenge.‌ ‌ 15. The‌ ‌crime‌ ‌committed‌ ‌by‌ ‌the‌ ‌accused‌ ‌must‌ ‌be‌ ‌provoked‌ ‌by‌ ‌prior‌‌ unjust‌‌or‌‌improper‌‌acts‌‌of‌‌the‌‌injured‌‌party.‌ ‌ 16. Exercise‌‌of‌‌a‌‌right‌‌or‌‌fulfillment‌‌of‌‌duty‌‌is‌NOT‌‌a‌‌proper‌‌source‌‌of‌‌ passion‌‌or‌‌obfuscation.‌ ‌ 17. It‌ ‌must‌ ‌be‌ ‌proven‌ ‌that‌ ‌the‌ ‌act‌ ‌which‌ ‌produced‌ ‌passion‌ ‌or‌‌ obfuscation‌ ‌took‌ ‌place‌ ‌at‌ ‌a‌ ‌time‌ ‌not‌ ‌far‌ ‌removed‌ ‌from‌ ‌the‌‌ commission‌‌of‌‌the‌‌crime.‌ ‌ 18. The‌ ‌crime‌ ‌committed‌ ‌must‌ ‌be‌ ‌the‌ ‌result‌ ‌of‌‌a‌‌‌sudden‌‌impulse‌‌of‌ natural‌‌and‌‌uncontrollable‌‌fury.‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 161‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ 19. It‌‌may‌‌be‌‌built‌‌up‌‌and‌‌strengthen‌‌over‌‌time‌‌until‌‌it‌‌can‌‌no‌‌longer‌‌be‌‌ repressed‌ ‌and‌ ‌will‌ ‌ultimately‌ ‌motivate‌ ‌the‌ ‌commission‌ ‌of‌ ‌the‌‌ crime.‌‌(P ‌ eople‌‌v.‌‌Oloverio‌‌2 ‌ 015‌‌Leonen,‌‌J)‌ 20. Considered‌ ‌as‌ ‌ONE‌ ‌mitigating‌ ‌circumstance‌ ‌with‌ ‌provocation‌ ‌if‌‌ both‌‌arose‌‌from‌‌one‌‌and‌‌the‌‌same‌‌cause.‌ ‌ 21. INCOMPATIBLE‌w ‌ ith‌‌the‌‌following:‌ ‌ a. Praeter‌‌intentionem‌;‌ ‌ b. Treachery;‌ ‌ c. Evident‌‌premeditation;‌ ‌ ‌ Provocation‌ ‌ But,‌ ‌we‌ ‌must‌‌stress‌‌that‌‌provocation‌‌and‌‌passion‌‌or‌‌obfuscation‌‌ are‌ ‌not‌ ‌two‌ ‌separate‌ ‌mitigating‌ ‌circumstances.‌ ‌Well-settled‌ ‌is‌ ‌the‌‌ rule‌‌that‌‌if‌‌these‌‌two‌‌circumstances‌‌are‌‌based‌‌on‌‌the‌‌same‌‌facts,‌‌they‌‌ should‌‌be‌‌treated‌‌together‌‌as‌‌one‌‌‌mitigating‌‌circumstance‌.‌‌ ‌ Nonetheless,‌ ‌since‌ ‌the‌ ‌mitigating‌ ‌circumstance‌ ‌of‌ ‌voluntary‌‌ surrender‌ ‌is‌ ‌also‌ ‌present,‌ ‌Article‌ ‌64‌ ‌(5)‌ ‌of‌ ‌the‌ ‌RPC‌ ‌should‌ ‌be‌‌ applied.‌ ‌The‌ ‌penalty‌ ‌for‌ ‌frustrated‌‌homicide,‌‌pursuant‌‌to‌‌Article‌‌50‌‌ of‌ ‌the‌ ‌RPC,‌ ‌is‌ ‌the‌ ‌penalty‌ ‌next‌ ‌lower‌ ‌in‌ d ‌ egree‌ ‌than‌ ‌that‌‌ prescribed‌‌by‌‌law‌‌for‌‌consummated‌‌homicide.‌ ‌ Voluntary‌‌Surrender‌ ‌ Passion‌‌or‌‌Obfuscation‌ ‌ Source‌ ‌ Offended‌‌party‌ ‌ Caused‌‌by‌‌provocation‌ ‌ Time‌‌ lapse‌ ‌ Immediately‌ ‌preceded‌ Need‌‌not‌‌be‌‌immediate‌ ‌ the‌‌act‌ ‌ Effect‌ ‌ Loss‌‌of‌‌reason‌‌and‌‌self-control‌‌of‌‌offender‌ ‌ ‌ 22. The‌‌following‌‌elements‌‌must‌‌be‌‌present‌‌for‌‌voluntary‌‌surrender‌‌to‌‌ be‌‌appreciated:‌‌ ‌ a) the‌‌offender‌‌has‌‌not‌‌been‌‌actually‌‌arrested;‌ ‌ b) the‌ ‌offender‌ ‌surrendered‌ ‌himself‌ ‌to‌ ‌a‌ ‌person‌ ‌in‌ ‌authority‌,‌‌ and,‌ ‌ c) the‌‌surrender‌‌must‌‌be‌‌voluntary,‌s‌ pontaneous‌.‌ ‌ Irresistible‌‌Force‌ ‌ Passion‌‌or‌‌Obfuscation‌ ‌ Kind‌ ‌ Exempting‌ ‌ Mitigating‌ ‌ Force‌ ‌ Physical‌ ‌ Not‌‌physical‌ ‌ Source‌ ‌ 3rd‌‌person‌ ‌ Offender‌‌himself‌ ‌ Lawful?‌ ‌ NO‌ ‌ Arise‌‌from‌‌lawful‌‌sentiments‌ Romera‌‌v.‌‌People‌ ‌ Thrusting‌‌his‌‌bolo‌‌at‌‌petitioner,‌‌threatening‌‌to‌‌kill‌‌him,‌‌and‌‌hacking‌‌ the‌ ‌bamboo‌ ‌walls‌ ‌of‌ ‌his‌ ‌house‌ ‌are,‌ ‌in‌ ‌our‌ ‌view,‌ ‌sufficient‌‌ provocation‌ ‌to‌ ‌enrage‌ ‌any‌ ‌man,‌ ‌or‌ ‌stir‌ ‌his‌ ‌rage‌ ‌and‌ ‌obfuscate‌ ‌his‌‌ thinking,‌ ‌more‌ ‌so‌ ‌when‌ ‌the‌ ‌lives‌ ‌of‌ ‌his‌ ‌wife‌ ‌and‌ ‌children‌ ‌are‌ ‌in‌‌ danger.‌ ‌Petitioner‌ ‌stabbed‌ ‌the‌ ‌victim‌ ‌as‌ ‌a‌ ‌result‌ ‌of‌ ‌those‌‌ provocations,‌ ‌and‌ ‌while‌ ‌petitioner‌ ‌was‌ ‌still‌ ‌in‌ ‌a‌ ‌fit‌ ‌of‌ ‌rage.‌ ‌In‌ ‌our‌‌ view,‌ ‌there‌ ‌was‌ ‌sufficient‌‌provocation‌‌and‌‌the‌‌circumstance‌‌of‌‌ passion‌‌or‌‌obfuscation‌‌attended‌‌the‌‌commission‌‌of‌‌the‌‌offense‌.‌ ‌ Manaban‌‌v.‌‌CA‌ ‌ Voluntary‌‌Surrender‌‌and‌‌Obfuscation‌ ‌ Manaban‌ ‌called‌‌the‌‌police‌‌to‌‌report‌‌the‌‌shooting‌‌incident.‌‌When‌‌the‌‌ police‌ ‌arrived,‌ ‌Manaban‌ ‌surrendered‌ ‌his‌ ‌service‌ ‌firearm‌ ‌and‌‌ voluntarily‌ ‌went‌ ‌with‌ ‌the‌ ‌police‌ ‌to‌ ‌the‌ ‌police‌ ‌station‌ ‌for‌‌ investigation.‌ ‌Thus,‌ ‌Manaban‌ ‌is‌ ‌entitled‌ ‌to‌ ‌the‌ ‌benefit‌ ‌of‌ ‌the‌‌ mitigating‌‌circumstance‌‌of‌v ‌ oluntary‌‌surrender‌.‌ ‌ On‌ ‌obfuscation‌,‌ ‌we‌ ‌find‌ ‌that‌ ‌the‌ ‌facts‌ ‌of‌ ‌the‌ ‌case‌ ‌do‌ ‌not‌ ‌entitle‌‌ Manaban‌ ‌to‌ ‌such‌ ‌mitigating‌ ‌circumstance.‌ ‌Manaban‌ ‌admitted‌‌ shooting‌ ‌Bautista‌‌because‌‌Bautista‌‌turned‌‌around‌‌and‌‌was‌‌allegedly‌‌ about‌ ‌to‌ ‌draw‌ ‌his‌ ‌gun‌ ‌to‌ ‌shoot‌ ‌Manaban.‌ ‌The‌ ‌act‌ ‌of‌ ‌Bautista‌ ‌in‌‌ turning‌ ‌around‌ ‌is‌ ‌not‌ ‌unlawful‌‌and‌‌sufficient‌‌cause‌‌for‌‌Manaban‌‌to‌‌ lose‌‌his‌‌reason‌‌and‌‌shoot‌‌Bautista.‌‌‌The‌‌defense‌‌failed‌‌to‌‌establish‌‌ by‌ ‌clear‌ ‌and‌ ‌convincing‌ ‌evidence‌ ‌the‌ ‌cause‌ ‌that‌ ‌allegedly‌‌ produced‌‌obfuscation.‌ ‌ Plea‌‌of‌‌guilty‌ ‌ Lumauig‌‌v.‌‌People‌‌‌2014‌ ‌ ‌ complainant's‌‌relatives‌‌who‌‌were‌‌pursuing‌‌him‌‌and‌‌who‌‌appeared‌‌to‌‌ be‌‌thirsting‌‌for‌‌his‌‌blood.‌ ‌ In‌ ‌sentencing‌ ‌petitioner,‌‌the‌‌Sandiganbayan‌‌correctly‌‌considered‌‌the‌‌ mitigating‌ ‌circumstance‌ ‌of‌ ‌voluntary‌ ‌surrender‌.‌ ‌However,‌ ‌it‌‌ failed‌ ‌to‌ ‌consider‌ ‌the‌ ‌mitigating‌ ‌circumstance‌ ‌of‌ ‌return‌ ‌or‌ ‌full‌‌ restitution‌‌of‌‌the‌‌funds‌‌that‌‌were‌‌previously‌‌unliquidated‌.‌ ‌ 23. Not‌‌mitigating‌‌if‌‌made‌‌on‌‌appeal.‌ ‌ 24. Plea‌ ‌of‌ ‌guilty‌‌to‌‌lesser‌‌offense‌‌than‌‌that‌‌charged‌‌is‌‌‌not‌‌‌mitigating.‌‌ However‌,‌‌if‌‌the‌‌‌information‌‌is‌‌amended‌‌to‌‌change‌‌the‌‌charge‌‌to‌‌a‌‌ lesser‌‌offense‌‌and‌‌the‌‌accused‌‌pleads‌‌guilty‌‌thereto,‌‌it‌‌is‌‌mitigating.‌ 25. The‌‌plea‌‌of‌‌guilty‌‌must‌‌be‌‌unconditional.‌ ‌ People‌‌v.‌‌Basite‌ ‌ 26. NOT‌‌mitigating‌‌in‌‌culpable‌‌felonies‌‌and‌‌in‌‌crimes‌‌under‌‌SPLs.‌ ‌ A‌ ‌surrender‌ ‌to‌ ‌be‌ ‌voluntary‌ ‌must‌ ‌be‌ spontaneous‌,‌ ‌showing‌ ‌the‌‌ intent‌ ‌of‌ ‌the‌ ‌accused‌ ‌to‌ ‌submit‌ ‌himself‌ ‌unconditionally‌ ‌to‌ ‌the‌‌ authorities,‌‌either‌‌because‌‌ ‌ 1. he‌‌acknowledges‌‌his‌‌guilt,‌‌or‌ ‌ 2. he‌‌wishes‌‌to‌‌save‌‌them‌‌the‌‌trouble‌‌and‌‌expense‌‌necessarily‌‌ incurred‌‌in‌‌his‌‌search‌‌and‌‌capture.‌ If‌ ‌none‌ ‌of‌ ‌these‌ ‌two‌ ‌(2)‌‌reasons‌‌impelled‌‌the‌‌accused‌‌to‌‌surrender,‌‌ because‌‌his‌‌surrender‌‌was‌‌obviously‌‌motivated‌‌more‌‌by‌‌an‌‌intention‌‌ to‌ ‌insure‌ ‌his‌ ‌safety,‌ ‌his‌ ‌arrest‌‌being‌‌inevitable,‌‌the‌‌surrender‌‌is‌‌not‌‌ spontaneous.‌ ‌Here,‌ ‌accused-appellant‌ ‌willingly‌ ‌went‌ ‌to‌ ‌the‌ ‌police‌‌ authorities‌ ‌with‌ ‌Gilbert‌ ‌Sacla‌ ‌only‌ ‌to‌ ‌escape‌ ‌the‌ ‌wrath‌ ‌of‌ ‌private‌‌ Analogous‌‌circumstances‌ ‌ a. Over‌‌60‌‌years‌‌with‌‌failing‌‌sight,‌‌similar‌‌to‌s‌ enility‌;‌ ‌ b. Outraged‌ ‌feeling‌ ‌of‌ ‌owner‌ ‌of‌‌animal‌‌taken‌‌for‌‌ransom‌‌similar‌‌ to‌v‌ indication‌;‌ ‌ c. Esprit‌ ‌de‌ ‌corps‌ ‌or‌ ‌mass‌ ‌psychology‌‌is‌‌similar‌‌to‌‌passion‌‌or‌‌ obfuscation;‌ ‌ d. Voluntary‌ ‌restitution‌ ‌of‌ ‌property‌ ‌similar‌ ‌to‌ ‌voluntary‌‌ surrender;‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 162‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ e. Extreme‌ ‌poverty‌ ‌similar‌ ‌to‌ ‌incomplete‌ ‌justification‌ ‌based‌ ‌on‌‌ state‌‌of‌‌necessity;‌ ‌ f. Testifying‌‌for‌‌the‌‌prosecution‌‌similar‌‌to‌p ‌ lea‌‌of‌‌guilty;‌ ‌ People‌‌v.‌‌Tampus‌‌and‌‌Montesclaros‌ ‌ otherwise,‌‌ordinary.‌ ‌ Minor‌ ‌ Above‌‌15‌‌but‌‌below‌‌18‌‌years‌‌old.‌ ‌ (Privileged)‌‌ ‌ Senility‌ ‌ We‌‌agree‌‌with‌‌both‌‌the‌‌trial‌‌and‌‌appellate‌‌courts‌‌in‌‌their‌‌appreciation‌‌ of‌ ‌the‌ ‌mitigating‌ ‌circumstance‌ ‌of‌ ‌illness‌ ‌as‌ ‌would‌ ‌diminish‌ ‌the‌‌ exercise‌ ‌of‌ ‌willpower‌ ‌of‌ ‌Ida‌ ‌without‌ ‌depriving‌ ‌her‌ ‌of‌ ‌the‌‌ consciousness‌‌of‌‌her‌‌acts,‌‌pursuant‌‌to‌‌Article‌‌13(9).‌ ‌ Dr.‌ ‌Costas‌ ‌testified‌ ‌that‌ ‌Ida‌ ‌was‌ ‌provisionally‌ ‌treated‌ ‌for‌‌ schizophrenia‌ ‌a‌ ‌few‌ ‌months‌ ‌before‌ ‌the‌ ‌incident.‌ ‌Ida‌ ‌was‌ ‌not‌‌ totally‌ ‌deprived‌ ‌of‌ ‌intelligence‌ ‌at‌ ‌the‌ ‌time‌ ‌of‌ ‌the‌ ‌incident;‌ ‌but,‌‌she‌‌ may‌‌have‌‌‌poor‌‌judgment.‌‌ ‌ 1. 2. Provocation‌ ‌ 3. Mitigating‌‌circumstances‌‌which‌‌are‌‌personal‌‌to‌‌offenders‌ ‌ 1. 1) From‌‌the‌‌moral‌‌attributes‌‌of‌‌the‌‌offender;‌‌or‌ ‌ 2) From‌‌his‌‌private‌‌relations‌‌with‌‌the‌‌offended‌‌party;‌‌or‌ ‌ 3) From‌‌any‌‌other‌‌personal‌‌cause,‌ ‌ Shall‌‌only‌‌serve‌‌to‌‌mitigate‌‌the‌‌liability‌‌of‌‌the‌‌principals,‌‌accomplices,‌‌ Immediate‌‌ vindication‌‌ of‌‌a‌‌grave‌‌ offense‌ ‌ and‌‌accessories‌‌to‌‌whom‌‌such‌‌circumstances‌‌are‌‌attendant.‌‌(Art‌‌62[3])‌ ‌ 2. Circumstances‌‌which‌‌are‌‌neither‌‌exempting‌‌nor‌‌mitigating‌ ‌ 1. Aberratio‌‌ictus‌;‌ ‌ 2. Mistake‌‌in‌‌the‌‌identity;‌ ‌ 3. Entrapment;‌ ‌ 4. Age‌‌of‌‌criminal‌‌responsibility;‌ ‌ 5. Performance‌‌of‌‌righteous‌‌action.‌ Passion‌‌or‌‌ obfuscation‌ ‌ Incomplete‌‌ defense‌ ‌ Not‌‌all‌‌requisites‌‌necessary‌‌to‌‌justify‌‌the‌‌act‌‌or‌‌to‌‌ exempt‌‌from‌‌criminal‌‌liability‌‌are‌‌attendant.‌ ‌ If‌‌majority‌‌of‌‌the‌‌requisites‌‌are‌‌present,‌p ‌ rivileged‌,‌‌ Voluntary‌‌ surrender‌ ‌ Such‌‌was‌‌made‌i‌ n‌‌open‌‌court‌,‌‌before‌‌the‌‌ competent‌‌court‌‌‌that‌‌is‌‌to‌‌try‌‌the‌‌case;‌‌and‌ ‌ 3. Such‌‌was‌‌made‌p ‌ rior‌‌‌to‌‌the‌‌presentation‌‌of‌‌ evidence‌‌for‌‌the‌‌prosecution.‌ ‌ 1. The‌‌offender‌‌is‌‌deaf‌‌and‌‌dumb,‌‌blind‌‌or‌‌ otherwise‌‌suffering‌‌some‌‌physical‌‌defect‌ ‌ Deaf‌‌and‌‌ 2. Dumb,‌‌Blind‌ ‌ Must‌‌originate‌‌from‌‌offended‌‌party;‌‌‌and‌ ‌ Must‌‌be‌‌immediate‌‌‌to‌‌the‌‌act,‌‌i.e.,‌‌to‌‌the‌‌ commission‌‌of‌‌the‌‌crime‌‌by‌‌the‌‌person‌‌who‌‌is‌‌ provoked.‌ ‌ There‌‌be‌‌a‌g ‌ rave‌‌offense‌‌‌done‌‌to‌‌the‌‌one‌‌ committing‌‌the‌‌felony,‌‌his‌‌spouse,‌‌ascendants,‌‌ descendants,‌‌legitimate,‌‌natural‌‌or‌‌adopted‌‌ brothers‌‌or‌‌sisters,‌‌or‌‌relatives‌‌by‌‌affinity‌‌within‌‌ the‌‌same‌‌degrees;‌ ‌ The‌‌felony‌‌is‌‌committed‌‌in‌‌vindication‌‌of‌‌such‌‌ grave‌‌offense.‌‌A‌l‌ apse‌‌of‌‌time‌‌‌is‌‌allowed‌‌‌between‌‌ the‌‌vindication‌‌and‌‌doing‌‌of‌‌the‌‌grave‌‌offense.‌ ‌ There‌‌be‌‌an‌‌act,‌‌both‌u ‌ nlawful‌‌and‌‌sufficient‌,‌‌to‌‌ produce‌‌such‌‌a‌‌condition‌‌of‌‌mind;‌‌and‌ ‌ 2. Said‌‌act‌‌which‌‌produced‌‌the‌‌obfuscation‌w ‌ as‌‌not‌‌ far‌‌removed‌‌from‌‌the‌‌commission‌‌of‌‌the‌‌ crime‌‌‌by‌‌a‌‌considerable‌‌length‌‌of‌‌time,‌‌during‌‌ which‌‌the‌‌perpetrator‌‌might‌‌recover‌‌his‌‌normal‌‌ equanimity.‌ ‌ ‌ Requisites‌ ‌ 2. Must‌‌be‌‌sufficient;‌ ‌ 1. Review‌‌of‌‌Mitigating‌‌Circumstances‌ ‌ Circumstance‌ Offender‌s‌ pontaneously‌‌confessed‌‌his‌‌guilt;‌ ‌ Offender‌‌is‌‌over‌‌70‌‌years‌‌old‌ ‌ There‌‌is‌‌a‌‌notable‌‌and‌‌evident‌‌disproportion‌‌between‌‌ Praeter‌‌ the‌‌means‌‌employed‌‌to‌‌execute‌‌the‌‌criminal‌‌act‌‌and‌‌ intentionem‌ ‌ its‌‌consequences.‌ ‌ Mitigating‌‌circumstances‌‌which‌‌arise‌ ‌ Plea‌‌of‌‌ guilty‌ ‌ 1. 1. Offender‌‌had‌n ‌ ot‌‌been‌‌actually‌‌arrested.‌ ‌ 2. He‌‌surrendered‌‌himself‌‌to‌‌a‌p ‌ erson‌‌in‌‌authority‌‌ or‌‌to‌‌the‌‌latter's‌‌agent;‌ ‌ 3. The‌‌surrender‌‌was‌‌voluntary.‌ ‌ Illness‌ ‌ Which‌‌thus‌‌restricts‌‌his‌‌means‌‌of‌‌action,‌‌ defense,‌‌or‌‌communications‌‌with‌‌his‌‌fellow‌‌ beings.‌ ‌ 1. The‌‌illness‌‌of‌‌offender‌‌must‌‌diminish‌‌the‌‌ exercise‌‌of‌‌his‌‌will-power;‌ ‌ 2. Such‌‌illness‌‌should‌‌not‌‌deprive‌‌the‌‌offender‌‌of‌‌ consciousness‌‌of‌‌his‌‌acts.‌ ‌ Analogous‌‌ ‌ Similar‌‌to‌‌any‌‌of‌‌the‌‌mitigating‌‌circumstances.‌ ‌ d.‌‌Aggravating‌‌circumstances‌ ‌ 1. That‌ ‌advantage‌‌be‌‌taken‌‌by‌‌the‌‌offender‌‌of‌‌his‌‌public‌‌position.‌‌ (‌Abuse‌‌of‌‌public‌‌position‌)‌ ‌ 2. That‌ ‌the‌‌crime‌‌be‌‌committed‌‌in‌‌contempt‌‌or‌‌with‌‌insult‌‌to‌‌the‌‌ public‌ ‌authorities.‌ ‌(‌Contempt‌ ‌of‌ ‌or‌ ‌insult‌ ‌to‌ ‌public‌‌ authorities‌)‌ ‌ 3. That‌ ‌the‌ ‌act‌ ‌be‌ ‌committed‌ ‌with‌ ‌insult‌ ‌or‌ ‌in‌ ‌disregard‌ ‌of‌ ‌the‌‌ respect‌ ‌due‌ ‌the‌ ‌offended‌ ‌party‌ ‌on‌ ‌account‌ ‌of‌ ‌his‌‌rank,‌‌age,‌‌or‌‌ sex,‌(‌ ‌Insult‌‌to‌‌offended‌‌party‌)‌ ‌ or‌‌that‌‌is‌‌committed‌‌in‌‌the‌‌dwelling‌‌of‌‌the‌‌offended‌‌party,‌‌if‌‌the‌‌ latter‌‌has‌‌not‌‌given‌‌provocation.‌(‌ ‌Dwelling‌)‌ ‌ 4. That‌‌the‌‌act‌‌be‌‌committed‌‌with‌‌abuse‌‌of‌‌confidence‌‌or‌‌obvious‌‌ ungratefulness.‌ ‌(‌Abuse‌ ‌of‌ ‌confidence‌ ‌or‌ ‌obvious‌‌ ungratefulness‌)‌ ‌ 5. That‌‌the‌‌crime‌‌be‌‌committed‌‌in‌‌the‌‌palace‌‌of‌‌the‌‌Chief‌‌Executive‌‌ or‌ ‌in‌ ‌his‌ ‌presence,‌ ‌or‌ ‌where‌ ‌public‌ ‌authorities‌‌are‌‌engaged‌‌in‌‌ the‌‌discharge‌‌of‌‌their‌‌duties,‌‌or‌‌in‌‌a‌‌place‌‌dedicated‌‌to‌‌religious‌‌ worship.‌(‌ ‌Palace‌‌of‌‌Chief‌‌Executive‌)‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 163‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ 6. That‌ ‌the‌ ‌crime‌ ‌be‌ ‌committed‌ ‌in‌ ‌the‌ ‌night‌ ‌time,‌ ‌or‌ ‌in‌ ‌an‌‌ uninhabited‌ ‌place,‌‌or‌‌by‌‌a‌‌band,‌‌whenever‌‌such‌‌circumstances‌‌ may‌ ‌facilitate‌ ‌the‌ ‌commission‌ ‌of‌ ‌the‌ ‌offense.‌ ‌(‌Nighttime,‌‌ Uninhabited‌‌place,‌)‌ ‌ 17. That‌‌means‌‌be‌‌employed‌‌or‌‌circumstances‌‌brought‌‌about‌‌which‌‌ add‌‌ignominy‌‌to‌‌the‌‌natural‌‌effects‌‌of‌‌the‌‌act.‌(‌ ‌Ignominy‌)‌ ‌ Whenever‌ ‌more‌ ‌than‌‌three‌‌armed‌‌malefactors‌‌shall‌‌have‌‌acted‌‌ together‌‌in‌‌the‌‌commission‌‌of‌‌an‌‌offense,‌‌it‌‌shall‌‌be‌‌deemed‌‌to‌‌ have‌‌been‌‌committed‌‌by‌‌a‌‌band.‌(‌ ‌Band‌)‌ ‌ There‌ ‌is‌ ‌an‌ ‌unlawful‌ ‌entry‌ ‌when‌ ‌an‌ ‌entrance‌ ‌is‌ ‌effected‌ ‌by‌ ‌a‌‌ way‌‌not‌‌intended‌‌for‌‌the‌‌purpose.‌ ‌ 18. That‌‌the‌‌crime‌‌be‌‌committed‌‌after‌‌an‌‌unlawful‌‌entry.‌‌‌(‌Unlawful‌‌ entry‌)‌ ‌ 19. That‌‌as‌‌a‌‌means‌‌to‌‌the‌‌commission‌‌of‌‌a‌‌crime‌‌a‌‌wall,‌‌roof,‌‌floor,‌‌ door,‌‌or‌‌window‌‌be‌‌broken.‌‌‌(‌Breaking‌‌wall,‌‌roof,‌‌floor,‌‌door,‌‌ or‌‌window‌)‌ ‌ 7. That‌‌the‌‌crime‌‌be‌‌committed‌‌on‌‌the‌‌occasion‌‌of‌‌a‌‌conflagration,‌‌ shipwreck,‌ ‌earthquake,‌ ‌epidemic‌ ‌or‌ ‌other‌ ‌calamity‌ ‌or‌‌ misfortune.‌(‌ ‌Calamity‌)‌ 8. That‌ ‌the‌ ‌crime‌ ‌be‌ ‌committed‌ ‌with‌ ‌the‌ ‌aid‌ ‌of‌ ‌armed‌ ‌men‌ ‌or‌‌ persons‌‌who‌‌insure‌‌or‌‌afford‌‌impunity.‌(‌ ‌Aid‌‌of‌‌armed‌‌men‌)‌ ‌ 9. That‌‌the‌‌accused‌‌is‌‌a‌‌recidivist.‌(‌ ‌Recidivist‌)‌ ‌ 20. That‌ ‌the‌ ‌crime‌ ‌be‌ ‌committed‌ ‌with‌ ‌the‌ ‌aid‌ ‌of‌ ‌persons‌ ‌under‌‌ fifteen‌ ‌years‌ ‌of‌ ‌age‌ ‌or‌ ‌by‌ ‌means‌‌of‌‌motor‌‌vehicles,‌‌motorized‌‌ watercraft,‌ ‌airships,‌ ‌or‌ ‌other‌ ‌similar‌ ‌means.‌ ‌(‌aab‌ ‌RA‌ ‌5438‌).‌‌ (‌Aid‌‌of‌‌person‌‌under‌‌15,‌‌Motor‌‌vehicle‌)‌ ‌ A‌ ‌recidivist‌ ‌is‌ ‌one‌ ‌who,‌ ‌at‌ ‌the‌ ‌time‌ ‌of‌‌his‌‌trial‌‌for‌‌one‌‌crime,‌‌ shall‌ ‌have‌ ‌been‌ ‌previously‌ ‌convicted‌ ‌by‌ ‌final‌ ‌judgment‌ ‌of‌‌ another‌‌crime‌‌embraced‌‌in‌‌the‌‌same‌‌title‌‌of‌‌this‌‌Code.‌ ‌ 21. That‌ ‌the‌ ‌wrong‌ ‌done‌ ‌in‌ ‌the‌ ‌commission‌ ‌of‌ ‌the‌ ‌crime‌ ‌be‌‌ deliberately‌‌augmented‌‌by‌‌causing‌‌other‌‌wrongs‌‌not‌‌necessary‌‌ for‌‌its‌‌commission.‌(‌ ‌Cruelty‌)‌ ‌ 10. That‌‌the‌‌offender‌‌has‌‌been‌‌previously‌‌punished‌‌by‌‌an‌‌offense‌‌to‌‌ which‌‌the‌‌law‌‌attaches‌‌an‌‌equal‌‌or‌‌greater‌‌penalty‌‌or‌‌for‌‌two‌‌or‌‌ more‌ ‌crimes‌ ‌to‌ ‌which‌ ‌it‌ ‌attaches‌ ‌a‌ ‌lighter‌ ‌penalty.‌‌ (‌Reiteracion‌)‌ ‌ 11. That‌ ‌the‌ ‌crime‌ ‌be‌ ‌committed‌ ‌in‌ ‌consideration‌ ‌of‌ ‌a‌ ‌price,‌‌ reward,‌‌or‌‌promise.‌(‌ ‌Price,‌‌reward,‌‌or‌‌promise‌)‌ ‌ 12. That‌ ‌the‌ ‌crime‌ ‌be‌ ‌committed‌ ‌by‌ ‌means‌ ‌of‌ ‌inundation,‌ ‌fire,‌‌ poison,‌‌explosion,‌‌stranding‌‌of‌‌a‌‌vessel‌‌or‌‌international‌‌damage‌‌ thereto,‌ ‌derailment‌ ‌of‌‌a‌‌locomotive,‌‌or‌‌by‌‌the‌‌use‌‌of‌‌any‌‌other‌‌ artifice‌‌involving‌‌great‌‌waste‌‌and‌‌ruin.‌(‌ ‌Great‌‌waste‌‌and‌‌ruin‌)‌ ‌ 13. That‌‌the‌‌act‌‌be‌‌committed‌‌with‌‌evident‌‌premeditation.‌‌‌(‌Evident‌‌ premeditation‌)‌ ‌ 14. That‌‌the‌‌craft,‌‌fraud‌‌or‌‌disguise‌‌be‌‌employed.‌‌‌(‌Craft,‌‌fraud,‌‌or‌‌ disguise‌)‌ 15. That‌ ‌advantage‌ ‌be‌ ‌taken‌ ‌of‌ s‌ uperior‌ s‌ trength,‌ o ‌ r‌ ‌means‌ ‌be‌‌ employed‌ ‌to‌ ‌weaken‌ ‌the‌ ‌defense.‌ ‌(‌Abuse‌ ‌of‌ ‌superior‌‌ strength‌)‌ ‌ 16. That‌‌the‌‌act‌‌be‌‌committed‌‌with‌‌treachery.‌(‌ ‌Alevosia‌)‌ ‌ There‌‌is‌‌treachery‌‌when‌‌the‌‌offender‌‌commits‌‌any‌‌of‌‌the‌‌crimes‌‌ against‌‌the‌‌person,‌‌employing‌‌means,‌‌methods,‌‌or‌‌forms‌‌in‌‌the‌‌ execution‌‌thereof‌‌which‌‌tend‌‌directly‌‌and‌‌specially‌‌to‌‌insure‌‌its‌‌ execution,‌ ‌without‌ ‌risk‌ ‌to‌ ‌himself‌ ‌arising‌ ‌from‌ ‌the‌ ‌defense‌‌ which‌‌the‌‌offended‌‌party‌‌might‌‌make.‌ ‌ against‌‌persons.‌‌ ‌ Recidivism‌‌vs‌‌Reiteracion‌ ‌ ‌ Recidivism‌ Reiteracion‌ ‌ As‌‌to‌‌1st‌‌offense,‌‌ Been‌‌adjudged‌‌with‌‌ Served‌‌out‌‌the‌‌sentence‌ ‌ offender‌‌shall‌‌have‌ ‌ finality‌ ‌ Previous‌‌and‌‌ Included‌‌in‌‌SAME‌‌ subsequent‌‌offenses‌ ‌ title‌ ‌ Always‌‌aggravating‌ ‌ ✔‌ ‌ Must‌‌NOT‌‌be‌‌embraced‌‌ in‌‌same‌‌title‌ ‌ ✘‌ ‌ The‌‌four‌‌forms‌‌of‌‌REPETITION‌ ‌ 1. Recidivism‌ 2. Reiteracion‌‌‌or‌‌habituality‌ ‌ 3. Multi-recidivism‌ ‌or‌ ‌habitual‌ ‌delinquency‌ ‌Art‌ ‌62[5]‌‌ Kinds‌ ‌ (Extraordinary‌ ‌aggravating)‌ ‌—‌ ‌if‌ ‌within‌ ‌a‌ ‌period‌ ‌of‌ ‌ten‌‌years‌‌ from‌‌the‌‌date‌‌of‌‌his‌‌release‌‌or‌‌last‌‌conviction‌‌of‌‌the‌‌crimes‌‌of‌‌ serious‌‌or‌‌less‌‌serious‌‌physical‌‌injuries,‌‌‌robo‌,‌‌‌hurto‌,‌‌‌estafa‌‌ or‌‌‌falsification‌,‌‌he‌‌is‌‌found‌‌guilty‌‌of‌‌any‌‌of‌‌said‌‌crimes‌‌a‌‌third‌‌ time‌‌or‌‌oftener.‌ ‌ 1. Generic‌‌‌—‌T ‌ hose‌‌that‌‌can‌‌be‌‌applied‌‌to‌‌all‌‌crimes.‌ ‌ 2. Specific‌— ‌ ‌A ‌ pplies‌‌only‌‌to‌‌particular‌‌crimes.‌ 3. Qualifying‌— ‌ ‌C ‌ hanges‌‌the‌‌nature‌‌of‌‌the‌‌crime.‌ ‌ 4. Inherent‌— ‌ ‌M ‌ ust‌‌accompany‌‌the‌‌commission‌‌of‌‌the‌‌crime.‌ ‌ 4. Quasi-recidivism‌ ‌Art‌‌160‌‌‌(Special‌‌aggravating)‌‌—‌‌commits‌‌a‌‌ felony‌ ‌after‌ ‌having‌ ‌been‌ ‌convicted‌ ‌by‌ ‌final‌ ‌judgment,‌ ‌before‌ beginning‌ ‌to‌ ‌serve‌ ‌such‌ ‌sentence,‌ ‌or‌ ‌while‌ ‌serving‌ ‌the‌‌same,‌‌ shall‌ ‌be‌ ‌punished‌ ‌by‌ ‌the‌ ‌maximum‌ ‌period‌ ‌of‌ ‌the‌ ‌penalty‌‌ prescribed‌‌by‌‌law‌‌for‌‌the‌‌new‌‌felony.‌ ‌ People‌‌v.‌‌Nabaluna‌ ‌ The‌ ‌element‌‌of‌‌‌treachery‌‌‌cannot‌‌simply‌‌be‌‌presumed.‌‌It‌‌‌must‌‌be‌‌ clearly‌‌proven‌‌as‌‌the‌‌crime‌‌itself‌.‌ ‌ The‌‌mere‌‌fact‌‌that‌‌two‌‌of‌‌the‌‌accused,‌‌with‌‌one‌‌of‌‌them‌‌being‌‌armed‌‌ with‌ ‌a‌ ‌bolo,‌ ‌does‌ ‌not‌ ‌necessarily‌ ‌constitute‌ ‌abuse‌ ‌of‌ ‌superior‌‌ strength‌ ‌on‌‌their‌‌part.‌‌To‌‌take‌‌advantage‌‌of‌‌superior‌‌strength,‌‌it‌‌is‌‌ imperative‌ ‌that‌ ‌there‌ ‌be‌‌a‌‌showing‌‌of‌‌purposely‌‌using‌‌excessive‌‌ force‌ ‌which‌ ‌is‌ ‌out‌ ‌of‌ ‌proportion‌ ‌to‌ ‌the‌ ‌means‌ ‌of‌ ‌defense‌‌ available‌t‌ o‌‌the‌‌person‌‌attacked.‌ ‌ Lastly,‌‌‌disregard‌‌of‌‌old‌‌age‌ ‌should‌‌not‌‌be‌‌taken‌‌into‌‌account‌‌for,‌‌ as‌‌stated‌‌in‌‌the‌‌case‌‌of‌‌‌People‌‌v.‌‌Pagal‌,‌‌it‌‌is‌‌not‌‌proper‌‌to‌‌consider‌‌ this‌ ‌aggravating‌ ‌circumstance‌ ‌in‌ ‌crimes‌ ‌against‌ ‌property‌.‌‌ Robbery‌‌with‌‌homicide‌‌is‌‌primarily‌‌a‌‌crime‌‌against‌‌property‌‌and‌‌not‌‌ Treachery‌‌or‌‌alevosia‌ ‌ 1. The‌‌settled‌‌rule‌‌is‌‌that‌‌treachery‌‌can‌‌exist‌‌even‌‌if‌‌the‌‌attack‌‌is‌‌ frontal,‌ ‌as‌ ‌long‌‌as‌‌the‌‌attack‌‌is‌‌sudden‌‌and‌‌unexpected,‌‌giving‌‌ the‌‌victim‌‌no‌‌opportunity‌‌to‌‌repel‌‌it‌‌or‌‌to‌‌defend‌‌himself.‌ 2. What‌‌is‌‌decisive‌‌is‌‌that‌‌the‌‌execution‌‌of‌‌the‌‌attack,‌‌without‌‌the‌‌ slightest‌ ‌provocation‌ ‌from‌ ‌an‌ ‌unarmed‌ ‌victim,‌ ‌made‌ ‌it‌‌ impossible‌‌for‌‌the‌‌victim‌‌to‌‌defend‌‌himself‌‌or‌‌to‌‌retaliate.‌ ‌ 3. There‌ ‌is‌ ‌treachery‌ ‌when‌ ‌the‌ ‌offender‌ ‌commits‌ ‌any‌ ‌of‌ ‌the‌‌ crimes‌‌against‌‌persons,‌‌employing‌‌means,‌‌methods‌‌or‌‌forms‌‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 164‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ in‌ ‌the‌ ‌execution‌ ‌thereof,‌ ‌which‌ ‌tend‌ ‌directly‌ ‌and‌ ‌specially‌ ‌to‌‌ ensure‌ ‌its‌ ‌execution‌ ‌without‌ ‌risk‌ ‌to‌ ‌himself‌ ‌arising‌ ‌from‌ ‌the‌‌ defense‌‌that‌‌the‌‌offended‌‌party‌‌might‌‌make.‌‌ ‌ 4. There‌‌are‌‌two‌‌(2)‌‌conditions‌‌that‌‌must‌‌concur‌‌for‌‌treachery‌‌to‌‌ exist,‌‌to‌‌wit:‌ ‌ a) the‌‌employment‌‌of‌‌means‌‌of‌‌execution‌‌gave‌‌the‌‌person‌‌ attacked‌ ‌no‌ ‌opportunity‌ ‌to‌ ‌defend‌ ‌himself‌ ‌or‌ ‌to‌‌ retaliate;‌‌and‌ ‌ b) the‌ ‌means‌ ‌or‌ ‌method‌ ‌of‌ ‌execution‌ ‌was‌ ‌deliberately‌‌ and‌‌consciously‌‌adopted‌.‌‌ ‌ 5. The‌ ‌essence‌ ‌of‌ ‌treachery‌ ‌is‌ ‌that‌‌the‌‌attack‌‌is‌‌‌deliberate‌‌and‌‌ without‌ ‌warning‌,‌ ‌done‌ ‌in‌ ‌a‌ ‌swift‌ ‌and‌ ‌unexpected‌ ‌manner,‌‌ affording‌ ‌the‌ ‌hapless,‌ ‌unarmed‌ ‌and‌ ‌unsuspecting‌ ‌victim‌ ‌no‌‌ chance‌‌to‌‌resist‌‌or‌‌escape.‌ ‌ People‌‌v.‌‌Bermudo‌‌2 ‌ 018‌ ‌ Gilberto‌‌was‌‌completely‌‌defenseless‌‌at‌‌the‌‌time‌‌of‌‌the‌‌attack‌‌because‌‌ he‌‌was‌‌surprised‌‌by‌‌Rommel‌‌with‌‌a‌‌blow‌‌to‌‌the‌‌head‌‌causing‌‌him‌‌to‌‌ fall‌ ‌to‌ ‌the‌ ‌ground.‌ ‌Rommel‌ ‌and‌‌co-accused‌‌continued‌‌to‌‌attack‌‌him‌‌ causing‌ ‌him‌‌multiple‌‌injuries,‌‌including‌‌the‌‌fatal‌‌ones.‌‌Gilberto‌‌was‌‌ never‌ ‌in‌ ‌a‌ ‌position‌ ‌to‌ ‌defend‌ ‌himself.‌ ‌Further,‌ ‌Rommel‌ ‌and‌ ‌his‌‌ co-accused‌ ‌consciously‌ ‌adopted‌ ‌the‌ ‌means‌ ‌of‌ ‌attack‌ ‌because,‌ ‌as‌‌ noted‌‌by‌‌the‌‌CA,‌‌they‌‌were‌‌already‌‌armed‌‌when‌‌they‌‌proceeded‌‌to‌‌the‌‌ crime‌ ‌scene.‌ ‌In‌ ‌addition,‌ ‌it‌ ‌is‌ ‌noteworthy‌ ‌that‌ ‌Rommel‌ ‌suddenly,‌‌ without‌‌warning‌‌or‌‌provocation,‌‌attacked‌‌Gilberto‌‌‌from‌‌behind‌.‌ ‌ People‌‌v.‌‌Bagabay‌‌2 ‌ 018‌ ‌ It‌ ‌is‌ ‌not‌ ‌enough‌ ‌that‌ ‌the‌ ‌attack‌ ‌was‌ ‌"sudden,"‌ ‌"unexpected,"‌ ‌and‌‌ "without‌ ‌any‌ ‌warning‌ ‌or‌ ‌provocation."‌ ‌There‌ ‌must‌ ‌also‌ ‌be‌ ‌a‌‌ showing‌‌that‌‌the‌‌offender‌‌‌consciously‌‌and‌‌deliberately‌‌adopted‌‌ the‌‌particular‌‌means,‌‌methods‌‌and‌‌forms‌‌in‌‌the‌‌execution‌‌of‌‌the‌‌ crime‌‌which‌‌tended‌‌directly‌‌to‌‌insure‌‌such‌‌execution,‌‌without‌‌risk‌‌to‌‌ himself.‌ ‌ People‌‌v.‌‌Jaurigue‌‌2 ‌ 019‌ ‌ There‌ ‌can‌ ‌be‌ ‌no‌ ‌treachery‌ ‌when‌ ‌the‌ ‌victim‌ ‌was‌‌"forewarned‌‌of‌‌the‌‌ danger‌ ‌he‌ ‌was‌ ‌in,"‌ ‌"put‌ ‌on‌ ‌guard,"‌ ‌or‌ ‌otherwise‌ ‌"could‌ ‌anticipate‌‌ aggression‌‌from‌‌the‌‌assailant"‌‌as‌‌when‌‌"the‌‌assault‌‌is‌‌preceded‌‌by‌‌a‌‌ heated‌ ‌exchange‌ ‌of‌ ‌words‌ ‌between‌‌the‌‌accused‌‌and‌‌the‌‌victim;‌‌or‌‌ when‌‌the‌‌victim‌‌is‌‌aware‌‌of‌‌the‌‌hostility‌‌of‌‌the‌‌assailant‌‌towards‌‌the‌‌ former."‌ ‌ People‌‌v.‌‌Angeles‌‌2 ‌ 019‌ ‌ Treachery‌ ‌may‌ ‌still‌ ‌be‌ ‌appreciated‌ ‌even‌ ‌when‌ ‌the‌ ‌victim‌ ‌was‌‌ forewarned‌ ‌of‌ ‌the‌‌danger‌‌to‌‌his‌‌person.‌‌What‌‌is‌‌‌decisive‌‌‌is‌‌that‌‌the‌‌ execution‌ ‌of‌ ‌the‌ ‌attack‌ ‌made‌ ‌it‌ ‌impossible‌ ‌for‌‌the‌‌victim‌‌to‌‌defend‌‌ himself‌‌or‌‌to‌‌retaliate.‌ ‌ Evident‌‌premeditation‌ ‌ To‌‌prove‌‌this‌‌aggravating‌‌circumstance,‌‌the‌‌prosecution‌‌must‌‌show‌‌the‌‌ following:‌ ‌ 1) the‌‌time‌‌when‌‌the‌‌offender‌d ‌ etermined‌‌to‌‌commit‌t‌ he‌‌crime;‌ ‌ 2) an‌ ‌act‌ ‌manifestly‌ ‌indicating‌ ‌that‌ ‌the‌ ‌offender‌ ‌clung‌ ‌to‌ ‌his‌‌ determination;‌‌and‌ ‌ 3) a‌ ‌lapse‌ ‌of‌ ‌time‌,‌ ‌between‌ ‌the‌ ‌determination‌ ‌to‌ ‌commit‌ ‌the‌‌ crime‌‌and‌‌the‌‌execution‌‌thereof,‌‌sufficient‌‌to‌‌allow‌‌the‌‌offender‌‌ to‌‌reflect‌‌upon‌‌the‌‌consequences‌‌of‌‌his‌‌act.‌ ‌ Mari‌‌v.‌‌CA‌ ‌ Abuse‌‌of‌‌superior‌‌strength‌ ‌ People‌‌v.‌‌Maron‌‌2 ‌ 019‌ ‌ Employment‌ ‌of‌ ‌means‌ ‌to‌ ‌weaken‌ ‌the‌ ‌defense‌ ‌is,‌ ‌at‌ ‌the‌ ‌very‌ ‌least,‌‌ subsumed‌ ‌under‌ ‌the‌ ‌qualifying‌ ‌circumstance‌ ‌of‌ ‌abuse‌ ‌of‌‌superior‌‌ strength.‌ ‌ In‌ ‌determining‌ ‌whether‌ ‌the‌ ‌qualifying‌ ‌circumstance‌ ‌of‌ ‌employing‌‌ means‌‌to‌‌weaken‌‌the‌‌defense‌‌is‌‌present,‌‌the‌‌Court‌‌shall‌‌be‌‌guided‌‌by‌‌ the‌ ‌same‌ ‌standard‌ ‌in‌‌determining‌‌the‌‌presence‌‌of‌‌abuse‌‌of‌‌superior‌‌ strength,‌ ‌i.e.,‌ ‌"‌notorious‌ ‌inequality‌ ‌of‌ ‌forces‌ ‌between‌ ‌the‌ ‌victim‌‌ and‌‌the‌‌aggressor/s‌‌that‌‌is‌‌plainly‌‌and‌‌obviously‌‌advantageous‌‌to‌‌the‌‌ aggressor's‌‌and‌‌purposely‌‌selected‌‌or‌‌taken‌‌advantage‌‌of‌‌to‌‌facilitate‌‌ the‌‌commission‌‌of‌‌the‌‌crime.”‌ ‌ People‌‌v.‌‌Pagapulaan‌‌2 ‌ 019‌ ‌ To‌ ‌take‌ ‌advantage‌ ‌of‌ ‌superior‌ ‌strength‌ ‌means‌ ‌to‌ ‌purposely‌ ‌use‌‌ excessive‌‌force‌‌out‌‌of‌‌proportion‌‌to‌‌the‌‌means‌‌of‌‌defense‌‌available‌‌to‌‌ the‌‌person‌‌attacked.‌‌ ‌ Unlike‌ ‌in‌ ‌treachery,‌‌where‌‌the‌‌victim‌‌was‌‌not‌‌given‌‌the‌‌opportunity‌‌ to‌ ‌defend‌ ‌himself‌ ‌or‌ ‌repel‌ ‌the‌ ‌aggression,‌ ‌taking‌ ‌advantage‌ ‌of‌‌ superior‌ ‌strength‌ ‌does‌ ‌not‌ ‌mean‌ ‌that‌ ‌the‌ ‌victim‌ ‌was‌‌ completely‌‌defenseless.‌ ‌ People‌‌v.‌‌Enojo‌‌2 ‌ 019‌ ‌ The‌ ‌mere‌ ‌fact‌ ‌that‌ ‌the‌ ‌victim‌ ‌is‌ ‌a‌ ‌woman‌ ‌is‌ ‌not‌ ‌per‌ ‌se‌ ‌an‌‌ aggravating‌ ‌circumstance‌.‌‌There‌‌was‌‌no‌‌finding‌‌that‌‌the‌‌evidence‌‌ proved‌ ‌that‌ ‌the‌ ‌accused‌ ‌in‌ ‌fact‌ ‌deliberately‌ ‌intended‌ ‌to‌ ‌offend‌ ‌or‌‌ insult‌ ‌the‌ ‌sex‌ ‌of‌ ‌the‌ ‌victim,‌ ‌or‌ ‌showed‌ ‌manifest‌ ‌disrespect‌ ‌to‌ ‌the‌‌ offended‌ ‌woman‌ ‌or‌ ‌displayed‌ ‌some‌ ‌specific‌ ‌insult‌ ‌or‌‌disrespect‌‌to‌‌ her‌‌womanhood.‌‌There‌‌was‌‌no‌‌proof‌‌of‌‌specific‌‌fact‌‌or‌‌circumstance,‌‌ other‌‌than‌‌the‌‌victim‌‌is‌‌a‌‌woman,‌‌showing‌‌insult‌‌or‌‌disregard‌‌of‌‌sex‌‌ in‌‌order‌‌that‌‌it‌‌may‌‌be‌‌considered‌‌as‌‌aggravating‌‌circumstance.‌ ‌ Nighttime‌‌or‌‌nocturnidad‌ ‌ a) particularly‌ ‌sought‌ ‌or‌ ‌darkness‌ ‌is‌ ‌taken‌‌advantage‌‌to‌‌commit‌‌ the‌‌offense,‌‌or‌ ‌ b) facilitated‌‌the‌‌commission‌‌of‌‌the‌‌crime.‌ ‌ Nighttime‌ ‌cannot‌ ‌be‌ ‌considered‌ ‌if‌ ‌it‌ ‌is‌ ‌shown‌ ‌that‌ ‌the‌ ‌place‌ ‌was‌‌ It‌‌has‌‌been‌‌consistently‌‌held‌‌that‌‌an‌‌attack‌ ‌made‌ ‌by‌ ‌a‌ ‌man‌ ‌with‌ ‌a‌ deadly‌ ‌weapon‌ ‌upon‌ ‌an‌ ‌unarmed‌ ‌and‌ ‌defenseless‌ ‌woman‌‌ constitutes‌ ‌the‌ ‌circumstance‌ ‌of‌ ‌abuse‌ ‌of‌ ‌that‌‌superiority‌‌which‌‌his‌‌ sex‌‌and‌‌the‌‌weapon‌‌used‌‌in‌‌the‌‌act‌‌afforded‌‌him,‌‌and‌‌from‌‌which‌‌the‌‌ woman‌‌was‌‌unable‌‌to‌‌defend‌‌herself.‌ ‌ People‌‌v.‌‌Arizobal‌‌‌re‌‌Dwelling,‌‌Treachery,‌‌Band,‌‌Nighttime‌ ‌ The‌‌trial‌‌court‌‌is‌‌correct‌‌in‌‌appreciating‌‌‌dwelling‌‌‌as‌‌an‌‌aggravating‌‌ circumstance.‌ ‌Generally,‌ ‌dwelling‌ ‌is‌ ‌considered‌ ‌inherent‌ ‌in‌ ‌the‌‌ crimes‌‌which‌‌can‌‌only‌‌be‌‌committed‌‌in‌‌the‌‌abode‌‌of‌‌the‌‌victim,‌‌such‌‌ as‌ ‌trespass‌ ‌to‌‌dwelling‌‌and‌‌robbery‌‌in‌‌an‌‌inhabited‌‌place.‌‌However,‌‌ in‌ ‌robbery‌ ‌with‌ ‌homicide‌ ‌the‌ ‌authors‌ ‌thereof‌ ‌can‌ ‌commit‌ ‌the‌‌ heinous‌ ‌crime‌ ‌without‌ ‌transgressing‌ ‌the‌ ‌sanctity‌ ‌of‌ ‌the‌ ‌victim's‌‌ domicile.‌ ‌ adequately‌‌lighted.‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 165‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ But‌ ‌treachery‌ ‌was‌ ‌incorrectly‌ ‌considered‌ ‌by‌ ‌the‌ ‌trial‌ ‌court.‌ ‌The‌‌ accused‌ ‌stand‌ ‌charged‌ ‌with,‌ ‌tried‌ ‌and‌ ‌convicted‌ ‌of‌ ‌robbery‌ ‌with‌‌ homicide‌ ‌which‌‌is‌‌primarily‌‌classified‌‌as‌‌a‌‌crime‌‌against‌‌property.‌‌ As‌‌such,‌‌treachery‌‌cannot‌‌be‌‌validly‌‌appreciated‌‌as‌‌an‌‌aggravating‌‌ circumstance‌.‌ ‌ While‌ ‌it‌ ‌appears‌ ‌that‌ ‌at‌ ‌least‌ ‌five‌ ‌(5)‌ ‌malefactors‌ ‌took‌ ‌part‌ ‌in‌ ‌the‌‌ commission‌ ‌of‌ ‌the‌ ‌crime,‌ ‌the‌‌evidence‌‌on‌‌record‌‌does‌‌not‌‌disclose‌‌ that‌‌"more‌‌than‌‌three"‌‌persons‌‌were‌‌‌armed‌,‌‌and‌‌robbery‌‌in‌‌"b ‌ and‌"‌‌ means‌ ‌"‌more‌ ‌than‌ ‌three‌ ‌armed‌ ‌malefactors‌ ‌united‌ ‌in‌ ‌the‌‌ commission‌‌of‌‌robbery."‌ ‌ Nighttime‌‌‌did‌‌not‌‌attend‌‌the‌‌commission‌‌of‌‌the‌‌crime.‌‌The‌‌fact‌‌that‌‌ the‌‌offense‌‌was‌‌committed‌‌at‌‌9:30‌‌in‌‌the‌‌evening‌‌does‌‌not‌‌suffice‌‌to‌‌ sustain‌ ‌nocturnidad.‌ ‌It‌ ‌must‌ ‌be‌ ‌shown‌ ‌that‌ ‌nocturnidad‌ ‌was‌‌ deliberately‌‌and‌‌intentionally‌‌sought‌.‌ ‌ People‌‌v.‌‌Nasayao‌‌r‌ e‌‌Treachery‌ ‌ The‌ ‌victim,‌ ‌while‌ ‌squatting‌ ‌on‌ ‌top‌ ‌of‌ ‌a‌ ‌bench‌ ‌and‌ ‌eating‌ ‌his‌ ‌meal‌‌ with‌ ‌a‌ ‌plate‌ ‌in‌ ‌one‌ ‌hand,‌ ‌was‌ ‌certainly‌ ‌in‌ ‌no‌ ‌position‌ ‌to‌ ‌defend‌‌ himself‌ ‌or‌ ‌to‌ ‌retaliate.‌ ‌Accused‌ ‌may‌ ‌have‌ ‌forewarned‌ ‌Joves‌ ‌about‌‌ what‌ ‌he‌ ‌was‌ ‌about‌ ‌to‌ ‌do‌ ‌by‌ ‌telling‌ ‌him‌ ‌to‌ ‌finish‌ ‌his‌ ‌meal.‌‌ Nevertheless,‌‌accused‌‌did‌‌not‌‌wait‌‌for‌‌Joves‌‌to‌‌finish.‌‌He‌‌did‌‌not‌‌give‌‌ Joves‌ ‌the‌ ‌opportunity‌ ‌to‌ ‌stand‌ ‌up.‌ ‌Joves‌ ‌not‌ ‌only‌ ‌failed‌ ‌to‌‌reply‌‌to‌‌ accused’s‌‌order‌‌for‌‌him‌‌to‌‌finish‌‌his‌‌meal,‌‌but‌‌also‌‌failed‌‌to‌‌make‌‌any‌‌ instinctive‌ ‌reaction‌ ‌to‌ ‌the‌ ‌perceived‌ ‌threat‌ ‌posed‌ ‌by‌ ‌accused‌ ‌who‌‌ was‌‌holding‌‌two‌‌knives.‌‌From‌‌all‌‌indications,‌‌the‌‌attack‌‌on‌‌Joves‌‌was‌‌ sudden‌‌and‌‌unexpected.‌ ‌ People‌‌v.‌‌de‌‌la‌‌Torre‌‌r‌ e‌‌Dwelling‌ ‌ In‌‌‌People‌‌v.‌‌Parazo‌,‌‌the‌‌“dwelling”‌‌contemplated‌‌in‌‌Article‌‌14(3)‌‌of‌‌ the‌ ‌RPC‌ ‌does‌ ‌not‌ ‌necessarily‌ ‌mean‌ ‌that‌ ‌the‌ ‌victim‌ ‌owns‌ ‌the‌‌ place‌ ‌where‌ ‌he‌ ‌lives‌ ‌or‌ ‌dwells‌.‌ ‌Be‌ ‌he‌ ‌a‌ ‌lessee,‌ ‌a‌ ‌boarder,‌ ‌or‌ ‌a‌‌ bedspacer,‌‌the‌‌place‌‌is‌‌his‌‌home,‌ ‌the‌‌sanctity‌‌of‌‌which‌‌the‌‌law‌‌ seeks‌‌to‌‌protect‌.‌‌The‌‌fact‌‌that‌‌the‌‌crime‌‌was‌‌consummated‌‌in‌‌the‌‌ nearby‌ ‌house‌ ‌is‌ ‌also‌ ‌immaterial.‌ ‌Marita‌ ‌was‌ ‌forcibly‌ ‌taken‌ ‌by‌‌ appellant‌ ‌from‌ ‌her‌ ‌dwelling‌ ‌house‌ ‌(kitchen)‌ ‌and‌ ‌then‌ ‌raped‌ ‌her.‌‌ Dwelling‌ ‌is‌‌aggravating‌‌if‌‌the‌‌victim‌‌was‌‌taken‌‌from‌‌his‌‌house‌‌ although‌‌the‌‌offense‌‌was‌‌not‌‌completed‌‌therein.‌ ‌ People‌‌v.‌‌Matibag‌‌‌2015‌ ‌ The‌ ‌special‌ ‌aggravating‌ ‌circumstance‌ ‌of‌ ‌use‌ ‌of‌ ‌unlicensed‌‌ firearm‌,‌ ‌which‌ ‌was‌ ‌duly‌ ‌alleged‌ ‌in‌ ‌the‌ ‌Information,‌ ‌should‌ ‌be‌‌ appreciated‌‌in‌‌the‌‌imposition‌‌of‌‌penalty.‌‌When‌‌Matibag‌‌killed‌‌Duhan‌‌ with‌‌his‌‌firearm,‌‌the‌‌use‌‌thereof‌‌was‌‌unauthorized‌‌under‌‌the‌‌purview‌‌ of‌ ‌RA‌ ‌8294‌ ‌and‌ ‌is‌ ‌equally‌ ‌appreciated‌ ‌as‌ ‌a‌ ‌special‌ ‌aggravating‌‌ circumstance.‌‌As‌‌a‌‌result,‌‌the‌‌imposition‌‌of‌‌the‌‌maximum‌‌penalty‌‌of‌‌ death,‌ ‌which‌ ‌is‌ ‌reduced‌ ‌to‌ ‌reclusion‌ ‌perpetua‌ ‌in‌ ‌light‌ ‌of‌ ‌RA‌ ‌9346,‌‌ stands‌‌proper.‌‌To‌‌this,‌‌the‌‌Court‌‌adds‌‌that‌‌Matibag‌‌is‌not‌‌eligible‌‌for‌ parole.‌ ‌ People‌‌v.‌‌Perreras‌‌r‌ e‌‌Dwelling‌ ‌ Dwelling‌‌‌aggravates‌‌a‌‌felony‌‌where‌‌the‌‌crime‌‌was‌‌committed‌‌in‌‌the‌‌ dwelling‌‌of‌‌the‌‌offended‌‌party‌‌if‌‌the‌‌latter‌‌has‌‌not‌‌given‌‌provocation‌‌ or‌ ‌if‌ ‌the‌ ‌victim‌‌was‌‌killed‌‌inside‌‌his‌‌house.‌‌Although‌‌‌accused‌‌was‌‌ outside‌‌of‌‌the‌‌house‌‌‌when‌‌he‌‌fired,‌‌the‌‌victim‌‌was‌‌inside‌‌his‌‌house.‌ For‌‌the‌‌circumstance‌‌of‌‌dwelling‌‌to‌‌be‌‌considered,‌‌it‌‌is‌‌not‌‌necessary‌‌ that‌ ‌the‌ ‌accused‌ ‌should‌ ‌have‌ ‌actually‌ ‌entered‌ ‌the‌ ‌dwelling‌ ‌of‌ ‌the‌‌ victim‌ ‌to‌ ‌commit‌ ‌the‌ ‌offense;‌ ‌it‌ ‌is‌ ‌enough‌ ‌that‌ ‌the‌ ‌victim‌ ‌was‌‌ attacked‌‌inside‌‌his‌‌own‌‌house‌.‌ ‌ of‌‌a‌‌final‌‌judgment‌‌of‌‌conviction‌‌when‌‌they‌‌committed‌‌the‌‌offenses.‌‌ Aspili,‌ ‌Magbanua,‌ ‌Mendoza‌ ‌and‌ ‌Rebutido‌ ‌have‌ ‌previously‌ ‌been‌‌ convicted‌ ‌of‌ ‌the‌ ‌crimes‌ ‌of‌ ‌frustrated‌ ‌homicide,‌ ‌serious‌ ‌physical‌‌ injuries,‌ ‌theft,‌ ‌and‌ ‌murder‌ ‌and‌ ‌trespass‌ ‌to‌ ‌dwelling,‌ ‌respectively.‌‌ Both‌‌Sales‌‌and‌‌Aguirre‌‌have‌‌previously‌‌been‌‌convicted‌‌of‌‌robbery‌‌in‌‌ band.‌ ‌ We‌ ‌likewise‌ ‌uphold‌ ‌the‌ ‌trial‌ ‌court's‌ ‌finding‌ ‌that‌ ‌the‌ ‌crime‌ ‌was‌‌ aggravated‌ ‌because‌ ‌it‌ ‌was‌ ‌committed‌ ‌by‌ ‌a‌ ‌band‌.‌ ‌All‌ ‌the‌ ‌six‌‌ appellants‌‌were‌‌armed‌‌when‌‌they‌‌boarded‌‌the‌‌vessel‌‌and‌‌perpetrated‌‌ their‌ ‌dastardly‌ ‌acts.‌ ‌There‌ ‌is‌ ‌also‌ ‌abuse‌‌of‌‌superior‌‌strength‌,‌‌ since‌‌most‌‌of‌‌the‌‌victims‌‌were‌‌women‌‌and‌‌children‌‌ranging‌‌from‌‌2‌‌to‌‌ 9‌‌years‌‌old.‌ ‌ However,‌ ‌the‌ ‌aggravating‌ ‌circumstances‌ ‌of‌ ‌nocturnity‌ ‌and‌ ‌craft‌‌ should‌‌not‌‌have‌‌been‌‌considered‌‌by‌‌the‌‌lower‌‌court.‌‌There‌‌was‌‌no‌‌ showing‌ ‌that‌ ‌the‌ ‌appellants‌ ‌purposely‌ ‌sought‌ ‌the‌ ‌cover‌ ‌of‌ ‌night‌‌ when‌ ‌they‌ ‌committed‌ ‌the‌ ‌special‌ ‌complex‌ ‌crime‌ ‌of‌ ‌robbery‌ ‌with‌‌ homicide.‌ ‌Neither‌ ‌did‌ ‌the‌ ‌appellants‌ ‌employ‌ ‌craft,‌ ‌since‌ ‌they‌ ‌had‌‌ already‌‌boarded‌‌the‌‌vessel‌‌when‌‌they‌‌pretended‌‌to‌‌buy‌‌Tanduay‌‌Rum‌‌ in‌ ‌exchange‌ ‌for‌ ‌the‌ ‌dried‌ ‌fish‌‌and‌‌chicken‌‌they‌‌were‌‌carrying.‌‌Even‌‌ without‌‌such‌‌pretense,‌‌they‌‌could‌‌nonetheless‌‌have‌‌carried‌‌out‌‌their‌‌ unlawful‌‌scheme.‌ ‌ Review‌‌of‌‌Aggravating‌‌Circumstances‌ ‌ People‌‌v.‌‌Taño‌ ‌ The‌ ‌Court‌ ‌finds‌ ‌that‌ ‌dwelling‌ ‌cannot‌ ‌be‌ ‌appreciated‌ ‌as‌ ‌an‌‌ aggravating‌‌circumstance.‌‌The‌‌building‌‌where‌‌the‌‌two‌‌offenses‌‌were‌‌ committed‌ ‌was‌ ‌not‌ ‌entirely‌ ‌for‌ ‌dwelling‌‌purposes‌.‌‌The‌‌evidence‌‌ shows‌ ‌that‌ ‌it‌ ‌consisted‌ ‌of‌ ‌two‌ ‌floors:‌ ‌the‌ ‌ground‌ ‌floor,‌ ‌which‌ ‌was‌‌ being‌‌operated‌‌as‌‌a‌‌video‌‌rental‌‌shop,‌‌and‌‌the‌‌upper‌‌floor,‌‌which‌‌was‌‌ used‌ ‌as‌ ‌a‌ ‌residence.‌ ‌It‌ ‌was‌ ‌in‌ ‌the‌ ‌video‌‌rental‌‌shop‌‌where‌‌the‌‌rape‌‌ was‌‌committed.‌‌True,‌‌the‌‌victim‌‌was‌‌dragged‌‌to‌‌the‌‌kitchen‌‌and‌‌toilet‌‌ but‌‌these‌‌two‌‌sections‌‌were‌‌adjacent‌‌to‌‌and‌‌formed‌‌parts‌‌of‌‌the‌‌store.‌‌ Being‌ ‌a‌ ‌commercial‌ ‌shop‌ ‌that‌ ‌caters‌ ‌to‌ ‌the‌ ‌public‌,‌ ‌the‌ ‌video‌‌ rental‌‌outlet‌‌was‌‌open‌‌to‌‌the‌‌public.‌‌As‌‌such,‌‌it‌‌is‌‌not‌‌attributed‌‌the‌‌ sanctity‌‌of‌‌privacy‌‌‌that‌‌jurisprudence‌‌accords‌‌to‌‌residential‌‌abodes.‌‌ People‌‌v.‌‌Aspili‌ ‌ We‌ ‌find‌ ‌no‌ ‌merit‌ ‌in‌ ‌the‌ ‌appellants'‌ ‌contention‌ ‌that‌ ‌the‌‌lower‌‌court‌‌ erred‌‌in‌‌considering‌‌‌recidivism‌‌‌as‌‌an‌‌aggravating‌‌circumstance.‌‌All‌‌ the‌ ‌appellants‌ ‌are‌ ‌recidivists.‌‌They‌‌were‌‌serving‌‌sentence‌‌by‌‌virtue‌‌ Circumstance‌ ‌ Requisites‌ ‌ Notes‌ ‌ Inherent‌i‌ n‌‌ Malversation‌‌ (217);‌‌ Falsification‌‌of‌‌ a) Done‌‌by‌‌a‌‌public‌‌officer;‌ ‌ document‌‌by‌‌ Abuse‌‌of‌‌public‌‌ b) Took‌‌advantage‌o ‌ f‌‌ public‌‌ position‌ ‌ position‌ ‌ officers(171);‌‌ Art‌‌19‌‌par‌‌3;‌‌ Crimes‌‌by‌‌public‌‌ officers‌‌ (204-245)‌ ‌ Contempt‌‌or‌‌ insult‌‌to‌‌the‌‌ public‌‌ a) public‌‌authority‌‌is‌‌ Becomes‌‌Direct‌‌ engaged‌‌in‌‌the‌‌exercise‌‌of‌‌ Assault‌‌if‌d ‌ one‌‌ his‌‌functions;‌ ‌ against‌‌authority‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 166‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ authorities‌ ‌ b) authority‌‌is‌‌not‌‌the‌‌ person‌‌against‌‌whom‌‌the‌‌ crime‌‌is‌‌committed;‌ ‌ c) offender‌‌knows‌‌him‌‌to‌‌be‌‌ a‌‌public‌‌authority;‌ ‌ d) presence‌‌has‌‌not‌‌ prevented‌‌the‌‌ commission‌‌of‌‌the‌‌crime.‌ ‌ clear.‌ ‌ a) Deliberate‌‌intent‌‌to‌‌offend‌‌ or‌‌insult‌‌(‌sine‌‌qua‌‌non‌)‌ ‌ Rank‌:‌‌there‌‌should‌‌be‌‌a‌‌ Insult‌‌or‌‌ difference‌‌in‌‌the‌‌social‌‌ Disregard‌‌of‌‌sex‌‌ disregard‌‌of‌‌ condition‌‌of‌‌the‌‌offender‌‌and‌‌ absorbed‌i‌ n‌‌ offended‌‌party‌ ‌ offended;‌ ‌ treachery;‌ ‌ Age‌:‌‌there‌‌is‌‌a‌‌considerable‌‌ gap;‌ ‌ Sex‌:‌‌Female.‌ ‌ it‌‌is‌‌enough‌‌that‌‌ the‌‌victim‌‌was‌‌ attacked‌‌inside‌‌ his‌‌own‌‌house‌ ‌ Dwelling‌ ‌ a) offended‌‌party‌‌must‌‌not‌‌ give‌‌provocation‌‌(s‌ ine‌‌ qua‌‌non‌)‌ ‌ Abuse‌‌of‌‌ confidence‌ ‌ ★ Betrayal‌‌of‌‌ confidence‌‌ a) offended‌‌party‌‌had‌‌trusted‌‌ NOT‌‌ the‌‌offender;‌ ‌ aggravating‌ ‌ b) offender‌‌abused‌‌such‌‌ ★ Confidence‌‌ trust‌‌by‌‌committing‌‌a‌‌ must‌‌be‌‌ crime‌‌against‌t‌ he‌‌offended‌‌ immediate‌‌ party;‌ ‌ and‌‌personal‌ c) abuse‌‌of‌‌confidence‌‌ ★ Stealing‌‌the‌‌ facilitated‌‌the‌‌ property‌‌of‌‌ commission‌‌of‌‌the‌‌crime‌ ‌ host‌‌is‌‌with‌‌ abuse‌‌of‌‌ confidence‌ ‌ the‌‌act;‌ ‌ a) Public‌‌authority‌‌must‌‌be‌‌ in‌‌their‌‌office‌‌while‌‌ Palace‌‌of‌‌the‌‌ performing‌‌his‌‌duty;‌ ‌ Chief‌‌Executive‌ ‌ b) He‌‌may‌‌be‌‌the‌‌offended‌‌ party‌ ‌ Chief‌‌Executive‌:‌‌ Need‌‌not‌‌be‌‌in‌‌ the‌‌palace;‌‌His‌‌ mere‌‌presence‌‌ aggravates;‌‌He‌‌ need‌‌not‌‌perform‌‌ his‌‌duties;‌ ‌ COMMON‌‌ELEMENTS‌‌FOR‌‌PAR‌‌6‌ ‌ a) facilitated‌‌the‌‌commission‌‌of‌‌the‌‌crime;‌‌OR‌ ‌ b) especially‌‌sought‌‌by‌‌the‌‌offender‌‌to‌‌insure‌‌the‌‌commission‌‌ of‌‌the‌‌crime‌‌or‌‌for‌‌the‌‌purpose‌‌of‌‌impunity;‌‌OR‌ ‌ c) offender‌‌took‌‌advantage‌‌for‌‌the‌‌purpose‌‌of‌‌impunity;‌ ‌ Calamity‌‌or‌‌ misfortune‌ ‌ a) Offender‌‌must‌‌take‌‌ advantage‌‌of‌‌calamity;‌ ‌ a) crime‌‌occurred‌‌in‌‌that‌‌ period‌‌of‌‌darkness‌‌ beginning‌‌at‌‌end‌‌of‌‌dusk‌‌ and‌‌ending‌‌at‌‌dawn;‌ ‌ Nocturnidad‌‌or‌‌ b) place‌‌must‌‌not‌‌be‌‌ Nighttime‌ ‌ illuminated;‌ ‌ c) crime‌‌must‌‌begin‌‌and‌‌be‌‌ accomplished‌‌in‌‌the‌‌ nighttime;‌ ‌ Two‌‌alternative‌‌ tests‌‌for‌‌ nocturnity:‌ ‌ a) Objecti‌ ve‌:‌‌ facilitat‌ es‌‌ crime;‌ ‌ b) Subject‌ ive‌:‌‌ purpose‌ ly‌‌ sought‌ ‌ Calamity‌‌ includes‌‌ conflagration,‌‌ shipwreck,‌‌ earthquake,‌‌ epidemic‌ ‌ Aid‌‌of‌‌armed‌‌ men‌ ‌ a) armed‌‌persons‌‌took‌‌part‌‌ in‌‌the‌‌commission‌‌of‌‌the‌‌ crime‌‌either‌‌directly‌‌or‌‌ indirectly;‌ ‌ b) accused‌‌availed‌‌himself‌‌ of‌‌their‌‌aid,‌‌or‌‌relied‌‌upon‌‌ them‌‌during‌‌the‌‌ commission‌‌of‌‌the‌‌crime‌ ‌ Not‌‌considered‌‌ when‌‌both‌‌ parties‌‌are‌‌ EQUALLY‌‌armed;‌ ‌ Not‌‌considered‌‌if‌‌ conspiracy‌‌is‌‌ present‌ ‌ Recidivist‌ ‌ a) Offender‌‌is‌‌on‌‌trial‌‌for‌‌an‌‌offense;‌ ‌ b) previously‌c‌ onvicted‌‌by‌‌final‌‌judgment‌‌of‌‌ another‌‌crime;‌ ‌ c) both‌‌offenses‌‌embraced‌‌in‌‌same‌‌title‌‌of‌‌Code;‌ ‌ d) offender‌‌be‌‌convicted‌‌of‌‌new‌‌offense‌ ‌ ★ Also‌‌applies‌‌if‌‌both‌‌offenses‌‌violate‌‌the‌‌ same‌‌Ordinance/SPL‌ ‌ ★ Controlling‌‌is‌‌time‌‌of‌‌TRIAL,‌‌not‌‌the‌‌ commission‌‌of‌‌crime;‌ ‌ ★ The‌‌commission‌‌of‌‌crime‌‌and‌‌rendering‌‌ of‌‌judgment‌‌must‌‌be‌‌successive:‌‌e.g.‌ ‌ Crime‌‌1‌‌→‌‌Judgment‌‌1‌‌→‌‌Crime‌‌2‌‌→‌‌Judgment‌‌2‌ ‌ Reiteracion‌‌or‌‌ habituality‌ ‌ a) Accused‌‌on‌‌trial‌‌for‌‌an‌‌ offense;‌ ‌ b) previously‌s‌ erved‌‌ In‌‌an‌‌ uninhabited‌‌ place‌ ‌ a) The‌‌place‌‌provides‌‌no‌‌ reasonable‌‌possibility‌‌of‌‌ the‌‌victim‌‌receiving‌‌some‌‌ help;‌ ‌ b) accused‌‌sought‌‌the‌‌ solitude‌‌for‌‌an‌‌easy‌‌and‌‌ uninterrupted‌‌ accomplishment‌‌of‌‌the‌‌ crime,‌‌and‌‌to‌‌insure‌‌ concealment‌‌of‌‌offense;‌ ‌ "‌For‌‌the‌‌ purpose‌‌of‌‌ impunity‌"‌‌ means‌‌to‌‌prevent‌‌ offender's‌‌ recognition,‌‌or‌‌ secure‌‌himself‌‌ from‌‌detection‌‌ and‌‌punishment.‌ ‌ By‌‌a‌‌band‌ ‌ a) at‌‌least‌‌four‌;‌ ‌ b) all‌f‌ our‌‌are‌a ‌ rmed‌;‌ ‌ c) all‌‌shall‌‌have‌‌acted‌‌ together,‌‌taking‌d ‌ irect‌‌ part‌‌in‌‌the‌‌execution‌‌of‌‌ One‌‌of‌‌the‌‌four‌‌ should‌‌not‌‌be‌‌a‌‌ principal‌‌by‌‌ inducement.‌ ‌ Obvious‌‌ ungratefulness‌‌must‌‌be‌‌obvious,‌‌i.e.‌‌manifest‌‌and‌‌ ungratefulness‌ ‌ ★ If‌‌offender‌‌ has‌‌not‌‌been‌‌ previously‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 167‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ sentence‌‌‌for‌‌another‌‌ punished‌‌or‌‌ offense‌‌of‌‌an‌‌equal‌‌or‌‌ served‌‌ greater‌‌penalty,‌‌or‌‌for‌‌two‌‌ sentence,‌‌ or‌‌more‌‌crimes‌‌of‌‌a‌‌ reiteracion‌‌ lighter‌‌penalty‌‌than‌‌that‌‌ is‌‌NOT‌‌ for‌‌the‌‌new‌‌offense;‌ ‌ attendant;‌ ‌ c) be‌‌convicted‌‌of‌‌the‌‌new‌‌ ★ Reiteracion‌ offense.‌ ‌ NOT‌‌ ALWAYS‌‌ aggravating‌ ‌ a) there‌‌must‌‌be‌‌at‌‌least‌‌two‌‌ Consideration‌ ‌ (2)‌‌principals,‌‌one‌‌by‌‌ of‌‌price,‌‌reward‌‌ inducement‌‌and‌‌the‌‌ or‌‌promise‌ ‌ other/s‌‌by‌‌direct‌‌ participation;‌ ‌ Great‌‌waste‌‌ and‌‌ruin‌ ‌ Explosion‌ ‌ Derailment‌‌of‌ Locomotive‌ ‌ If‌‌not‌‌alleged‌‌to‌‌ qualify‌‌the‌‌crime‌‌ to‌‌murder,‌‌ GENERIC‌‌only‌ ‌ When‌‌the‌‌crime‌‌committed‌‌is‌‌ parricide,‌‌there‌‌is‌‌only‌‌ GENERIC‌‌aggravating‌ ‌ Means‌‌are‌‌ If‌ ‌there‌ ‌is‌ ‌intent‌ ‌to‌‌kill,‌‌using‌‌ explosion,‌‌crime‌‌is‌‌MURDER‌ ‌ purposely‌‌used‌‌ to‌‌accomplish‌‌a‌‌ If‌ ‌person‌ ‌dies‌ ‌as‌ ‌a‌ ‌result‌‌ criminal‌‌ without‌ ‌intent,‌ ‌COMPLEX‌‌ purpose.‌ ‌ CRIME‌ ‌of‌‌damage‌‌to‌‌means‌‌of‌‌ communication‌ ‌with‌‌ homicide‌‌(Arts‌‌330‌‌and‌‌249‌‌in‌‌ rel‌‌to‌‌Art‌‌4‌‌and‌‌48);‌ ‌ a) time‌‌when‌‌offender‌‌ determined‌‌to‌‌commit‌‌ crime;‌ ‌ b) act‌‌indicating‌‌culprit‌‌ Evident‌‌ clung‌‌to‌‌this‌‌ Premeditation‌ ‌ determination;‌ ‌ c) sufficient‌‌lapse‌‌of‌‌time‌‌ between‌‌determination‌‌ and‌‌execution,‌‌allowing‌‌ REFLECTION‌‌and‌‌COOL‌‌ After‌‌offender‌‌ had‌‌determined‌‌ to‌‌commit‌‌the‌‌ crime,‌‌2nd‌‌req.‌‌ exists.‌ ‌ THOUGHT‌ ‌ Craft‌ ‌ Act‌‌done‌‌in‌‌order‌‌ involves‌ ‌intellectual‌ ‌trickery‌‌ not‌‌to‌‌arouse‌‌ and‌‌cunning‌ ‌ suspicion‌‌of‌‌the‌‌ victim;‌ ‌ Fraud‌ ‌ Differs‌‌from‌‌ involves‌‌insidious‌‌words‌‌or‌‌ Craft‌‌in‌‌that‌‌ machinations‌‌used‌‌to‌‌induce‌‌ Fraud‌‌involves‌‌ the‌‌victim‌‌in‌‌a‌‌manner‌‌which‌‌ direct‌‌ would‌‌enable‌‌the‌‌offender‌‌to‌‌ carry‌‌out‌‌his‌‌criminal‌‌design.‌ ‌ inducement‌‌by‌‌ insidious‌‌words‌ ‌ Disguise‌ ‌ involves‌ ‌resorting‌ ‌to‌ ‌any‌ ‌device‌ ‌to‌ ‌conceal‌‌ identity‌ ‌ Abuse‌‌of‌‌ superior‌‌ strength‌ ‌ a) There‌ ‌should‌ ‌be‌‌ notorious‌ ‌inequality‌ ‌of‌‌ Incompatible‌‌ forces‌ ‌between‌ ‌the‌ ‌two‌‌ with‌ ‌Passion‌ o ‌ r‌‌ parties;‌ ‌ obfuscation‌ ‌ b) Offender‌ ‌takes‌ ‌advantage‌‌ of‌‌this‌‌inequality.‌ ‌ Alevosia‌‌or‌‌ Treachery‌ ‌ a) At‌‌the‌‌time‌‌of‌‌the‌‌attack,‌‌ a) Applies‌‌to‌‌ victim‌‌was‌‌not‌‌in‌‌a‌‌ crimes‌‌ position‌‌to‌‌defend‌‌himself‌‌ against‌‌ or‌‌retaliate;‌‌AND‌ ‌ persons;‌ ‌ b) offender‌‌consciously‌‌ b) mode‌‌of‌‌ adopted‌‌the‌‌particular‌‌ attack‌‌ means,‌‌methods,‌‌or‌‌ consciously‌‌ forms.‌ ‌ adopted.‌ ‌ Ignominy‌ ‌ A‌‌circumstance‌‌ pertaining‌‌to‌‌the‌‌ moral‌‌order,‌‌ must‌ ‌tend‌ ‌to‌ ‌make‌‌the‌‌effects‌‌ which‌‌adds‌‌ of‌‌the‌‌crime‌‌more‌‌humiliating,‌‌ disgrace‌‌and‌‌ putting‌‌the‌‌victim‌‌to‌‌shame;‌ ‌ obloquy‌‌to‌‌the‌‌ material‌‌injury‌‌ caused‌‌by‌‌the‌‌ crime.‌ ‌ There‌ ‌is‌ ‌an‌ ‌unlawful‌ ‌entry‌‌ when‌ ‌an‌ ‌entrance‌ ‌is‌ ‌effected‌‌ Unlawful‌‌Entry‌ ‌ NOT‌‌for‌‌escape‌ ‌ by‌ ‌a‌ ‌way‌ ‌not‌‌intended‌‌for‌‌the‌‌ purpose.‌‌ ‌ Breaking‌w ‌ all,‌‌ Offender‌ ‌need‌ ‌not‌ ‌enter‌ ‌the‌ ‌building‌ ‌for‌‌ roof,‌‌floor,‌‌door,‌‌ FORCIBLE‌E ‌ NTRY‌‌to‌‌be‌‌aggravating.‌ ‌ or‌‌window‌ ‌ Aid‌‌of‌‌person‌‌ under‌‌15‌ ‌ Means‌‌of‌‌motor‌‌ vehicle‌ ‌ Cruelty‌ ‌ 1. 2. Two‌‌different‌‌aggravating:‌‌aid‌‌of‌‌minors‌‌ under‌‌15,‌‌means‌‌of‌‌motor‌‌vehicle;‌ ‌ Estafa‌‌cannot‌‌be‌‌committed‌‌by‌‌means‌‌of‌‌ motor‌‌vehicle‌ ‌ a) Injury‌‌caused‌‌be‌‌ The‌‌culprit‌‌ deliberately‌‌increased‌‌ enjoys‌‌and‌‌ by‌‌causing‌o ‌ ther‌‌wrong‌;‌ ‌ delights‌‌in‌‌ b) Other‌‌wrong‌‌is‌‌ making‌‌his‌‌ unnecessary‌i‌ n‌‌ victim‌‌suffer.‌ ‌ accomplishing‌‌the‌‌crime;‌ ‌ e.‌‌Alternative‌‌circumstance‌ ‌ Alternative‌ ‌circumstances‌ ‌are‌ ‌those‌ ‌which‌ ‌must‌ ‌be‌ ‌taken‌ ‌into‌‌ consideration‌‌as‌‌aggravating‌‌or‌‌mitigating‌‌according‌‌to‌‌the‌‌nature‌‌and‌‌ effects‌ ‌of‌ ‌the‌ ‌crime‌ ‌and‌ ‌the‌ ‌other‌ ‌conditions‌ ‌attending‌ ‌its‌‌ commission.‌‌They‌‌are‌‌the‌‌relationship,‌‌intoxication‌‌and‌‌the‌‌degree‌‌of‌‌ instruction‌‌and‌‌education‌‌of‌‌the‌‌offender.‌ ‌ The‌ ‌alternative‌ ‌circumstance‌ ‌of‌ ‌relationship‌ ‌shall‌ ‌be‌ ‌taken‌ ‌into‌‌ consideration‌ ‌when‌ ‌the‌ ‌offended‌ ‌party‌ ‌is‌ ‌the‌ ‌spouse,‌ ‌ascendant,‌‌ descendant,‌ ‌legitimate,‌ ‌natural,‌ ‌or‌ ‌adopted‌ ‌brother‌ ‌or‌ ‌sister,‌ ‌or‌‌ relative‌‌by‌‌affinity‌‌in‌‌the‌‌same‌‌degrees‌‌of‌‌the‌‌offender.‌ ‌ The‌ ‌intoxication‌ ‌of‌‌the‌‌offender‌‌shall‌‌be‌‌taken‌‌into‌‌consideration‌‌ as‌ ‌a‌ ‌mitigating‌ ‌circumstances‌ ‌when‌ ‌the‌ ‌offender‌ ‌has‌‌committed‌‌a‌‌ felony‌ ‌in‌ ‌a‌ ‌state‌ ‌of‌ ‌intoxication,‌ ‌if‌ ‌the‌ ‌same‌ ‌is‌ ‌not‌ ‌habitual‌ ‌or‌‌ subsequent‌ ‌to‌ ‌the‌ ‌plan‌ ‌to‌ ‌commit‌ ‌said‌ ‌felony‌ ‌but‌ ‌when‌ ‌the‌‌ intoxication‌ ‌is‌ ‌habitual‌ ‌or‌ ‌intentional,‌ ‌it‌ ‌shall‌ ‌be‌ ‌considered‌ ‌as‌ ‌an‌‌ aggravating‌c‌ ircumstance.‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 168‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ People‌‌v.‌‌Orilla‌‌‌re‌‌relationship‌ ‌ The‌ ‌Amended‌ ‌Information‌ ‌did‌ ‌not‌ ‌allege‌ ‌Remilyn’s‌‌minor‌‌age.‌‌‌The‌‌ prosecution’s‌ ‌failure‌ ‌to‌‌allege‌‌specifically‌‌Remilyn’s‌‌minor‌‌age‌‌ prevents‌‌the‌‌transformation‌‌of‌‌the‌‌crime‌‌to‌‌its‌‌qualified‌‌form‌.‌ ‌ Based‌ ‌on‌ ‌a‌ ‌strict‌ ‌interpretation,‌ ‌alternative‌ ‌circumstances‌ ‌are‌ ‌thus‌‌ not‌ ‌aggravating‌ ‌circumstances‌ ‌per‌ ‌se.‌ ‌Jurisprudence‌ ‌considers‌‌ relationship‌ ‌as‌ ‌an‌ ‌aggravating‌‌circumstance‌‌in‌‌crimes‌‌against‌‌ chastity‌.‌‌However,‌‌‌rape‌‌is‌‌no‌‌longer‌‌a‌‌crime‌‌against‌‌chastity‌‌for‌‌ it‌‌is‌‌now‌‌classified‌‌as‌‌a‌c‌ rime‌‌against‌‌persons‌.‌ ‌ A‌ ‌circumstance‌ ‌which‌ ‌is‌ ‌present‌ ‌prior‌ ‌to‌ ‌or‌ ‌simultaneously‌‌with‌‌ the‌‌offense‌‌by‌‌reason‌‌of‌‌which‌‌the‌‌accused‌‌who‌‌acts‌‌with‌‌criminal‌‌ intent,‌ ‌freedom‌ ‌and‌‌intelligence‌‌does‌‌not‌‌incur‌‌a‌‌criminal‌‌liability‌‌ for‌‌an‌‌act‌‌which‌‌constitutes‌‌a‌‌crime.‌ ‌ 1. Spontaneous‌‌desistance‌‌in‌‌attempted‌‌felonies‌‌(Art.‌‌6);‌ ‌ 2. Accessories‌‌in‌‌light‌‌felonies‌‌(Art.‌‌16);‌ ‌ 3. Accessories‌ ‌exempt‌ ‌from‌ ‌criminal‌ ‌liability‌ ‌by‌ ‌reason‌ ‌of‌‌ relationship‌‌(Art.‌‌20);‌ ‌ 4. People‌ ‌v.‌ ‌Bondoc‌ ‌lack‌ ‌of‌ ‌instruction‌ ‌generally‌ ‌mitigating‌‌ except‌i‌ n‌‌Crimes‌‌against‌‌property‌‌and‌‌chastity‌ ‌ A‌ ‌close‌ ‌examination‌ ‌of‌ ‌the‌ ‌record‌ ‌is‌ ‌indicative‌ ‌of‌ ‌the‌ ‌lack‌ ‌of‌‌ instruction‌ ‌of‌ ‌the‌ ‌offender.‌ ‌There‌ ‌is‌ ‌more‌ ‌than‌ ‌sufficient‌‌ justification‌ ‌for‌ ‌the‌ ‌finding‌ ‌of‌ ‌the‌ ‌mitigating‌ ‌circumstance‌ ‌of‌ ‌the‌‌ above‌ ‌character‌ ‌that‌ ‌would‌ ‌lessen‌ ‌the‌ ‌rigor‌ ‌of‌ ‌the‌ ‌Anti-Subversion‌‌ law.‌ ‌ People‌‌v.‌‌Fontillas‌‌2 ‌ 010‌‌‌re‌‌intoxication‌ ‌ The‌ ‌Court‌ ‌of‌ ‌Appeals‌ ‌correctly‌ ‌rejected‌ ‌the‌ ‌accused-appellant's‌‌ assertion‌‌that‌‌his‌‌extreme‌‌i‌ ntoxication‌‌‌from‌‌alcohol‌‌on‌‌the‌‌night‌‌of‌‌ the‌‌rape‌‌should‌‌be‌‌appreciated‌‌as‌‌a‌‌mitigating‌‌circumstance.‌‌Accused‌‌ did‌‌not‌‌present‌‌any‌‌evidence‌‌that‌‌his‌‌intoxication‌‌was‌‌‌not‌‌habitual‌‌ or‌‌subsequent‌‌to‌‌the‌‌plan‌‌to‌‌commit‌‌the‌‌rape‌.‌ ‌ People‌‌v.‌‌Dawaton‌ ‌ The‌ ‌trial‌ ‌court‌ ‌erred‌ ‌in‌ ‌not‌ ‌appreciating‌ ‌the‌ ‌alternative‌‌ circumstance‌ ‌of‌ ‌intoxication‌ ‌in‌ ‌favor‌ ‌of‌ ‌the‌ ‌accused‌.‌ ‌There‌‌ being‌‌no‌‌indication‌‌that‌‌the‌‌accused‌‌was‌‌a‌‌habitual‌‌drunkard‌‌or‌‌that‌‌ his‌‌alcoholic‌‌intake‌‌was‌‌intended‌‌to‌‌fortify‌‌his‌‌resolve‌‌to‌‌commit‌‌the‌‌ crime,‌ ‌the‌ ‌circumstance‌ ‌of‌ ‌intoxication‌ ‌should‌ ‌be‌ ‌credited‌ ‌in‌ ‌his‌‌ favor.‌ ‌ f.‌‌Absolutory‌‌causes‌ ‌ Are‌ ‌those‌ ‌where‌ ‌the‌ ‌act‌ ‌committed‌ ‌is‌ ‌a‌ ‌crime‌ ‌but‌ ‌for‌ ‌reasons‌ ‌of‌‌ public‌‌policy‌‌and‌‌sentiment,‌‌there‌‌is‌n ‌ o‌‌penalty‌‌imposed‌.‌ ‌ A‌ ‌legal‌ ‌spouse‌ ‌or‌ ‌parent‌ ‌who‌ ‌inflicts‌ ‌slight‌ ‌or‌ ‌less‌ ‌serious‌‌ physical‌‌injuries‌‌under‌‌exceptional‌‌circumstances;‌‌(Art.‌‌247.‌‌If‌‌ death‌ ‌or‌ ‌serious‌ ‌injuries‌ ‌result,‌ ‌there‌‌is‌‌mitigated‌‌liability,‌‌as‌‌ “‌extenuating‌‌circumstance‌”)‌‌ ‌ 5. Persons‌ ‌not‌ ‌criminally‌ ‌liable‌ ‌for‌ ‌theft,‌ ‌estafa‌ ‌or‌ ‌malicious‌‌ mischief‌‌‌by‌‌reason‌‌of‌‌relationship‌‌to‌‌the‌‌offended‌‌party.‌‌(Art.‌‌ 332)‌ ‌ Entrapment‌‌f rom‌‌Instigation‌ ‌ Entrapment‌ ‌ Instigation‌ ‌ law‌ ‌officers‌ ‌employ‌ ‌ruses‌ ‌and‌‌ schemes‌ ‌to‌ ‌ensure‌ ‌the‌‌ the‌‌accused‌‌is‌‌induced‌‌to‌‌commit‌‌ apprehension‌ ‌of‌ ‌the‌ ‌criminal‌‌ the‌‌crime.‌ ‌ while‌ ‌in‌ ‌the‌ ‌actual‌ ‌commission‌‌ of‌‌the‌‌crime.‌ ‌ the‌ ‌law‌ ‌officer‌ ‌conceives‌ ‌the‌‌ commission‌ ‌of‌ ‌the‌ ‌crime‌ ‌and‌‌ the‌ ‌mens‌ ‌rea‌‌originates‌‌from‌‌the‌‌ suggests‌ ‌to‌ ‌the‌ ‌accused‌ ‌who‌‌ mind‌‌of‌‌the‌‌criminal‌ ‌ adopts‌‌the‌‌idea‌‌and‌‌carries‌‌it‌‌into‌‌ execution‌ ‌ does‌‌NOT‌‌exempt‌‌‌the‌‌criminal‌‌ from‌‌liability.‌ ‌ considered‌‌an‌a ‌ bsolutory‌‌cause.‌ ‌ People‌‌v.‌‌Casio‌‌2 ‌ 014‌‌Leonen,‌‌J‌ ‌ Accused‌ ‌was‌ ‌predisposed‌ ‌to‌ ‌commit‌ ‌the‌ ‌offense‌ ‌because‌ ‌she‌‌ initiated‌‌the‌‌transaction.‌‌As‌‌testified‌‌by‌‌PO1‌‌Veloso‌‌and‌‌PO1‌‌Luardo,‌‌ accused‌‌called‌‌out‌‌their‌‌attention‌‌by‌‌saying‌‌“C ‌ hicks‌‌mo‌‌dong?‌”‌ ‌ With‌‌regard‌‌to‌‌the‌‌lack‌‌of‌‌prior‌‌surveillance,‌‌prior‌‌surveillance‌‌is‌‌ not‌‌a‌‌condition‌‌for‌‌an‌‌entrapment‌‌operation’s‌‌validity‌.‌‌As‌‌ held‌‌in‌‌‌People‌‌v.‌‌Padua‌,‌‌‌a‌‌prior‌‌surveillance‌‌is‌‌not‌‌a‌‌prerequisite‌‌ for‌ ‌the‌ ‌validity‌ ‌of‌ ‌an‌ ‌entrapment‌ ‌or‌ ‌buy-bust‌ ‌operation,‌ ‌the‌‌ conduct‌‌of‌‌which‌‌has‌‌no‌‌rigid‌‌or‌‌textbook‌‌method.‌ ‌ People‌‌v.‌‌Doria‌ ‌ Entrapment‌ ‌in‌ ‌the‌ ‌Philippines‌ ‌is‌ ‌not‌‌a‌‌defense‌‌available‌‌to‌‌the‌‌ accused.‌ ‌It‌ ‌is‌ ‌instigation‌ ‌that‌ ‌is‌ ‌a‌ ‌defense‌ ‌and‌ ‌is‌ ‌considered‌ ‌an‌‌ absolutory‌c‌ ause.‌ ‌ In‌ ‌the‌ ‌case‌ ‌at‌ ‌bar,‌ ‌the‌ ‌evidence‌ ‌shows‌ ‌that‌ ‌it‌ ‌was‌ ‌the‌ ‌confidential‌‌ informant‌‌who‌‌initially‌‌contacted‌‌Doria.‌‌At‌‌the‌‌pre-arranged‌‌meeting,‌‌ the‌‌informant‌‌was‌‌accompanied‌‌by‌‌PO3‌‌Manlangit‌‌who‌‌posed‌‌as‌‌the‌‌ buyer‌ ‌of‌ ‌marijuana.‌ ‌PO3‌ ‌Manlangit‌ ‌handed‌ ‌the‌ ‌marked‌ ‌money‌ ‌to‌‌ Doria‌ ‌as‌ ‌advance‌ ‌payment‌ ‌for‌ ‌one‌ ‌(1)‌‌kilo‌‌of‌‌marijuana.‌‌Doria‌‌was‌‌ apprehended‌ ‌when‌ ‌he‌ ‌later‌ ‌returned‌ ‌and‌ ‌handed‌ ‌the‌ ‌brick‌ ‌of‌‌ marijuana‌‌to‌‌PO3‌‌Manlangit.‌ ‌ Battered‌‌Woman‌‌Syndrome‌ ‌ People‌‌v.‌‌Genosa‌‌‌in‌‌rel.‌‌to‌‌Sec.‌‌26,‌‌RA‌‌9262‌ ‌ The‌ ‌severe‌ ‌beatings‌ ‌repeatedly‌ ‌inflicted‌ ‌on‌ ‌appellant‌ ‌constituted‌ ‌a‌‌ form‌ ‌of‌ ‌cumulative‌ ‌provocation‌ ‌that‌ ‌broke‌ ‌down‌‌her‌‌psychological‌‌ resistance‌ ‌and‌ ‌self-control.‌ ‌This‌ ‌“‌psychological‌ ‌paralysis‌”‌ ‌she‌‌ suffered‌ ‌diminished‌ ‌her‌ ‌will‌ ‌power,‌ ‌thereby‌ ‌entitling‌ ‌her‌ ‌to‌ ‌the‌‌ mitigating‌ ‌factor‌ ‌under‌ ‌paragraphs‌ ‌9‌ ‌and‌ ‌10‌ ‌of‌ ‌Article‌ ‌13.‌ ‌In‌‌ addition,‌ ‌appellant‌ ‌should‌ ‌also‌ ‌be‌ ‌credited‌ ‌with‌ ‌the‌ ‌extenuating‌ circumstance‌‌of‌‌having‌‌acted‌‌upon‌‌an‌‌impulse‌‌so‌‌powerful‌‌as‌‌to‌‌have‌‌ naturally‌‌produced‌‌‌passion‌‌and‌‌obfuscation‌.‌ ‌ In‌ ‌order‌ ‌to‌‌be‌‌classified‌‌as‌‌a‌‌battered‌‌woman‌,‌‌the‌‌couple‌‌must‌‌‌go‌‌ through‌‌the‌‌battering‌‌cycle‌‌at‌‌least‌‌TWICE‌.‌‌The‌‌battered‌‌woman‌‌ syndrome‌ ‌is‌ ‌characterized‌ ‌by‌ ‌the‌ ‌so-called‌ ‌“c ‌ ycle‌ ‌of‌ ‌violence‌,”‌‌ which‌‌has‌‌three‌‌phases:‌‌ ‌ 1) the‌‌tension-building‌‌phase;‌ ‌ 2) the‌‌acute‌‌battering‌‌incident;‌‌and‌ ‌ 3) the‌‌tranquil,‌‌loving‌‌(or,‌‌at‌‌least,‌‌nonviolent)‌‌phase.‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 169‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ a. The‌ ‌Court‌ ‌failed‌ ‌to‌ ‌find‌ ‌ample‌ ‌evidence‌ ‌that‌ ‌would‌ ‌confirm‌ ‌the‌ presence‌ ‌of‌ ‌the‌ ‌essential‌ ‌characteristics‌ ‌of‌ ‌BWS.‌ ‌The‌ ‌defense‌ ‌fell‌‌ short‌ ‌of‌ ‌proving‌ ‌all‌ ‌three‌ ‌phases‌ ‌of‌ ‌the‌ ‌“cycle‌ ‌of‌ ‌violence”‌‌ supposedly‌ ‌characterizing‌ ‌the‌ ‌relationship‌ ‌of‌ ‌Ben‌ ‌and‌ ‌Marivic‌‌ Genosa.‌ ‌ commission‌‌of‌‌the‌‌crime;‌‌and‌‌ ‌ b. 5. 6. Principals‌ ‌ 11. Principals‌‌by‌‌direct‌‌participation‌‌have‌‌CCR;‌‌Principal‌‌by‌‌induction,‌‌ c. d. Two‌‌ways‌‌of‌‌becoming‌p ‌ rincipal‌‌by‌‌induction‌,‌‌by‌‌directly‌ ‌ a. e. ii. By‌‌using‌i‌ rresistible‌‌force;‌ ‌ By‌‌causing‌u ‌ ncontrollable‌‌fear;‌O ‌ R‌ ‌ b. Inducing‌ ‌ i. ii. By‌‌giving‌‌price,‌‌or‌‌offering‌r‌ eward‌o ‌ r‌‌promise‌;‌ ‌ By‌‌using‌w ‌ ords‌‌of‌‌command.‌ ‌ another‌‌to‌‌commit‌‌a‌‌crime.‌ ‌ 3. Becomes‌ ‌liable‌ ‌only‌ ‌when‌ ‌the‌ ‌principal‌ ‌by‌ ‌direct‌ ‌participation‌‌ committed‌‌the‌‌act.‌ ‌ 4. The‌‌inducement‌‌ ‌ The‌ ‌words‌ ‌must‌ ‌be‌ ‌uttered‌ ‌prior‌ ‌to‌ ‌the‌ ‌commission‌ ‌of‌ ‌the‌‌ The‌‌material‌‌executor‌‌of‌‌the‌‌crime‌‌‌has‌‌no‌‌personal‌‌reason‌‌to‌‌ commit‌‌the‌‌crime.‌ ‌ 7. One‌‌cannot‌‌be‌‌held‌‌guilty‌‌of‌‌having‌‌instigated‌‌the‌‌commission‌‌of‌‌a‌‌ crime‌ ‌without‌ ‌first‌ ‌being‌ ‌shown‌ ‌that‌ ‌the‌ ‌crime‌ ‌has‌ ‌been‌‌actually‌‌ committed‌‌by‌‌another.‌ ‌ Forcing‌ ‌ i. The‌ ‌words‌ ‌used‌ ‌must‌ ‌be‌‌so‌‌‌direct,‌‌efficacious,‌‌powerful‌‌as‌‌to‌‌ crime;‌‌and‌ ‌ If‌‌the‌‌2nd‌‌requisite‌‌is‌‌absent,‌‌there‌‌is‌‌only‌‌‌conspiracy‌,‌‌which‌‌may‌‌ not‌‌be‌‌punishable‌‌in‌‌and‌‌of‌‌itself.‌ ‌ 2. He‌‌must‌‌have‌‌an‌‌‌ascendancy‌‌or‌‌‌influence‌‌over‌‌the‌‌person‌‌who‌‌ amount‌‌to‌‌physical‌‌or‌‌moral‌‌coercion;‌ ‌ of‌‌the‌‌conspirators‌‌kidnapped‌‌the‌‌victim.‌ ‌ By‌‌induction‌ ‌ The‌‌one‌‌commanding‌‌must‌‌have‌‌the‌‌intention‌‌of‌‌procuring‌‌the‌‌ acted;‌ ‌ exc‌‌‌where‌‌there‌‌was‌‌conspiracy‌‌to‌‌kidnap‌‌and‌‌kill‌‌and‌‌only‌‌one‌‌ 8. Collective‌‌Criminal‌‌Responsibility‌‌(CCR)‌ ‌ principal‌‌by‌‌induction‌:‌ ‌ b. by‌‌acts‌‌which‌‌directly‌‌tended‌‌to‌‌the‌‌same‌‌end.‌ ‌ the‌‌crime‌‌may‌‌be‌‌liable‌‌as‌‌co-principal.‌‌But‌‌he‌‌is‌‌held‌‌guilty‌‌of‌‌the‌‌ same‌‌crime‌‌through‌‌reckless‌‌imprudence.‌ ‌ Requisites‌‌for‌‌a‌‌person‌‌using‌‌‌words‌‌of‌‌command‌‌to‌‌be‌‌liable‌‌as‌‌ commission‌‌of‌‌the‌‌crime;‌ ‌ b) Carried‌‌out‌‌their‌‌plan‌‌and‌‌‌personally‌‌took‌‌part‌‌‌in‌‌its‌‌execution‌‌ One‌ ‌who,‌ ‌by‌ ‌acts‌ ‌of‌ ‌negligence,‌ ‌cooperates‌ ‌in‌ ‌the‌‌commission‌‌of‌‌ 10. When‌‌the‌‌offenders‌‌are‌‌criminally‌‌liable‌‌in‌‌the‌‌‌same‌‌manner‌‌and‌‌ to‌ ‌the‌‌same‌‌extent‌.‌‌The‌‌penalty‌‌to‌‌be‌‌imposed‌‌must‌‌be‌‌the‌‌same‌‌ for‌‌all.‌ ‌ a. a) Participated‌‌in‌‌the‌‌criminal‌r‌ esolution‌;‌‌and‌ ‌ 9. The‌ ‌inducement‌ ‌must‌ ‌precede‌ ‌the‌ ‌act‌ ‌induced‌ ‌and‌ ‌must‌ ‌be‌ ‌so‌‌ By‌‌direct‌‌participation‌ ‌ 1. that‌‌such‌‌must‌‌be‌‌the‌‌determining‌‌cause‌‌‌of‌‌the‌‌crime.‌ ‌ influential‌ ‌in‌ ‌producing‌ ‌the‌ ‌criminal‌ ‌act‌ ‌that‌ ‌without‌ ‌it,‌ ‌the‌ ‌act‌‌ would‌‌not‌‌have‌‌been‌‌performed.‌ ‌ 3.‌‌Persons‌‌liable‌‌and‌‌degree‌‌of‌‌participation‌ ‌ a.‌‌Principals,‌‌accomplices,‌‌and‌‌accessories‌ ‌ must‌ ‌be‌ ‌made‌ ‌directly‌ ‌with‌ ‌the‌ ‌intention‌ ‌of‌ ‌procuring‌ ‌the‌‌ But‌ ‌if‌ ‌the‌ ‌one‌ ‌charged‌ ‌as‌ ‌principal‌ ‌by‌ ‌direct‌ ‌participation‌ ‌is‌‌ acquitted‌‌because‌‌he‌‌acted‌‌without‌‌criminal‌‌intent,‌‌‌his‌‌acquittal‌‌is‌‌ NOT‌‌a‌‌ground‌‌for‌‌the‌‌acquittal‌‌of‌‌the‌‌principal‌‌by‌‌inducement.‌ ‌ except‌ ‌that‌ ‌who‌ ‌directly‌ ‌forced‌ ‌another‌ ‌to‌ ‌commit‌ ‌a‌ ‌crime,‌ ‌and‌‌ principal‌ ‌by‌ ‌direct‌ ‌participation‌ ‌have‌ ‌CCR;‌ ‌Principal‌ ‌by‌‌ indispensable‌ ‌cooperation‌ ‌has‌ ‌CCR‌ ‌with‌ ‌the‌ ‌principal‌ ‌by‌ ‌direct‌‌ participation.‌ ‌ Accomplices‌ ‌ Accomplices‌ ‌are‌ ‌persons‌ ‌who,‌ ‌not‌ ‌being‌ ‌included‌ ‌in‌ ‌Article‌‌17‌‌of‌‌the‌‌ RPC,‌ ‌cooperate‌ ‌in‌ ‌the‌ ‌execution‌ ‌of‌ ‌the‌ ‌offense‌ ‌by‌ ‌previous‌ ‌or‌‌ simultaneous‌‌acts.‌‌ ‌ The‌‌following‌‌‌requisites‌‌‌must‌‌be‌‌proved‌‌in‌‌order‌‌that‌‌a‌‌person‌‌can‌‌be‌‌ considered‌‌an‌‌accomplice:‌ ‌ a) community‌‌of‌‌design‌,‌‌i.e.,‌‌knowing‌‌that‌‌criminal‌‌design‌‌of‌‌the‌‌ principal‌ ‌by‌ ‌direct‌ ‌participation,‌ ‌he‌‌concurs‌‌with‌‌the‌‌latter‌‌in‌‌ his‌‌purpose;‌ ‌ b) he‌‌‌cooperates‌‌in‌‌the‌‌execution‌‌of‌‌the‌‌offense‌‌by‌‌‌previous‌‌‌or‌‌ simultaneous‌‌acts;‌‌and,‌ ‌ c) there‌ ‌must‌ ‌be‌ ‌a‌ ‌relation‌ ‌between‌ ‌the‌ ‌acts‌ ‌done‌ ‌by‌ ‌the‌‌ principal‌ ‌and‌ ‌those‌ ‌attributed‌ ‌to‌ ‌the‌ ‌person‌ ‌charged‌ ‌as‌‌ accomplice.‌ ‌ By‌‌indispensable‌‌cooperation‌ ‌ a) There‌ ‌is‌ ‌either‌ ‌anterior‌ ‌conspiracy‌ ‌or‌ ‌unity‌ ‌of‌ ‌criminal‌‌ purpose‌‌and‌‌intention‌‌immediately‌‌before‌‌the‌‌commission‌‌of‌‌ the‌‌crime‌‌charged;‌‌and‌ ‌ b) Cooperation‌ ‌in‌ ‌the‌ ‌commission‌ ‌of‌ ‌the‌ ‌offense‌ ‌by‌ ‌performing‌‌ another‌ ‌act‌,‌ ‌without‌ ‌which‌ ‌it‌ ‌would‌ ‌not‌ ‌have‌ ‌been‌‌ accomplished.‌ ‌ Gurro‌‌v.‌‌People‌‌2 ‌ 019‌ ‌ The‌ ‌prosecution‌ ‌failed‌ ‌to‌ ‌prove,‌ ‌much‌ ‌less‌ ‌allege,‌ ‌any‌‌overt‌‌act‌‌on‌‌ Excel's‌‌part‌‌showing‌‌his‌‌direct‌‌participation‌‌in‌‌the‌‌kidnapping‌‌itself.‌‌ It‌‌must‌‌be‌‌remembered‌‌that‌‌for‌‌one‌‌to‌‌be‌‌regarded‌‌as‌‌an‌‌accomplice,‌‌ it‌‌must‌‌be‌‌shown‌‌that‌ ‌ 1. he‌ ‌knew‌ ‌the‌ ‌criminal‌ ‌design‌ ‌of‌ ‌the‌ ‌principal‌ ‌by‌ ‌direct‌‌ participation,‌‌and‌‌concurred‌‌with‌‌the‌‌latter‌‌in‌‌his‌‌purpose;‌‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 170‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ 2. 3. he‌ ‌cooperated‌ ‌in‌ ‌the‌ ‌execution‌ ‌by‌ ‌previous‌ ‌or‌‌ simultaneous‌ ‌acts,‌ ‌with‌‌the‌‌intention‌‌of‌‌supplying‌‌material‌‌ or‌ ‌moral‌ ‌aid‌ ‌in‌‌the‌‌execution‌‌of‌‌the‌‌crime‌‌in‌‌an‌‌efficacious‌‌ way;‌‌and‌ ‌ his‌ ‌acts‌ ‌bore‌ ‌a‌ ‌direct‌ ‌relation‌ ‌with‌ ‌the‌ ‌acts‌‌done‌‌by‌‌the‌‌ principal.‌ ‌ At‌ ‌best,‌ ‌Excel's‌ ‌participation‌ ‌in‌ ‌the‌ ‌incident‌ ‌was‌ ‌limited‌ ‌to‌ ‌acts‌‌ committed‌ ‌after‌ ‌the‌ ‌abduction‌ ‌was‌ ‌already‌ ‌consummated.‌‌ Particularly,‌‌Excel‌‌retrieved‌‌the‌‌ransom‌‌money‌‌from‌‌Metrobank.‌ ‌ 12. Where‌ ‌there‌ ‌is‌ ‌doubt‌ ‌whether‌ ‌accused‌ ‌acted‌ ‌as‌ ‌principal‌ ‌or‌‌ accomplice,‌‌he‌‌should‌‌be‌‌liable‌‌only‌‌as‌‌an‌‌accomplice.‌ ‌ 13. When‌ ‌the‌ ‌participation‌ ‌of‌ ‌an‌ ‌accused‌ ‌is‌ ‌not‌ ‌disclosed,‌ ‌only‌ ‌an‌‌ Accessories‌ ‌ Accessories‌‌are‌‌those‌‌who,‌‌‌having‌‌knowledge‌‌of‌‌the‌‌commission‌‌of‌‌ the‌ ‌crime,‌ ‌and‌ ‌without‌ ‌having‌ ‌participated‌ ‌therein,‌ ‌either‌ ‌as‌‌ principals‌‌or‌‌accomplices,‌‌take‌‌part‌‌subsequent‌‌to‌‌its‌‌commission‌‌in‌‌ any‌‌of‌‌the‌‌following‌‌manners:‌ ‌ the‌‌effects‌‌of‌‌the‌‌crime.‌ ‌ b) By‌‌‌concealing‌‌or‌‌destroying‌ ‌the‌‌body‌‌of‌‌the‌‌crime,‌‌or‌‌the‌‌ effects‌‌or‌‌instruments‌‌thereof,‌‌in‌‌order‌‌to‌‌prevent‌‌its‌‌discovery.‌ ‌ c) By‌ ‌harboring,‌ ‌concealing,‌ ‌or‌‌assisting‌ ‌in‌‌the‌‌escape‌‌of‌‌ the‌ ‌principals‌ ‌of‌ ‌the‌ ‌crime,‌ ‌provided‌ ‌the‌ ‌accessory‌ ‌acts‌‌with‌‌ abuse‌ ‌of‌ ‌his‌ ‌public‌ ‌functions‌ ‌or‌ ‌whenever‌ ‌the‌ ‌author‌ ‌of‌ ‌the‌‌ crime‌ ‌is‌ ‌guilty‌ ‌of‌ ‌treason,‌ ‌parricide,‌ ‌murder,‌‌or‌‌an‌‌attempt‌‌to‌‌ take‌‌the‌‌life‌‌of‌‌the‌‌Chief‌‌Executive,‌‌or‌‌is‌‌known‌‌to‌‌be‌‌habitually‌‌ guilty‌‌of‌‌some‌‌other‌‌crime.‌ ‌ 14. An‌‌accomplice‌‌does‌‌not‌‌have‌‌previous‌‌agreement‌‌or‌‌understanding‌‌ or‌‌is‌‌not‌‌in‌‌conspiracy‌‌with‌‌the‌‌principal‌‌by‌‌direct‌‌participation.‌ ‌ 15. What‌ ‌differentiates‌ ‌an‌ ‌accomplice‌ ‌from‌ ‌a‌ ‌conspirator‌ ‌is‌ ‌that‌ ‌the‌‌ 16. In‌‌other‌‌words‌ ‌ a. Conspirators‌‌‌are‌‌the‌A ‌ UTHORS‌o ‌ f‌‌a‌‌crime;‌ ‌ b. Accomplices‌ ‌are‌ ‌mere‌‌‌INSTRUMENTS‌‌‌who‌‌perform‌‌acts‌‌‌not‌‌ essential‌‌‌to‌‌the‌‌perpetration‌‌of‌‌the‌‌offense.‌ ‌ 20. The‌‌liability‌‌of‌‌an‌‌accessory‌‌is‌‌subordinate‌‌and‌‌subsequent‌‌to‌‌that‌‌ of‌‌the‌‌principal.‌‌ ‌ 21. Thus,‌ ‌when‌ ‌the‌ ‌principal‌ ‌is‌ ‌acquitted,‌ ‌no‌ ‌legal‌ ‌grounds‌ ‌exist‌ ‌for‌‌ convicting‌‌accused‌‌as‌‌an‌‌accessory.‌‌‌Exception‌‌‌to‌‌this‌‌rule‌‌is‌‌when‌‌ the‌‌principal‌‌is‌‌acquitted‌‌due‌‌to‌‌an‌‌‌exempting‌‌circumstance‌‌such‌‌ as‌‌minority‌‌or‌‌insanity.‌ ‌ 22. Apprehension‌‌and‌‌conviction‌‌of‌‌the‌‌principal‌‌is‌‌‌not‌‌necessary‌‌for‌‌ the‌‌accessory‌‌to‌‌be‌‌held‌‌criminally‌‌liable.‌ ‌ Exempted‌‌accessories‌ ‌ 17. The‌‌acts‌‌of‌‌the‌‌accomplice‌‌are‌‌‌necessary‌,‌‌but‌‌‌not‌‌indispensable‌‌ to‌ ‌the‌ ‌commission‌ ‌of‌ ‌the‌ ‌crime.‌‌He‌‌merely‌‌supplies‌‌the‌‌principal‌ with‌‌material‌‌or‌‌moral‌‌aid‌‌‌without‌‌conspiracy‌‌with‌‌the‌‌latter.‌ ‌ 18. The‌ ‌moral‌ ‌aid‌ ‌may‌ ‌be‌ ‌through‌ ‌advice,‌ ‌encouragement‌ ‌or‌‌ agreement.‌ ‌ 19. An‌ ‌accomplice‌ ‌may‌ ‌be‌ ‌liable‌ ‌for‌ ‌a‌ ‌crime‌ ‌different‌ ‌from‌ ‌that‌‌ which‌‌the‌‌principal‌‌committed.‌ ‌ Time‌‌of‌‌Participation‌ ‌ ‌ Previous‌ ‌ Simultaneous‌ ‌ After‌ ‌ Principal‌ ‌ ✔‌ ‌ ✔‌ ‌ ✔‌ ‌ Accomplice‌ ‌ ✔‌ ‌ ✔‌ ‌ a) By‌‌‌profiting‌‌‌themselves‌‌or‌‌assisting‌‌the‌‌offender‌‌to‌‌profit‌‌by‌‌ accomplice.‌ ‌ former‌ ‌only‌ ‌concurs‌ ‌with‌ ‌the‌ ‌criminal‌ ‌design,‌ ‌and‌ ‌not‌ ‌the‌‌ criminal‌ ‌intention.‌ ‌The‌ ‌conspirators‌ ‌have‌ ‌already‌ ‌decided‌ ‌upon‌‌ such‌‌course‌‌of‌‌action.‌‌Accomplices‌‌come‌‌to‌‌know‌‌about‌‌it‌‌after‌‌the‌‌ principals‌‌have‌‌reached‌‌the‌‌decision.‌ ‌ 2. Assisted‌‌‌the‌‌offender‌‌to‌‌profit‌‌by‌‌the‌‌effects‌‌of‌‌the‌‌crime.‌ ‌ GR‌:‌‌ ‌When‌‌the‌‌principal‌‌is‌‌his‌ ‌ 1. Spouse,‌ ‌ 2. Ascendant,‌ ‌ 3. Descendant,‌‌or‌ ‌ 4. Legitimate,‌ ‌natural‌ ‌or‌ ‌adopted‌ ‌brother,‌ ‌sister‌ ‌or‌ ‌relative‌ ‌by‌‌ affinity‌‌within‌‌the‌‌same‌‌degree.‌ ‌ EXC‌‌ if‌‌such‌‌accessory‌ ‌ 1. Profited‌‌‌by‌‌the‌‌effects‌‌of‌‌the‌‌crime,‌‌or‌ ‌ Accessory‌ ‌ ‌ ‌ ‌ ✔‌ ‌ People‌‌v.‌‌Agapinay‌ ‌ As‌ ‌regards‌ ‌Julia‌ ‌Rapada,‌ ‌it‌ ‌is‌ ‌the‌‌opinion‌‌of‌‌this‌‌Court‌‌that‌‌she‌‌‌can‌‌ not‌ ‌be‌ ‌held‌ ‌liable‌ ‌(as‌ ‌a‌ ‌principal‌ ‌by‌ ‌inducement)‌.‌ ‌Her‌ ‌words,‌‌ "Kill‌‌him‌‌and‌‌we‌‌will‌‌bury‌‌him"‌‌amount‌‌to‌‌‌imprudent‌‌utterances‌,‌‌ and‌‌not,‌‌rather,‌‌in‌‌the‌‌nature‌‌of‌‌a‌‌command‌‌that‌‌had‌‌to‌‌be‌‌obeyed.‌ ‌ Only‌ ‌Romeo,‌ ‌Delfin,‌ ‌and‌ ‌Fortunato‌‌should‌‌be‌‌held‌‌as‌‌‌principals‌‌in‌‌ the‌ ‌crime‌ ‌of‌ ‌murder.‌ ‌Romeo‌‌is‌‌guilty,‌‌as‌‌he‌‌admitted‌‌in‌‌open‌‌court,‌‌ by‌ ‌direct‌ ‌participation‌,‌ ‌while‌ ‌Delfin‌ ‌and‌ ‌Fortunato‌ ‌are‌ ‌liable‌ ‌as‌‌ principals‌ ‌by‌ ‌cooperation‌.‌ ‌In‌‌holding‌‌the‌‌victim‌‌by‌‌his‌‌arms,‌‌both‌‌ allowed‌‌Romeo‌‌to‌‌inflict‌‌upon‌‌him‌‌a‌‌stab‌‌wound.‌ ‌ Alex,‌‌Dante,‌‌and‌‌Cirilo,‌‌on‌‌the‌‌other‌‌hand,‌‌should‌‌be‌‌held‌‌as‌‌‌simple‌‌ accomplices‌‌for‌‌their‌‌acts‌‌of‌‌pelting‌‌the‌‌victim‌‌with‌‌rocks.‌‌Since‌‌the‌‌ deceased‌ ‌had‌ ‌already‌ ‌sustained‌‌two‌‌stab‌‌wounds,‌‌the‌‌act‌‌of‌‌hurling‌‌ rocks‌ ‌at‌ ‌him‌ ‌was‌ ‌not‌ ‌indispensable‌ ‌to‌ ‌justify‌ ‌holding‌ ‌them‌ ‌legally‌‌ liable‌‌as‌‌principals.‌ ‌ People‌‌v.‌‌Madali‌ ‌ Annie's‌ ‌participation‌ ‌in‌ ‌the‌ ‌shooting‌ ‌of‌ ‌the‌ ‌victims‌ ‌consisted‌ ‌of‌‌ beaming‌ ‌her‌ ‌flashlight‌ ‌at‌ ‌them‌ ‌and‌ ‌warning‌ ‌her‌ ‌husband‌ ‌of‌ ‌the‌‌ presence‌‌of‌‌other‌‌persons‌‌in‌‌the‌‌vicinity.‌‌However,‌‌‌such‌‌assistance‌‌ merely‌‌facilitated‌‌the‌‌commission‌‌of‌‌the‌‌felonious‌‌acts‌‌of‌‌shooting.‌‌ Ricarte‌ ‌Madali‌ ‌could‌ ‌have‌ ‌nevertheless‌ ‌accomplished‌ ‌his‌‌ criminal‌‌acts‌‌without‌‌Annie's‌‌cooperation‌‌and‌‌assistance.‌ ‌ Neither‌ ‌may‌ ‌Annie's‌ ‌shouts‌ ‌of‌ ‌"here‌ ‌comes,‌ ‌here‌ ‌comes‌ ‌another,‌‌ shoot"‌‌be‌‌considered‌‌as‌‌having‌‌incited‌‌Ricarte‌‌to‌‌fire‌‌at‌‌the‌‌victims‌‌to‌‌ make‌ ‌Annie‌ ‌a‌ ‌principal‌ ‌by‌ ‌inducement‌.‌ ‌There‌ ‌is‌ ‌no‌ ‌proof‌ ‌that‌‌ those‌ ‌inciting‌ ‌words‌ ‌had‌ ‌great‌ ‌dominance‌ ‌and‌ ‌influence‌ ‌over‌‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 171‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ Madali.‌ ‌The‌ ‌fact‌ ‌that‌ ‌Annie‌ ‌dealt‌ ‌a‌ ‌blow‌ ‌on‌ ‌Agustin‌ ‌while‌ ‌he‌ ‌was‌‌ being‌‌dragged‌‌by‌‌Madali‌‌to‌‌their‌‌yard‌‌does‌‌‌not‌‌‌make‌‌her‌‌a‌‌principal‌‌ by‌ ‌direct‌‌participation‌.‌‌Annie's‌‌act,‌‌being‌‌previous‌‌to‌‌Madali's‌‌act‌‌ of‌ ‌shooting‌ ‌Agustin,‌ ‌was‌ ‌actually‌ ‌not‌ ‌indispensable‌ ‌to‌ ‌the‌ ‌crime‌‌ committed‌‌against‌‌Agustin.‌ ‌ People‌‌v.‌‌Balderama‌ ‌ Balderrama‌ ‌had‌ ‌great‌ ‌moral‌ ‌ascendancy‌ ‌and‌ ‌influence‌ ‌over‌ ‌the‌‌ accused‌ ‌Oscar.‌ ‌We‌ ‌are‌‌convinced‌‌that‌‌Oscar,‌‌who‌‌was‌‌not‌‌shown‌‌to‌‌ have‌‌any‌‌rancor‌‌against‌‌Nestor,‌‌would‌‌not‌‌have‌‌given‌‌the‌‌fatal‌‌thrust‌‌ had‌ ‌it‌ ‌not‌ ‌been‌ ‌for‌ ‌Ernesto's‌ ‌shout‌ ‌of‌ ‌"Birahin‌ ‌mo‌ ‌na"‌ ‌or‌ ‌"birahin‌‌ mo."‌ ‌ People‌‌v.‌‌Tampus‌‌and‌‌Montesclaros‌‌‌supra‌ ‌ The‌ ‌finding‌ ‌of‌ ‌guilt‌ ‌of‌ ‌Ida‌ ‌as‌ ‌an‌ ‌accomplice‌‌‌in‌‌the‌‌rape‌‌of‌‌ABC‌‌is‌‌ dependent‌ ‌on‌ ‌proving‌ ‌the‌ ‌guilt‌ ‌of‌ ‌the‌ ‌principal‌ ‌accused.‌ ‌All‌ ‌the‌‌ requisites‌ ‌concur‌ ‌in‌ ‌order‌ ‌to‌ ‌find‌ ‌Ida‌ ‌guilty‌ ‌as‌ ‌an‌ ‌accomplice‌ ‌to‌‌ Tampus‌ ‌in‌ ‌the‌ ‌rape‌ ‌of‌ ‌ABC.‌ ‌There‌ ‌was‌ ‌community‌ ‌of‌ ‌design‌‌ between‌ ‌Ida‌ ‌and‌ ‌Tampus‌ ‌to‌ ‌commit‌ ‌the‌ ‌rape‌ ‌of‌ ‌ABC.‌ ‌Ida‌ ‌had‌‌ knowledge‌ ‌of‌ ‌and‌ ‌assented‌ ‌to‌ ‌Tampus'‌ ‌intention‌ ‌to‌ ‌have‌ ‌sexual‌‌ intercourse‌‌with‌‌her‌‌daughter.‌‌She‌‌forced‌‌ABC‌‌to‌‌drink‌‌beer,‌‌and‌‌when‌‌ ABC‌ ‌was‌ ‌already‌ ‌drunk,‌ ‌she‌ ‌left‌ ‌ABC‌ ‌alone‌ ‌with‌ ‌Tampus,‌ ‌with‌ ‌the‌‌ knowledge‌‌and‌‌even‌‌with‌‌her‌‌express‌‌consent‌‌to‌‌Tampus'‌‌plan‌‌to‌‌have‌‌ sexual‌‌intercourse‌‌with‌‌her‌‌daughter.‌ ‌ It‌‌is‌‌settled‌‌jurisprudence‌‌that‌‌the‌‌previous‌‌acts‌‌of‌‌cooperation‌‌by‌‌the‌‌ accomplice‌ ‌should‌ ‌not‌ ‌be‌ ‌indispensable‌ ‌to‌ ‌the‌ ‌commission‌ ‌of‌ ‌the‌‌ crime;‌‌otherwise,‌‌she‌‌would‌‌be‌‌liable‌‌as‌‌a‌‌principal‌‌by‌‌indispensable‌‌ cooperation.‌ ‌The‌ ‌evidence‌ ‌shows‌ ‌that‌ ‌the‌ ‌acts‌ ‌of‌ ‌cooperation‌ ‌by‌‌ Ida‌‌are‌‌not‌‌indispensable‌‌to‌‌the‌‌commission‌‌of‌‌rape‌‌by‌‌Tampus.‌‌ First,‌ ‌because‌ ‌it‌ ‌was‌ ‌both‌ ‌Ida‌‌and‌‌Tampus‌‌who‌‌forced‌‌ABC‌‌to‌‌drink‌‌ beer,‌ ‌and‌ ‌second‌ ‌because‌ ‌Tampus‌ ‌already‌ ‌had‌ ‌the‌ ‌intention‌‌to‌‌have‌‌ sexual‌‌intercourse‌‌with‌‌ABC‌‌and‌‌he‌‌could‌‌have‌‌consummated‌‌the‌‌act‌‌ even‌‌without‌‌Ida's‌‌consent.‌ b.‌‌Conspiracy‌‌and‌‌proposal‌ ‌ Article‌ ‌8.‌ ‌Conspiracy‌ ‌and‌ ‌proposal‌ ‌to‌ ‌commit‌ ‌felony.‌ ‌—‌‌ Conspiracy‌ ‌and‌ ‌proposal‌ ‌to‌‌commit‌‌a‌‌felony‌‌are‌‌punishable‌‌only‌‌in‌‌ the‌‌cases‌‌in‌‌which‌‌the‌‌law‌‌specially‌‌provides‌‌a‌‌penalty‌‌therefor.‌ ‌ A‌ ‌conspiracy‌ ‌exists‌ ‌when‌ ‌two‌ ‌or‌ ‌more‌ ‌persons‌ ‌come‌ ‌to‌ ‌an‌‌ agreement‌ ‌concerning‌ ‌the‌ ‌commission‌ ‌of‌ ‌a‌ ‌felony‌ ‌and‌ ‌decide‌ ‌to‌‌ commit‌‌it.‌ ‌ 2. cooperate,‌ ‌is‌ ‌not‌ ‌enough‌ ‌to‌ ‌constitute‌ ‌one‌ ‌as‌ ‌a‌ ‌party‌ ‌to‌ ‌a‌‌ conspiracy,‌ ‌absent‌ ‌any‌ ‌active‌ ‌participation‌ ‌in‌ ‌the‌‌ commission‌ ‌of‌‌the‌‌crime‌,‌‌with‌‌a‌‌view‌‌to‌‌the‌‌‌furtherance‌‌of‌‌ the‌‌common‌‌design‌‌and‌‌purpose‌.‌ ‌ There‌ ‌is‌ ‌proposal‌ ‌when‌ ‌the‌ ‌person‌‌who‌‌has‌‌decided‌‌to‌‌commit‌‌a‌‌ felony‌‌proposes‌‌its‌‌execution‌‌to‌‌some‌‌other‌‌person‌‌or‌‌persons.‌ ‌ GR‌‌ ‌Conspiracy‌‌and‌‌proposal‌‌to‌‌commit‌‌a‌‌felony‌‌are‌‌NOT‌‌ 3. When‌ ‌conspiracy‌ ‌relates‌ ‌to‌ ‌a‌ ‌crime‌ ‌actually‌ ‌committed,‌ ‌it‌ ‌is‌‌ not‌ ‌a‌ ‌felony‌ ‌but‌ ‌only‌ ‌a‌ ‌manner‌ ‌of‌ ‌incurring‌ ‌criminal‌‌ liability‌.‌ ‌Thus,‌ ‌an‌ ‌act‌ ‌of‌ ‌one‌ ‌is‌ ‌the‌ ‌act‌ ‌of‌ ‌all.‌ ‌It‌ ‌is‌ ‌then‌ ‌not‌‌ punishable‌‌as‌‌a‌‌separate‌‌offense.‌ ‌ punishable.‌ ‌ EXC‌‌ Mere‌ ‌presence,‌ ‌knowledge,‌ ‌acquiescence‌ ‌to‌ ‌or‌ ‌agreement‌ ‌to‌‌ When‌‌the‌‌law‌‌specially‌‌provides‌‌a‌‌penalty‌‌therefor.‌ ‌ a. Conspiracy‌‌to‌‌commit‌‌treason‌‌(115);‌ ‌ b. Conspiracy‌ ‌to‌ ‌commit‌ ‌coup‌ ‌d’etat,‌ ‌rebellion‌ ‌or‌ ‌insurrection‌‌ conspirators‌ ‌actually‌ ‌hit‌ ‌and‌ ‌killed‌ ‌the‌ ‌victim.‌ ‌What‌ ‌is‌‌ (136);‌ ‌ important‌ ‌is‌ ‌that‌ ‌all‌‌participants‌‌‌performed‌‌specific‌‌acts‌‌ Conspiracy‌‌to‌‌commit‌‌sedition‌‌(141).‌ ‌ with‌ ‌such‌ ‌closeness‌ ‌and‌ ‌coordination‌ ‌as‌ ‌to‌ ‌unmistakably‌‌ indicate‌‌a‌‌common‌‌purpose‌‌or‌‌design‌‌to‌‌bring‌‌about‌‌the‌‌death‌‌ of‌‌the‌‌victim.‌ ‌ c. 4. Requisites‌‌of‌‌proposal‌ ‌ 1. A‌‌person‌‌has‌‌decided‌‌to‌‌commit‌‌a‌‌felony‌;‌‌and‌ ‌ 2. That‌ ‌he‌ ‌proposes‌ ‌its‌ ‌execution‌ ‌to‌ ‌some‌ ‌other‌ ‌person‌ ‌or‌‌ persons.‌ ‌ There‌‌is‌‌no‌‌criminal‌‌proposal‌‌when‌‌—‌ ‌ 1. The‌ ‌person‌ ‌who‌ ‌proposes‌ ‌is‌ ‌not‌ ‌determined‌‌to‌‌commit‌‌the‌‌ felony.‌ ‌ 2. There‌‌is‌‌no‌‌decided,‌‌concrete‌‌and‌‌formal‌‌proposal.‌ ‌ 3. It‌‌is‌‌not‌‌the‌‌execution‌‌of‌‌the‌‌felony‌‌that‌‌is‌‌proposed.‌ ‌ The‌‌‌proposal‌‌need‌‌not‌‌be‌‌accepted‌‌for‌‌the‌‌proponent‌‌to‌‌be‌‌criminally‌‌ liable.‌ ‌If‌ ‌the‌ ‌proposal‌ ‌is‌ ‌accepted,‌ ‌it‌ ‌may‌ ‌transform‌ ‌to‌ ‌a‌ ‌conspiracy‌‌ because‌ ‌there‌ ‌would‌‌then‌‌be‌‌an‌‌agreement‌‌and‌‌a‌‌decision‌‌to‌‌commit‌‌a‌‌ felony.‌ ‌ Conspiracy‌‌as‌‌a‌‌crime‌‌and‌‌as‌‌a‌‌mode‌‌of‌‌incurring‌‌ criminal‌‌liability‌ ‌ 1. Conspiracy‌ ‌exists‌ ‌when‌ ‌two‌ ‌or‌ ‌more‌ ‌persons‌ ‌come‌ ‌to‌ ‌an‌‌ agreement‌ ‌concerning‌ ‌the‌ ‌commission‌ ‌of‌ ‌a‌ ‌crime‌ ‌and‌‌ decide‌‌to‌‌commit‌‌it‌.‌‌Conspiracy,‌‌like‌‌the‌‌crime‌‌itself,‌‌must‌‌be‌‌ proven‌‌beyond‌‌reasonable‌‌doubt.‌‌ ‌ In‌ ‌a‌ ‌conspiracy,‌ ‌it‌ ‌is‌ ‌not‌ ‌necessary‌ ‌to‌ ‌show‌ ‌that‌ ‌all‌ ‌the‌‌ Requisites‌‌of‌‌conspiracy‌‌ ‌ 1. That‌‌two‌‌or‌‌more‌‌‌persons‌‌came‌‌to‌‌an‌‌agreement;‌ ‌ 2. The‌‌agreement‌‌concerned‌‌the‌c‌ ommission‌o ‌ f‌‌a‌‌felony;‌‌and‌ ‌ 3. That‌‌the‌‌execution‌‌of‌‌the‌‌felony‌‌be‌d ‌ ecided‌‌upon.‌ ‌ Kinds‌‌of‌‌conspiracy,‌‌their‌‌differences‌‌and‌‌similarities‌ ‌ In‌ ‌Fernan,‌ ‌Jr‌ ‌v.‌ ‌People‌,‌ ‌a‌ ‌prosecution‌ ‌of‌ ‌36‌ ‌accused‌ ‌for‌ ‌estafa‌‌on‌‌119‌‌ counts‌ ‌through‌ ‌falsification‌ ‌of‌‌public‌‌documents‌‌in‌‌order‌‌to‌‌commit‌‌a‌‌ series‌ ‌of‌ ‌highway‌‌scams‌‌through‌‌‌multiple‌‌conspiracies‌‌among‌‌them,‌‌ the‌‌SC‌‌categorized‌‌the‌‌structure‌‌of‌‌such‌‌multiple‌‌conspiracies‌‌thereof‌‌as‌‌ a‌‌guide‌‌for‌‌prosecution.‌ ‌ It‌ ‌adverted‌ ‌to‌ ‌Estrada‌‌v.‌‌Sandiganbayan‌‌wherein‌‌such‌‌structures‌‌were‌‌ named‌‌as:‌ ‌ 1) Wheel‌‌or‌‌circle‌‌conspiracy,‌‌in‌‌which‌‌there‌‌is‌‌a‌‌single‌‌person,‌‌ or‌‌‌hub‌,‌‌dealing‌‌individually‌‌with‌‌2‌‌or‌‌more‌‌persons‌‌or‌‌groups,‌‌ the‌‌spokes‌;‌‌and‌ ‌ 2) Chain‌ ‌conspiracy,‌ ‌usually‌ ‌involving‌ ‌the‌ ‌distribution‌ ‌of‌‌ narcotics‌ ‌and‌ ‌contraband,‌ ‌in‌ ‌which‌ ‌there‌ ‌is‌ ‌successive‌‌ communication‌‌and‌‌cooperation.‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 172‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ Extent‌‌of‌‌liability‌‌of‌‌conspirators‌ ‌ 1. All‌‌are‌‌liable‌‌for‌‌the‌‌felony‌‌agreed‌‌upon‌‌under‌‌the‌‌‌conspiracy‌‌ theory.‌ ‌ 2. Liable‌‌only‌‌for‌‌such‌‌other‌‌crimes‌‌which‌‌could‌‌be‌‌foreseen‌‌and‌‌ which‌ ‌are‌ ‌the‌ ‌natural‌ ‌and‌ ‌logical‌ ‌consequences‌ ‌of‌ ‌the‌‌ conspiracy,‌‌or‌f‌ oreseeable‌‌offenses.‌ ‌ directed‌‌against‌‌one‌‌and‌‌the‌‌same‌‌person‌‌is‌‌‌individual‌‌‌and‌‌‌not‌‌ collective‌,‌‌and‌‌that‌‌each‌‌of‌‌the‌‌participants‌‌is‌‌liable‌‌only‌‌for‌‌his‌‌ own‌ ‌acts.‌ ‌Consequently,‌ ‌Banisa‌ ‌must‌ ‌be‌ ‌absolved‌ ‌from‌ ‌criminal‌‌ responsibility‌ ‌for‌ ‌the‌ ‌assault‌ ‌on‌ ‌the‌ ‌victims.‌ ‌It‌‌is‌‌clear‌‌that‌‌neither‌‌ the‌ ‌victims‌ ‌nor‌ ‌Banisa‌ ‌could‌ ‌have‌ ‌anticipated‌ ‌Bangcado's‌ ‌act‌ ‌of‌‌ shooting‌ ‌the‌ ‌victims‌ ‌since‌ ‌the‌ ‌attack‌ ‌was‌ ‌sudden‌ ‌and‌ ‌without‌ ‌any‌‌ reason‌‌or‌‌purpose.‌‌Thus,‌‌the‌‌criminal‌‌design‌‌of‌‌Bangcado‌‌had‌‌not‌‌yet‌‌ been‌‌revealed‌‌prior‌‌to‌‌the‌‌killings.‌ ‌ Thus,‌ ‌when‌ ‌the‌ ‌agreement‌ ‌was‌‌to‌‌commit‌‌robbery,‌‌‌homicide‌‌ is‌‌foreseeable‌,‌‌whereas‌‌rape‌‌is‌‌NOT.‌ ‌ 3. A‌ ‌member‌ ‌of‌ ‌a‌ ‌band‌‌in‌‌a‌‌robbery‌‌‌en‌‌cuadrilla‌‌is‌‌liable‌‌for‌‌all‌‌ assaults,‌‌inclusive‌‌of‌‌homicide‌‌and‌‌rape,‌‌where‌‌he‌‌was‌‌present‌‌ when‌‌these‌‌other‌‌crimes‌‌were‌‌being‌‌committed‌‌but‌‌he‌‌did‌‌not‌‌ attempt‌‌to‌‌prevent‌‌the‌‌same‌‌(Art‌‌296‌‌par‌‌2),‌‌‌regardless‌‌‌if‌‌such‌‌ additional‌‌offenses‌‌were‌‌foreseeable‌‌or‌‌not.‌ ‌ 4. If‌‌both‌‌conspiracy‌‌to‌‌rob‌‌and‌c‌ uadrilla‌a‌ re‌‌present:‌ ‌ a. If‌‌a‌‌homicide‌‌is‌‌committed,‌‌the‌‌lookout‌‌is‌‌liable‌‌under‌‌ the‌‌conspiracy‌‌theory‌;‌ ‌ b. If‌‌a‌‌rape‌‌was‌‌committed‌‌in‌‌his‌‌presence‌‌and‌‌he‌‌did‌‌not‌‌ attempt‌ ‌to‌ ‌prevent,‌ ‌he‌ ‌will‌ ‌be‌ ‌liable‌ ‌under‌ ‌the‌‌ cuadrilla‌‌‌rule‌;‌ ‌ c. If‌ ‌the‌ ‌lookout‌ ‌was‌ ‌not‌ ‌present‌ ‌when‌ ‌homicide‌ ‌and‌‌ rape‌ ‌were‌ ‌committed,‌ ‌he‌ ‌will‌ ‌only‌ ‌be‌ ‌liable‌ ‌for‌ ‌the‌‌ homicide‌‌under‌‌the‌‌conspiracy‌‌theory‌.‌ ‌ Liability‌‌for‌‌prior‌‌acts‌ ‌ The‌‌liability‌‌of‌‌a‌‌conspirator‌‌for‌‌acts‌‌performed‌‌by‌‌his‌‌co-conspirators‌‌ before‌‌he‌‌joined‌‌the‌‌conspiracy‌‌depends‌‌on‌‌the‌‌nature‌‌of‌‌those‌‌acts:‌ ‌ 1. If‌ ‌the‌ ‌prior‌ ‌acts‌ ‌were‌ ‌the‌ ‌beginning‌ ‌of‌ ‌a‌ ‌felony‌ ‌which‌ ‌was‌‌ consummated‌‌after‌‌‌he‌‌joined,‌‌he‌‌is‌‌liable‌‌for‌‌prior‌‌acts;‌ ‌ 2. If‌ ‌they‌ ‌were‌ ‌separate‌ ‌felonies‌ ‌unrelated‌ ‌to‌ ‌those‌ ‌committed‌‌ after‌‌he‌‌joined,‌‌‌NOT‌‌liable‌;‌ ‌ People‌‌v.‌‌Bagano‌ ‌ For‌ ‌conspiracy‌ ‌to‌ ‌exist,‌ ‌it‌ ‌is‌ ‌sufficient‌ ‌that‌ ‌at‌ ‌the‌ ‌time‌ ‌of‌ ‌the‌‌ commission‌ ‌of‌ ‌the‌ ‌offense‌ ‌the‌ ‌accused‌ ‌had‌ ‌the‌ ‌same‌ ‌purpose‌ ‌and‌‌ were‌ ‌united‌ ‌in‌ ‌its‌ ‌execution.‌ ‌Proof‌ ‌of‌ ‌an‌ ‌actual‌ ‌planning‌ ‌of‌ ‌the‌‌ perpetuation‌‌of‌‌the‌‌crime‌‌is‌‌not‌‌a‌‌condition‌‌precedent‌.‌‌ ‌ From‌‌the‌‌mode‌‌and‌‌manner‌‌in‌‌which‌‌the‌‌offense‌‌was‌‌perpetrated,‌‌and‌‌ as‌‌can‌‌be‌‌inferred‌‌from‌‌their‌‌acts,‌‌it‌‌is‌‌evident‌‌that‌‌Bagano‌‌and‌‌Cañ ete‌‌ were‌ ‌one‌ ‌in‌ ‌their‌ ‌intention‌ ‌to‌ ‌kill‌ ‌Montecino.‌ ‌The‌ ‌fact‌ ‌that‌ ‌it‌ ‌was‌‌ Bagano‌ ‌who‌ ‌delivered‌ ‌the‌ ‌fatal‌ ‌blow‌ ‌on‌ ‌Montecino‌ ‌and‌ ‌Cañ ete's‌‌ participation‌ ‌was‌ ‌limited‌ ‌to‌ ‌a‌ ‌mere‌ ‌embrace‌ ‌is‌ ‌immaterial.‌‌ Conspiracy‌ ‌bestows‌ ‌upon‌ ‌them‌ ‌equal‌ ‌liability;‌ ‌hence,‌ ‌they‌ ‌shall‌‌ suffer‌‌the‌‌same‌‌fate‌‌for‌‌their‌‌acts.‌ ‌ People‌‌v.‌‌Verceles‌ ‌ Conspiracy‌ ‌has‌ ‌been‌ ‌sufficiently‌ ‌proved‌ ‌by‌ ‌the‌ ‌prosecution.‌‌ Accused-appellants‌ ‌were‌ ‌one‌ ‌in‌ ‌design‌ ‌with‌ ‌accused‌ ‌Mamerto‌‌ Soriano‌‌in‌‌taking‌‌personal‌‌properties‌‌belonging‌‌to‌‌others‌‌without‌‌the‌‌ latter’s‌ ‌consent‌ ‌by‌ ‌breaking‌ ‌one‌‌of‌‌the‌‌windows‌‌to‌‌be‌‌used‌‌as‌‌their‌‌ ingress.‌ ‌In‌ ‌the‌ ‌course‌ ‌of‌ ‌the‌ ‌robbery,‌ ‌one‌ ‌of‌ ‌them,‌ ‌particularly‌‌ Mamerto‌ ‌Soriano,‌ ‌succumbed‌ ‌to‌ ‌lustful‌‌desires‌‌and‌‌raped‌‌Maribeth‌‌ Bolito‌ ‌while‌ ‌accused-appellants‌ ‌just‌‌stood‌‌outside‌‌the‌‌door‌‌and‌‌did‌‌ nothing‌‌to‌‌prevent‌‌Mamerto‌‌Soriano.‌‌ ‌ Once‌ ‌conspiracy‌ ‌is‌ ‌established‌ ‌between‌ ‌two‌ ‌accused‌ ‌in‌ ‌the‌‌ commission‌‌of‌‌the‌‌crime‌‌of‌‌robbery,‌‌they‌‌would‌‌be‌‌both‌‌equally‌‌ culpable‌‌for‌‌the‌‌rape‌‌committed‌‌by‌‌one‌‌of‌‌them‌‌on‌‌the‌‌occasion‌‌ of‌‌the‌‌robbery‌,‌‌‌unless‌‌any‌‌of‌‌them‌‌proves‌‌that‌‌he‌‌endeavored‌‌to‌‌ prevent‌‌the‌‌other‌‌from‌‌committing‌‌the‌‌rape‌.‌‌ ‌ People‌‌v.‌‌Bangcado‌‌‌re‌‌Doctrine‌‌of‌‌Limited‌‌Liability‌ ‌ In‌‌the‌‌absence‌‌of‌‌any‌‌previous‌‌plan‌‌or‌‌agreement‌‌to‌‌commit‌‌a‌‌ crime,‌ ‌the‌ ‌criminal‌ ‌responsibility‌ ‌arising‌ ‌from‌ ‌different‌ ‌acts‌‌ People‌‌v.‌‌Compo‌ ‌ The‌‌mere‌‌presence‌‌of‌‌Lemuel,‌‌who‌‌was‌‌not‌‌shown‌‌to‌‌be‌‌armed,‌‌at‌‌the‌‌ scene‌ ‌of‌ ‌the‌ ‌crime‌ ‌does‌ ‌not‌ ‌connote‌ ‌conspiracy.‌ ‌Singularity‌ ‌of‌‌ purpose‌ ‌and‌ ‌unity‌ ‌in‌ ‌the‌ ‌execution‌ ‌of‌ ‌the‌ ‌unlawful‌ ‌objective‌‌ are‌‌essential‌‌to‌‌establish‌‌conspiracy‌.‌ ‌ Mere‌ ‌knowledge,‌ ‌acquiescence,‌ ‌or‌ ‌agreement‌ ‌to‌ ‌cooperate,‌ ‌is‌‌ not‌‌enough‌‌to‌‌constitute‌‌one‌‌as‌‌a‌‌party‌‌to‌‌a‌‌conspiracy,‌‌absent‌‌ any‌‌active‌‌participation‌‌in‌‌the‌‌commission‌‌of‌‌the‌‌crime,‌‌with‌‌a‌‌ view‌ ‌to‌ ‌the‌ ‌furtherance‌ ‌of‌ ‌the‌ ‌common‌ ‌design‌ ‌and‌ ‌purpose‌.‌‌ Conspiracy‌ ‌transcends‌ ‌companionship.‌ ‌The‌ ‌presence‌ ‌and‌ ‌company‌‌ of‌ ‌Lemuel‌ ‌were‌ ‌not‌ ‌necessary‌ ‌or‌ ‌essential‌ ‌to‌ ‌the‌ ‌perpetration‌‌of‌‌ the‌‌murder.‌ ‌ Garcia‌‌v.‌‌CA‌ ‌ Conspiracy‌ ‌was‌ ‌alleged‌ ‌in‌ ‌the‌ ‌information.‌ ‌Thus,‌ ‌it‌ ‌is‌ ‌not‌‌ necessary‌ ‌to‌ ‌allege‌ ‌with‌ ‌exactitude‌ ‌the‌ ‌specific‌ ‌act‌ ‌of‌ ‌the‌‌ accused,‌ ‌as‌ ‌it‌ ‌is‌ ‌a‌ ‌well-settled‌ ‌doctrine‌ ‌that‌ ‌in‌‌conspiracy‌‌the‌‌ act‌‌of‌‌one‌‌is‌‌the‌‌act‌‌of‌‌all.‌ ‌ Neither‌‌is‌‌the‌‌fact‌‌that‌‌the‌‌two‌‌others‌‌allegedly‌‌in‌‌conspiracy‌‌with‌‌the‌‌ petitioner‌‌were‌‌not‌‌named‌‌with‌‌particularity,‌‌nor‌‌tried‌‌and‌‌convicted,‌‌ of‌ ‌any‌ ‌moment.‌ ‌An‌ ‌information‌ ‌alleging‌ ‌conspiracy‌ ‌can‌ ‌stand‌‌ even‌ ‌if‌ ‌only‌ ‌one‌ ‌person‌ ‌is‌ ‌charged‌ ‌except‌ ‌that‌ ‌the‌ ‌court‌ ‌cannot‌‌ pass‌ ‌verdict‌ ‌on‌ ‌the‌ ‌co-conspirators‌ ‌who‌ ‌were‌ ‌not‌ ‌charged‌ ‌in‌ ‌the‌‌ information.‌ ‌ However,‌‌the‌‌mere‌‌fact‌‌that‌‌the‌‌petitioner‌‌had‌‌prior‌‌knowledge‌‌of‌‌the‌‌ criminal‌ ‌design‌ ‌of‌ ‌the‌ ‌principal‌ ‌perpetrator‌ ‌and‌ ‌aided‌ ‌the‌ ‌latter‌ ‌in‌‌ consummating‌ ‌the‌ ‌crime‌ ‌does‌ ‌not‌ ‌automatically‌ ‌make‌ ‌him‌ ‌a‌‌ co-conspirator.‌ ‌Both‌ ‌knowledge‌ ‌of‌ ‌and‌‌participation‌‌in‌‌the‌‌criminal‌‌ act‌ ‌are‌ ‌also‌ ‌inherent‌ ‌elements‌‌of‌‌an‌‌accomplice.‌‌‌In‌‌cases‌‌of‌‌doubt‌‌ as‌ ‌to‌ ‌whether‌ ‌persons‌ ‌acted‌ ‌as‌ ‌principals‌‌or‌‌accomplices,‌‌the‌‌ doubt‌‌must‌‌be‌‌resolved‌‌in‌‌their‌‌favor‌‌and‌‌they‌‌should‌‌be‌‌held‌‌ guilty‌‌as‌‌accomplices‌.‌ ‌ People‌‌v.‌‌Canturia‌⭐‌ ‌ Only‌‌Canturia‌‌should‌‌be‌‌held‌‌responsible‌‌for‌‌the‌‌crime‌‌because‌‌ he‌ ‌alone‌ ‌perpetrated‌ ‌the‌ ‌detestable‌ ‌crime‌ ‌of‌ ‌rape‌.‌‌The‌‌others‌‌ could‌‌not‌‌be‌‌held‌‌liable‌‌therefor.‌‌For‌‌while‌‌the‌‌evidence‌‌does‌‌show‌‌a‌‌ conspiracy‌ ‌among‌ ‌the‌ ‌accused,‌ ‌it‌ ‌also‌ ‌suggests‌ ‌that‌ ‌the‌ ‌agreement‌‌ was‌‌to‌‌commit‌‌robbery‌‌only;‌‌and‌‌there‌‌is‌‌no‌‌evidence‌‌that‌‌the‌‌other‌‌ members‌ ‌of‌ ‌the‌ ‌band‌ ‌of‌ ‌robbers‌ ‌were‌ ‌aware‌ ‌of‌ ‌Canturia's‌ ‌lustful‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 173‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ intent‌ ‌and‌ ‌his‌ ‌consummation‌ ‌thereof‌ ‌so‌ ‌that‌ ‌they‌ ‌could‌ ‌have‌‌ attempted‌‌to‌‌prevent‌‌the‌‌same.‌ ‌ Said‌‌other‌‌members‌‌of‌‌Canturia's‌‌band‌‌may‌‌and‌‌should‌‌be‌‌held‌‌guilty‌‌ of‌‌the‌‌crime‌‌of‌‌robbery‌‌by‌‌a‌‌band‌‌under‌‌Article‌‌294,‌‌No.‌‌5,‌‌in‌‌relation‌‌ to‌‌Article‌‌296.‌ ‌ c.‌‌Multiple‌‌offenders‌ ‌ ‌ Notwithstanding‌ ‌the‌ ‌fact‌ ‌that‌ ‌it‌ ‌was‌ ‌only‌ ‌Elison‌ ‌who‌ ‌dealt‌ ‌with‌‌or‌‌ personally‌‌transacted‌‌with‌‌private‌‌complainant‌‌until‌‌the‌‌time‌‌the‌‌sale‌‌ was‌‌consummated,‌‌by‌‌his‌‌own‌‌testimony‌‌petitioner‌‌admitted‌‌all‌‌the‌‌ acts‌ ‌by‌ ‌which‌ ‌he‌ ‌actively‌ ‌cooperated‌ ‌and‌‌not‌‌merely‌‌acquiesced‌‌in‌‌ perpetrating‌‌the‌‌fraud‌‌upon‌‌private‌‌complainant.‌‌That‌‌petitioner‌‌is‌‌a‌‌ conspirator‌‌having‌‌joint‌‌criminal‌‌design‌‌with‌‌Elison‌‌is‌‌evident‌‌from‌‌ the‌ ‌fact‌ ‌that‌ ‌as‌ ‌between‌ ‌them,‌ ‌both‌ ‌knew‌ ‌that‌ ‌petitioner‌ ‌was‌ ‌the‌‌ person‌ ‌selling‌ ‌the‌ ‌vehicle‌ ‌under‌ ‌the‌ ‌false‌ ‌pretense‌ ‌that‌ ‌a‌ ‌certain‌‌ Henry‌ ‌Austria‌ ‌was‌ ‌the‌ ‌registered‌ ‌owner.‌‌‌Petitioner,‌‌together‌‌with‌‌ Elison,‌ ‌clearly‌ ‌deceived‌ ‌private‌ ‌complainant‌ ‌in‌ ‌order‌ ‌to‌‌ defraud‌‌him.‌ ‌ People‌‌v.‌‌Rafael‌ ‌ Appellant's‌ ‌participation‌‌in‌‌the‌‌commission‌‌of‌‌the‌‌crimes‌‌consisted‌‌ of‌ ‌his‌ ‌presence‌ ‌at‌ ‌the‌ ‌locus‌ ‌criminis,‌ ‌and‌ ‌his‌ ‌shouting‌ ‌"‌Patayin,‌‌ patayin‌ ‌iran‌ ‌amen!‌"‌ ‌(Kill‌ ‌them‌ ‌all!)‌‌‌during‌‌the‌‌later‌‌stage‌‌of‌‌the‌‌ fatal‌ ‌incident‌.‌ ‌The‌ ‌prosecution‌ ‌witnesses‌ ‌did‌ ‌not‌ ‌see‌‌him‌‌bearing‌‌ any‌‌weapon‌‌or‌‌using‌‌one‌‌to‌‌inflict‌‌any‌‌injury‌‌on‌‌the‌‌victims.‌‌He‌‌did‌‌ not‌‌run‌‌away‌‌with‌‌the‌‌two‌‌other‌‌accused‌‌still‌‌at‌‌large.‌‌Thus,‌‌‌we‌‌are‌‌ far‌‌from‌‌convinced‌‌that‌‌conspiracy‌‌existed‌‌between‌‌appellant‌‌and‌‌ any‌ ‌of‌‌his‌‌sons.‌‌‌Relationship‌‌or‌‌association‌‌alone‌‌is‌‌NOT‌‌a‌‌ badge‌‌of‌‌conspiracy‌.‌‌ ‌ His‌ ‌acts,‌ ‌however,‌‌demonstrated‌‌his‌‌concurrence‌‌in‌‌their‌‌aggressive‌‌ design‌ ‌and‌ ‌lent‌‌support‌‌to‌‌their‌‌nefarious‌‌intent‌‌and‌‌afforded‌‌moral‌‌ and‌ ‌material‌ ‌support‌ ‌to‌ ‌their‌ ‌attack‌ ‌against‌ ‌the‌ ‌victims.‌ ‌Hence,‌‌we‌‌ are‌ ‌convinced‌ ‌he‌ ‌must‌ ‌be‌ ‌held‌ ‌liable‌ ‌as‌ a ‌ ccomplice‌ ‌in‌ ‌the‌‌ commission‌‌of‌‌the‌‌crimes.‌ ‌ Recidivist‌ Requires‌ ‌ Conviction‌‌a‌‌3rd‌‌time‌‌or‌‌oftener‌ ‌ 2nd‌‌conviction‌ ‌ Crimes‌ ‌ serious‌‌or‌‌less‌‌serious‌‌physical‌‌ injuries,‌‌robo,‌‌hurto,‌‌estafa‌‌or‌‌ falsification‌ ‌ Same‌‌title‌ ‌ Intervening‌‌ period‌ ‌ Within‌‌10‌‌years‌‌from‌‌his‌‌last‌‌ release‌‌or‌‌conviction‌‌for‌‌any‌‌of‌‌ specified‌‌crimes‌ ‌ immaterial‌ ‌ Succeeding‌‌ offense‌‌ committed‌ ‌ After‌c‌ onviction‌f‌ or‌‌preceding‌‌ offense‌ ‌ After‌c‌ ommission‌‌ of‌‌preceding‌‌ offense‌ ‌ Results‌‌in‌ ‌ Imposition‌‌of‌‌additional‌‌penalty‌ ‌ Aggravates‌‌crime‌ ‌ Sim‌‌v.‌‌CA‌‌‌re‌‌Implied‌‌Conspiracy‌ ‌ Conspiracy‌ ‌is‌ ‌deemed‌ ‌implied‌ ‌when‌ ‌the‌ ‌malefactors‌ ‌have‌ ‌a‌‌ common‌‌purpose‌‌and‌‌were‌‌united‌‌in‌‌its‌‌execution‌.‌‌Spontaneous‌‌ agreement‌‌or‌‌active‌‌cooperation‌‌by‌‌all‌‌perpetrators‌‌at‌‌the‌‌moment‌‌of‌‌ the‌ ‌commission‌ ‌of‌ ‌the‌ ‌crime‌ ‌is‌ ‌sufficient‌ ‌to‌ ‌create‌ ‌joint‌ ‌criminal‌‌ responsibility.‌ ‌ Habitual‌‌delinquent‌ ‌ Requisites‌‌of‌‌habitual‌‌delinquency‌ ‌ 1. 2. At‌ ‌least‌ ‌three‌ ‌of‌ ‌the‌ ‌specified‌ ‌crimes‌ ‌be‌ ‌present,‌ ‌on‌ ‌the‌‌ preceding‌ ‌2‌ ‌of‌ ‌which‌ ‌the‌‌accused‌‌has‌‌been‌‌convicted‌‌by‌‌final‌‌ judgment;‌ ‌ Interval‌ ‌between‌ ‌first‌ ‌conviction‌ ‌or‌ ‌release‌ ‌and‌ ‌the‌ ‌2nd‌‌ conviction‌ ‌must‌ ‌not‌ ‌exceed‌ ‌10‌ ‌years.‌ ‌Such‌ ‌interval‌ ‌must‌ ‌be‌‌ maintained‌‌for‌‌the‌‌succeeding‌‌offenses;‌ ‌ 3. The‌ ‌2nd‌‌felony‌‌must‌‌have‌‌been‌‌committed‌‌after‌‌conviction‌‌or‌‌ release‌ ‌in‌ ‌the‌ ‌first‌ ‌felony,‌ ‌and‌ ‌the‌ ‌3rd‌ ‌felony‌‌must‌‌have‌‌been‌‌ committed‌‌after‌‌conviction‌‌or‌‌release‌‌in‌‌the‌‌2nd‌‌felony.‌ ‌ ★ Offenses‌ ‌committed‌ ‌and‌ ‌convictions‌ ‌at‌ ‌or‌ ‌about‌ ‌the‌ ‌same‌ ‌time‌‌ shall‌ ‌be‌ ‌considered‌ ‌as‌ ‌only‌ ‌ONE‌ ‌in‌ ‌reckoning‌ ‌the‌ ‌required‌ ‌3‌‌ convictions.‌ ‌ Distinctions‌‌among‌‌the‌‌forms‌‌of‌‌repetition‌ ‌ Recidivism‌ ‌ Reiteracion‌‌ or‌‌Habituality‌ ‌ Quasi‌‌ Recidivism‌ ‌ Habitual‌‌ Delinquency‌ ‌ Offense‌‌which‌‌ the‌‌accused‌‌ was‌‌previously‌‌ convicted‌‌of‌‌ and‌‌of‌‌which‌‌ he‌‌is‌‌convicted‌‌ anew‌‌must‌‌be‌‌ embraced‌‌ under‌‌the‌‌ same‌‌Title‌o‌ f‌‌ the‌‌RPC.‌‌ ‌ Serving‌‌ sentence‌‌for‌‌an‌‌ Need‌‌not‌‌be‌‌ offense‌‌ embraced‌‌ punished‌‌ under‌‌the‌‌same‌‌ under‌‌the‌‌RPC‌‌ Title‌‌of‌‌the‌‌ or‌‌SPL,‌‌while‌‌ RPC;‌‌BOTH‌‌ the‌‌offense‌‌that‌‌ offenses‌‌ he‌‌commits‌‌ however‌‌must‌‌ while‌‌serving‌‌ be‌‌punished‌‌ sentence‌‌must‌‌ under‌‌the‌‌RPC‌.‌ ‌ be‌‌punished‌‌ under‌‌the‌‌RPC‌.‌ ‌ Previous‌‌ conviction‌‌by‌‌ final‌‌judgment‌‌ is‌‌enough.‌ ‌ Service‌‌of‌‌ sentence‌‌is‌‌ required.‌ ‌ Previous‌‌ conviction‌‌by‌‌ final‌‌judgment‌‌ is‌‌enough.‌ ‌ Previous‌‌ conviction‌‌by‌‌ final‌‌judgment‌‌ is‌‌enough.‌ ‌ No‌‌period‌‌ between‌‌ convictions.‌ ‌ No‌‌period‌‌ between‌‌ convictions.‌ ‌ No‌‌period‌‌ between‌‌ convictions.‌ ‌ Within‌‌10‌‌ years‌‌from‌‌ release‌‌or‌‌last‌‌ conviction‌ ‌ Generic‌‌ Aggravating‌ ‌ Generic‌‌ Aggravating‌ ‌ Special‌‌ Aggravating‌ ‌ Extraordinary‌‌ Aggravating‌ ‌ Can‌‌be‌‌offset‌ ‌ Can‌‌be‌‌offset‌ ‌ Can‌‌not‌‌be‌‌ offset‌ ‌ Can‌‌not‌‌be‌‌ offset‌ ‌ serves‌‌to‌‌ increase‌‌ penalty‌‌to‌‌ maximum‌‌ period.‌ ‌ serves‌‌to‌‌ increase‌‌ penalty‌‌to‌‌ maximum‌‌ period.‌ ‌ serves‌‌to‌‌ increase‌‌ penalty‌‌to‌‌ maximum‌‌ period.‌ ‌ Additional‌‌ penalty‌‌is‌‌ imposed.‌ ‌ Always‌‌ aggravating‌ ‌ Not‌‌always‌‌ aggravating‌ ‌ Always‌‌ aggravating‌ ‌ Additional‌‌ penalty‌‌always‌‌ imposed‌ ‌ Robbery,‌‌theft,‌‌ serious‌‌or‌‌less‌‌ serious‌‌PI,‌‌ estafa‌‌or‌‌ falsification‌ ‌ 4.‌‌Penalties‌ ‌ a.‌‌Imposable‌‌penalties‌ ‌ 1. The‌‌law‌‌must‌‌exist‌‌prior‌‌to‌‌the‌‌commission‌‌of‌‌the‌‌crime.‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 174‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ 2. Regardless‌‌of‌‌the‌‌number‌‌of‌‌aggravating‌‌circumstances,‌‌the‌‌penalty‌‌ cannot‌ ‌go‌ ‌higher‌ ‌than‌ ‌that‌ ‌prescribed‌‌by‌‌law,‌‌unless‌‌the‌‌nature‌‌of‌‌ the‌‌crime‌‌has‌‌changed.‌ ‌ 3. 4. 5. c. A‌‌person‌‌shall‌‌be‌‌deemed‌‌to‌‌be‌‌a‌‌‌habitual‌‌delinquent,‌‌if‌‌within‌‌a‌‌ Perpetual‌‌or‌‌temporary‌‌special‌‌disqualification‌ ‌ Suspension‌‌from‌‌public‌‌office‌‌the‌‌right‌‌to‌‌vote‌‌and‌‌ be‌‌voted‌‌for‌‌the‌‌profession‌‌or‌‌calling‌ ‌ prescribed‌ ‌by‌ ‌the‌ ‌law‌ ‌defining‌ ‌the‌ ‌crime,‌ ‌as‌ ‌there‌ ‌is‌ ‌another‌‌ provision‌‌of‌‌law‌‌providing‌‌such.‌ ‌ period‌‌of‌‌ten‌‌years‌‌from‌‌the‌‌date‌‌of‌‌his‌‌release‌‌or‌‌last‌‌conviction‌‌of‌‌ the‌‌crimes‌‌of‌‌serious‌‌or‌‌less‌‌serious‌‌physical‌‌injuries,‌‌robo,‌‌hurto,‌‌ estafa‌ ‌or‌ ‌falsification,‌ ‌he‌ ‌is‌ ‌found‌ ‌guilty‌ ‌of‌ ‌any‌ ‌of‌ ‌said‌ ‌crimes‌ ‌a‌‌ third‌‌time‌‌or‌‌oftener.‌‌(A ‌ rt‌‌62[5]‌)‌ ‌ The‌ ‌general‌ ‌rule‌ ‌is‌ ‌that‌ ‌penal‌ ‌laws‌ ‌shall‌ ‌have‌ ‌a‌ ‌retroactive‌ ‌effect‌‌ 8. Criminal‌‌liability‌‌under‌‌a‌‌repealed‌‌law‌‌‌subsists:‌ ‌ insofar‌‌as‌‌they‌‌favor‌‌the‌‌person‌‌guilty‌‌of‌‌a‌‌felony‌e‌ xcept‌ ‌ a. When‌‌the‌‌provisions‌‌of‌‌the‌‌former‌‌law‌‌are‌r‌ eenacted‌;‌ ‌ a. If‌‌the‌‌offender‌‌is‌‌a‌‌habitual‌‌delinquent;‌ ‌ b. When‌‌repeal‌‌is‌‌by‌i‌ mplication‌;‌‌OR‌ ‌ b. The‌‌new‌‌or‌‌amendatory‌‌law‌‌is‌‌not‌‌favorable‌‌to‌‌him;‌‌or‌ ‌ c. When‌‌there‌‌is‌‌a‌s‌ aving‌‌clause.‌ ‌ c. Retrospective‌‌application‌‌is‌‌expressly‌‌proscribed.‌ ‌ 7. The‌ ‌penalty‌ ‌for‌ ‌habitual‌ ‌delinquents‌ ‌may‌ ‌be‌ ‌higher‌ ‌than‌ ‌that‌‌ An‌‌ex‌‌post‌‌facto‌‌law‌‌‌is‌‌one‌‌which:‌‌ ‌ Penalty‌ ‌ and‌‌which‌‌was‌‌innocent‌‌when‌‌done,‌‌and‌‌punishes‌‌such‌‌an‌‌act;‌‌ ‌ b) aggravates‌ ‌a‌ ‌crime,‌ ‌or‌ ‌makes‌ ‌it‌ ‌greater‌ ‌than‌ ‌it‌ ‌was,‌ ‌when‌‌ committed;‌ ‌ c) changes‌ ‌the‌ ‌punishment‌ ‌and‌ ‌inflicts‌ ‌a‌ ‌greater‌ ‌punishment‌‌ than‌‌the‌‌law‌‌annexed‌‌to‌‌the‌‌crime‌‌when‌‌committed;‌ ‌ d) alters‌‌the‌‌legal‌‌rules‌‌of‌‌evidence‌,‌‌and‌‌authorizes‌‌conviction‌‌ Death‌ ‌ The‌‌favorable‌‌effect‌‌of‌‌a‌‌new‌‌law‌‌may‌‌find‌‌the‌‌defendant‌‌in‌‌one‌‌of‌‌ these‌‌situations:‌ ‌ c.‌‌Duration‌‌and‌‌effects‌ ‌ Time‌‌included‌‌in‌‌its‌ ‌ Penalties‌ ‌ entirety‌ ‌ Afflictive‌ ‌ Perpetual‌‌or‌‌temporary‌‌special‌‌disqualification‌ ‌ Arresto‌‌mayor‌ ‌ protection‌ ‌to‌ ‌which‌ ‌he‌ ‌has‌ ‌become‌ e‌ ntitled,‌ ‌such‌ ‌as‌ ‌the‌‌ protection‌ ‌of‌ ‌a‌ ‌former‌ ‌conviction‌ o ‌ r‌ ‌acquittal,‌ ‌or‌ ‌a‌‌ proclamation‌‌of‌‌amnesty.‌ ‌ As‌‌to‌‌Gravity‌ ‌ Capital‌ ‌ Perpetual‌‌or‌‌temporary‌‌absolute‌‌disqualification‌ ‌ e) assuming‌ ‌to‌ ‌regulate‌ ‌civil‌ ‌rights‌ ‌and‌ ‌remedies‌ ‌only,‌ ‌in‌ ‌effect‌‌ deprives‌ ‌a‌ ‌person‌ ‌accused‌ ‌of‌ ‌a‌ ‌crime‌ ‌of‌ ‌some‌ ‌lawful‌‌ Forfeiture‌o ‌ r‌‌confiscation‌‌of‌‌instruments‌‌and‌‌ proceeds‌‌of‌‌the‌‌offense‌ ‌ min‌ ‌ med‌ ‌ max‌ ‌ Reclusion‌‌temporal‌ ‌ Prision‌‌mayor‌ ‌ f) Indemnification‌ ‌ NB:‌ ‌RA‌ ‌9346‌ ‌abolished‌‌death‌‌penalty;‌‌converts‌‌death‌‌penalty‌‌to‌‌RP‌‌or‌‌ Life‌‌Imprisonment‌‌(P ‌ p‌‌v.‌‌Bon‌)‌ ‌ Reclusion‌‌perpetua‌ ‌ upon‌ ‌less‌ ‌or‌ ‌different‌ ‌testimony‌ ‌than‌ ‌the‌ ‌law‌ ‌required‌ ‌at‌ ‌the‌‌ time‌‌of‌‌the‌‌commission‌‌of‌‌the‌‌offense;‌ ‌ imposes‌ ‌penalty‌ ‌or‌ ‌deprivation‌ ‌of‌ ‌a‌ ‌right‌ ‌for‌ ‌something‌‌ which‌‌when‌‌done‌‌was‌‌lawful,‌‌and‌ ‌ Civil‌‌interdiction‌ ‌ Payment‌‌of‌‌costs‌ ‌ b.‌‌Classification‌ ‌ a) makes‌‌criminal‌‌an‌‌act‌‌done‌‌before‌‌the‌‌passage‌‌of‌‌the‌‌law‌‌ 6. Perpetual‌‌or‌‌temporary‌‌absolute‌‌disqualification‌ ‌ Sentence‌‌is‌‌being‌‌carried‌‌out.‌ ‌ Prisión‌‌correccional‌ ‌ Correctional‌ ‌ Suspension‌ ‌ Destierro‌ ‌ Arresto‌‌menor‌ ‌ Light‌ ‌ Public‌‌censure‌ ‌ Fine‌‌>‌‌1.2M‌ ‌ Afflictive‌ ‌ Fine‌‌of‌‌40K‌‌to‌‌1.2M‌ ‌ Reclusion‌‌ temporal‌ ‌ Prision‌‌ mayor,‌‌ absolute‌‌DQ‌‌ and‌‌special‌‌ temporary‌‌ DQ‌ ‌ Prosecution‌‌begins;‌ ‌ Fine‌‌<‌‌40K‌ ‌ Light‌ ‌ b. Sentence‌‌has‌‌been‌‌passed‌‌but‌‌service‌‌has‌‌not‌‌begun;‌ ‌ Bond‌‌to‌‌keep‌‌the‌‌peace‌ ‌ N/A‌ ‌ 6Y‌‌1D‌‌ ‌ to‌‌ ‌ 12Y‌ ‌ Prisión‌‌ 6M‌‌1D‌ ‌ correccional,‌‌ to‌‌ ‌ suspension‌‌ 6Y‌ ‌ and‌‌destierro‌ ‌ Correctional‌ ‌ a. 12Y‌‌1D‌‌ ‌ 12Y‌‌1D‌‌ ‌ 14Y‌‌8M‌‌1D‌‌ 17Y‌‌4M‌‌1D‌‌ to‌‌ ‌ to‌‌ ‌ to‌‌ ‌ to‌‌ ‌ 20Y‌ ‌ 14Y‌‌8M‌ ‌ 17Y‌‌4M‌ ‌ 20Y‌ ‌ Arresto‌‌ mayor‌ ‌ 1M‌‌1D‌‌ ‌ to‌ ‌ 6M‌ ‌ 6Y‌‌1D‌‌ ‌ to‌‌ ‌ 8Y‌ ‌ 8Y‌‌1D‌‌ ‌ to‌‌ ‌ 10Y‌ ‌ 10Y‌‌1D‌‌ ‌ to‌‌ ‌ 12Y‌ ‌ 6M‌‌1D‌‌ ‌ 2Y‌‌4M‌‌1D‌‌ to‌‌ ‌ to‌‌ ‌ 2Y‌‌4M‌ ‌ 4Y‌‌2M‌ ‌ 4Y‌‌2M‌‌1D‌‌ to‌ ‌ 6Y‌ ‌ 1M‌‌ ‌ to‌‌ ‌ 2M‌ ‌ 2M‌‌1D‌‌ ‌ to‌ ‌ 4M‌ ‌ 4M‌‌1D‌‌ ‌ to‌ ‌ 6M‌ ‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 175‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ Arresto‌‌ menor‌ ‌ 1‌‌-‌‌30D‌ ‌ 1‌‌-‌‌10D‌ ‌ 11‌‌-‌‌20D‌ ‌ 21‌‌-‌‌30D‌ ‌ Rules‌‌for‌‌the‌‌computation‌‌of‌‌penalties‌ ‌ ‌ In‌‌prison‌ ‌ Temporary‌‌ Penalties‌ ‌ Deprivation‌‌ of‌‌liberty‌ ‌ Other‌‌ penalties‌ ‌ Not‌‌in‌‌prison‌ ‌ From‌ ‌the‌ ‌day‌ ‌judgment‌‌ becomes‌‌final‌ ‌ ‌ ‌ Offender‌‌is‌‌placed‌‌at‌‌the‌‌ disposal‌‌of‌‌judicial‌‌ authorities‌‌for‌‌ enforcement‌‌of‌‌penalties‌ ‌ From‌ ‌the‌ ‌day‌ ‌offender‌ ‌commences‌ ‌to‌ ‌serve‌ ‌his‌‌ sentence‌ ‌ Preventive‌‌imprisonment‌ ‌ 1. 4. Credit‌‌for‌‌the‌‌penalty‌‌of‌‌‌reclusion‌‌perpetua‌‌shall‌‌be‌‌deducted‌‌from‌‌ 30‌‌years.‌ ‌ 5. a. Recidivists;‌ ‌ a. b. Those‌ ‌who‌ ‌failed‌ ‌to‌ ‌voluntarily‌ ‌surrender‌ ‌upon‌ ‌being‌‌ summoned‌‌for‌‌the‌‌execution‌‌of‌‌their‌‌sentence;‌ ‌ c. Habitual‌‌delinquents;‌ ‌ d. Escapees;‌ ‌ e. Those‌‌charged‌‌with‌h ‌ einous‌‌crimes.‌ ‌ c. with‌‌the‌‌assistance‌‌of‌‌counsel‌‌ ‌ d. to‌ ‌abide‌ ‌by‌ ‌the‌ ‌same‌ ‌disciplinary‌ ‌rules‌ ‌imposed‌ ‌upon‌‌ 1. a. When‌ ‌they‌ ‌are‌ ‌recidivists‌,‌ ‌or‌ ‌have‌ ‌been‌ ‌convicted‌‌ ii. b. c. a. Deprivation‌‌of‌ ‌ ii. iii. 2. Public‌‌office‌‌or‌‌employment;‌ ‌ b. Loss‌‌of‌‌all‌‌rights‌‌to‌‌retirement‌‌pay‌‌or‌‌other‌‌pension.‌ ‌ PTSD‌f‌ or‌‌public‌‌office,‌‌profession‌‌or‌‌calling‌ ‌ a. Deprivation‌ ‌of‌ ‌the‌ ‌office,‌ ‌employment,‌ ‌profession‌ ‌or‌‌ calling;‌ ‌ b. 3. under‌‌preventive‌‌imprisonment.‌ ‌ DQ‌‌for‌‌holding‌‌similar‌‌offices‌‌or‌‌employments.‌ ‌ PTSD‌f‌ or‌‌the‌‌exercise‌‌of‌‌right‌‌of‌‌suffrage‌ ‌ a. Deprivation‌‌of‌‌the‌‌right‌‌to‌‌vote‌‌and‌‌be‌‌voted‌‌upon;‌ ‌ Marital‌‌authority;‌ ‌ Right‌ ‌to‌ ‌manage‌ ‌his‌ ‌property‌ ‌and‌ ‌of‌ ‌the‌ ‌right‌ ‌to‌‌ NB:‌‌‌But‌‌can‌‌dispose‌‌by‌‌will‌‌or‌‌donation‌m ‌ ortis‌‌causa.‌ ‌ 6. Bonds‌‌to‌‌keep‌‌the‌‌peace‌ ‌ a. present‌ ‌two‌ ‌sufficient‌ ‌sureties‌ ‌who‌ ‌shall‌ ‌undertake‌ ‌that‌‌ such‌ ‌person‌ ‌will‌ ‌not‌ ‌commit‌ ‌the‌ ‌offense‌ ‌sought‌ ‌to‌ ‌be‌‌ prevented;‌ ‌ b. Loss‌‌of‌‌right‌‌to‌‌retirement‌‌pay‌‌or‌‌pension‌ ‌ a. Rights‌‌of‌‌parental‌‌authority‌‌or‌‌guardianship;‌ ‌ dispose‌‌of‌‌such‌‌property‌i‌ nter‌‌vivos.‌ ‌ DQ‌ ‌for‌ ‌the‌ ‌offices‌ ‌or‌ ‌public‌ ‌employments‌ ‌and‌ ‌for‌ ‌the‌‌ temporary‌D ‌ Qs‌‌last‌‌during‌‌term‌‌of‌‌the‌‌sentence,‌e‌ xcept‌:‌ ‌ When‌ ‌upon‌ ‌being‌ ‌summoned‌ ‌for‌ ‌the‌ ‌execution‌ ‌of‌ ‌their‌‌ Otherwise,‌ ‌he‌ ‌shall‌ ‌only‌ ‌be‌ ‌credited‌ ‌to‌ ‌four-fifths‌ ‌of‌ ‌his‌ ‌time‌‌ Right‌‌to‌‌vote‌‌or‌‌to‌‌be‌‌voted‌‌upon.‌ ‌ NB:‌ ‌Perpetual‌ ‌DQs‌ ‌last‌ ‌during‌ ‌lifetime‌ ‌of‌ ‌convict,‌ ‌while‌‌ sentence‌‌they‌‌have‌f‌ ailed‌‌to‌‌surrender‌‌voluntarily‌.‌ ‌ 3. Public‌‌office‌‌and‌‌employments,‌‌even‌‌if‌‌by‌‌election;‌ ‌ exercise‌‌of‌‌any‌‌of‌‌the‌‌rights‌‌mentioned;‌ ‌ previously‌‌twice‌‌or‌‌more‌‌times‌‌of‌‌any‌‌crime;‌‌and‌ ‌ b. having‌‌similar‌‌functions.‌ ‌ i. Deprivation‌‌of‌‌ ‌ i. If‌‌suspended‌‌from‌‌public‌‌office,‌‌cannot‌‌hold‌‌another‌‌office‌‌ 5. Civil‌‌interdiction‌ ‌ PTAD‌f‌ or‌‌public‌‌office‌ ‌ a. convicted‌‌prisoners,‌‌ ‌ except‌‌‌in‌‌the‌‌following‌‌cases:‌ ‌ b. PTSD‌‌=‌‌Perpetual‌‌or‌‌Temporary‌S ‌ pecial‌‌DQ.‌ ‌ undergone‌‌preventive‌‌imprisonment‌‌if‌‌the‌‌detention‌‌prisoner‌‌ ‌ after‌‌being‌‌informed‌‌of‌‌the‌‌effects‌‌thereof‌‌and‌‌ ‌ or‌‌calling,‌‌or‌‌right‌‌of‌‌suffrage;‌ ‌ PTAD‌‌=‌‌Perpetual‌‌or‌‌Temporary‌A ‌ bsolute‌D ‌ Q;‌ ‌ deprivation‌ ‌of‌ ‌liberty,‌ ‌with‌ ‌the‌ ‌full‌‌time‌‌‌during‌‌which‌‌they‌‌have‌‌ b. DQ‌‌from‌‌holding‌‌such‌‌office‌‌or‌‌exercising‌‌such‌‌profession‌‌ Effects‌‌of‌‌Penalties‌ ‌ Shall‌ ‌be‌ ‌credited‌ ‌in‌ ‌the‌ ‌service‌ ‌of‌ ‌their‌ ‌sentence‌ ‌consisting‌ ‌of‌‌ agrees‌‌voluntarily‌‌in‌‌writing‌‌ ‌ Suspension‌ ‌from‌ ‌public‌ ‌office,‌ ‌profession‌ ‌or‌ ‌calling,‌ ‌or‌ ‌the‌‌ right‌‌of‌‌suffrage‌ ‌ When‌ ‌the‌ ‌offense‌ ‌charged‌ ‌is‌‌nonbailable,‌‌or‌‌he‌‌cannot‌‌furnish‌‌the‌‌ a. 4. Cannot‌‌hold‌‌any‌‌public‌‌office.‌ ‌ These‌‌offenders‌‌are‌N ‌ OT‌e‌ ntitled‌‌to‌‌such‌‌credit:‌ ‌ required‌‌bail.‌ ‌ 2. b. deposit‌‌such‌‌amount‌‌in‌‌the‌‌office‌‌of‌‌the‌‌clerk‌‌of‌‌the‌‌court‌‌ to‌‌guarantee‌‌said‌‌undertaking;‌ ‌ c. If‌ ‌offender‌ ‌fails‌ ‌to‌ ‌give‌ ‌the‌ ‌bond‌ ‌as‌ ‌required‌ ‌he‌ ‌shall‌ ‌be‌‌ detained‌ ‌for‌ ‌a‌ ‌period‌ ‌which‌ ‌shall‌ ‌in‌ ‌no‌ ‌case‌ ‌exceed‌ ‌six‌‌ months‌,‌ ‌if‌ ‌he‌ ‌shall‌ ‌have‌ ‌been‌ ‌prosecuted‌ ‌for‌‌a‌‌‌grave‌‌or‌‌ less‌‌grave‌‌felony,‌‌and‌‌shall‌‌not‌‌exceed‌‌‌thirty‌‌days,‌‌if‌‌for‌‌a‌‌ light‌‌felony.‌ ‌ Effects‌‌of‌‌pardon‌ ‌ 1) shall‌‌not‌‌work‌‌the‌‌restoration‌‌of‌‌the‌‌right‌‌to‌‌hold‌‌public‌‌office,‌‌ or‌ ‌the‌ ‌right‌ ‌of‌ ‌suffrage,‌ ‌unless‌ ‌such‌ ‌rights‌ ‌be‌ ‌expressly‌‌ restored‌‌by‌‌the‌‌terms‌‌of‌‌the‌‌pardon.‌ ‌ 2) shall‌ ‌in‌ ‌no‌ ‌case‌ ‌exempt‌ ‌the‌ ‌culprit‌ ‌from‌ ‌the‌ ‌payment‌ ‌of‌ ‌the‌‌ civil‌‌indemnity‌‌imposed‌‌upon‌‌him‌‌by‌‌the‌‌sentence.‌ ‌ Based‌‌on‌‌the‌‌Books‌‌of‌A ‌ quino,‌‌Sundiang,‌‌Miravite,‌‌De‌‌Leon,‌‌R ‌ eyes,‌‌Regalado,‌‌Campanilla‌ ‌ ‌ by‌R ‌ GL‌ ‌ 176‌o ‌ f‌‌‌249‌ ‌ COM‌xC ‌ RM‌ ‌ PRE-WEEK‌‌NOTES‌‌ For‌‌the‌‌2020/21‌‌#BestBarEver‌ ‌ ‌ 6. 7. What‌‌are‌‌not‌‌penalties‌ ‌ Limitations‌‌upon‌‌its‌‌exercise‌ ‌ a. Only‌‌after‌‌conviction;‌ ‌ b. Does‌‌not‌‌extend‌‌to‌‌cases‌‌of‌‌impeachment.‌ ‌ The‌‌arrest‌‌and‌‌temporary‌‌detention‌‌of‌‌accused‌‌persons,‌‌as‌‌well‌‌ as‌‌their‌‌detention‌‌by‌‌reason‌‌of‌‌insanity‌‌or‌‌imbecility,‌‌or‌‌illness‌‌ requiring‌‌their‌‌confinement‌‌in‌‌a‌‌hospital.‌ ‌ 2. The‌ ‌commitment‌ ‌of‌ ‌a‌ ‌minor‌ ‌to‌ ‌any‌ ‌of‌ ‌the‌ ‌institutions‌‌ When‌‌the‌‌‌principal‌‌‌penalty‌‌is‌‌remitted‌‌by‌‌pardon,‌‌‌only‌‌the‌‌effect‌‌ of‌ ‌that‌‌principal‌‌penalty‌‌is‌‌extinguished,‌‌but‌‌not‌‌the‌‌accessory‌‌ penalties‌ ‌attached‌ ‌to‌ ‌it,‌ ‌except‌ ‌when‌ ‌an‌ ‌absolute‌ ‌pardon‌ ‌is‌‌ granted‌‌‌after‌‌the‌‌term‌‌of‌‌imprisonment‌‌has‌‌expired‌,‌‌everything‌‌ is‌‌removed.‌ ‌ Pardon‌‌by‌ ‌ Applicable‌‌to‌ ‌ President‌ ‌ Any‌‌crimes‌ ‌ Offended‌‌party‌ ‌ As‌‌to‌‌civil‌‌liability‌ ‌ Does‌‌not‌‌affect‌ ‌ Extinguishes‌ ‌ As‌‌to‌‌conditions‌ ‌ May‌‌be‌‌absolute‌‌ Not‌‌subject‌‌to‌‌conditions‌ ‌ or‌‌conditional‌ ‌ Must‌‌be‌‌given‌ ‌ After‌‌conviction‌ ‌ Before‌‌institution‌‌of‌‌case‌ ‌ 4. Any‌‌party‌ ‌ Only‌‌bars‌‌prosecution‌ ‌ In‌‌adultery‌‌or‌‌ concubinage,‌‌must‌‌be‌‌ given‌‌to‌‌both‌‌offenders.‌ ‌ Pecuniary‌‌liabilities‌ ‌ In‌‌case‌‌the‌‌property‌‌of‌‌the‌‌offender‌‌should‌‌not‌‌be‌‌sufficient‌‌for‌‌the‌‌ payment‌‌of‌‌all‌‌his‌‌pecuniary‌‌liabilities,‌‌the‌‌same‌‌shall‌‌be‌‌met‌‌in‌‌the‌‌ following‌o ‌ rder‌:‌ ‌ a. The‌‌reparation‌o ‌ f‌‌the‌‌damage‌‌caused.‌ ‌ b. Indemnification‌o ‌ f‌‌consequential‌‌damages.‌ ‌ c. The‌‌fine‌.‌ ‌ d. The‌‌cost‌o ‌ f‌‌the‌

3-COMxCRM Commercial and Criminal Laws PRE-WEEK NOTES

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