1
In February 2021, news outlets and the media broke the story of the hacking of the
account of Bangladesh Bank with the Federal Reserve Bank of New York where
somehow, US$81,000,000.00 found its way to the Philippine banking system. Based
on
the incident report prepared by the Bangladesh Bank, the beneficiaries of the
fraudulent
transfer had four accounts with Data Bank (DB).
Investigation by the Anti-Money Laundering Council (AMLC) revealed that the
withdrawals from the four DB accounts were eventually transferred to Mr.
Skywalker's account amounting to US$65,668,664.37. This amount was credited to
Remit Mo's account, a remittance company, upon Mr. Skywalker's instructions. The
other US$15,215,977.26 was also credited to Remit Mo's account on the same day.
Remit Mo
was informed by Mr. Skywalker that he intended to take advantage of the influx of
Chinese casino players for the Chinese New Year. Hence, upon Mr. Skywalker's
instructions, Remit Mo delivered US$29,000,000.00 to Blueberry Resorts and
Hotels, Inc.'s (BRHI) BDO Account No. 123456789.
Upon finding of probable cause that BRHI’s BDO Account No. 123456789 was
related to the unlawful activity of hacking, the AMLC issued a resolution
authorizing the AMLC Secretariat to file, through the Office of the Solicitor General,
an ex parte petition for the issuance of a freeze order against the subject account.
On March 15, 2021, the Court of Appeals issued the freeze order effective for 20
days. Upon motion by the AMLC, the Court of Appeals extended the freeze order
for six months from March 15,2021, or until September 15, 2021.
Due to complexity of the case, the financial investigation was not yet completed by
September 15, 2021, prompting the AMLC to file a motion requesting an extension
of another six months of the freeze order, from September 15, 2021 to March 15,
2022.
Should the Court of Appeals grant the motion? Explain.
The Motion for Extension filed by the AMLC should be denied.
Under the Anti-Money Laundering Act, the total period of the freeze order issued
by the Court of Appeals shall not exceed six months.
Here, the Court of Appeals already approved the Motion for Extension filed by the
AMLC extending the freeze order for six months from March 15, 2021. Thus, approving
the subsequent Motion for Extension of the Freeze Order will be contrary to the period
prescribed by the Act.
Therefore, the Court of Appeals should not grant the motion for being contrary to
the prescribed period under the Anti-Money Laundering Act.
2
In 2015, a year before the 2016 presidential elections, reports abounded on the
supposed disproportionate wealth of then Vice President Din Djarin and the rest of
his family, some of whom were likewise elected public officers. From various news
reports announcing the inquiry into then Vice President Djarin's bank accounts,
including accounts of members of his family, through a petition for bank inquiry
filed by Anti-Money Laundering Council with the Court of Appeals, Katan Djarin
Grogu Law Firm (KDG) was most concerned with the article published in the Manila
Times on 25 February 2015. The following day, 26 February 2015, KDG wrote the
Court of Appeals requesting for copy of petition and relevant documents. The
Court of Appeals wrote back and informed that any such petition, if it exists, is
strictly confidential.
Forestalled in the Court of Appeals thus alleging that it had no ordinary, plain,
speedy, and adequate remedy to protect its rights and interests in the purported
ongoing unconstitutional examination of its bank accounts by Anti-Money
Laundering Council (AMLC), KDG undertook direct resort to the Supreme Court via
petition for certiorari and prohibition on the ground that the provisions on bank
inquiry under Anti-Money Laundering Act is unconstitutional insofar as it allows
the examination of a bank account without any notice to the affected party thereby
violating the person’s right to due process and the person’s right to privacy. Rule
on the petition.
I will deny the petition for certiorari and prohibition on the ground that the provisions on
bank inquiry under Anti-Money Laundering Act is unconstitutional.
The ground that the subject provisions violate the person’s right to due process is not
meritorious. The Supreme Court once ruled that the investigation and determination of
possible money laundering offenses by the AMLC are mere duties afforded by law as an
investigative body. Here, the inquiry of the bank accounts which is allowed by court is
valid and does violate the right to due process.
The second ground invoking the right to privacy is also not meritorious. Under the AntiMoney Laundering Act, the authority to inquire and examine accounts shall be in
accordance with the Constitution. Here, the examination of Djarin’s and family members’
accounts were made in consideration of their constitutional rights and the state policies.
Accordingly, the examination of a bank account is not violative of a person’s right to
privacy.
Therefore, I will deny the petition for certiorari and prohibition.
3
X's "MINI-MINE" burgers are bestsellers in the country. Its "MINI-MINE" logo, which
bears the color blue, is a registered mark and has been so since the year 2010. Y,
a competitor of X, has her own burger which she named "PA-MINE-PO" and her
logo thereon is printed in bluish-green. When X sued Y for trademark infringement,
the trial court ruled in favor of the plaintiff by applying the Holistic Test. The court
held that Y infringed on X's mark since the dissimilarities between the two marks
are too trifling and frivolous such that Y's "PA-MINE-PO," when compared to X's
"MINI-MINE," will likely cause confusion among consumers. Was the court correct
in applying the Holistic Test? Explain.
No, the court was incorrect for applying the Holistic Test. The court should have applied
the Dominancy Test.
Jurisprudence provides that Holistic Test is not incorporated in the Intellectual Property
Code and thus has been abandoned. Thus, the Dominancy Test should prevail because
it has been incorporated in the Intellectual Property Code. Here, the Court erred in
deciding based on the dissimilarities between the two marks. The Court should have
greater weight to the resemblance of the two marks which would likely cause confusion
among consumers.
Therefore, the court was incorrect for applying the Holistic Test.
4
STPI is a local association of motorized banca owners and operators ferrying
passengers from Talisay City to Taal Volcano in Batangas and back. Mario and
Pedro were members and officers of STPI.
The Board of Trustees of STPI passed a resolution to suspend the rights and
privileges of Mario and Pedro for thirty (30) days for their refusal to pay their
membership dues and berthing fees. Mario and Pedro filed a case in court arguing
that the Board of Trustees committed an ultra vires act in suspending their rights
and privileges since STPI’s articles of incorporation and by-laws were bereft of any
provision that grants power upon its Board to impose disciplinary actions on its
delinquent officers and/or members. Was the argument of Mario and Pedro
correct? Why?
No, the argument of Mario and Pedro was not correct because the Board of Trustees did
not commit an ultra vires act.
Under the Corporation Code, a corporation may exercise powers as may be provided by
the Code unless such acts are reasonably necessary for the interest of the corporation.
In this case, the rights and privileges of Mario and Pedro as members were suspended
for their refusal to pay their membership dues and berthing fees. The Board of Trustees
did not commit an ultra vires act in suspending their rights and privileges because the
imposition of disciplinary actions against Mario and Pedro are reasonably necessary for
the interest of STPI.
Therefore, the argument of Mario and Pedro was not correct.
5
Jurists Review Center Inc. owns and operates the Jurists Bar Review Center, a
review center which provides bar review lectures and coaching for those intending
to take the bar examination. Jurists Review Center Inc. applied with the Intellectual
Property Office for the registration as a trademark of “Jurists Bar Review Center.”
The examiner denied the trademark application on the ground that the word
“Jurists” is a generic or descriptive term. Was the denial of the trademark
application proper? Explain.
No, the denial of the trademark application was improper because the word “Jurists” is
not a generic or descriptive term.
Under the Intellectual Property Code, a mark cannot be registered if it consists exclusively
of signs that are generic for the goods or services to which it is incorporated.
Here, the word “Jurists” is not a generic nor a descriptive term for the services which the
Jurists Review Center wishes to offer. It does not tell nor describe what goods or services
Jurists Review Center has.
Therefore, the denial of trademark application was improper.
6
Alex was an incorporator in Scriptoria Corporation (Scriptoria for brevity), a
corporation which Alex and his friends incorporated for the purpose of engaging
in the call-center business. Alex invested 10 million as paid-up capital ₱ in
Scriptoria. After incorporation, Scriptoria obtained a 10-year ₱50 million peso loan
from Citibank. As security for the loan, Scriptoria executed a real estate mortgage
in favor of Citibank over its parcel of land in Dasmariñas, Cavite.
Scriptoria’s business did not prosper and it sustained heavy losses within 3 years
from its incorporation. Alex wants the corporation to return his ₱10 million
investment. All the other stockholders have no objection to returning Alex’s
investment to him. May the corporation return Alex’s investment to him? Explain.
7
X applied for life insurance with Metropolitan Life Insurance Company. The
application contained this question: “Have you ever had any ailment or disease of the
stomach or intestines, liver, kidney or genitourinary organ?” X, a laundry woman who
has no medical knowledge answered “No.” The application was approved and the
premium was paid. Six months after the issuance of the policy, X died from stomach
cancer. The post-mortem examination of X shows that she had the cancer at the time
she applied for the policy. Can the beneficiary of X collect on the policy? Explain.
Yes, the beneficiary of X can collect on the policy.
Under the Insurance Code, the beneficiary of an insurer is not entitled to the
insurance proceeds when there is concealment.
Here, there was no intent to conceal the medical condition of X because she has
no medical knowledge of her condition.
Therefore, Yes, the beneficiary of X can collect on the policy.
8
A.M. Trucking, a small company, operates two trucks for hire on selective basis.
It caters to only a few customers, and its trucks do not make regular or scheduled trips.
It does not even have a certificate of public convenience. On one occasion, Reynaldo
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contracted AM to transport, for a fee, 100 sacks of rice from Manila to Baguio City.
However AM failed to deliver the cargo, because its truck was carnapped in the parking
lot of a restaurant in Tarlac City while the driver was having lunch. Reynaldo seeks to
recover from AM the value of the rice but AM contends that it is not liable as a common
carrier and even granting that it is a common carrier, the loss of the rice was due to a
fortuitous cause. May Reynaldo recover the value of the rice from AM?
No, Reynald may not recover the value of the rice from AM.
Under the Transportation Law, it is a general rule that common carriers are liable
for the destruction, loss, or deterioration unless it is caused by the act of the enemy.
Here, the vehicle was carnapped resulting to the loss of the rice.
Therefore, Reynald may not recover the value of the rice from AM.
9
Upon learning that his nephew Lex Magtanggol had passed the 2020-2021 bar
exam, Tito Magtanggol sent by text to Lex through his iPhone the following message:
“Because of the pride that you have brought to our clan, I donate to you ₱500,000!” Lex
texted back (also through his iPhone), “Thanks, Uncle Tito! That’s so generous of you!”
Tito texted back, “You’re welcome, Attorney Magtanggol!”
However, Tito died the next day, leaving behind an estate with an estimated
value of ₱900 million.
May Lex successfully file a money claim for the donation in the proceedings for
the settlement of Tito’s estate?
Yes, Lex may successfully file a money claim for the donation in the proceedings
for the settlement of Tito’s estate.
Under the Laws on Donations, a donation of a movable property amounting to
more than ₱5,000 must be reduced in writing. Furthermore, the Electronic Commerce
Act provides that when a law requires for a document to be in writing, that requirement
is satisfied by an electronic document.
Here, the donation of Tito Magtanggol amounting to ₱500,000 was accepted by
Lex in writing through text messages. The text messages are considered electronic
documents. Thus, the donation is valid.
Therefore, Lex may successfully file a money claim for the donation.
10
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Professor Charles Queensfield lectures before lawyers in Mandatory Continuing
Legal Education (MCLE) seminars on the field of Banking Law & Practice. In the course
of his lectures, Prof. Queensfield gives hand-outs to the attendees on the contents of
his lectures. Prof. Queensfield cautions the attendees that the hand-outs he is giving
are for their exclusive use and should not be disseminated without his express written
consent. However, no copies of his handouts were registered and deposited with the
National Library and the Supreme Court library. One of the attendees, Atty. James
Hurt, uploaded without Prof. Queensfield’s consent his handouts to the website,
www.scribd.com, where they can be viewed and downloaded by anyone who visits the
website. What crime, if any, did Atty. James Hurt commit? Explain.
Atty. James Hurt committed two crimes: copyright infringement and online piracy.
Under the Intellectual Property Code, a person who reproduced or publicly
displayed a copyrighted work without the owner’s permission is liable for copyright
infringement. Here, Atty. James Hurt uploaded Prof. Queensfield’s handouts without his
consent despite the caution that the handouts are for their exclusive use and should not
be disseminated without the author’s consent. The fact that the handouts were not
registered and deposited with the National Library and the Supreme Court Library are
immaterial. Therefore, Atty. James Hurt is liable for copyright infringement.
Furthermore, Atty. James Hurt committed online piracy. Under the Electronic
Commerce Act, the reproduction or distribution of a protected work through the use of
Internet constitutes online piracy. Here, Atty. James Hurt uploaded the protected work of
Prof. Queensland infringing his property rights. Therefore, Atty. James Hurt is liable for
online piracy.
11
Plaintiffs filed a collection action against X Corporation. Upon execution of the
court’s decision, X Corporation was found to be without assets. Thereafter, plaintiffs
filed an action against its present and past stockholder Y Corporation which owned
substantially all of the stocks of X Corporation. The two corporations have the same
board of directors and Y Corporation financed the operations of X Corporation. May Y
Corporation be held liable for the debts of X Corporation? Why?
Yes, Y Corporation may be held liable for the debts of X Corporation.
Under the Corporation Law, the Doctrine of Piercing the Corporate Veil applies
when the notion of a legal entity is used to defeat public convenience, justify a wrong,
defend crime or protect fraud.
Here, Y Corporation owned substantially all the stocks of X Corporation and the
two corporations have the same board of directors. This proves that X Corporation is an
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extension of Y Corporation’s personality. Also, Y financed and controls the operations of
X.
Therefore, Y Corporation may be held liable for the debts of X Corporation.
12
Crypfinex Corp. is a corporation incorporated in Singapore. It invested in
Bonniebee Corp., a Philippine corporation operating a fast-food chain, by acquiring 30%
of its shares. As a result, Crypfinex Corp. nominated 30% of the directors of Bonniebee
Corp., all of whom are Singaporeans and officers of Crypfinex Corp. A minority
stockholder of Bonniebee Corp. filed a complaint with the SEC against Crypfinex for
investing in Bonniebee without obtaining a license to do business. Will the complaint
prosper?
13
Author Y died on 3 February 2014. May Bozania Publishing Company publish
Y’s books on 18 July 2064 without getting his heir’s authorization?
No, Bozania Publishing Company cannot publish Y’s books without getting any
his heir’s authorization because it falls within the 50-year term.
Under the Intellectual Property Code, the copyright of literary and artistic works
shall be protected during the author’s lifetime and for fifty years after his death which will
be counted on the first day of January of the succeeding year.
Considering that Y died on 2014, the 50-year term will be counted from January
1, 2015 and will expire on January 1, 2065.
Therefore, Bozania cannot publish Y’s books without getting his heir’s
authorization.
14
Mr. X purchased a ticket from AirB Airlines for his trip to United States with
stopover in Dubai, United Arab Emirates (UAE). He purchased the ticket in the office of
AirB Airlines in Makati. He departed from NAIA on January 1, 2022. He stayed in the
UAE for a couple of days. However, on 3 January 2022, the airplane of AirB Airlines
crash landed in the airport in the United States. Mr. X was severely injured during the
crash landing because he hit his head on the window. Mr. X underwent a series of
operations to treat his injuries. Mr. X seasonably filed a notice of claim against AirB
Airlines claiming that he suffered damages by way of medical expenses in the total
amount that is equivalent to 50,000 Special Drawing Rights (SDR). He is also asking for
exemplary damages in the amount of P1,000,000.00. Assume that the United States,
the Philippines and UAE are members of the Montreal Convention of 1999. AirB denied
the claim on the ground that AirB and its employees and agents were not negligent.
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a) Is the denial of the claim for damages for medical expenses justified?
No, the denial of the claim for damages for medical expenses is not justified.
Under the Transportation Law, the carrier’s liability with respect to the damages
suffered as a result of death or physical injuries is limited to 128, 821 Special Drawing
Rights.
Here, the total amount of medical expenses is equivalent to only 50, 000 Special
Drawing Rights which is below the limit of the carrier’s liability.
Therefore, the denial of the claim for damages for medical expenses is not
justified.
b) What about the denial of the claim for exemplary damages, is the same
justified?
Yes, the denial of the claim for damages for exemplary damages is justified.
Under the Transportation Law, the carrier’s liability with respect to the damages
suffered as a result of death or physical injuries is limited to 128, 821 Special Drawing
Rights.
Here, X is asking for exemplary damages in the amount of P1,000,000.00 which
is beyond the limit of the carrier’s liability.
Therefore, the denial of the claim for damages for exemplary damages is
justified.
15
After one year of operation, Safe Realty, Inc., wanted to declare dividends to its
stockholders. Ramos, its President, asked Santos, its Treasurer, whether this is
feasible, considering the financial standing of the corporation. Santos reported that the
corporation posted a 1M profit and its real estate has appreciated ₱ in value to the tune
of ₱4M. The Board then declared dividends to its stockholders computed on the basis
of the ₱5M representing profits and appreciation in value of its real estate. Is the
dividend declaration proper? Explain.
No, the declaration is not proper because of the absence of the approval of its
stockholders.
Under the Revised Corporation Code, the declaration of dividend should be
approved by the stockholders representing at least 2/3 of the outstanding capital stock
at a regular or special meeting duly called for that purpose.
Here, the Board declared the dividends without the approval of its stockholders
which is contrary to the Revised Corporation Code.
Therefore, the declaration is not proper.
16
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The legitimate wife and children of the deceased Lothario Casanova are asking
for either revocation or reduction in the insurance proceeds because Lothario
designated his concubine and illegitimate children as beneficiaries in his life insurance
policy. Lothario’s wife and legitimate children demand that the insurer turn over the
insurance proceeds to them. May the insurance proceeds be turned over to Lothario’s
legitimate wife and children?
No, the insurance proceeds may not be turned over to Lothario’s legitimate wife
and children because they are not the designated beneficiaries in the insurance policy.
Under the Insurance Code, the insurance proceeds shall apply exclusively to the
interest of the designated beneficiaries in the policy unless otherwise stated.
Here, insurer Lothario validly designated his concubine and illegitimate children
as beneficiaries in his life insurance policy. The legitimate wife and children of Lothario
cannot ask for the revocation or reduction of the insurance proceeds for being third
parties of the contract. Also, insurance contracts are governed by the Insurance Code,
not by the Civil Code.
Therefore, the insurance proceeds may not be turned over to Lothario’s wife and
legitimate children.