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2018 BAR EXAMINATIONS

REVIEWER ON
MERCANTILE LAW

ELSA M. CAÑETE, CPA, CSP, DBA (Candidate), Juris Doctor


TABLE OF CONTENTS

I. LETTERS OF CREDIT
A. Definition and Nature of Letter of Credit --------------------- Page 01
B. Parties to a Letter of Credit
1. Rights and Obligations of Parties ------------------------ Page 02
C. Basic Principles of Letter of Credit
1. Doctrine of Independence --------------------------------- Page 03
2. Fraud Exception Principle --------------------------------- Page 04
3. Doctrine of Strict Compliance ---------------------------- Page 04

II. TRUST RECEIPTS LAW


A. Definition/Concept of a Trust Receipt Transaction
1. Loan/Security Feature -------------------------------------- Page 05
2. Ownership of the Goods, Documents and Instruments
under a Trust Receipt --------------------------------------- Page 05
B. Rights of the Entruster ------------------------------------------- Page 06
1. Validity of the Security Interest as Against the
Creditors of the Entrustee/Innocent Purchasers
for Value ----------------------------------------------------- Page 07
C. Obligations and Liabilities of the Entrustee ------------------- Page 07
1. Payment/Delivery of Proceeds of Sale or Disposition
of Goods, Documents or Instruments -------------------- Page 07
2. Return of Goods, Documents or Instruments in Case
Of Sale ------------------------------------------------------- Page 07
3. Liability for Loss of Goods, Documents or
Instruments -------------------------------------------------- Page 08
4. Penal Sanction if Offender is a Corporation ------------ Page 08
D. Remedies Available ---------------------------------------------- Page 08
E. Warehouseman’s Lien ------------------------------------------- Page 09
III. NEGOTIABLE INSTRUMENTS LAW
A. Forms and Interpretation ---------------------------------------- Page 11
1. Requisites of Negotiability -------------------------------- page 16
2. Kinds of Negotiable Instruments ------------------------- Page 16

B. Completion and Delivery


1. Insertion of Date -------------------------------------------- Page 19
2. Completion of Blanks -------------------------------------- Page 20
3. Incomplete and Undelivered Instruments --------------- Page 20
4. Complete but Undelivered Instruments ----------------- Page 20
C. Signature
1. Signing in Trade Name ------------------------------------ Page 21
2. Signature of Agent ------------------------------------------ Page 21
3. Indorsement by Minor or Corporation ------------------- Page 22
4. Forgery ------------------------------------------------------- Page 23
D. Consideration ----------------------------------------------------- Page 25
E. Accommodation Party ------------------------------------------- Page 27
F. Negotiation
1. Distinguished from Assignment -------------------------- Page 28
2. Modes of Negotiation -------------------------------------- Page 28
3. Kinds of Indorsements ------------------------------------- Page 31
G. Rights of the Holder
1. Holder in Due Course -------------------------------------- Page 33
2. Defenses Against the Holder ------------------------------ Page 38
H. Liabilities of Parties ---------------------------------------------- Page 39
1. Maker --------------------------------------------------------- Page 39
2. Drawer -------------------------------------------------------- Page 39
3. Acceptor ------------------------------------------------------ Page 39
4. Indorser ------------------------------------------------------- Page 40
5. Warranties --------------------------------------------------- Page 42
I. Presentment for Payment
1. Necessity of Presentment for Payment ------------------- Page 43
2. Parties to Whom Presentment for Payment
should be Made --------------------------------------------- Page 44
3. Dispensation with Presentment for Payment ----------- Page 44
4. Dishonor by Non-Payment -------------------------------- Page 45
J. Notice of Dishonor
1. Parties to be Notified --------------------------------------- Page 45
2. Parties who may Give Notice and Dishonor ------------ Page 46
3. Effect of Notice --------------------------------------------- Page 47
4. Form of Notice ---------------------------------------------- Page 47
5. Waiver -------------------------------------------------------- Page 47
6. Dispensation with Notice ---------------------------------- Page 47
7. Effect of Failure to Give Notice -------------------------- Page 47
K. Discharge of Negotiable Instrument
1. Discharge of Negotiable Instrument --------------------- Page 48
2. Discharge of Parties Secondarily Liable ---------------- Page 48
3. Right of Party who Discharged Instrument ------------ Page 49
4. Renunciation by Holder ----------------------------------- Page 49
L. Material Alteration
1. Concept ------------------------------------------------------- Page 50
2. Effect of Material Alteration ------------------------------ Page 51
M. Acceptance
1. Definition ---------------------------------------------------- Page 52
2. Manner ------------------------------------------------------- Page 53
3. Time for Acceptance --------------------------------------- Page 53
4. Rules Governing Acceptance ----------------------------- Page 53
N. Presentment for Acceptance
1. Time/Place/Manner of Presentment ---------------------- Page 54
2. Effect of Failure to Make Presentment ------------------ Page 56
3. Dishonor by Non-Acceptance ----------------------------- Page 56
O. Promissory Notes ------------------------------------------------- Page 57
P. Checks
1. Definition ---------------------------------------------------- Page 58
2. Kinds --------------------------------------------------------- Page 58
3. Presentment for Payment
a. Time ---------------------------------------------------- Page 59
b. Effect of Delay ---------------------------------------- Page 59

IV. INSURANCE CODE


A. Concept of Insurance -------------------------------------------- Page 60
B. Elements of an Insurance Contract ---------------------------- Page 60
C. Characteristics/Nature of Insurance Contracts --------------- Page 62
D. Classes
1. Marine -------------------------------------------------------- Page 63
2. Fire ------------------------------------------------------------ Page 69
3. Casualty ------------------------------------------------------ Page 71
4. Suretyship ---------------------------------------------------- Page 72
5. Life ------------------------------------------------------------ Page 72
6. Compulsory Motor Vehicle Liability Insurance -------- Page 75
E. Insurable Interest
1. In Life/Health ----------------------------------------------- Page 76
2. In Property --------------------------------------------------- Page 77
3. Double Insurance and Over Insurance ------------------ Page 79
4. Multiple or Several Interests on Same Property -------- Page 79
F. Perfection of the Contract of Insurance
1. Offer and Acceptance/Consensual ------------------------ Page 80
a. Delay in Acceptance ---------------------------------- Page 81
b. Delay in issuance of Policy -------------------------- Page 81
2. Premium Payment ------------------------------------------ Page 81
3. Non-Default Options in Life Insurance ------------------ Page 83
4. Reinstatement of a Lapsed Policy of Life Insurance --- Page 83
5. Refund of Premiums ---------------------------------------- Page 84
G. Rescission of Insurance Contracts
1. Concealment ------------------------------------------------ Page 84
2. Misrepresentation/Omissions ----------------------------- Page 86
3. Breach of Warranties --------------------------------------- Page 88
H. Claims Settlement and Subrogation
1. Notice and Proof of Loss ---------------------------------- Page 89
2. Guidelines on Claims Settlement ------------------------- Page 91
a. Unfair Claims Settlement; Sanctions --------------- Page 92
b. Prescription of Actions ------------------------------- Page 93
c. Subrogation -------------------------------------------- Page 93

V. TRANSPORTATION LAWS
A. Common Carriers ------------------------------------------------- Page 93
1. Diligence Required of Common Carriers --------------- Page 94
2. Liabilities of Common Carriers --------------------------- Page 95
B. Vigilance over Goods
1. Exempting Causes ------------------------------------------ Page 95
a. Requirement of Absence of Negligence ----------- Page 97
b. Absence of Delay ------------------------------------- Page 97
c. Due Diligence to Prevent or Lessen the Loss ----- Page 98
2. Contributory Negligence ----------------------------------- Page 98
3. Duration of Liability
a. Delivery of Goods to Common Carrier ------------ Page 98
b. Actual or Constructive Delivery -------------------- Page 98
c. Temporary Unloading or Storage ------------------- Page 99
4. Stipulations Limiting Liability
a. Void Stipulations -------------------------------------- Page 99
b. Limitation of Liability to Fixed Amount --------- Page 100
c. Limitation of Liability in Absence of Declaration of
Greater Value ---------------------------------------- Page 100
5. Liability for Baggage of Passengers -------------------- Page 100
a. Checked-In Baggage -------------------------------- Page 101
b. Baggage in Possession of Passengers ------------- Page 101
C. Safety of Passengers
1. Void Stipulations ------------------------------------------ Page 102
2. Duration of Liability -------------------------------------- Page 102
a. Waiting for Carrier or Boarding of Carrier ------ Page 103
b. Arrival at Destination ------------------------------- Page 103
3. Liability for Acts of Others
a. Employees -------------------------------------------- Page 104
b. Other Passengers and Strangers ------------------- Page 105
4. Extent of Liability for Damages ------------------------ Page 105
D. Bill of Lading
1. Three-Fold Character ------------------------------------- Page 108
2. Delivery of Goods ----------------------------------------- Page 108
a. Period of Delivery ----------------------------------- Page 108
b. Delivery Without Surrender of Bill of
Lading ------------------------------------------------- Page 109
c. Refusal of Consignee to Take Delivery ---------- Page 109
3. Period for Filing Claims ---------------------------------- Page 109
4. Period for Filing Actions --------------------------------- Page 110
E. Maritime Commerce
1. Charter Parties --------------------------------------------- Page 111
a. Bareboat/Demise Charter -------------------------- Page 111
b. Time Charter ----------------------------------------- Page 112
c. Voyage/Trip Charter -------------------------------- Page 112
2. Liability of Ship Owners and Shipping Agents ------- Page 112
a. Liability for Acts of Captain ----------------------- Page 113
b. Limited Liability Rule ------------------------------ Page 114
c. Exceptions to the Limited Liability Rule --------- Page 114
3. Accidents and Damages in Maritime Commerce
a. General and Particular Averages ------------------ Page 115
b. Collisions --------------------------------------------- Page 116
4. Carriage of Goods by Sea Act
a. Application ------------------------------------------- Page 117
b. Notice of Loss or Damage -------------------------- Page 117
c. Period of Prescription ------------------------------- Page 118
d. Limitation of Liability ------------------------------ Page 118
F. The Warsaw Convention
1. Applicability ----------------------------------------------- Page 118
2. Limitation of Liability ------------------------------------ Page 119
a. Liability to Passengers ------------------------------ Page 120
b. Liability for Checked Baggage -------------------- Page 120
c. Liability for Handcarried Baggage ---------------- Page 120
3. Willful Misconduct --------------------------------------- Page 120

VI. THE CORPORATION CODE


A. Corporation
1. Definition --------------------------------------------------- Page 121
2. Attributes of a Corporation ------------------------------ Page 121
B. Classes of Corporations ---------------------------------------- Page 122
C. Nationality of Corporations
1. Place of Incorporation Test ------------------------------ Page 125
2. Control Test ------------------------------------------------ Page 125
3. Grandfather Rule ------------------------------------------ Page 126
D. Corporate Juridical Personality
1. Doctrine of Separate Juridical Personality ------------- Page 128
a. Liability for Torts and Crimes --------------------- Page 128
b. Recovery of Moral Damages ---------------------- Page 128
2. Doctrine of Piercing the Corporate Veil --------------- Page 128
a. Grounds for Application of Doctrine ------------- Page 129
b. Test in Determining Applicability ---------------- Page 129
E. Incorporation and Organization
1. Number and Qualifications of Incorporators ---------- Page 130
2. Corporate Name; Limitations on Use of
Corporate Name ------------------------------------------- Page 130
3. Corporate Term -------------------------------------------- Page 131
4. Minimum Capital Stock and Subscription
Requirements ---------------------------------------------- Page 131
5. Articles of Incorporation
a. Nature and Function of Articles ------------------- Page 132
b. Contents ----------------------------------------------- Page 132
c. Amendment ------------------------------------------ Page 135
d. Non-Amendable Items ----------------------------- Page 135
6. Registration and Issuance of Certificate
of Incorporation ------------------------------------------- Page 135
7. Adoption of By-Laws
a. Nature and Functions of By-Laws ---------------- Page 136
b. Requisites of Valid By-Laws ---------------------- Page 136
c. Binding Effect --------------------------------------- Page 137
d. Amendment or Revision ---------------------------- Page 137
F. Corporate Powers
1. General Powers; Theory of General Capacity --------- Page 137
2. Specific Powers; Theory of Specific Capacity -------- Page 138
a. Power to Extend or Shorten Corporate Term --- Page 138
b. Power to Increase or Decrease Capital
Stock or Incur, Create, Increase Bonded
Indebtedness ------------------------------------------ Page 139
c. Power to Deny Pre-Emptive Rights --------------- Page 141
d. Power to Sell or Dispose of Corporate Assets --- Page 141
e. Power to Acquire Own Shares --------------------- Page 143
f. Power to Invest Corporate Funds in Another
Corporation or Business ---------------------------- Page 143
g. Power to Declare Dividends ----------------------- Page 144
h. Power to Enter Into Management Contracts ----- Page 145
i. Ultra Vires Acts
i. Applicability of Ultra Vires Doctrine --------- Page 145
ii. Consequences of Ultra Vires Acts ------------ Page 146
3. How Exercised
a. By the Shareholders -------------------------------- Page 146
b. By the Board of Directors -------------------------- Page 147
c. By the Officers --------------------------------------- Page 148
4. Trust Fund Doctrine --------------------------------------- Page 148
G. Board of Directors and Trustees
1. Doctrine of Centralized Management ------------------ Page 149
2. Business Judgment Rule --------------------------------- Page 150
3. Tenure, Qualifications, and Disqualifications of
Directors or Trustees -------------------------------------- Page 151
4. Elections ---------------------------------------------------- Page 152
a. Cumulative Voting/Straight Voting --------------- Page 152
b. Quorum ----------------------------------------------- Page 153
5. Removal ---------------------------------------------------- Page 153
6. Filling of Vacancies -------------------------------------- Page 154
7. Compensation --------------------------------------------- Page 154
8. Rules on Fiduciaries’ Duties and Liabilities ----------- Page 155
9. Responsibility for Crimes -------------------------------- Page 157
10. Inside Information ----------------------------------------- Page 158
11. Contracts
a. By Self-Dealing Directors with the
Corporation ------------------------------------------- Page 158
b. Between Corporations with Interlocking
Directors ---------------------------------------------- Page 158
12. Executive Committee ------------------------------------- Page 159
13. Meetings
a. Regular or Special ----------------------------------- Page 159
i. When and Where -------------------------------- Page 160
ii. Notice --------------------------------------------- Page 160
b. Who Presides ---------------------------------------- Page 161
c. Quorum ----------------------------------------------- Page 161
d. Rule on Abstention --------------------------------- Page 162
H. Stockholders and Members
1. Rights of Stockholders and Members ------------------ Page 162
a. Doctrine of Equality of Shares -------------------- Page 163
2. Participation in Management
a. Proxy -------------------------------------------------- Page 163
b. Voting Trust ------------------------------------------ Page 164
c. Cases When Stockholders’ Action is Required
i. By a Majority Vote ------------------------------ Page 165
ii. By a Two-Thirds Vote ------------------------- Page 166
iii. By Cumulative Voting ------------------------ Page 169
3. Proprietary Rights
a. Right to Dividends ---------------------------------- Page 169
b. Right of Appraisal ----------------------------------- Page 169
c. Right to Inspect -------------------------------------- Page 171
d. Pre-Emptive Right ----------------------------------- Page 173
e. Right to Vote ----------------------------------------- Page 174
f. Right to Dividends ---------------------------------- Page 174
g. Right of First Refusal ------------------------------- Page 175
4. Remedial Rights
a. Individual Suit --------------------------------------- Page 175
b. Representative Suit ---------------------------------- Page 175
c. Derivative Suit --------------------------------------- Page 175
5. Obligations of a Stockholder ---------------------------- Page 176
6. Meetings ---------------------------------------------------- Page 177
a. Regular or Special ----------------------------------- Page 178
i. When and Where -------------------------------- Page 178
ii. Notice --------------------------------------------- Page 180
b. Who Calls the Meetings ---------------------------- Page 180
c. Quorum ----------------------------------------------- Page 180
d. Minutes of the Meetings ---------------------------- Page 180

I. Capital Structure
1. Subscription Agreements --------------------------------- Page 181
2. Consideration for Shares of Stock ---------------------- Page 182
3. Shares of Stock
a. Nature of Shares of Stock -------------------------- Page 183
b. Consideration for Shares of Stock ---------------- Page 183
c. Watered Stock
i. Definition ----------------------------------------- Page 183
ii. Liability of Directors for Watered Stocks ---- Page 184
iii. Trust Fund Doctrine for Liability for
Watered Stocks ---------------------------------- Page 184
d. Situs of the Shares of Stock ------------------------ Page 185
e. Classes of Shares of Stock ------------------------- Page 185
4. Payment of Balance of Subscription -------------------- Page 189
a. Call by Board of Directors ------------------------- Page 190
b. Notice Requirement -------------------------------- Page 190
c. Sale of Delinquent Shares ------------------------- Page 191
i. Effect of Delinquency -------------------------- Page 191
ii. Call by Resolution of the Board of
Directors ------------------------------------------ Page 191
iii. Notice of Sale ------------------------------------ Page 191
iv. Auction Sale and the Highest Bidder --------- Page 191
5. Certificate of Stock --------------------------------------- Page 192
a. Nature of the Certificate ---------------------------- Page 193
b. Uncertificated Shares ------------------------------- Page 193
c. Negotiability ----------------------------------------- Page 194
i. Requirements for Valid Transfer of
Stocks --------------------------------------------- Page 194
d. Issuance ---------------------------------------------- Page 194
i. Full Payment ------------------------------------- Page 195
ii. Payment Pro-Rata ------------------------------- Page 195
e. Lost or Destroyed Certificates -------------------- Page 195
6. Stock and Transfer Book
a. Contents ---------------------------------------------- Page 196
b. Who May Make Valid Entries --------------------- Page 196
7. Disposition and Encumbrance of Shares
a. Sale of shares ---------------------------------------- Page 196
b. Allowable Restrictions on the Sale of Shares --- Page 197
c. Requisites of a Valid Transfer --------------------- Page 197
d. Involuntary Dealings with Shares ---------------- Page 197

J. Dissolution and Liquidation


1. Modes of Dissolution ------------------------------------- Page 198
a. Voluntary --------------------------------------------- Page 198
i. Where No Creditors Are Affected ------------- Page 199
ii. Where Creditors Are Affected ----------------- Page 200
iii. Shortening of Corporate Term ----------------- Page 200
b. Involuntary ------------------------------------------- Page 201
i. Expiration of Corporate Term ----------------- Page 201
ii. Non-use of Corporate Charter or Continuous
Inorperation of a Corporation ---------------- Page 201
iii. Legislative Dissolution ------------------------- Page 201
iv. Dissolution by the SEC on Grounds under
Existing Laws ---------------------------------- Page 202
2. Methods of Liquidation ---------------------------------- Page 202
a. By the Corporation Itself --------------------------- Page 203
b. By Conveyance to a Trustee within a
Three-Year Period ----------------------------------- Page 203
c. By Management Committee or Rehabilitation
Receiver ----------------------------------------------- Page 204
d. By Liquidation after Three Years ----------------- Page 204
K. Other Corporations
1. Non-Stock Corporations
a. Definition --------------------------------------------- Page 205
b. Purposes ---------------------------------------------- Page 205
c. Treatment of Profits --------------------------------- Page 205
d. Distribution of Assets upon Dissolution --------- Page 205
2. Foreign Corporations
a. Bases of Authority over Foreign Corporations
i. Consent ------------------------------------------- Page 206
ii. Doctrine of “Doing Business” (related
to definition under the R.A. No. 7042 or
the Foreign Investments Act) ------------------ Page 206
b. Necessity of a License to Do Business
i. Requisites for Issuance of a License ----------- Page207
ii. Resident Agent ----------------------------------- Page 208
c. Personality to Sue ----------------------------------- Page 208
d. Suability of Foreign Corporations ---------------- Page 208
e. Instances When Unlicensed Foreign Corporations
May Be Allowed to Sue ---------------------------- Page 208
f. Grounds for Revocation of License --------------- Page 208
L. Mergers and Consolidations
1. Definition and Concept ---------------------------------- Page 210
2. Plan of Merger or Consolidation ----------------------- Page 210
3. Articles of Merger or Consolidation ------------------- Page 210
4. Procedure -------------------------------------------------- Page 211
5. Effectivity -------------------------------------------------- Page 212
6. Effects and Limitations ---------------------------------- Page 212

VII. SECURITIES REGULATION CODE (R.A. NO. 8799)


A. State Policy, Purpose ------------------------------------------- Page 214
B. Definition of Securities ---------------------------------------- Page 214
C. Kinds of Securities
1. Exempt Securities ----------------------------------------- Page 214
2. Exempt Transactions ------------------------------------- Page 215
3. Non Exempt ------------------------------------------------ Page 215
D. Procedure for Registration of Securities --------------------- Page 215
E. Prohibitions on Fraud, Manipulation and Insider Trading
1. Manipulation of Security Prices ------------------------- Page 216
2. Fraudulent Transactions ---------------------------------- Page 217
3. Insider Trading -------------------------------------------- Page 217
F. Protection of Investors
1. Tender Offer Rule ----------------------------------------- Page 218
2. Rules on Proxy Solicitation ------------------------------ Page 218
3. Disclosure Rule -------------------------------------------- Page 219
G. Civil Liability ---------------------------------------------------- Page 220
VIII. BANKING LAWS
A. The New Central Bank Act (R.A. No. 7653)
1. State Policies ----------------------------------------------- Page 220
2. Responsibility and Primary Objective of the BSP ---- Page 221
3. Monetary Board; Powers and Functions --------------- Page 221
4. The BSP and Banks in Distress
a. Conservatorship -------------------------------------- Page 221
b. Closure ------------------------------------------------ Page 223
c. Receivership ------------------------------------------ Page 224
d. Liquidation ------------------------------------------- Page 226
5. Legal Tender Power --------------------------------------- Page 228
6. Foreign Exchange Operations --------------------------- Page 228
B. Law on Secrecy of Bank Deposits (R.A. No. 1405, as amended)
1. Purpose ----------------------------------------------------- Page 229
2. Prohibited Acts -------------------------------------------- Page 229
3. Deposits Covered ----------------------------------------- Page 229
4. Exceptions ------------------------------------------------- Page 230
5. Garnishment of Deposits, including Foreign
Deposits ---------------------------------------------------- Page 231
C. General Banking Law of 2000 (R.A. No. 8791)
1. Definition and Classification of Banks ---------------- Page 232
2. Distinction of Banks from Quasi-Banks and
Trust Entities ----------------------------------------------- Page 233
3. Bank Powers and Liabilities
a. Corporate Powers ------------------------------------ Page 233
b. Banking and Incidental Powers -------------------- Page 234
4. Diligence Required of Banks ---------------------------- Page 234
5. Nature of Bank Funds and Bank Deposits ------------- Page 235
6. Stipulation on Interests ----------------------------------- Page 235
7. Grant of Loans and Security Requirements
a. Ratio of Net Worth to Total Risk Assets --------- Page 236
b. Single Borrower’s Limit ---------------------------- Page 236
c. Restrictions on Bank Exposure to DOSRI
(Directors, Officers, Stockholders and
their Related Interests) ------------------------------ Page 237

IX. INTELLECTUAL PROPERTY CODE (EXCLUDE IMPLEMENTING


RULES & REGULATIONS)
A. Intellectual Property Rights in General
1. Intellectual Property Rights ------------------------------ Page 237
2. Differences between Copyrights, Trademarks
and Patent -------------------------------------------------- Page 238
B. Patents
1. Patentable Inventions ------------------------------------- Page 238
2. Non-Patentable Inventions ------------------------------- Page 238
3. Ownership of a Patent
a. Right to a Patent ------------------------------------- Page 239
b. First-to-File Rule ------------------------------------ Page 239
c. Inventions Created Pursuant to a
Commission ------------------------------------------ Page 239
d. Right of Priority ------------------------------------- Page 240
4. Grounds for Cancellation of a Patent ------------------- Page 240
5. Remedy of the True and Actual Inventor -------------- Page 240
6. Rights Conferred by a Patent ---------------------------- Page 240
7. Limitations of Patent Rights ----------------------------- Page 241
a. Prior User --------------------------------------------- Page 242
b. Use by the Government ----------------------------- Page 242
8. Patent Infringement --------------------------------------- Page 242
a. Tests in Patent Infringement
i. Literal Infringement ----------------------------- Page 243
ii. Doctrine of Equivalents ------------------------- Page 243
b. Defenses in Actions for Infringement ------------ Page 243
9. Licensing
a. Voluntary --------------------------------------------- Page 244
b. Compulsory ------------------------------------------ Page 246
10. Assignment and Transmission of Rights --------------- Page 248

C. Trademarks
1. Definition of Marks, Collective Marks,
Trade Names ----------------------------------------------- Page 249
2. Acquisition of Ownership of Mark --------------------- Page 249
3. Acquisition of Ownership of Trade Name ------------- Page 250
4. Non-Registrable Marks ----------------------------------- Page 250
5. Tests to Determine Confusing Similarity between Marks
a. Dominancy Test ------------------------------------- Page 251
b. Holistic Test ------------------------------------------ Page 251
6. Well-Known Marks --------------------------------------- Page 252
7. Rights Conferred by Registration ----------------------- Page 252
8. Infringement and Remedies
a. Trademark Infringement ---------------------------- Page 252
b. Damages ---------------------------------------------- Page 254
c. Requirement of Notice ------------------------------ Page 254
9. Unfair Competition --------------------------------------- Page 254

D. Copyrights
1. Basic Principles, Sections 172.2, 175 and 181 -------- Page 256
2. Copyrightable Works
a. Original Works -------------------------------------- Page 257
b. Derivative Works ------------------------------------ Page 258
3. Non-Copyrightable Works ------------------------------- Page 258
4. Rights of Copyright Owner ------------------------------ Page 260
5. Rules on Ownership of Copyright ---------------------- Page 261
6. Limitations on Copyright
a. Doctrine of Fair Use -------------------------------- Page 263
7. Copyright Infringement ---------------------------------- Page 263

X. SPECIAL LAWS
A. Anti-Money Laundering Act (R.A. No. 9160, as amended by
R.A. No. 9194)
1. Policy of the Law ------------------------------------------ Page 268
2. Covered Institutions --------------------------------------- Page 268
3. Obligations of Covered Institutions --------------------- Page 270
4. Covered Transactions ------------------------------------- Page 272
5. Suspicious Transactions ---------------------------------- Page 272
6. Money Laundering; How Committed ------------------ Page 273
7. Unlawful Activities or Predicate Crimes --------------- Page 274
8. Anti-Money Laundering Council ----------------------- Page 276
9. Functions --------------------------------------------------- Page 277
10. Freezing of Monetary Instrument or Property --------- Page 278
11. Authority to Inquire Into Bank Deposits --------------- Page 278
B. Foreign Investments Act (R.A. No. 7042)
1. Policy of the Law ------------------------------------------ Page 280
2. Definition of Terms
a. Foreign Investment ------------------------------------ Page 281
b. “Doing Business” in the Philippines ---------------- Page 281
c. Export Enterprise --------------------------------------- Page 281
d. Domestic Market Enterprise -------------------------- Page 281
C. Electronic Commerce Act of 2000 (R.A. No. 8792)
and A.M. No. 01-7-01-SC or the Rules on
Electronic Evidence -------------------------------------------- Page 281
D. Philippine Competition Act (R.A. No. 10667) -------------- Page 281

E. Financial Rehabilitation and Insolvency Act of 2010 (R.A. No.


10142)
1. Types of Rehabilitation Proceedings
a. Court Supervised
i. Voluntary Proceedings -------------------------- Page 282
ii. Involuntary Proceedings ------------------------ Page 283
b. Pre-Negotiated --------------------------------------- Page 283
c. Out of Court or Informal --------------------------- Page 285
2. Commencement Order ------------------------------------ Page 286
3. Rehabilitation Receiver ----------------------------------- Page 288
4. Management Committee --------------------------------- Page 290
5. Rehabilitation Plan ---------------------------------------- Page 291
6. Cram Down Effect ---------------------------------------- Page 293
7. Stay or Suspension Order -------------------------------- Page 293
8. Liquidation
a. Kinds of Debtors
i. Juridical Debtors
1) Voluntary Liquidation ------------------- Page 294
2) Involuntary Liquidation ----------------- Page 295
ii. Individual Debtors
1) Suspension of Payments ---------------- Page 296
2) Voluntary Liquidation ------------------- Page 299
3) Involuntary Liquidation ----------------- Page 299
b. Procedure
i. Conversion of Rehabilitation Proceedings to
Liquidation Proceedings ---------------------- Page 300
ii. Liquidation Order -------------------------------- Page 301
iii. Effects of the Liquidation Order --------------- Page 301
iv. Rights Of Secured Creditors ------------------- Page 302
v. Powers, Duties, and Responsibilities of
the Liquidator ---------------------------------- Page 302
vi. Determination of Claims ----------------------- Page 303
vii. Liquidation Plan -------------------------------- Page 304