University ofthe Philippines Lave Law Center SUGGESTED ANSWERS 7 to the 2018 BAR EXAMINATIONS IN MERCANTILE LAW ion of the authent ay YBM the amount ow. pay YBM th red under the trust receipt. YBM thereafter commenced the Civil suit to hold ¥B Table for fire to ensure hat te electronic pars loaded for exgoraton in China corresponded with those Ueseribed in the bill of lading. Is there any merit in the case against YB? (2.5%) 7 SUGGESTED ANSWER: SUGGESTED ANSWER: va) There 1s no merit in the case against YB. YB only acted sam advising bank whose only obligation after determining, the apparent authenteity of th Teter of eredit ist eansmit 9 SY thereof to the beneficiary ofthe letter ofereit.¢ has no obligation to ensure that the goods loaded for exportation corresponded with those deserfbed in the bill of lading (Bank af Americ Court of “Appeals, GuR No. 105395, Dec. 10,1993) ‘¥B cannot be considered 1 confirming bank, because to be one It must have assumed # f credit tivect obligation to the sell as if t has issued the letter o}(Murphit Export Corporation ». Allied Banking Co poration, (GR No. 187922, September 21, 2016). YW not » because it did not b of the bene he beneficiary of the letter of credit. Even YB acted as a con negotiating bank, such kind of correspondent bank has no simiar obligation to ensure that the goods shipped match with those described in t bill of lading () Criminal suit against YEC and its President for estafa, and sought the payment of the amount covered in the trust receipt. The defense of the YEC President is that he cannot be held liable for a transaction of the corporation, of which he only acted as an officer, and that it is YEC as the principal that should be held liable under the trust receipt, which was entered into in the name of YEC and pursuant to YEC's corporate purposes. He cited as his legal ground the "Doctrine of S Juridical Personality." Is 1 dent's contention meritorious? (2.5%) STED ANSWER: ‘ (hi The President of YEC cannot invoke as a defense the doctrine of separate juridical pers ality to avoid criminal li y. The specifically makes the director, officer or any person responsible for the violation of the Trust Receipt agreement criminally liable precisely for the reason that 2 Corporation, being a juridical entity, cannot be the subject of the penalty of imprisonment. Nevertheless, following the same doctrine of sep: ate legal personality, he eannot be civilly liable there being no showing that he bound imself with YEC to pay the loan. Only YEC is liable to pay the loan covered by the letter of eredititrust receipt (Ching ¥. Secretary of Justice, (G. R. No. 164317, February 6, 2006 and Section 13 of PD 115)}Yolanda executed and signed & promissory note with all the negotiability being present. except for the amount which was lef ¢. rao beng oe jak anid decided to place tc amor a SHS key managed to obtain the promissory note from ane, TPE P10 million, winen Sak and ile out a nda bur ccd he ape ee ek constitute the latter to be a holder in due cot wor ea a Yoands able onthe noe? 5%) WER: ED Al ‘Yvette cannot hold Yolanda liable on the note. This is a case of incomplete and undelivered instrument, insofar as Yolanda is concerned. Where an incomplete instrument has not been delivered, i will not, if completed and negotiated without authority, be a valid contract in the hands of any holder, including . a holder in due course as against Yolanda, witose signature was Placed thereon before delivery (Section 15 of she Negotiable Instruments Law [NIL)). (te) Would your answer be the same if the promissory note was actually completed by Yolanda (including the amount of PhP 10 million), but stolen from her desk by Yohann? Can Yvette enforce the note against Yolanda? (2.5%) ‘ED ANSWER: The answer will not be the same. Now that the instrument is complete but undelivered and in the hands of Yvette, a holder in due course, 1 delivery to make all part prior to Yvette liable is conclusively presumed under Section 16 of the NIL, therefore, Yvette can hold Yolanda . a prior party, liable. ‘A complete but undelivered instrument is only a personal defense not available againt a holder in due course.overs amount of PhP 5 mili x » NOURH ts President, Ve Yektas (Yektas), which loan was evidenced by a peaitets ¥imas (PN), which reads as follows: missory Note Winhin one yea fom date hereof, I promise to pay ot © pay tothe onder of VAS YSMAEL, the sum of PhP5,000,000 with int mS | | annum. poe | YARN & THREAD Corporation \ By: \ | ( ) \ Yimas Yektas : | ‘ektas was the controlling stockholder of YTC at the time the PN_ was ; As security for the payment of the PN, Yektas issued and delivered to Yas Ysmael a postdated personal check covering the face value of the PN drawn from his account with Yellow Bell Bank and Trust Company (YBTC), The proceeds of the loan under the PN were used by YTC as working capita issued \ year later, Yas Ysmael inserted the date of * November 23, 2017” on the date section of the PN, and made a formal demand upon YTC, through Yektas, to pay the note, but witich was refused on the ‘ground that Yektas was no longer the President and controlling shareholder of YTC. By this time, all the shares of YTC had already been sold 10 a new group of investors. Yas Ysmael deposited the personal check issued by Yektas which bounced. He then filed a collection suit nst YTC and Yektas including the accrued interest. rhe defendants raised the following defenses in the collection suit, Rule on the merits of each defense. (2% each) ) YBC Bank is not a mortgagee-buyer in good faith. As a bank, it should have exercised due diligence to determine who the actual and true owner of the real property is prior to the grant of the loan; also, Yamsuan, being the first buyer, has a prior right to the property xIV on Tune 21, 2008, Yate took out a life insurance policy on her lite in the amount of PhP 10 million and named her husband Vandy and dau imevocable beneficiaries. Before the policy was issued and the premiums were paid ‘Yate underwent a medical checkup with a physician accredited by the insurer, and the only result found was that she was suffering from high blood pressure. Yate was previously diagnosed by a private physician of having breast cancer which she did net diseiose {6 the insurer in her application, nor to the insurer's ai physician because dy then, she was told that she was already cancer-free after ‘undergoing surgery which removed both her breasts. She was later diagnosed with osychotic tendency that graduated into extreme despondency. She was found dead hanging in her closet 36 months after the issuance of the policy. The polic authorities declared it to be a case of suicide. The policy did not include suicide as an excepted risk. editedsn cause for d laim of the 1 had can SUGGESTED ANSWER a) ‘The insurer cannot raise the issue of concealment, 1 i should be disclosed to Code). Yate's previous cancer diagnosis i s. the beneficiaries are entitled (0 received the pr Jc is that the insurer in life insurance is liable in case of su nly when it is committed after the policy has been in for period of two years from the date of issue or last reinstatemen T le, however, admits of an exception so that when suicide i committed in the state of insanity. it shall be compensabl regardless of the date of commission (Section 183 of the Insuran Code). In the facts given, Yate was di nosed with psychotic graduated into extreme despondency; thus, ev though Yate committed su je 36 months from issuance of the policy, the insurer is liable. xv distinctive-tasting pastllas is well-known throughout the country as havin; been developed within a close-knit women's group in Barangay San Ysmael which wa clone a very busy national highway. Its popularity has encou sexting up of several shops selling similar delicacies, being the pastillas of "Barangay San Ysmael.” Eventually, the pastillas of Ali ‘with the most famous product Voling under the brand name "Ysmaellas" began to attract national. distinction Sling therefore registered it as a copyright with the National Library. Her 2 ine commercial value of the brand, started using "Ysmacllas” for her pastllas but used different colors. Aling Yasrwin 5 the brand name "'Ysmaellas" with the Intellectual Property Otive (1?) ing ‘Yasmin, realiziYasmin ft i Valing) cOpyTM? Whats eat SWER ling, Yoting cannot suecesstully obtain court relief to proniniy s the brand name “ Yemacllas Aling Yasmin from usi °s copyright. The brand nam product on the basis of Aling Yel smaellas © is proper subject of trademark, not copyright It on a trade name or mark can not be interchanged. The copy! does not guarantee her the right (0 the exclusive use of (hy for the reason that it is not a proper subject of said intellectual March 19, (GR. No. 115 right (Kho ». Court of Appeals, August 23, 2017). Juan v. Juan, (GR. No. 2213 The registration of a copyright is Only 2 proof of the recording of the copyright but not a condition precedent for the copyright to subsist and for copyright infringement prosper; whereas, registration of a trademark is an indispensable requisite for any trademark infringement suit. (o) Can Aling Yasmin seek injunctive relief against Aling Yoling fom using the brand name “Ysmaellas,” the latter relying on the doctrine of prior use” as evidenced by her prior copyright registration? (2.5%) ESTED ANSWER: (b) _Aling Yasmien can seek injunctive relief against Aling Yoling from using the brand name “ Ysmaellas “ because of the doctrine of of the trademark that confers the right to prior use. It is owners! register. Registration dues not confer ownership. Since Aling do trade name in ‘Yasmin was the first oe to use the br commerce, then she is considered the owner thereof /EY Industrial Sules v. Shen Dar 634 SCRA 363(2010)]- aCan Aling Yoling seek the cance tion of Aling, Yasmin's tr tration of the brand name “Ysmaellas” on the ema ane : : : © ground of “Well Known Brand” clearly evidenced by her (Aling. Yoling’) price Copyright registration, actual use of the brand, and several rong %) coverages? NO, Aling Yoling can not seek the cancellation of Aling Ya min’s trademark registration of the brand name “ Ysmacllas on the ground of well-known brand, because the well- known mark rule only applies t0 a mark which is well-known internationally and in the Philippines (Section 123 (E) of the Intellectual Property Code]. She, however, can seek the cancellation of the trademark for being the prior user even though the mark is not well-known. XVI ‘osha was able to put together a mechanical water pump in his garage consisting of suction systems capable of drawing water from the earth using less human effort than what was then required by existing models. The water pump system provides for a new system which has the elements of novelty and inventive steps. Yosha, while preparing to have his invention registered with the IPO, had several models of his new systema fabricated and sold in his province. Yosha’s invention no longer patentable by virtue of the fact that he had Id several models to the public before the formal application for registration of patent was filed with the IPO? (2.52 (a) Vosha’s invention is still patentable despite the fact he had sold several models to the public before the formal application for registration of the patent was filed with the IPO. It is true that an invention shail not be considered new if it forms part of a prior art and that prior art shall consist of everything which has been made available to the public anywhere in the world, before the filing date or the priority date of the application claiming the invention.This, however, presupposes that the one who has made available the patentable invention to the public is a person other than the applicant for patent 2If Yosha is able to properly register his pa ith the wrynyone who bas possession of the revel models from hem? (2.5%) TED ANSWER: Yosha can no longer prevent anyone who has possession of the cavlier models from using them even if Yosha is able to properly veatster the patent with the TPO. One of the limitations of patent rights isthe use ofthe patented product which has been put on th market in the Philippines by the owner of the product insofar as such use is performed after the product has Deen so put on the said marker [Section 172 of the Intellectual Property Code). xvi ‘ Yvan was a slot machine operator supervisor in a casino ope Philippine Amusement and Gaming Corporation (PAGCOR). On the intelligence repor he was found, in connivance with some slot machine customers, to have padded the credit meter readings of slot machine: e was employed. After being served with notice and opportunity 10 Findings, he was found guilty of the charges and ordered dismissed by PAGCOR After receiving his copy of the order for dismissal, he claimed to have sent t0 the Beard of PAGCOR his motion for reconsideration through facsimile transmiss' sfier a considerable time, when his motion for reconsideration was unacted upon, he filec an action with the Civil Service Commission (CSC) for illegal dismissal. R claimed that his action has prescribed because it was filed more than 15 Gays after his dismissal became finai, Yvan claimed that there was no final Gecision yet because the Board of PAGCOR has not yet acted on bis motion for reconsideration. He presen:ed a copy of his facsimile transmission addressed to the Beard of PAGCOR seeking reconsideration of his dismissal, and the fact that there has been no action taken. Hie claimed that based on the Electronic Commerce Act of 2000, ais facsimile transmission should be considered like ‘any genuine and duchentic paper pleading. PAGCOR denied having received it and was able to prove thet the telephone number of PAGCOR used in the facsimile transmission was wrong, CSC denied his complaint cn account of prescription. He appealed CSC's dismissal in court ia the casino whe! te (a) Was CSC correct in dismissing the case? (2.5%) SUGGESTED ANSWER: (a) CSC is correct in dismissing the case. The E-commerce law does not cover or allow e-filing or facsimile transmission as a mode of 23fing of pleadings in administe cases [Torres v. PAGCOR, Gu, No. 193531, December 6, 2011] sy Can Yvan's bank be ordered by the court to disclose if ¢ ‘ sonable ank deposit when the alle suc SWER: sy No, Yvan's bank cannot be ordered by the court to disclose if there vere unreasonable increases in his bank deposit when the ened seis were committed. ‘The inquiry into bank deposits allowable tinder RA 1405 must be premised on the fact that the money deposited in the account is itself the subject of the actions otherwise, the inquiry will amount «gan impermissible Jament into one’s right to privacy (BSB Group ¥. Go, G. No. 168644, February 16, 2010) xvi rough vai ft and bribery, Mayor Ycasiano ac Jorge amount of weaith which he converted into U.S. dolla Foreigr uumulated a and deposited in a turrency Deposit Unit (FCDU) account with the Yuen Bank (YB). On a tip iven by the secretary of the mayor, the Anti-Money Laundering Council (AMLC) seat an order to YB to coniirm the amount of U.S. dollars that Mayor Ycasiano had in his FCDU account. YB claims that, under the Foreign Currency Deposit Act (RA. Na, 6426, a5 amended), 2 written permission from the depositor is the only ‘lowed for the examination of FCDU accounts. YB alleges that AMLC on annot order a banking institution to reveal matters relating to bank gal position of YB, in requiring written permission from the depositor, correct? (2.5%) SUGGESTED ANSWER: (a Yes, the legal position of YB in requring written permission from the depositor is correct, The AMLC cannot order the bank to inquire into the bank account of any depositor on mere suspicion of acts of graft and bribery inquiry order issued by the competent court. 24(o) Does AMLC nave the power to order a bankin saiters relating to bank accounts? (2.5%) SUGGESTED. ) ‘The AMLE has no. power to order a banking institution to reveat rnatters relating to bank accounts without a bank inquiry order 8 institution to reveal issued by the competent court about the existence of probable cause that the deposits, funds or investments of the person relate to unlawful activities under the Anti-Money Laundering law. A bank inquiry order, however, is not necessary, however, and as such, the AMLA may order the disclosure of information about bank accounts if the predicate crime/s is/arg: a) hijacking, b) kidnapping, ¢) violation of the terrorism financing act, d) murder, e) arson and, f) violation of the Dangerous Drugs law (Section 11 of AMLA). - Nothing follows - +