Syllabus in Special Commercial Law

I. Introduction to Commercial Law

General Concepts, Applicable Laws, Commercial Contracts

II. Letters of Credit

Definition; Parties; Doctrine of Independence, Fraud Exception Principle,

Doctrine of Strict Compliance; Types of Letters of Credit

Cases:
1. Bank of America v. CA, 228 SCRA 357 (1993)
2. Prudential Bank and Trust Co. v. IAC, 216 SCRA 257 (1992)
3. Feati Bank and Trust Co. v. CA, 196 SCRA 576 (1991)
4. MWSS v. Daway, 432 SCRA 559 (2004)
5. Reliance Commodities v. Daewoo Industrial, 228 SCRA 545 (1993)
6. Lee v. CA, 375 SCRA 579 (2002)
7. Bank of Commerce v. Serrano, 451 SCRA 484 (2005)
8. BPI v. De Reny Fabric, 35 SCRA 253 (1970)
9. Insular Bank of Asia & America v. IAC, 167 SCRA 450 (1988)
10. Transfield v. Luzon Hydro, 443 SCRA 307 (2004)
11. Philippine Virginia Tobacco v. De Los Angeles, 164 SCRA 543 (1988)
12. Rodzssen Supply v. Far East Bank, 357 SCRA 618 (2001)
13. Abad v. CA, 181 SCRA 191 (1990)
14. Consolidated Bank v. CA, 356 SCRA 671 (2001)
15. Maphil Export v. Allied Banking, G.R. No. 187922, 21 Sept. 2016
16. Landbank v. Monet’s Export, 453 SCRA 173 (2005)
17. PNB v. San Miguel, G.R. No. 186063, 15 Jan. 2014
18. HSBC v. National Steel, G.R. No. 183486, 24 Feb. 2016

III. Trust Receipts

Definition; Rights of Entruster; Obligations of Entrustee; Remedies Available;

Warehouseman’s Lien

Cases:
1. Lee vs. Court of Appeals, 375 SCRA 579 (2002)
2. Rosario Textile Mills Corp. vs. Home Bankers Savings and Trust
Company, 462 SCRA 88 (2005)
3. Colinares vs. Court of Appeals, 339 SCRA 609 (2000)
4. Consolidated Bank & Trust Corp. vs. Court of Appeals, 356 SCRA 671
(2001)
5. Anthony L. Ng vs. People of the Philippines, G.R. No. 173905, April
23, 2010
6. Metropolitan Bank & Trust Co. v. Gonzales, G.R. No. 180165, April 7,
2009

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 7. Metropolitan Bank & Trust Co. v. Go, G.R. NO. 155647, November 23,
2007
8. Hur Tin Yang vs. People of the Philippines, G.R. No. 195117, August
14, 2013
9. People vs. Hon. Nitafan 207 SCRA 726 (1992)
10. DBP vs. Prudential Bank, 475 SCRA 623 (2005)
11. Prudential Bank vs. National Labor Relations Commission, 251 SCRA
412 (1995)
12. Pilipinas Bank vs. Ong, 387 SCRA 37 (2002)
13. Ong vs. Court of Appeals, 401 SCRA 649 (2003)
14. Tupaz IV vs. Court of Appeals, 475 SCRA 398 (2005)
15. Landl & Company vs. Metropolitan Bank, 435 SCRA 639 (2004)

IV. The Securities Regulation Code (R.A. 8799)

and its Amended IRR

State policy (Sec. 2)

Powers of the SEC (Sec. 5)
a. Philippine Veterans Bank vs SEC, G.R. No. 191995 , 3 August 2011
What are “securities”? (Sec. 3)
a. SEC v. Prosperity.com Incorporated, G.R. No. 164197, 25 January
2012
Requirement of registration (Sec. 8)
Procedure of registration (Sec. 12)
a. Stages
i. Pre-filing stage
ii. Filing stage
iii. Pre-offering stage
iv. Offering period
v. Filing of notice of completion
b. Shelf registration
Public offering (Rule 3N)
a. Power Homes Unlimited Corp. v. SEC, G.R. No. 164182, 26
February 2008
Exempt securities (Sec. 9)
Exempt transactions (Sec. 10)
Tender offer (Sec. 19)
a. CEMCO Holdings, Inc. VS National Life Insurance Company of the
Philippines, G.R. No. 171815, 7 August 2007
Prohibited activities (Sec. 24)
a. Wash sale
b. Improper matched orders
c. Marking the close
d. Painting the tape
e. Hype and dump
f. Squeezing the float

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 g. Boiler room operations
h. Other manipulative devices
i. Short-sale
j. Stop-loss order
Fraudulent transactions (Sec. 26)
Insider trading
a. Who is an “insider”? (Sec. 3)
b. Material information (Rule 3)
c. Insider’s duty to disclose when trading (Sec. 27)
Transactions of directors, officers and principal stockholders (Sec. 23)

V. The Foreign Investments Act (R.A. 7042),

as Amended by R.A. 8179

State policy and scope of the FIA

Kinds of enterprises under the FIA
a. Export enterprise
i. Definition
ii. Foreign investment in export enterprises
b. Domestic market enterprise
i. Definition
ii. Foreign investment in domestic market enterprises
iii. Small and medium-sized domestic market enterprises
c. Investment areas reserved to Philippine nationals
i. The Foreign Investments Negative List
ii. The 11th FINL
Philippine national
a. Definition; 6 classes of Philippine nationals
b. Classification of corporations
i. Domestic v. foreign; Place of incorporation test
ii. Philippine national v. non-Philippine national; Nationality
test
c. Narra Nickel vs. Redmont, G.R. No. 195580 April 21, 2014
d. Narra Nickel vs. Redmont, G.R. No. 195580 January 28, 2015
e. Gamboa v. Teves, G.R. No. 176579, June 28, 2011
f. Gamboa v. Teves, G.R. No. 176579, October 9, 2012
g. Roy v. Herbosa, G.R. No. 207246, November 22, 2016
Doing business
a. Doing business (Sec. 3)
h. Hahn v. CA, G.R. No. No. 176579, October 9, 2012
VI. The New Central Bank Act (R.A. 7653)

State policy
Responsibility and objectives of the BSP
a. Maintain price stability
i. Currency issue

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 a. Exclusive issue power (Sec. 50)
b. Liability for notes and coins (Sec. 51)
c. Government guarantee (Sec. 52)
d. Legal tender (Sec. 52)
ii. Liquidity management
a. Set interest rate policy
b. Open market operations (Sec. 61, Guiding principle)
iii. Lender of last resort
a. Normal credit operations (Sec. 82)
b. Special credit operations (Sec. 83)
c. Emergency credit operations (Sec. 84)
iv. Banker, financial advisor and official depositary of the
government
b. Promote and maintain monetary stability and convertibility of the
peso
i. Management of foreign exchange reserves (Sec. 70)
ii. Determine foreign exchange rate policy (Sec. 74)
c. Financial supervision
i. Supervisory powers (Sec. 4)
ii. Power to administer oaths and issue subpoena (Sec. 25)
The Monetary Board (Sec. 15)
Conservatorship (Sec. 29)
a. Ground for conservatorship
b. Term of conservatorship
c. Requisites for conservatorship
d. Powers and duties of the conservator
i. First Phil. Bank v. CA, G.R. No. 115849, 24 Jan. 1996
e. Termination of conservatorship
Receivership (Secs. 30-33)
a. Grounds for receivership (Secs. 30 and 36; R.A. 8791 Sec. 53)
b. Term of receivership
c. Requisites for receivership
i. Rural Bank of San Miguel v. Monetary Board, G.R. No.
150886, 16 Feb. 2007
ii. Banco Filipino v. Monetary Board, G.R. No. 70054, 11
December 1991
iii. Rural Bank of Buhi v. CA, G.R. No. L-61689, 20 June 1988
iv. Central Bank v. CA, G.R. No. 76118, 30 March 1993
d. Effect of declaration of receivership
i. Villanueva v. CA, G.R. No. 114870, 26 May 1995
ii. Abacus v. Manila Banking Corp., G.R. No. 162270, 6 April
2005
e. Rehabilitation v. liquidation
i. Philippine Veterans Bank v. Vega, G.R. No. 105364, 28
June 2001
ii. Pacific Banking Corp. Employees Org. v. CA, G.R. No.

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 109373 March 20, 1995

VII. The General Banking Law (R.A. 8791)

State policy
Powers of banks
a. General corporate powers
b. Banking powers
c. Incidental powers
Fiduciary nature of banking
a. Equitable PCI Bank v. Tan, G.R. No. 165339 Aug. 23, 2010
b. Central Bank v. Citytrust, G.R. No. 141835, Feb. 4, 2009
c. Westmont Bank v. Ramos, G.R. No. 160260, Oct. 24, 2012
d. Tan v. CA, G.R. No. 108555, Dec. 20, 1994
Definition and classification of banks (Secs. 3.1 and 3.2)
Banks vs. Quasi-banks vs. Trust entities
Nature of bank deposits
a. Consolidated Bank v. CA, G.R. No. 138569, 11 Sept. 2003
b. Guingona v. City Fiscal, G.R. No. L-60033, 4 April 1984
c. Associated Bank v. Tan, G.R. No. 156940, 14 Dec. 2004
d. Central Bank v. Morfe, G.R. No. L-38427, 12 March 1975
Risk-based capital (Sec. 34)
a. Ratio of net worth to total risk assets
b. When may be altered/suspended/relieved
c. Consequence of noncompliance
Limit on loans, credit accommodations and guarantees
a. The single borrower limit
i. Limit [Sec. 35.1; 2018 Manual of Regulations for Banks
(MORB) Sec. 362a]
ii. Liabilities included (Secs. 35.3 and 35.4; MORB Sec. 362c
and d)
iii. Exclusions (Sec. 35.5; MORB Sec. 362)
iv. Increase in limit (Sec. 35.2; MORB Sec. 362b)
v. Loans to banks and non-bank entities (Sec. 35.6; MORB
Sec. 362g)
b. Loans and other credit accommodations against real estate
i. Limit (Sec. 37)
ii. Central Bank v. CA, G.R. No. L-45710, 3 Oct. 1985
iii. Republic Planters Bank v. Sarmiento, G.R. No. 170785, 19
Oct. 2007
iv. Prudential Bank v. Alviar, G.R. No. 150197 July 28, 2005
c. Loans and other credit accommodations secured by chattels and
intangibles
i. Limit (Sec. 38)
d. Unsecured loans or other credit accommodations (Sec. 41)
Restriction on Exposure to Directors, Officers, Stockholders and Their Related

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Interests (DOSRI)
a. Who are the DOSRI? (MORB Sec. 131)
b. Requirements for DOSRI transactions (Sec. 36)
i. Approval
ii. Reportorial
iii. Ceilings
(a) Individual ceilings and exclusions (MORB Sec. 344)
(b) Aggregate ceiling and exclusions (MORB Sec. 345)
iv. Go v. BSP, G.R. No. 178429, 23 Oct. 2009
c. Penalty for violation (Sec. 36)
d. Waiver of secrecy of deposit (MORB Sec. 347)
Prohibitions
a. Prohibition to act as insurer (Sec. 54)
b. Prohibited transactions (Sec. 55)
c. Conducting business in an unsafe or unsound manner (Sec. 56)
d. Prohibition on dividend declaration (Sec. 57)

VIII. The Bank Secrecy Law (R.A. 1405)

State policy (Sec. 1)

Deposits covered (Sec. 2)
Prohibited acts (Secs. 2 and 3)
Exceptions
a. Sec. 2
i. BSB Group, Inc. v. Go, G.R. No. 168644, 16 Feb. 2010
ii. PNB v. Gancayco, G.R. No. L-18343, 30 Sept. 1965
b. Sec. 8, Foreign Currency Deposit Act (R.A. 6426)
i. GSIS v. CA, G.R. No. 189206, 8 June 2011
ii. Intengan v. CA, G.R. No. 128996 : 15 Feb. 2002
c. Secs. 9c and 11, Anti-Money Laundering Act (R.A. 9160, as
amended)
d. Sec. 27, Human Security Act (R.A. 9372)
e. Sec. 10, Anti-Terrorism Law (R.A. 10168)
f. Sec. 6f, Title I, The National Internal Revenue Code (Authority of
the Commissioner to Inquire into Bank Deposit Accounts and  other
Related information held by Financial Institutions), as amended by
the Exchange of Information on Tax Matters Law (R.A. 10021)
g. Sec. 8 par. 8, PDIC Charter (R.A. 3591), as amended by R.A. 9576

IX. The Anti-Money Laundering Act

(R.A. 9160, as amended)

State policy (Sec. 2)

Persons covered (Sec. 3a, as amended by R.A. 10365)
Obligations of a covered person (Sec. 9, as amended by R.A. 9194 and R.A.
10365)

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 a. Customer identification
b. Record-keeping
c. Reporting of covered and suspicious transactions
i. Covered transaction
ii. Suspicious transaction
iii. Unlawful activities
Money laundering offenses (Sec. 4, as amended by R.A. 9194 and R.A. 10365)
Criminal prosecution (Sec. 6, as amended by R.A. 10365)
Remedies available (Secs. 10, 11, 12, as amended by R.A. 9194 and R.A.
10365)
Prohibition against political harassment (Sec. 16)

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