Bar Review Institute University of The Philippines College of Law Last Minute Tips in Mercantile Law BAR 2020/2021
Bar Review Institute University of The Philippines College of Law Last Minute Tips in Mercantile Law BAR 2020/2021
Bar Review Institute University of The Philippines College of Law Last Minute Tips in Mercantile Law BAR 2020/2021
1
I. Corporations Q2: Is a holding corporation liable for the
02
A. Kinds of Corporations claims of the employees of its subsidiary?
Q1: Bases Conversion and Development A2: No. Mere ownership of all or nearly all
Authority (“BCDA”) is created under a of the capital stock of the corporation is
special law and has an authorized capital not enough reason to disregard the
02
of P100,000,000,000.00 which may be fully separate personality of the holding
subscribed by the Republic of the company unless there is control not just in
Philippines and shall either be paid up share ownership but in finances and
from the proceeds of the sales of its land business practices; such control was used
I2
assets or by transferring properties valued
in such amount to BCDA. BCDA has no
voting shares of stocks and was formed
for a specific purpose - to own, hold
to perpetuate fraud or violate a duty in
contravention of the plaintiff’s right; and
such control and breach of duty are the
proximate cause suffered by the plaintiff.
BR
and/or administer military reservations in (Maricalum Mining Corporation v. Ely
the country and implement its conversion Florentino, G.R. No. 221813, July 23, 2018)
to other productive use. Is BCDA a
Q3: Person A donated a parcel of land to
government-owned or controlled
an XYZ corp., pending issuance by SEC of
corporation?
AW
purposes mentioned under Section 87 of A3: (a) XYZ corp. is not correct, as XYZ
the Revised Corporation Code. (Bases corp. is not a de facto corporation when it
Conversion and Development Authority v. accepted the donation. The filing of
Commissioner of Internal Revenue, G.R. No. articles of incorporation and the issuance
205925, June 20, 2018) of the certificate of incorporation are
essential for the existence of a de facto
corporation. In the absence of a certificate
1
qualifications and none of the
applies when a person who has assumed
disqualifications under the Corporation
an obligation in favor of a non-existent
02
Code to be a director of a publicly listed
corporation, having transacted with the
company, and has enough votes to be
latter as if it was duly incorporated, is
assured of a board seat, does a stockholder
prevented from denying the existence of
have any vested right to be elected as a
the latter to avoid the enforcement of the
director?
02
contract. (Missionary Sisters of Our Lady of
Fatima v. Alzona, G.R. No. 224307, August 6, A6: No, because while he may have
2018) enough votes, he may not have the
qualifications of a director under the law
B. Corporation Sole
I2
Q4: May a corporation sole acquire and
hold real property in the Philippines if its
presiding bishop, priest, minister or rabbi
and by-laws of the corporation. The
by-laws, for instance, may provide as a
ground for disqualification being a
director, stockholder, or a representative of
BR
is a foreigner? a competing corporation. (John Gokongwei
v. Securities and Exchange Commission, G.R.
A4: Yes, a corporation sole, regardless of
No. L-45911, April 11, 1979)
the nationality of its presiding bishop,
priest, minister, rabbi or presiding elder, Q7: What officers are the directors of a
AW
Q5: May the sole stockholder of the OPC the board shall also elect a compliance
be made liable beyond his subscription to officer. The same person may hold two (2)
the corporation? or more positions concurrently, except that
no one shall act as president and secretary
A5: Yes, provided that the sole stockholder
or as president and treasurer at the same
cannot prove that the corporation was
time, unless otherwise allowed by the
adequately financed and that the property
of the OPC is independent of the
1
20% of the Board of corporations vested
Q10: What are the requisites to create an
with public interest. These include:
Emergency Board under the Revised
02
a. Public companies as described Corporation Code?
under the Securities Regulation
A10: The power to create an Emergency
Code. A public company is any
Board is lodged with the Board. The
corporation with class of equity
requisites are:
02
shares listed for trading on an
Exchange, or with assets in a. The vacancy prevents the
excess of P50 Million and has remaining directors from
200 or more holders, at least constituting a quorum;
1
Q13.A: Define the Nell Doctrine.
a. Knowingly voting for or
02
assenting to patently unlawful A13.A: The Nell Doctrines provides the
acts of the corporation; general rule that where one corporation
b. Gross negligence or bad faith in sells or otherwise transfers all of its assets
directing the affairs of the to another corporation, the latter is not
corporation; liable for the debts and liabilities of the
02
c. Acquiring any personal or transferor.
pecuniary interest in conflict
Q13.B: State the exceptions to the Nell
with his duty as director or
Doctrine
trustee or officer resulting in
I2 damage to the corporation;
d. He consents to the issuance of
watered stocks or who, having
A13.B: The exceptions to the Nell Doctrine
are:
BR
a. When the buyer expressly or
knowledge thereof, does not
impliedly assumes the
forthwith file with the
liabilities of the seller;
corporate secretary his written
b. If the sale amounts to a merger
objection thereto;
or consolidation;
e. Her agrees to hold himself
c. If the sale is entered into
AW
1
request stating that Person A did not show
hold-over director will not change the
any circumstance that an examination is
nature of the cause of the vacancy which is
02
proper?
due to the expiration of the director’s
A15: No. Person A, as a stockholder, has term. As such, the vacancy must be filled
the right to inspect the records of a by the stockholders in a regular or special
corporation. The stockholders’ right of meeting called for the purpose pursuant to
02
inspection of the corporation’s books and the Revised Corporation Code. (Valle Verde
records is based upon their ownership of Country Club, Inc. et al. v. Africa, G.R. No.
the assets and property of the corporation, 151969, September 4, 2009)
regardless of the number of shares the
E. Articles of Incorporation and
I2
stockholder owns. Also, the right to
inspect is not conditional of a showing of
any particular dispute or of proving any
mismanagement or other occasion
By-laws
Q17: Will a pledgee, to whom shares were
assigned as security for a loan transaction
BR
rendering an examination proper. If the but was not given both the Articles of
right is to be denied, the corporation Incorporation and by-laws of the
should show proof that the purpose of the Corporation, be bound by by-laws of the
shareholder is improper, by way of Corporation?
defense. (Terelay Investment and
AW
1
dispute must be any one of the following: Corporation v. Gozon, et al., G.R. No. 195956,
(a) between the corporation, partnership, March 11, 2015)
02
or association and the public; (b) between
the corporation, partnership, or
association and its stockholders, partners, Q20: Can a television show concept be
members, or officers; (c) between the copyrighted?
02
corporation, partnership, or association
and the State as far as its franchise, permit A20: No. The copyright over the
or license to operate is concerned; and (d) audio-visual recordings of a dating show
among the stockholders, partners, or is valid. However, this does not extend to
the general concept or format of its dating
I2
associates themselves.
Under the nature of the controversy test,
the disagreement must not only be rooted
game show. Copyright does not extend to
an idea, procedure, process, system,
method of operation, concept, principle, or
BR
in the existence of an intra-corporate
discovery, regardless of the form in which
relationship, but must pertain to the
it is described, explained, illustrated, or
enforcement of the parties’ correlative
embodied in such work. The IP Code,
rights and obligations under the
Corporation Code and the internal and under Section 175, states that no protection
shall extend, under this law, to any idea,
AW
(Norma D. Cacho and North Star 108946, January 28, 1999, Mendoza, J.)
International Travel, Inc. vs. Virginia D.
Balagtas, G.R. No. 202974, February 7, 2018) Q21: Are creators required to register their
literary or artistic works for these to be
III. Intellectual Property protected by copyright?
U
A. Copyright
A21: No, literary and artistic works are
Q19: Is news footage copyrightable? original intellectual creations in the
literary and artistic domain protected from
A19: Yes, an idea or event must be the moment of their creation. [Section 172,
distinguished from the expression of that IP Code]
idea or event. News or the event itself is
1
ownership. (Manly v. Dadodette, G.R. No. Q25: Can moral rights be waived?
165306, September 20, 2005)
02
A25: An author may waive his moral
Q22: When is there a substantial rights by a written instrument, but no
reproduction of a copyrightable work? such waiver shall be valid where its effect
is to permit another person: (1) to use the
A22: It does not necessarily require that
02
name of the author or the title of his work
the entire copyrighted work, or even a
or his reputation with respect to any
large portion of it, be copied. If so much is
altered version of his work which would
taken that the value of the original is
injure the reputation of another; and (2) to
sensibly diminished, or the labors of the
I2
original author are substantially and to an
injurious extent appropriated by another,
that is sufficient in point of law to
use the name of the author with respect to
a work he did not create. [Section 195, IP
Code]
BR
constitute piracy. (Habana v. Robles, G.R. Q26: Can moral rights be assigned or
No. 131522, July 19, 1999, Pardo, J.) licensed?
subject to license.
holders.
C. Fair Use Principle
A23: The moral rights of copyright holders
under Section 193 of the IP Code are (1) Q27: What is the definition of fair use?
the right of attribution; (2) the right to alter
A27: Fair use has been defined as a
work prior to, or withhold publication; (3)
PL
attribution.
unfair use arises however, if no copying is
Q24: What is the term of moral rights? proved to begin with. This is in
consonance with the principle that there
A24: The right of attribution shall last
can be no infringement if there was no
during the lifetime of the author, and in
copying. It is only where some form of
perpetuity after his death.
copying has been shown that it becomes
1
185 of the Intellectual Property Code lists A31: Anyone, except a public enemy, may
four (4) factors to determine if there was be insured. [Section 7, IC]
02
fair use, viz: Every person has an insurable interest in
a. The purpose and character of the the life and health of (a) himself; (b) any
person on whom he depends wholly or in
use, including whether such use is of a
part for education or support; (c) any
02
commercial nature or is for non-profit
person under a legal obligation to him for
educational purposes;
the payment of money, or respecting
b. The nature of the copyrighted property or services, of which death or
work; illness might delay or prevent the
I2
c. The amount and substantiality of
the portion used in relation to the
performance; and (d) any person upon
whose life any estate or interest vested in
him depends. [Section 10, IC]
BR
copyrighted work as a whole; and
Q32: If a person procures insurance on his
d. The effect of the use upon the own life, who may be his beneficiary?
potential market for or value of the
A32: A person may designate anyone as a
copyrighted work. beneficiary except those disqualified to
AW
Q29: Can quotations from a book receive donation under Article 739 of the
constitute infringement? Civil Code such as (1) persons in illicit
relations; (2) persons found guilty of
A29: Not automatically. Quotations from a adultery or concubinage; and (3) public
published work if they are compatible officer or his wife, descendants, or
with fair use and only to the extent ascendants. The beneficiary need not have
PL
1
by the entity holding the
the time when the contract is made, but it
information, or
need not exist at the time of loss. [Section
02
(b) when put together with other
19, IC]
information would directly and
B. Claims for Life Insurance certainly identify an individual.
[Section 3(g)]
Q34: If a fact, unintentionally concealed by
02
the insured, was not the proximate cause For example, an individual’s identity
of the loss, may the insurer raise would be apparent and can be directly
concealment as a defense against the ascertained from their full name alone
insurance claims? (under (a) above). This may not be the case
I2
A34: Yes, provided that the fact concealed
is a material fact.
with an individual’s permanent address,
which alone may not be sufficient to
directly ascertain their identity, but such
BR
While the facts concealed need not be the address is also personal information under
proximate cause of the loss in order to (b) above, because it would certainly
constitute concealment or be intentionally identify that individual when put together
concealed, such facts must be material. with other information.
Materiality is to be determined not by the
event, but solely by the probable and Q36: Define consent as required under the
AW
have definitely affected the insurer’s or recorded means. It may also be given
action on the application of the insured, on behalf of the data subject by an agent
either by approving it with the specifically authorized by the data subject
corresponding adjustment for a higher to do so. [Section 3(b)]
U
premium or rejecting the same. (Sunlife Q37: Who are covered by the Data Privacy
Assurance Company of Canada v. Court of Act?
Appeals, G.R. No. 105135, June 22, 1995)
A37: The DPA applies to any natural and
V. Republic Act No. 10173 (Data Privacy Act juridical person involved in personal
of 2012) information processing including those
personal information controllers and
1
A38: Personal information processing
the lawful processing of personal
refers to any operation or any set of
information?
02
operations performed upon personal
information including, but not limited to, A40: Personal information shall be
the collection, recording, organization, processed according to the general
storage, updating or modification, principles of transparency, legitimate
retrieval, consultation, use, consolidation, purpose and proportionality. [Section 11]
02
blocking, erasure or destruction of data.
This means that the data subject should be
[Section 3(j)]
made aware of the nature and purpose of
Q39: Does the Data Privacy Act provide the processing of their data (transparency);
I2
for exceptions?
A39: Yes, the DPA does not apply to:
that such purpose should be not contrary
to law, morals, or public policy (legitimate
purpose); and the processing shall be
relevant to such purpose and not excessive
BR
(a) Information about any individual who
is or was an officer or employee of a (proportionality).
government institution that relates to the
Q41: In order to comply with a local
position or functions of the individual;
ordinance restricting unvaccinated
(b) Information about an individual who is persons and persons over the age of 65
AW
or was performing service under contract years old from dining in restaurants, your
for a government institution that relates to favorite cafe requests you to accomplish a
the services performed, including the health declaration for this purpose before
terms of the contract, and the name of the entering. The cafe asks you for
individual given in the course of the information such as your vaccination
performance of those services; status and age, as well as your nationality,
PL
including the name of the individual and transparency, legitimate purpose, and
the exact nature of the benefit; proportionality. Proportionality is absent
here, because a person’s nationality,
(d) Personal information processed for
marital status, and religion are not
journalistic, artistic, literary or research
relevant to the legitimate purpose of the
purposes
health declaration, which is only to check
a guest’s vaccination status and age.
1
(PIC).
b. The right to block the use of
02
data/information beyond the stated
purpose.
c. The right to access information from
the PIC
d. The right to rectify false information.
02
e. The right to object to the processing
of information.
f. The right of portability which is
where the data stored by the PIC
I2 may be obtained by the data subject
and transferred to his own medium.
g. The right to file a complaint with the
BR
National Privacy Commission.
h. The right to ask for damages in case
the information process is false,
incomplete or rendered false,
incomplete or irrelevant, or in excess
AW