I.

Suggested Answer C. The dollar savings account is covered by PDIC Law

only while the trust fund is not covered by any of these laws.
Regulatory Issuance No. 2011-02 was published by the Philippine Deposit
Insurance Corporation (PDIC) last January to clarify which deposit accounts and
transactions are excluded from the coverage of deposit insurance. It will be
recalled that Congress passed Republic Act No. 9576 in 2009 which increased
the maximum amount of deposits covered by PDIC insurance to P500,000. The
same law excluded from the coverage of the PDIC insurance the following
accounts or transactions: (i) investment products, such as bonds and securities,
(ii) deposit accounts which are unfunded, or that are fictitious or fraudulent, (iii)
deposit accounts constituting or emanating from unsafe or unsound banking
practices, and (iv) deposits determined to be the proceeds of unlawful activity.
Under the PDIC regulation, the account is an investment product if no debtorcreditor relationship exists between the bank and the client, and instead, the
relationship is that of trustor-trustee or principal-agent; the principal amount is not
protected; the amount is not withdrawable on demand; and other analogous
features. On the other hand, deposit accounts are unfunded or are fictitious or
fraudulent if the bank did not receive the money alleged to be deposited, or when
the deposit is simulated or feigned, as when it was made to appear that money
was received by the bank but in fact was not, or when the bank employed means
calculated to deceive.
Dollar Savings is covered by R.A. No. 6426 Foreign Currency Deposit Act of the
Philippines.

II.

Suggested Answer B. Pre-emptive right

(Sec.39 Corporation Code Pre-emptive rights option privilege of an existing
stockholder to subscribe to a proportionate part of shares subsequently issued by
the corporation before the same can be disposed of in favor of the others;
includes all issues and disposition of shares of any class.)

III.
Suggested Answer A. Yes, because Sugbu Bank is bound to know the signature
of its clients.
(Bank of P.I. vs. Casa Montessori Internationale, 430 SCRA 261 (2004]
Forgery is the counterfeiting of any writing, consisting of the signing of anothers
name with intent to defraud, is forgery.
The bank which allows the payment on a check where the signature is forged is
liable to the depositor-drawer. When one of two persons suffers the wrongful act
of a third person, he whose negligence was the proximate cause of the loss must
bear the loss. Pursuant to its prime duty to ascertain well the genuineness of the
signatures of its client- depositors, the drawee-bank is expected to use
reasonable business prudence. In the performance of that obligation, it is bound

by its internal banking rules and regulation that form part of the contract it enters
into with its depositors.
A drawee bank must restore to the account of the drawer the amounts of checks
on which the signature of its president was forged even of the forger was the
independent auditor of the drawer, who was in charge of reconciling the bank
statements with the records of the drawer.
IV.
Suggested Answer A. Yes, because although Sunrise Insurance Company is a
covered institution
(REVISED IMPLEMENTING RULES AND REGULATIONS R.A. NO. 9160, AS
AMENDED BY R.A. NO. 9194 Rule 3.a.2. Insurance companies, insurance
agents, insurance brokers, professional reinsurers, reinsurance brokers, holding
companies, holding company systems and all other persons and entities
supervised and/or regulated by the Insurance Commission (IC).
(a) An insurance company includes those entities authorized to transact
insurance business in the Philippines, whether life or non-life and whether
domestic, domestically incorporated or branch of a foreign entity. A contract of
insurance is an agreement whereby one undertakes for a consideration to
indemnify another against loss, damage or liability arising from an unknown or
contingent event. Transacting insurance business includes making or proposing
to make, as insurer, any insurance contract, or as surety, any contract of
suretyship as a vocation and not as merely incidental to any other legitimate
business or activity of the surety, doing any kind of business specifically
recognized as constituting the doing of an insurance business within the meaning
of Presidential Decree (P.D.) No. 612, as amended, including a reinsurance
business and doing or proposing to do any business in substance equivalent to
any of the foregoing in a manner designed to evade the provisions of P.D. No.
612, as amended.
V.
Suggested Answer: A. The trustor has the right to vote while the trustee retains
the right to be elected as director and the right to receive dividends.
(Section 59. Voting trusts. One or more stockholders of a stock corporation
may create a voting trust for the purpose of conferring upon a trustee or trustees
the right to vote and other rights pertaining to the shares for a period not
exceeding five (5) years at any time: Provided, That in the case of a voting trust
specifically required as a condition in a loan agreement, said voting trust may be
for a period exceeding five (5) years but shall automatically expire upon full
payment of the loan.)

VI. Suggested Answer: D. Unenforceable Legal Basis: Under Section 33 of

the Warehouse Receipts Law, the warehouseman may satisfy his lien for a
claim which has become due, after serving written notice to the person on
whose account the goods are held and the claim is not paid on or before the

date mentioned in the notice, which shall not be less than ten (10) days from
the delivery of such notice. Without the payment, the warehouseman is
authorized by law to validly sell the goods through auction.In the case at bar,
while Saldy, the warehouseman, has an authority to validly sell the goods
held by him after Tony failed to pay after due notice, but the authority granted
to him is only to sell the goods through action and not to a direct buyer.
Thus, Saldy exceeded on his authority.Under Article 1403 of the Civil Code,
contracts entered into by one who has acted beyond his powers are
unenforceable.Therefore, the sale by Saldy, the warehouseman, of the goods
he held to a direct buyer and not by auction is considered unenforceable. VII.
Suggested Answer: D. No, the doctrine of limited liability provides for the
extinguishment of its liability to cargo owners by reason of shipwreck Legal
Basis:Settled is the rule that the ship owners or agents liability is merely coextensive with his interest in the vessel such that a total loss thereof results in
its extinction. The total destruction of the vessel extinguishes maritime liens
because there is no longer any res to which it can attach (Monarch vs. Court
of Appeals, 333 SCRA 71).Moreover, Article 587 of the Code of Commerce
provides; the ship agent shall also be civilly liable for the indemnities in favor
of third persons which arise from the conduct of the captain in the vigilance
over the goods which the vessel carried; but he may exempt himself
therefrom by abandoning the vessel with all her equipment and the freight he
may have earned during the voyage.