Online Final Examination

Commercial Law Review

May 2, 2020

INSTRUCTIONS: Carefully read these instructions before you start answering the
questions. Answer each question based on the applicable laws and or jurisprudence
on the matter. Answer the questions using a presentation or approach as if you are
answering an actual bar examination questions.

I
(10 points)

X worked as an OFW in Tokyo, Japan and he has a deposit in his name with
Philippine National Bank (PNB) in Tokyo in the amount of SIX HUNDRED
THOUSAND PESOS (P600,000.00), Philippine currency.

X also maintains in the Philippines the following accounts: (a) personal account
with PNB-Legazpi in the amount of P700,000.00; (b) joint account with his wife
with PNB-Naga City in the amount of P500,000.00; (c) joint account with Y with
PNB-Tabaco in the amount of P500,000.00; and joint account with Z with PNB-
Caloocan in the amount of P500,000.00.

X maintains another personal account in the Philippines with a subsidiary bank of

PNB in the amount of P450,000.00 with accrued interest in the amount of
P50,000.00.

Assume that PNB and its subsidiaries closed due to insolvency, how much each
depositor in the problem can recover from the PDIC? Explain why.

II

X has a shipment of goods to Sidney Australia from the Philippines but at the time
he arrived at the airport the airline told him that the plane bound for Australia will
be arriving the following day. So, X left the goods with the airline and he was
issued an airwaybill and the goods were in the meantime stored in the warehouse
of the carrier. When aircraft arrived the following day, the water craft of the airline
transporting the goods of X from the warehouse to the aircraft sank due to the
negligence of the watercraft damaging the goods of X before they could be loaded
to the aircraft.
 Questions:

a. X asked you if it is possible for him to recover damages from the airline
under the provisions of the Warsaw Convention. How will you explain your
answer to X?
b. Give two (2) purposes of the Warsaw Convention?
c. What are the documents made uniform by the Warsaw Convention?

III
(10 points)

X was given by his bank a credit line. X had drawn several times on his credit line
and for each drawing X signed a promissory note stating: (a) the amount that he
had drawn; (b) the interest that he had to pay on each drawing made; and (c) the
period when X was supposed to pay for each drawing. X was able to pay on time
all his drawings but the time came when his bank attempted to collect from him a
sum of money representing accumulated service fees which fees were authorized
by the BSP. X refused to pay the sum representing the accumulated service fees so
the bank sued X.

Questions:

a. As X’s counsel what will be your defense to prevent the bank from
collecting the accumulated service charges? Elaborate your answer.
a. What is the purpose of the Truth in Lending Act?
b. What is the duty of the lender or seller under the Truth in Lending Act?

IV
(10 points)

X obtained a loan from Y secured by a real estate mortgage. X failed to pay his
obligation at maturity so Y initiated the extrajudicial foreclosure of the real estate
mortgage. During the scheduled public auction, Y pleaded to X to give him few
months to pay his obligation and to postpone the auction sale. X conceded to Y so
they agreed in writing before the sheriff conducting the auction to postpone the
auction sale. However, Y still failed to pay despite the extended opportunity
afforded to him so X decided to pursue the auction sale pursuant to their written
agreement before the sheriff.

Questions:
 a. Can the auction sale be validly made on the date as agreed by X and Y?
Explain your answer.
b. In extrajudicial foreclosure of real estate mortgage, what composes the
redemption price if the mortgagor is other than a juridical person?
c. Who may exercise the right of redemption?
d. Is the right of redemption transferrable? Why or why not? Explain.
e. In extrajudicial foreclosure of real estate mortgage, what is the remedy of
the highest bidder if the mortgagor does not want to vacate the property,
and is this remedy also available against any person who is in possession
of the mortgaged property? Explain.

V
(10 points)

X is the consignee of goods from Thailand worth 5 million pesos which he fully
insured. The vessel from Thailand carrying the goods covered by a bill of lading
from Thailand arrived at the port of destination in the Philippines on April 30,
2019. The goods were turned over by the carrier to the arrastre operator on March
5, 2019 and the latter turned over the goods to the customs broker on March 8,
2019 who agreed to transport the goods to the warehouse of X. After the goods
were delivered to the warehouse of X, some of the goods were lost and damaged.
As X’s lawyer he asked you to file a case in connection with the lost and damaged
goods.

Questions:

a. Against whom are you going to file a case? Explain.

b. What is the basis of your cause of action?
c. What law is the basis of your cause of action?
d. What is the prescriptive period in filing the action? Why?
e. In there a condition precedent to be complied with before an action in
court can be filed? Explain.

VI
(10 points)

X is charged for plunder and other anti-graft and corrupt practices act before the
Sandiganbayan. In the course of the trial the prosecution moved for the issuance of
subpoena to a certain bank official so that he may be examined on the bank deposit
of Y who is X’s wife. Y vigorously opposed the motion.
Questions:

a. If you were the court, would you grant the motion? Explain.
b. Will your answer be the same if Y is merely a relative of the wife of X?
Explain.
c. What are the purposes of the secrecy of bank deposits law?
d. What are the prohibited acts under the law on secrecy of bank deposits?

VII
(10 points)

a. X obtained a loan from ABC Corporation for 115 million pesos secured
by the vessel worth 100 million pesos owned by X payable within five
years. Before X could pay the loan, the vessel sank during its voyage due
to a strong typhoon it encountered. Discuss and explain the legal
consequences of the sinking of the vessel.

b. Two vessels were involved in a collision bringing extensive damage to

both vessels and their cargoes. The ship owners sued each other and
presented evidence pointing to each vessel as the one at fault during the
collision. However, the court could not identify which between the two
vessels was at fault. If you were the judge how will you decide the case?
Who will be held liable for the damaged cargoes? Explain your answers?

c. MV Don Lucas owned and operated by MDC Inc. agreed to transport

huge volume of furniture sets of X from Tabaco Port to Mindoro Port for
Y who owned a furniture display center. On its way to Mindoro, MV
Don Lucas encountered a storm in the middle of the sea causing its
master to jettison furniture sets to lighten the vessel. The typhoon came
so sudden that it evaded detection from PAG-ASA that it was not able to
announce its coming to the public immediately. MV Don Lucas and the
goods of other cargo owners arrived safely at Port Mindoro. X asked you
who he can hold liable for the jettisoned furniture sets. How will answer
the question of X as his lawyer?

VIII
(10 points)

a. Explain by giving an example the “first public distribution” in copyright.

b. Supposed that you produced a film and you sold it. Can the buyer view
the film and invite others to view the film? Explain.
c. Will your answer in letter (b) be the same if the buyer would like to rent
the film to others? Why or why not?
d. What is the meaning of “rental” under the copyright law?
e. Suppose a band performed a surprise and impromptu performance of
song it newly created at the roof top of a two story building in Makati
without inviting any person to view the band’s performance, can you
consider it a public performance under the copy right law? Why or why
not?

IX
(10 points)

a. XXX Corporation owned 65% of the outstanding shares entitled to vote

in YYY Corporation – a SEC-registered enterprise. Lucas, a Filipino,
owned 70% shares entitled to vote in XXX Corporation and five of its
directors are also Filipinos. What is the nationality of YYY Corporation?
Explain.

b. Will your answer be the same if 70% of the outstanding shares entitled to
vote in XXX Corporation belonged to aliens? Why or why not?

c. Will your answer in letter (b) be the same if only 55% of the shares
outstanding entitled to vote in XXX Corporation belonged to aliens but
not more 60% percent of its directors are aliens? Why or why not? Why
or why not?

d. XYZ Corporation owned 69% while Filipinos owned 31% of the shares
in ABC Corporation. XYZ Corporation is 47% Filipino and 53% alien
owned. ABC Corporation is how many percent Filipino owned? May
ABC Corporation engage in the development of natural resources in the
Philippines?

e. A case was filed by a lawyer against the corporation to enforce the

personal liability of directors and officers of the corporation because of
their failure to pay the lawyer his professional fees. Does this illustrate
the piercing the veil of corporate fiction? Why or why not?
 X
(10 points)

a. XXX Corporation, a debtor corporation as defined under the FRIA, filed

a petition for voluntary court-supervised rehabilitation proceedings
before the Regional Trial Court. After the RTC issued the
Commencement Order, YYY Corporation, as one of the principal
creditors filed in another court an action for judicial foreclosure of real
estate mortgage to enforce against XXX Corporation its liability under
the mortgage. Is the action of YYY Corporation sanctioned by law?
Explain.

b. ABC Corporation, a creditor of the XYZ Corporation filed criminal cases

against the officers and directors of the latter. While the criminal cases
are pending in court, XYZ Corporation through its authorized and
responsible officers filed a petition for voluntary court-supervised
rehabilitation proceedings where the commercial court where the petition
was filed issued in due time the Commencement Order. Upon issuance of
the Commencement Order, the officers and directors of XYZ Corporation
filed a motion to suspend the criminal cases in the court where the cases
are pending on the ground that the commercial court already issued a
Commencement Order. If you were the judge, would you suspend the
proceedings in the criminal cases? Why or why not?
--------------------Good Luck--------------------