ATENEO CENTRAL BAR OPERATIONS

COMMERCIAL LAW QUESTIONNAIRE COPY

1985 Commercial Law Bar Examination

1. Rubberworld Inc. sought registration of the trademark “Juggler” for its casual rubber shoes in Inter Partes
Case No. 602 filed with the Patent Office. The registration was opposed by a Belgian Corporation which
alleges that it owns and has not abandoned the trademark “Juggler” although it admits that it has no
license to do business in the Philippines, it is not presently selling footwear under the trademark “Juggler”
in the Philippines, and it has not been licensed nor does it have any agreement with any local entity or
firm to sell any of its product in the Philippines. At the trial, it was established that Rubberworld had spent
a considerable amount and effort in popularizing said trademark in the Philippines, Acting on petition, the
Patent Office dismissed the opposition and ordered the registration of the trademark “Juggler” in the
name of Rubberworld. Discuss the validity of the aforesaid decision.

2. Archipelago Lines, Inc., a carrier, accepted for shipment from Iloilo to Manila a cargo consiting of 800
sacks of rice, knowing that some sacks had big holes and others had their openings just loosely tied with
strings. Due to spillage of the rice during the trip, there was shortage in the rice delivered by the carrier to
the consignee. When sued,Archipelago Lines, Inc. interposed the defense wthat the carrier was not liable
because the spillage was due to the defective condition of the sacks. As a judge, how would you rule on
the liability of the carrier? Reasons.

3. Dona Buding checked in a the PAL counter of the Manila Domestic Airport on a flight to Bacolod. Noticing
that Dona Buding had two big baggages being checked in, the counter clerkcalled her attention to
thestipulation in the plane ticket and asked if she was going to make any declaration on the value of the
same, but Dona Buding just looked at him and did not say anything. The plane arrived in Bacolod, but the
two baggeges could nowhere be found. PAL promised to deliver the two bagges the next day, but never
did. Dona Buding sued PAL, claiming P10,000 damages for the loss of the two baggages. PAL answered
that it was liable only for P200 for the plane ticket clearly stipulated that: "That total liability of the carrier
for lost or damaged baggage is limited to P100 per baggage, unless the passenger decalres a higher
valuation in excess of P100 but not in excess, however, of a total valuation of P1,000, and unless
additional charges are paid pursuant to the Carrier's Tariffs." The trial court ruled in favor of PAL.
Comment on the legality of the court's decision.

4. (A) What is the "limited liability rule" in maritime law, otherwise known as the "real or hypothecary
nature of maritime law?" Explain. (B) Whare the exceptions to the said rule? Explain.

5. Jose Reyes signed a blank check, and in his haste to attend a party, left the check on top of his executive
desk in his office. Later, Nazareno force open the door to Reyes' office and stole the blank check.
Nazareno immediately filled in the amount of P50,000 and a fictitious name as payee on the said check.
Nazareno then endorsed the check in the payee's name and passed it to Roldan. Thereafter, Roldan
endorsed the check to Dantes. (A) Can Dantes enforce the check against Jose Reyes? Explain. (B) If Dantes
is a holder in due course, will your answer to question (A) be the same? Explain. (C) Can Dantes enforce
the check against Roldan? Explain

6. Santos purchased Vera's car for P50,000. Not having enough cash on hand, Santos offered to pay in check.
Vera refused to accept the check unless it is endorsed by Reyes, their mutual friend. Reyes endorsed
Santos' check and Vera, knowing that Reyes had not received any value for endorsing the check, accepted
it. The next day, Vera presented the check to the drawee bank for the payment. Payment was refused for

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lack of funds. Vera gave notice of dishonor to Retes, but Retes refused to pay, saying that he endorsed
merely as a friend. (A) Is Reyes liable to Vera? Explain. (B) In the event reyes voluntarily pays vera, does
reyes have the right to recover from santos? Explain.

7. On September 21, 1984, Pedro Cruz borrowed $10,000 from Johnny Reyes, a balikbayan, in Manila, and
promised to repay the loan in American dollars in Manila on September 21, 1985. The loan agreement
was signed in Manila and the parties even had it notaried by a notary public. (A) Is the stipulation for
payment in American dollars enforceable? Explain. (B) Does the obligation to pay subsist?

8. In a complaint for damages, ZebraCorporation alleged that its President, Anton Molina, suffered mental
anguish social humiliation and serious axiety as a result of the tortious acts of Omega Corporation. In its
answer with counterclaim, Omega Corporation allged that it suffered besmirched reputation because of
the unfounded suit of Zebra Corporation and accordingly claimed for the award of moral damages. (A)
May Zebra Corporation recover moral damages based on its allegations in the complaint? Discuss (B) May
Omega Corporation recover moral damages on its counterclaim? Reasons.

9. Tantalus Corporation, of which 97% of the issued and outstanding shares of stock were owned by Roger
Mano, had financial obligations to it employees by way of unpaid wages and allowances. Tantalus
Corporation was dissolve by shortening its corporate life and all its assets turned over to Suceso
Corporation, of which 95% of the subscribed shares were held by RogerMano and his wife. Then, Tantalus
Corporation ceased to operated. (A) May the employees of Tantalus Corporation proceed against the
Suceso Corporation to recover their unpaid claims? Discuss. (B) What is the doctrine of "Piercing the veil
of Corporate Entity" and in what cases did the supreme court apply the said doctrine?

10. June Roco purchased from Maharlika Subdivision a 1,000 square meter parcel of lot. Annotated at the
back of the Certificate of Title issued to him are restrictions regarding the nature and specifications of the
construction of a residential house that may be constucted thereon and a statement making the
purchaser an automatic member of the Maharlika Village Association, a registered non-stock, non-profit
corporation. Two years thereafter, Roco applied for a building permit to construct a three storey edifice
on the said place. Upon being informed and learning of the said construction, the Maharlika Village
Association advise him to stop the said construction since it violated the restrictions contained at the back
of his title. Despite said admonition, Roco proceeded with the constructio compelling Maharlika to file an
action before the Regional Trial Court of the place for "Injuction with Damages." Roco moved to dismiss
on the ground that the case is a corporate controversy which therefore falls within the exclusive
jurisdiction of the SEC pursuant to Section 5 of PD 942A. Resolve Roco's motion to dismiss

11. Rey Bautista insured his 1984 Galant with Alpha Insurance Co., Inc. for own-damage, theft and third-party
liability effective August 21, 1984 to August 20, 1985. On August 3, 1985 the car was brought to "Car
Specialists", a wellknown auto repair shop for a general check-up. On August 11, 1985, while in the
custody of the said shop, the car was taken by one of the employees of the shop and driven to a hideout
in Montalban, Rizal. While travelling along a narrow street, the car smashed into a parked gravel and sand
truck and it suffered an extensive damage. Rey filed a claim for total loss with Alpha, but the claim was
denied. Rey then sued Alpha to collect on the policy. Rule on the said case stating the legal basis in
support of your decision.

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12. Eduardo Fernandez applied for and was issued Policy No. 0777 by Atlas Life Insurance Corporation on a
whole life plan for P200,000. Although he was married to Clara, with whom he had five (5) legitimate
children, he designated his common law wife, Diana Cruz, as his revocable beneficiary in the policy, and
he referred to Diana, in his application and policy,as his wife. Five years thereafte, he died. Diana
immediately filed her claim for the proceeds of the policy as the designated beneficiary. Clara also filed
her claim as legal wifre. The insurance company filed a petition for Interpleader before the Regional Trial
Court of Rizal to determine who whould be entitled to the proceeds of the policy. If you were the judge,
how would you decide the siad interpleader action? Explain

13. Don Mariano was able to secure a favorable judgment against Nestor Pe for recovery of sum of money
and the said judgment had become final and executory. Don Mariano was informed by someone that
Nestor Pe might have a sizeable a sizeable savings deposit with Xena Commercial Bank of which Don
Mariano was a stockholder, with one share registered in his name. Immediately, he rushed to the bank
and demanded from the bank manager that he be shwon the bank records to see if Nestor really had such
savings deposit. When the bank manager refused and invoked RA 1405, Don Mariano cited his rights as a
stockholder to inspect corporate records. (A) Is the stand of the bank manager legally tenable? Explain. (B)
What remedy is available to Don Mariano? Explain.

14. Bohol Mining Corporation Is 60% Filipino-owned and 40% Canadian-owned. As provided in its Articles of
Incorporation and By-Laws, its board of directors is composed of nine members. During the last annual
stockholders meeting held on May 31, three of the nine elected directors were Canadian citizens. Juan De
La Cruz, together with two other Filiopino stockholders petitioned the SEC to disqualify the said three
Canadians and to enjoin them from discharing their functions as directors, on the grounds that aliens
cannot participate in any capacity in a nationalied indurstry, like mining; and the exploitation of natural
resources is reserved under the Constitution to Filipino Citizens. Will the petition prosper? Explain.

15. Act. No. 1956, more popularly known as the Insolvency Law, deals with 1) suspension of payments, 2)
voluntary insolvency and 3) involuntary insolvency. Briefly discuss the said subjects and outline the
procedure that will have to be undertaken in connection therewith.

16. (A) What is the so called "doctrine of corporate opportunity?" What is the underlying philosophy upon
which such doctrine rests? (B) What is a "voting trust" and what are the legal limitations of the voting
trust agreement?

17. When oriental bank was ordered closed by the central bank on May 15, 1985, Elizabeth Diaz had three
separate deposit accounts in her name with the said Bank, namely: P200,000 in time deposit; P100,000 in
current deposit; and P50,000 in savings deposit. Under the PDIC law, how much, if any, could she recover
from each of the three separate accounts? Explain

18. Nestor Dionisio invented a space age revolutionary mini room air conditioner and was able to secure the
registration of patent and issuance of patent certificate for said invention by the Philippines' Patent
Office. He immediately went into commercial production and sale of his invention. Later, Carlos Asistio,
who used to be Nestor's plant manager, organized his own company, and engaged in the manufacture of
exactly the same mini room air condiioners for his own outfit and which he sold for his own beneit. As
counsel of Dionisio, what legal steps would you take to protect his rights and interests? Discuss

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19. Juan Royo is constructing his family home on a lot in Marikina which he leased from Fernando Paz. Short
of funds to finish the house, Juan borrowed from Trader Royal Bank the sum of P150,000. By mutual
agreement, Juan Royo executed a chattel mortgage over the residential house in favor of the bank. Is a
chattel mortgage over a residential house consturcted on a rented lan belongning to another person valid
and enforceable? Explain.

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