KRIZ T.

ELMIDO BSA II-A DATE:

AEC 216 REGULATORY FRAMEWORK AND LEGAL ISSUES IN BUSINESS
WEEK 13
ACTIVITY 2: Summarize important learnings and apply on the following

1. Give specific case applying the principle of pactum commissorium.

ANSWER:
My father entered into a contract called “sangla tira” with Ben involving our untitled house and
lot in Zamboanguita (Negros Oriental). The contract states that my father borrowed
₱150,000.00 from Ben and the latter would take possession of the subject house and lot for two
years or until 2019. It also stipulates that if my father is unable to pay the ₱150,000.00 after two
years, Ben will become the owner of the property. We failed to pay the ₱150,000.00 in 2019
because my father got an accident, which eventually caused her death.We offered to pay Ben
the ₱150,000.00 plus interest but he refused to accept it claiming that he already owns the
property. He cited the failure of my father to pay her loan in 2019, saying this clause is expressly
provided in the contract.

The stipulation provided in the contract that Ben will be the owner of the house and lot in case
my father fails to pay the borrowed amount is void. This stipulation is called pactum
commissorium.

2. Describe the consequences as to debtor’s heirs and as to creditor’s heirs of the indivisibility of a
pledge or mortgage.
ANSWER:
Article 2089. A pledge or mortgage is indivisible, even though the debt may be divided among
the successors in interest of the debtor or of the creditor.
Therefore, the debtor’s heir who has paid a part of the debt cannot ask for the proportionate
extinguishment of the pledge or mortgage as long as the debt is not completely satisfied.
Neither can the creditor’s heirs who received his share of the debt return the pledge or cancel
the mortgage, to the prejudice of the other heirs who have not been paid.

3. Relate the requisites for a contract of pledge and real estate mortgage.
ANSWER:
 That they be constituted to secure the fulfillment of a principal obligation
 That the pledger or mortgagor be the absolute owner of the thing pledged or
mortgaged
 That the person constituting the pledge or mortgage have the free disposal of their
property, and in the absence thereof, that they be legally authorized for the purpose,
third persons who are not parties to the principal obligation may secure the latter by
pledging or mortgaging their own property.
KRIZ T. ELMIDO BSA II-A DATE:
AEC 216 REGULATORY FRAMEWORK AND LEGAL ISSUES IN BUSINESS
ASSESSMENT: Write true if the statement is correct and false if otherwise.

TRUE 1. Both contract of pledge and real estate mortgage are accessory contract

TRUE 2. A pledge or mortgage may be constituted to guarantee the performance of a voidable or

unenforceable contract.

TRUE 3. In a real estate mortgage contract, it is essential that the mortgagor be the absolute owner of
the property to be mortgage.

TRUE 4. The liability of the accommodation mortgagors extends only up to the loan value of their
mortgage property and not to the entire loan itself

TRUE 5. The creditor cannot appropriate the things given by way of pledge or mortgage, or dispose
them.

TRUE 6. A pledge or mortgage is indivisible.

TRUE 7. In case there be several things given in mortgage or pledge and each one of them guarantees
only a determinate portion of credit, the debtor shall have a right to the extinguishment of the pledge or
mortgage as the portion of the debt for which each thing is specifically answerable is satisfied.

TRU 8. Once mortgage is foreclosed, indivisibility ceases.

TRUE 9. The concept on indivisibility of mortgage does not apply to the right of redemption of an
accommodation mortgagor and his assignees.

TRUE 10. Revised Penal Code penalizes any person who, pretending to be the owner of any real
property, shall covey, sell, encumber, or mortgage the same.
KRIZ T. ELMIDO BSA II-A DATE:
AEC 216 REGULATORY FRAMEWORK AND LEGAL ISSUES IN BUSINESS

WEEK 14
Activity 2: Apply the theory learned on the following situations:

1. In what instance the contract of pledge must be in writing?

ANSWER:

2. Discuss the rule for a pledge to take effect against the third person.
ANSWER:
Article 2096 of the Civil Code state that for a pledge to take effect against third person, it should
be in a public instrument which must contain the description of the thing pledged and the date
of the pledge.

3. Describe the 2 types of foreclosure of mortgage.

ANSWER:
Judicial- It is the ordinary action for foreclosure under Rule 68 of the Rules of Court. It is based
on a personal claim against a specific property of the mortgagor. The mortgagee is specifically
given the right to claim for deficiency.
Extrajudicial- It is when a mortgagee is given a special power of attorney to sell the mortgaged
property by public auction under Act No. 3135. A deficiency claim is allowed.

4. Discuss the rule on redemption under judicial foreclosure

ANSWER:
The mortgage is specifically given the right to claim for deficiency.

5. What is the essence of Antichresis.

ANSWER:
By the contract of Antichresis, the creditor acquires the right to receive the fruits of an
immovable of his debtor, with the obligation to apply them to the payment of the interest, if
owing, and thereafter to the principal of his credit.

6. Discuss the instance of registering the mortgage in two chattel mortgage register.
ANSWER:
The chattel mortgage must be registered in two chattel mortgage register when the mortgagor
resides in one province, but the property is located in another province. The registration must
be in both, otherwise the chattel mortgage is void.

7. List down the rights and obligations of antichretic creditor.

ANSWER:
 The right to the fruits of the thing.
 The right to retain the things until the debt is paid.
 The right to have the thing sold upon nonpayment at maturity.
KRIZ T. ELMIDO BSA II-A DATE:
AEC 216 REGULATORY FRAMEWORK AND LEGAL ISSUES IN BUSINESS

ASSESSESMENT

TRUE 1. All movables which are within commerce may be pledge, provided they are susceptible of
possession.

TRUE 2. Incorporeal rights evidenced by negotiable instruments may be pledged.

TRUE 3. If the property is capable of manual delivery, there should be actual delivery.

TRUE 4. If the pledgor is not the owner of the thing pledge, the pledge is void.

TRUE 5. Unless there is a stipulation to the contrary, the pledge extends to the interest and earnings
of the right pledged.

FALSE 6. The subject matter of a real estate mortgage is always a real property.

TRUE 7. Growing crops and unpaid rent cannot be mortgage separately from the estate producing
them.

TRUE 8. By mortgaging a piece of property, a debtor merely subjects it to lien but ownership thereof is
not parted with.

TRUE 9. Once a mortgage has been signed in due form, the mortgagee is entitled to its registration as
a matter of right.

TRUE 10. A mortgage liability is usually limited to the amount mentioned in a contract.

TRUE 11. The mortgagee has the right to recover deficiency in case of judicial foreclosure by way of
mere motion.

FALSE 12. The law does not require the contract of antichresis to be in writing.

TRUE 13. An unrecorded chattel mortgage is not valid.

TRUE 14. In both pledge and chattel mortgage, the subject matter is a movable property, if the subject
is delivered to creditor or third person, instead of being recorded, the contract is pledge and not a
chattel mortgage.

TRUE 15. Chattel mortgage can only cover obligations existing at the time the mortgage is constituted.
KRIZ T. ELMIDO BSA II-A DATE:
AEC 216 REGULATORY FRAMEWORK AND LEGAL ISSUES IN BUSINESS

WEEK 15
Activity 2: Based on the information read, answer the following:
1.) Discuss the importance of the enactment of the Intellectual Property Right.
ANSWER:
The Enactment of the Intellectual Property Rights protects and secure the exclusive
rights of scientist, inventors, artists and other gifted citizens to their intellectual
property and creations, particularly when beneficial to the people.

2.) What are the amendments/ changes made in the Intellectual Property Code of the
Philippines repealing provisions of other previously made laws?
ANSWER:

3.) Are the Bureaus and respective functions and qualifications of each person assigned in
each position, appropriately enough to cover areas covered by the intellectual Property?
Explain.
ANSWER:
YES,
KRIZ T. ELMIDO BSA II-A DATE:
AEC 216 REGULATORY FRAMEWORK AND LEGAL ISSUES IN BUSINESS

WEEK 16
Activity 2: Apply the theory learned on the following situations:
1.) Dr. Nobel discovere3d a new method for treating Alzheimer’s involving a special method
of diagnosing the disease, treating it with a new medicine that has been discovered after
long experimentation and field testing, and novel mental isometric exercises. He comes
to you for advice on how he can have his discoveries protected. Can he legally protect
his new method of diagnosis, the new medicine, and new method of treatment? If no
why? If yes, how?
ANSWER:
Dr. Nobel can be protected by a patent for the new medicine as it falls within the scope
of Sec. 21. But no protection can be legally extended to him for the method of diagnosis
and method of treatment which are expressly non-patentable under Sec. 22.

2.) X works as a research computer engineer with the Institutor of Computer Technology, a
government agency. When not busy with his work, but during office hours, he
developed a software program for law firms that will allow efficient monitoring of the
cases, which software program is not at all related to his work. Assuming the program is
patentable, who has the right over the patent?
ANSWER:
The Right to a Patent is to the employee, because the inventive activity is not part of his
regular duties even if he uses the time, facilities and materials of the employer.

3.) What is the term of patent? Is it absolute? Explain.

ANSWER:
Sec. 54. Term of Patent. – The term of a patent shall be twenty (20) years from the filing
date of the application.
Note.
The term shall be 20 years from the filling date of the applica. However, a patent
shall cease to be in force and effect if any prescribed annual fees therefor is not paid
within the prescribed time or if the patent is cancelled in accordance with the provisions
of the IP Code and the Regulations.

4.) Explain the grounds for cancellation of patent.

ANSWER:
KRIZ T. ELMIDO BSA II-A DATE:
AEC 216 REGULATORY FRAMEWORK AND LEGAL ISSUES IN BUSINESS
According to section 61 cancellation of patent any interested person may, upon
payment of the required fee, petition to cancel the patent or any claim thereof, or parts
of the claim, on any of the following grounds:
a) That what is claimed as the invention is not new or patentable;
b) That the patent does not disclose the invention in a manner sufficiently clear and
complete for it to be carried out by any person skilled in the art; or
c) That the patent is contrary to public order or morality.

Where the grounds for cancellation relate to some of the claims or parts of the claim,
cancellation may be effected to such extent only.

WEEK 17
Activity 1: In a sheet of bond paper write the summary of the assigned readings.(RFLB page
545-722)

Activity 2: Apply the theory learned on the following situations:

1.) For how long a certificate of registration shall remain in force.
ANSWER:
Sec. 145. Duration. – A certificate of registration shall remain in force for ten (10) years:
Provided, that the registrant shall file a declaration of actual use and evidence of
obstacles to such use, as prescribed by the Regulations, within one (1) year from the
fifth anniversary of the days of the registration of the mark. Otherwise, the mark shall
be removed from the Register by the Office.

2.) When shall the request of renewal of registration for trademark be made?
ANSWER:
Sec. 146. Renewal. –
A registration may be renewed for periods of ten (10) years at its expiration upon filling
of a request and payment of the prescribed fees. The request shall contain the following
indications and/or supporting documents:
a) An indication that renewal is sought;
b) The name, address and other contact details of the registrant or successor-in-interest,
hereafter referred to as the “right holder”;
c) The registration number;
d) The filing date of the application which resulted in the registration to renewed;
KRIZ T. ELMIDO BSA II-A DATE:
AEC 216 REGULATORY FRAMEWORK AND LEGAL ISSUES IN BUSINESS
3.) Describe the characteristics of qualified applicant for trademark registration.
ANSWER:
Qualified applicant for trademark registration must be the person who controls the
nature and the quality of the goods or the services and the owner can be an individual,
partnership or corporation.

4.) Will an application for registration or registration of trademark be assigned or

transferred? If yes when can it be considered null and void?
ANSWER:

Yes according to Sec. 149. Assignment and Transfer of Application and Registration. –
149.1. An application for registration of a mark, or its registration, may be assgined or
transferred with or without the transfer of the business using the mark.
149.2. Such assignment or transfer shall, however, be null or void if it is liable to mislead
the public, particularly as regards the nature, source, manufacturing process,
characteristics, or suitability for their purpose, of the goods or services to which the
mark is applied.

ASSESSMENT: Write true if the statement is correct and false if otherwise.

KRIZ T. ELMIDO BSA II-A DATE:
AEC 216 REGULATORY FRAMEWORK AND LEGAL ISSUES IN BUSINESS
TRUE 1. Marks are visible signs that are capable of distinguishing goods or services.
TRUE 2. There are marks that are not allowed by law to be used or registered.
TRUE 3. Each case must be decided on its own merits in ascertaining whether there is
colourable.
TRUE 4. Likelihood of confusion is enough to make a case for trademark infringement
TRUE 5. Trademarks that are considered well-known may be protected in the Philippines even
without registration.
TRUE 6. Registration of a mark does not preclude a third party to use their names, pseudonyms,
etc. as long as such use is confined to the purpose of mere identification only.
TRUE 7. A registered mark may be transferred or assigned without transfer of the business
using the mark.
FALSE 8. Unregistered trade names are protected from infringement.
FALSE 9. Unfair competition and trademark infringement are not the same.
TRUE 10. Criminal liability attaches to trademark infringement.

WEEK 18
Activity 2: Apply the theory learned on the following situations:
1.) What intellectual property rights are protected by copyright?
ANSWER:
Literary and Artistic Works, Derivative Work.

2.) Compare and contrast copyright from patent.

ANSWER:
Copyright is the right granted by a statute to the proprietor of an intellectual production
to its exclusive use and enjoyment to the extent specified in the statute. Copyright is
purely a statutory right it means that the rights are limited to what the statute. Patent is
a monopoly granted only for specific purposes and objectives. Copyrights protects
original works of authorship while patent protects inventions or discoveries.

3.) List down the scope of copyright confined to literary and artistic works.
ANSWER:
Sec. 172. Literary and Artistic Works. –
KRIZ T. ELMIDO BSA II-A DATE:
AEC 216 REGULATORY FRAMEWORK AND LEGAL ISSUES IN BUSINESS
172.1 Literary and artistic works, hereinafter referred to as “works” are original
intellectual creations in the literary and artistic domain protected from the moment of
their creation and shall include in particular:
a) Books, pamphlets, articles and other writings;
b) Periodical and newspapers;
c) Lectures, sermons, addresses, dissertations prepared for oral delivery, whether or not
reduced in writing or other material form;
d) Letters;
e) Dramatic or dramatico-musical compositions; choreographic works or entertainment
in dumb shows;
f) Musical compositions, with or without words;
g) Works of drawing, painting, architecture, sculpture, engraving, lithography or other
works of art; models or designs for works of art;
h) Original ornamental designs or models for articles of manufacture, whether or not
registrable as an industrial design, and other works of applied art;
i) Illustrations, maps, plans, sketches, charts and three-dimensional works relative
to geography, topography, architecture or science;
j) Drawings or plastic works of a scientific or technical character;
k) Photographic works including works produced by a process analogous to
photography; lantern slides;
l) Audiovisual works and cinematographic works and works produced by a process
analogous to cinematography or any process for making audio-visual recordings;
m) Pictorial illustrations and advertisements;
n) Computer programs; and
o) Other literary, scholarly, scientific and artistic works.
ASSESSMENT: Answer concisely.
1.) Under the Intellectual Property Code, lectures, sermons, addresses or dissertations
prepared for oral delivery, whether or not reduced in writing or material forms are
regarded as?
ANSWER:
Literary and Artistic Works

2.) Juan Xavier wrote and published a story similar to unpublished copyrighted story of
Manoling Santiago. It was, however, conclusively proven that Juan Xavier was not
aware that the story of Manoling Santiago was protected by the copyright. Manoling
Santiago sued Juan Xavier for infringement of copyright. Is Juan Xavier liable?Why or
Why not?
ANSWER:
KRIZ T. ELMIDO BSA II-A DATE:
AEC 216 REGULATORY FRAMEWORK AND LEGAL ISSUES IN BUSINESS
Yes. Juan Xavier is liable for Infringement of Copyright. It is necessary that Juan
Xavier is aware that the story of Manoling Santiago was protected by copyright. The
work of Manoling Santiago is protected from the time of its creation

3.) X’s painting of Madonna and child was used by her mother to print some
personalized gift wrapper. As part of her mother’s efforts to raise funds for Bantay
Bata, the mother of X sold the wrapper to friends. Y, an entrepreneur, liked the
painting in the wrapper and made copies and sold the same through National
Bookstore. Should X sue Y? Explain your answer.
ANSWER:
X can sue Y for Infringement because artistic works are protected from the moment
of creation.

4.) X came up with a new way of presenting a telephone directory in a mobile phone,
which he dubbed as the “iTel” and which uses lesser time for locating names and
telephone numbers. May X have his “iTel” copyrighted in his name? State your
reason.
ANSWER:
No because it is a mere system or method.