COMMERCIAL LAW MOCKBAR

1
Yes, the court should grant the motion.

The Court ruled that the freeze order shall be effective from 20 days to 6 month depending
upon the circumstances. The effectivity of the freeze order can be subject to extension if there
was still no conclusion of the investigation by the government authority and it is still necessary
to determine the culprits of the crime and if there was indeed commission of violation of the
law.

Here, the financial investigation by the AMLC was not yet completed on the sixth month. There
was still no final determination of all those who are involve in the crime. There was still no
conclusion on the investigation. There was still no resolution of the case. If the freeze order will
be lifted up, this will cause the disposition of the money , to be hidden by the culprits and it will
be even more difficult for the government to trace up the money.

Hence, the motion on the extension of the freeze order should be granted.

2
The petition is not meritorious

Under the Anti-Money Laundering Act, the law authorizes inquiry and examination of the bank
deposit and investment if there is probable cause that they are connected to the proceeds of
unlawful activity or money laundering offenses. The petition should be filed in the Court of
Appeals and not in any court since it is the Court of Appeals which is vested with power and
authority by law to try money laundering offenses. Under the doctrine of hierarchy, the action
should be instituted in the lower court which is vested with jurisdiction before resort to a
higher court.

In the case at bar, there is a probable cause that the bank deposit is connected with the
proceeds of unlawful activity or money laundering offenses since the wealth of the vice-
president and his family is disproportionate to their income. It is not the Supreme Court but it is
the Court of Appeals which is directly vested with law the power and authority to try money
laundering cases. The petition should be instituted in the Court of Appeals before resort to
Supreme Court.

Hence, the petition should not be granted.

3
The court should apply the dominancy test
The Court held that to determine trademark infringement, the court can apply either the
dominancy test or holistic test. In dominancy test, the court shall determine if there is big
similarity between the registered trademark and in the infringing trademark and if the
infringing trademark has procure the dominant feature of the registered trademark. In holistic
test, the court shall consider not only the words, signs, symbols in the trademark but the over-
all appearance of the goods if the goods of the infringing trademark is substantially similar to
the goods with registered trademark that would cause confusion to the customers whether the
goods are the same or the businesses are connected.

Here, the court should apply the dominancy test. The court did not base its judgment on the
over-all appearance of the goods but based on the trademark itself of the goods. X’s trademark
is MINI-MINE while Y’s trademark is PA-MINE-PO. One of the dominant feature of X’s trademark
is the word MINE which was procured also by Y’s trademark. Because of the use of the word
MINE, this will cause confusion among the customers whether the burgers are from the same
source or the businesses are connected.

Hence, the court should use the dominancy test to determine if there was trademark
infringement

4
The argument of Mario and Pedro is not correct.

Under the Doctrine of Ultra Vires , the corporation shall exercise powers conferred by law, its
articles of incorporation and other powers that are necessary and incidental to the powers
conferred by law and its articles of incorporation. If the powers exercise by the corporation is
not vested by the law or its Articles of Incorporation, not necessary and incidental to the
powers conferred, they are not valid and unenforceable.

Here, the imposition of disciplinary action against the officers and members of the association
are necessary and incidental to the powers conferred by law to the association and to its
articles of incorporation. A corporation cannot exist without disciplinary measures to those who
violate its policies. The policy of the corporation is one of its foundations and noncompliance
with them would prevent the corporation from accomplishing its purpose and cause its
destruction.

Hence, the association can impose disciplinary actions.

5
The denial of the trademark application is not proper.
According to the Intellectual Property Law, the generic or descriptive term can be subject of
trademark registration if it has acquired secondary meaning which means that the use of the
term connects, relates directly to the goods or enterprise it is use and not to anything else in
the country. The people will directly associate the word with the enterprise it is used.

Here, the use of the term Jurist albeit generic or descriptive term, connects or relates directly
with the existence of the bar review center and not to any enterprise or business in the
country. The people will directly associate the word jurists to the bar review center.

Hence, the term Jurist can be subject of trademark registration

6
No, the corporation may not return Alex’s investment.

Under the Trust Fund Doctrine, the payment of the subscription of the shares in the
corporation and all its assets and properties serves as security for the payment of all debts and
liabilities of the corporation to its creditor. Therefore, these assets and properties of the
corporation cannot be impaired to protect the creditors of the corporation.

Here, the investment of Alex is one of the assets and properties of the corporation. The
investment serves as one of the securities for the payment of the debts and liabilities of the
corporation. The return of the investment will impair these securities to protect the creditors of
the corporation.

Hence, the investment cannot be returned

7
Yes, the beneficiary of X can recover the policy.

The Court held, that if the insured is in good faith does not know the fact which will constitute
as fraud or concealment, that fact will not affect the contract of insurance. Good faith means
the insured do not have the intention to defraud the insurance company as can be gathered
from all the facts and circumstances in the case.

Here, X was only a laundrywoman. She has no medical knowledge as to diseases, illnesses,
ailments. She does not know of her health status. It is not shown that there was intention of
her to defraud the insurance company.

Hence, the beneficiary can recover

As to the contention that AM is not a common carrier, under the Transportation law, a common
carrier is one engage in the transportation of passengers or goods by land, sea, air, for a
compensation, offering its services to the public. The issuance of the certificate of public
convenience is immaterial in the to determine whether it is a common carrier or not.

Here, the trucking is engage in the transportation of goods by land, for a consideration, offering
its services to the public. It is immaterial that it caters only limited customers and does not have
regular trips because it is still an offering of its services to the public and still engaging in the
transportation of goods.

As to the contention that even it is a common carrier, it is still not liable because the loss of the
goods was due to fortuitous event, under the Transportation Law, the common carrier is still
liable despite the existence of the fortuitous event, if it incurred delay or negligence in the
transportation of the goods.

Here, the trucking incurred negligence in the transportation of goods. The truck was carnapped
when its driver was having lunch. There was failure to exercise the diligence of a good father of
the family to ensure the safety of the goods during its transportation until its arrival in the place
of its destination.

Hence, the trucking is liable under all circumstances

9
No, Lex may not successfully file a money claim for the donation in the proceeding for the
settlement of the estate.

Under the Donation Law, if the amount donated exceeds 5, 000.00, the donation must be in
public or private instrument and the acceptance of the donation must be likewise in public or
private instrument. The donor should know the acceptance of the donee within the lifetime of
the donor.

Here, the donation was 500, 000.00 which should be already in public or private instrument as
provided by law. The acceptance of the donation must be also in public or private instrument.
Both the donation and the acceptance of the donation were not reduced into public or private
instrument. There was no compliance of the law, therefore the donation is not enforceable.
Hence, Lex cannot successfully file a money claim

10
Atty. Hurt committed copyright infringement

Under the Intellectual Property Law, copyright infringement is committed when a person, not
the author or owner of the work, distributed the work without the consent of the author. The
works of an author is protected by law from the moment of its creation and not subject to any
registration to gain protection from law.

Here, Atty hurt distributed the work by uploading it in the website without the consent of its
owner or author. By uploading it in the website, there was distribution of the work.

Hence, copyright infringement was committed

11
No, Y corporation cannot be held liable

Under the Doctrine of Separate Personality, the corporation has a distinct and separate
personality from its board/ trustees, stockholders/ members, officers, employees, affiliates and
subsidiaries. The separate personality can be disregarded only if it is used to perpetuate fraud,
justify wrong, defend a crime. In this case, those who composed the corporation are directly
liable to creditors and other third persons.

Here, it is not shown that the separate personality of X corporation was used to perpetuate
fraud, justify wrong, defend a crime. Therefore, its separate personality cannot be disregarded
and those who composed it cannot be held directly liable to the debts and liabilities of the
corporation.

Hence, Y corporation cannot be directly liable.

12
The complaint will not prosper

The Court ruled that a foreign corporation is required to obtained license in the country if it in
engage in doing business. Doing business in the Philippines means that the corporation is selling
products in the country, entered into service contracts with individual or juridical entity, gaining
customers orders, stays in the country for more than 180 days.
Here, the foreign corporation is not selling products, entered into service contracts with
individual or juridical entity in the country, doe s not gain customers orders and does stay in the
country for more than 180 days.

Hence, the foreign corporation is not required to obtain license to do business in the country

13
Yes, the company can publish Y’s books

Under the Intellectual Property Code, the author of the books together with his heirs and
assigns, owns the copyright of the work during the lifetime of the author plus fifty years after
his death. After the 50 years, the work is of public dominion already and anyone can make use
of the work.

Here, the copyright of the author will end on February 3, 2064. After that date, onwards, the
work is of public dominion and anyone can make use, distribute the work.

Hence, the company can publish Y’s books on July 18, 2064.

14a
The denial of the claim damages for medical expenses is not justified.

The Montreal Convention of 1999 provides that the air carrier is liable to the death and injuries
caused to the passengers if they were inflicted while on board the aircraft. The air carrier is
liable to the actual damages suffered by the passengers.

Here the cause of the injury suffered by Mr X was inflicted while on board of the aircraft during
its crash landing. The medical expenses are the cost of the actual damage suffered by Mr. X

Hence, the denial of the damages for medical expenses which are the cost of the actual damage
suffered is not justified.

B
The denial of the exemplary damages was justifies.

The Montreal Convention of 1999 provides only that the aircraft shall be directly liable for all
the death and injuries suffered by its passengers while on board. It provides only for actual
damages suffered and not anything else.
Here, the exemplary damages are not the actual damages suffered by the passenger while on
board the aircraft. The exemplary damages are not included in the cost of te actual damage
suffered by the passenger.

Hence, the denial of the exemplary damages is justified

15
No, the dividend declaration is not proper.

Under the Corporation Code, the corporation can declare dividends when it has unrestricted
retained earnings in its books and not including the appreciation of the value of its real
properties and other properties. The dividend can be declared on the basis of the profits alone
of the corporation. The other properties of the corporation such as its real properties and other
properties cannot be taken since it serves a security for all the debts and liabilities of the
corporation to the protection of its creditors under the Trust Fund Doctrine.

Here, it was wrong to include in the declaration of dividends the appreciation of the real
properties of the corporation. The real properties and other properties of the corporation
cannot be taken because it will cause impairment of the securities for all the debts and
liabilities of the corporation to the protection of the creditors under the Trust Fund Doctrine.

Hence, the inclusion of the appreciation of the real properties in the declaration of dividend
was not proper.

16
Yes, the insurance proceeds may be turned over to Lothario’s legitimate wife and children.

The Court held that it should be the legitimate family who should receive the proceeds from
the insurance. The legitimate family should file a petition in court to be declared as the proper
party to receive the insurance proceeds. And upon order of the court, the insurance company
should turn over the insurance proceeds to the legitimate family.

Here, Lothario Casnova has legitimate family who the rightful to receive the insurance family.
They should file a petition in court to be declared as the rightful beneficiaries of the insurance
proceeds and upon order of the court, the insurance company should turn over the proceed to
the legitimate family.

Hence, upon order of the court, the insurance proceeds may be turn over to the legitimate
family.