Friday, March 31, 2006

Araullo 2005 Bar Passers

Congratulations!!!
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1. Avelino Catahan Jr
2. Renato Villones
3. Julius King Cruz
4. Kelly Belino
5. Florida Daquiz
6. Grace Ignacio
7. Neil Perez
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WE ARE VERY PROUD OF YOU!!!
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For a complete list of Bar Passers
click here.

Thursday, March 30, 2006

Santiago vs Comelec

For a copy of the blogger's digested case click here.

For a copy of the original text click here.

Petition For Initiative


Yesterday, someone came to my office and asked how many personnel do I have. When I said 28 (including me), he gave me three sheets (see photo) and asked that we fill up and sign those sheets like everyone else in the government does. He left and said he will be back to collect the signed sheets tomorrow.
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The sheet contains a proposition:
"Do you approve of the amendment of the Articles VI and VII of the 1987 Constitution, changing the form of government from the present bicameral-presidential to a unilateral-parliamentary system of government, in order to achieve greater efficiency, simplicity and economy in government; and providing an Article XVII as transitory provisions for the orderly shift from one system to another?"
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By signing your name, you are approving the proposed amendment to the 1987 Constitution and your signature shall form part of the petition for initiative to amend the Constitution and signifies your support for the filing of such petition.
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Guess who's heading the campaign to collect the signatures? Lets recite the alphabet - ABCDILG - HIJKLMNOP.
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Misnomer - it should be Government's Initiative and not People's Initiative because the government is initiating the action.
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I have posted previously here the decision of Supreme Court on Santiago vs Comelec where People's Initiative was denied due to lack of implementing guidelines. So, this is just another waste of time and money for the initiators.

Conflict of Laws - Final Exams

Let me share our finals exam in Conflicts of Laws given by Atty. Reymon Fabros:
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1. Marvin filed a civil suit in the Philippines against Jolina citing in his complaint a provision of law in Hong Kong. After Marvin rested his case, he realized that he failed to prove the provisions of the law he was invoking. In his memorandum, Marvin insisted that the Hong Kong provision shuld be applied considering that Hong Kong is just one hour away from plane, our courts can take cognizance of the said provision of law. Is Marvin correct? What will you do with the case?
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2. A, a former filipino citizen died intestate. He left all his properties, a 10-hectare industrial lot located in the Philippines to B, his only son who now resides in California. Prior to his death, A was already an American citizen and was residing with his son in California. C, a brother of A, contested the fitness of B to inherit from his father considering that a foreigner cannot own real properties in the Philippines. A posited that since it is his capacity that is in issue, the law of California should prevail. Render a legal opinion on the matter.
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3. Jang Geum, a naturalized Filipino, got married to Jung Jung, a Korean national. Their marriage was celebrated in Hong Kong, but on their fifth anniversary, they again had a wedding ceremony in Korea. Assuming the law in Korea allows an agreement to govern the properties of the spouse to be entered even after the marriage, and the spouses agreed on an "absolute separation of property" regime, may Jang Geum insist in Philippine Courts that their properties in the Philippines be considered as forming part of the absolute community of property? Why?
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4. Yao, a black African guy, got married to Ming, a Filipino born of a Chinese father. Before migrating to Africa, Ming worked as a waitress in Ma Mon Luk. When Ming was fired because the customers were turned off by her name (some arguing that because her name gives the impression that Ma Mon Luk's siopao is made from cat's meat), they went to live in Africa. Ming did not adopt the citizenship of her husband though. When Kobe, their first child was born, Yao was denying that the child is his. Ming argues that Yao has no proof that the child is not his. Ming considers Yao unfair and unreasonable for suspecting that he is not the father of Kobe simply because Hobe is white and has natural blonde hair. If you are the judge, how will you rule the case of yao? Explain.
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Any answers?

Wednesday, March 22, 2006

Whenever You Remember


this one goes out to all my classmates in law (Batch 2006) - this is a nice graduation song (feeling senti)


WHENEVER YOU REMEMBER
Carrie Underwood
When you look back on times we had
I hope you smile
And know that through the good and through the bad
I was on your side when nobody could hold us down
We claimed the brightest star
And we, we came so far
And no they won’t forget
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(Chorus)
Whenever you remember times gone by
Remember how we held our heads so high
When all this world was there for us
And we believe that we could touch the sky
Whenever you remember, I’ll be there
Remember how we reached that dream together
Whenever you remember
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When you think back on all we’ve done
I hope you’re proud
When you look back and see how far we’ve come
It was our time to shine
And nobody could hold us down
They thought they’d see us fall
But we, we stood so tall
And no we won’t forget
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Whenever you remember times gone by
Remember how we held our heads so high
When all this world was there for us
And we believe that we could touch the sky
Whenever you remember, I’ll be there
Remember how we reached that dream together
Whenever you remember
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Yeahhh, Ooohh
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We claimed the brightest star
And we, we came so far
And know that we showed them all
And no they won’t forget
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Yeahhh
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Whenever you remember times gone by
Remember how we held our heads so high
When all this world was there for us
And we believe that we could touch the sky
Whenever you remember, I’ll be there
Remember how we reached that dream together
Whenever you remember
Whenever you remember
Ooohh, whenever you remember

Tuesday, March 21, 2006

Remedial Law Final Exam


Let me post here our final exam in remedial law review given last night by Judge Adriano. The first three questions came as a surprise to us because Judge said that the coverage of the final exam shall be limited to criminal procedures and evidence only. Well, I guess he just taught us a hard lesson – that is, always expect the unexpected in the BAR.

Here are the ten questions:

1.May the adopter still file a petition to revoke the adoption degree? What is the remedy?

2.A filed a petition for habeas corpus before the RTC in Cabanatuan City for the release of A’s daughter allegedly being detained by B in Quezon City. If you were the counsel of B, what step will you take?

3.What body or tribunal has jurisdiction to entertain a petition for the dissolution of a corporation?

4.May a prosecutor file an information for acts of lasciviousness without a complaint from he offended party? Supposing the offended party already executed an affidavit of complaint, is a criminal complaint still necessary to initiate a proceeding for acts of lasciviousness?

5.A vehicular collision occurred involving the vehicles of A and B. The driver of A was charged with reckless imprudence before the MTC. A and his driver in turn filed a civil suit for damages against B and B’s driver before he RTC for the recovery of damages amounting to P500,000. B moved to dismiss the civil action before the RTC on the ground that the civil action based on the crime is deemed instituted with the criminal action for reckless imprudence before the MTC. Resolve the motion of B.

6.A was charged with robbery before the office of the City Prosecutor. May he file a petition for bail before the actual filing of the criminal complaint before the proper court?

7.A brought a parcel to a courier service for delivery to a friend. The employee of the courier service opened the parcel for inspection without A’s consent. The parcel contained marijuana. Is the marijuana admissible in a prosecution for violation of RA 9165?

8.The police saw a man walking in a wobbly manner, with red eyes and coming from a place in a cemetery known as hangout of drug addicts. The police frisked the man and found marijuana. Is the marijuana admissible as evidence in Court?

9.Explain the two axioms of admissibility of evidence.

10. A, the lawyer on direct examination wanted to prove that there was other agreement aside from those stated in the contract. He asked the witness - - - “Aside from what was stated in the contract, is there other agreement between you and the defendant?” If you were the lawyer for the defendant what ground should you object and why?
Any answers?

Saturday, March 18, 2006

Legal Counseling

Here are the questions in the Legal Counseling given to and answered by Junior Law Students.
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1. My brother was a firetruck driver. One night he was riding a car on his way to a dinner with friend. Because he sustained injuries in the collision, he tried to claim employee's compensation with the GSIS. Do you think my brother's claim will be favorably be acted upon by the GSIS?
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2. After 24 years of marriage, my brother filed a petition for nullity of marriage on the ground of psychological incapacity. My sister-in-law countered that it was my brother who abandoned the conjugal home and lived with another woman. My sister-in-law filed a criminal complaint for concubinage against my brother. May my brother use as a defense the pendency of the annulment case that he filed, or at least use it to suspend the criminal proceeding on account of prejudicial question?
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3. I bought a property in Kapitan Pepe Subdivision four (4) months ago, where I paid the amount of 1.8 million pesos. After buying the said property I moved and resided therein, but have not yet transferred the title to my name as the former owner undertook to effect said transfer himself. Two months ago, a certain Mr. Kikay went to my house in Kapitan Pepe wanting to buy the same. I told him that I just bought the house and that I am not selling it. I went to the Register of Deeds last week and found the title already transferred not in my name but to that of Mr. Kikay. I found out that the same property was sold two weeks ago by the same owner to Mr. Kikay for 2 million pesos. What should I do?
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4. In 1993, my sister got married. A year after, her husband disappeared without a trace. Some say that she can file an annulment case. Some say that she needs to file a petition for the declaration of his presumptive death, or judicial declaration of absence. What does my sister need for her to remarry?
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Any advise?

Wednesday, March 15, 2006

Derivative Suits

Been busy lately with our School's Law Week Celebrations and English Fest (ill have a post on this later) so this is going to be a short topic.
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The rights of a stockholder to sue:
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There are 3 types of suits which a stockholder may institute based on wrongful or fraudulent acts of directors or other persons:
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1. Individual suits - wrong done personally to the stockholder and not to other stockholders. (example - when right of inspection is denied to a particular stockholder).
2. Class suit - wrong done to a group of stockholders (example - the whole class of preferred stockholders' rights violated)
3. Derivative suit - wrong dome to a corporation intself.
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Requirements Relating to Derivative Suit:
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1. The party bringing the suit must be a stockholder at the time of the act or transaction complained of. (no of shares immaterial)
2. Intra-corporate remedies have been exhausted. (the SH has made a demand on the BOD but the latter refused to heed his plea)
3. The cause of action actually devolves on the corporation and not to the particular SH bringing the suit. (any benefit recovered must be accounted for the corporation who is the real party in interest.
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Who may institute derivative suits?
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1. a minority stockholder;
2. a corporate officer;
3. a treasurer;
4. a director; or
5. a majority stockholder when requirement of 2/3 affirmative vote is necessary.
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Tuesday, March 14, 2006

Cell Phone Law

According to a proposed new law that would go into effect Jan 1, 2006 you will no longer be able to use a cell phone while driving unless you have a "hands free" adapter.
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I went to Globe and Smart Business Centers in SM branches and they wanted P2,500 for a headset with a microphone for my cell phone. Having a friend in the cell phone business, I talked with him and was able to come up with an alternative, working through Ace Hardware.
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These kits are compatible with any mobile phone and one size fits all. I paid him P2.50 each because he bought in quantity. Then we tried it with Nokia, Sony Ericsson and Samsung units and they worked perfectly.
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A photo is attached so scroll down & take a look and let me know if you want one. Also, forward this to anyone you know, who has a cell phone, and who may want one!
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I thought you could use a laugh.
WE ALL NEED TO LAUGH MORE......
HAVE A GREAT DAY

Monday, March 13, 2006

Civil Law II Midterm Exam

Just wanna share our midterm exam on Civil Law Review II (all about succession) given by Judge Sonny M. Arenas
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1. Define
a) Succession
b) Codicil
c) Preterition
d) Fideicommissary substitution
e) Collation
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2. When Jose affixed his signature in his last will and testament, Pedro, one of the three witnesses, went to a nearby canteen located on the same floor of the building to buy coke and pancit because he was very hungry. During the will's probate, an oppositor objected to it because the will is null and void on the grund that the witness Pedro was not present when Jose signed it. Is the will valid or void? Why?
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3. John made a will consisiting of seven pages. During its probate, Perla, a daughter of John who was given a minimal inheritance, opposed the will because page 4 of the will was not signed by her father John and witness Lorna. Oppositor Perla now claims that the said will of her father is void. Is she correct? Why?
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4. Peter and Susan are husband and wife. They have two sons Arnel and Boy. Arnel married Patty and they have children A, B and C. It so happened that Arnel died laeving properties worth P5 million. During the period, Arnel was a bachelor, he had an illicit affair with Gemma and Anna is the fruit of their unlawful union. Also during the exixtence of the marriage between Arnel and Patty, they adopted Maria. As a judge, you distribute now the estate of Arnel to his survivors Peter and Susan (parents), Boy (brother), Patty (wife), A, B and C (children), Gemma (paramour), Anna (illegitimate child) and Maria (adopted). Why is Arnel's estate distributed the way you answered it?
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5. Mario has an illegitimate son Tony. Mario died. However, MArio ha a full-blood brither Carlo but the latter (Carlo) also passed away later. Carlo is survived by his widiw and three children of Jose, the other brother of the late Mario and the late Carlo. Now, Tony filed a complaint to get his share in the wealth of Carlo. Is Tony's complaint valid? Why?
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6. Robert, a widower, has three sons who are now all married and with their respective children. Because the children of Robert are bad guys and money spenders, Robert made a last will and testament giving all his properties valued at P50 million to his great friend Luis who will manage and take care of Robert's business properties. During the probate of the will, the three sons of Robert opposed it. Will their joint opposition prosper? Explain.
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Any answers?

Saturday, March 11, 2006

Batangas - A Church for Travelers


We visited this church on our way home from Lemery, Batangas.

Real Property Taxes


Nature and purpose of Property Taxes.

Property taxes are assessed on all property, or all property of a certain class located within a certain territory on a specified date in proportion to its value or in accordance with some other reasonable method of apportionment.

In the Philippines, a real property tax is an annual AD VALOREM TAX imposed by LGU’s on real property within their jurisdiction, determined on the basis of a fixed proportion of the value of the property.

The function of a property tax is to raise revenue. Such tax does not impose any condition nor does it place any restriction upon the use of the property taxed.


Fundamental Principles Governing Appraisal And Assessment Of Real Property:

a.) Real property shall be appraised at its current and fair market value.
b.) Real property shall be classified for assessment purposes on the basis of its actual use.
c.) Real property shall be assessed on the basis of a uniform standard within each local government unit.
d.) The appraisal, assessment, and collection of real property tax shall not be let to any private person; and
e.) The appraisal and assessment of real property shall be equitable.


Appraisal and assessment of Real Property:

Steps in assessment of Real Property

1. Listing of all properties subject to the tax; and
2. The valuation of such properties.

Duty to declare Real Property

It shall be the responsibility of the owner, administrator or their representatives to declare, under oath, the true value of real property, taxable or exempt, within 60 days after the acquisition. The sworn declaration shall be filed once every 3 years before June 30th of the year commencing 1992. The failure or refusal to make that declaration within the prescribed period would authorize the provincial or city assessor to declare the property in the name of the defaulting owner, if known, or against an unknown owner as the case may be, and to assess the property for taxation.(Secs. 201-204 LGC). In the case of Testate Estate of Concordia Lim V. City of Manila, it was held that the unpaid tax attaches to the property and is chargeable against the person who had actual or beneficial use and possession of it regardless of whether or not he is the owner. To impose the real property tax on the subsequent owner who was neither the owner nor the beneficial user of the property during the designated periods would not only be contrary to law but also unjust.


Imposition of Real Property tax

The real property tax has been considered and held to be national, despite the fact that in practice it is local in its imposition and utilization.


Real property taxation covers the levy, assessment and collection of:

Annual ad valorem tax.
Special levies by LGUs
a) Additional 1% for special education fund.
b) Additional 5% on idle lands
c) Special assessments on property benefited by improvements undertaken by the government.

Real properties subject to this tax include:

Lands, buildings, machinery and other improvements, not otherwise specifically exempted under the Local Government Code.

- Improvements include valuable additions made to a property or an amelioration in its condition, amounting to more than a mere repair or replacement of parts involving capital expenditures and labor, which is intended to enhance its value, beauty or utility or to adopt it for new or further purposes.
- Machinery embraces machines, equipment, mechanical contrivances, instruments, appliances or apparatus, which may not be attached, permanently or temporarily, to the real property.


Exceptions from Real Property tax:

1. Real property owned by the Republic of the Philippines or any of its political subdivisions except when the beneficial use thereof has been granted, for consideration or otherwise, to a taxable person;
2. Charitable institutions, churches, parsonages, or convents appurtenant thereto, mosques, non profit or religious cemeteries, and all lands, buildings, and improvements actually, directly and exclusively used for religious, charitable, or educational purposes.
3. All pieces of machinery and equipment that are actually, directly, and exclusively used by local water districts, and government – owned or controlled corporations engaged in the supply and distribution of water and/or generation and transmission of electric power.
4. All real property owned by duly registered cooperatives as provided for under RA 6938, and
5. Machinery and equipment used for pollution control and environmental protection.


Remedies against a special Levy
An owner of real property or any person having a legal interest therein, affected by a special levy may, upon receipt of the written notice of assessment thereof, avail himself of the same remedies of appeal that may be taken from assessments of the provincial, city or municipal assessor calling for the payment of the real property tax (sec 244, LGC)

Note that even the tradition exemptees (Religious, educational, charitable institutions) are required to pay special assessments and to be exempted, it must first obtain certificate of exemption.


Payment of real property tax:


- The RPT for any year shall attach and become due and payable on the 1st day of January and taxes levied under the title on real property taxation shall be from the date of accrual, and constitute as lien upon the property subject to such tax.

- Payment however, may be made on or before January 20.


- Payment by installment may be made at the discretion of the taxpayer, without penalty in four equal installments, the 1st to be due and payable on or before March 31; and the 2nd on or before September 30 and the 4th on or before December 31, except special levies which shall be governed by the local ordinance imposing the same (SEC 250.LGC).

- In case of delinquency, an interest of 2% per month on the unpaid tax shall be imposed. If the basic real property tax and the additional tax accruing to the special education fund are paid in advance, the Sanggunian may grant a discount not exceeding 20% of the annual tax due.

COLLECTION REMEDIES:
1. judicial
2. administrative (extra-judicial)

· The basic real property tax and any other related taxes levied shall be collected within five (5) years from the date they become due. No action for collection can be had beyond this period, except:

1. If the local treasurer is legally prevented from collecting.
2. If the owner requests for reinvestigation and signs a waiver.
3. If the owner is out of the country or cannot be located.

PROCEDURES IN EFFECTING LEVY OF REAL PROPERTY:

a.) Notice of delinquency
b.) Issuance of a warrant of levy
c.) Advertisement
d.) Auction sale


TAXPAYER’S REMEDIES

ON ASSESSMENTS:

Any owner or person having legal interest in the property who is not satisfied with the action of the provincial, city, or municipal assessor may, within 60 days from the date of receipt by him of the written notice of assessment, may appeal to the local board of assessment appeals of the province or city concerned by a petition under oath together with the supporting documents thereof.
The Board shall decide the appeal within 20 days from receipt of the appeal, based on substantial evidence. The decision may be appealed within 30 days from receipt thereof by the taxpayer to the Central Board of Assessment Appeals.

The decision of the Central Board of Assessment Appeals shall be final and executory.


Note that an appeal does not suspend the collection of the tax as assessed, without prejudice to a later adjustment depending on the outcome of the appeal.

PAYMENT UNDER PROTEST:

No protest shall be entertained unless the tax is first paid. When a taxpayer desires for any reason to pay his tax under protest, he shall indicate the amount or portion thereof which he is contesting and such protest shall be annotated in the tax receipts by writing thereon the word “paid” under protest, within 30 days. In the case of manila Electric C. V. Barlis, 357 SCRA 832, the Supreme Court ruled: “Payment of the tax assessed under protest, is a condition sine qua non before the trial court could assume jurisdiction over the petition and for failure to do so, the RTC has no jurisdiction to entertain it.” It further stated: “Under the doctrine of primacy of administrative remedies an error in the assessment must be administratively pursued to the exclusion of ordinary courts whose decisions would be void for lack of jurisdiction.”

The amount or portion of the tax contested shall be held in trust by the treasurer and the difference shall be treated as revenue.

In the event that the protest is finally decided in favor of the protestant, the amount or portion of the tax protested against may either be:
a.) refunded to the protestant
b.) applied as tax credit to any other existing or future tax liability of the said protestant.

Friday, March 10, 2006

The Husband Store!

A store that sells husbands has just opened in New York City, where a woman may go to choose a husband. Among the instructions at the entrance is a description of how the store operates. You may visit the store ONLY ONCE !
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There are six floors and the attributes of the men increase as the shopper ascends the flights. There is, however, a catch . . .. you may choose any man from a particular floor, or you may choose to go up a floor, but you cannot go back down except to exit the building! So, a woman goes to the Husband Store to find a husband .
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On the first floor the sign on the door reads:Floor 1 - These men have jobs and love the Lord.
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The second floor sign reads:Floor 2 - These men have jobs, love the Lord, and love kids.
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The third floor sign reads:Floor 3 - These men have jobs, love the Lord, love kids, and are extremely good looking.
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"Wow," she thinks, but feels compelled to keep going. She goes to the fourth floor and sign reads:
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Floor 4 - These men have jobs, love the ! Lord, love kids, are drop- dead good looking and help with the housework.
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"Oh, mercy me!" she exclaims, "I can hardly stand it!"
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Still, she goes to the fifth floor and sign reads:Floor 5 - These men have jobs, love the Lord, love kids, are drop- dead gorgeous, help with the housework, and have a strong romantic streak.
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She is so tempted to stay, but she goes to the sixth floor and the sign reads:Floor 6 - You are visitor 4,363,012 to this floor. There are no men on this floor. This floor exists solely as proof that women are impossible to please.
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Thank you for shopping at the Husband Store. Watch your step as you exit the building, and have a nice day!
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Please send this to all men for a good laugh and to all the women who can handle the truth!Remember Greed is one of the seven deadly sins.You have to learn to be grateful for what you have to get more. When you are ungrateful you end up with nothing.
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Thnx Andrea for the e-mail.

Appellate Court Semi-Final Exam

Just wanna share part II of our exam questionnaire on appelate court.
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1. If a person is convicted by the RTC in criminal case involving violation of tax laws (tax evasion), where will he file the appeal?
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2. Is appeal available to the order of the court denying your motion to dismiss? Why?
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3. Is the decision of the NLRC, a quasi-judicial body, appealable? Where will you file the appeal?
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4. Explain the doctrine of exhaustion of administrative remedy.
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5. After an attempt to stage a coup d' etat, B/Gen. Lim and Col. Querubin were subjected to court martial. They were convicted and on appeal, the Chief of Staff of the AFP affirmed their conviction. Not satisfied with the performance of their lawyers, Gen. Lim and Col. Querubin asked your assistance to appeal further their conviction. As counsel of the two military officers, what action under the law will you take to protect their interests?
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Any answers?

Thursday, March 09, 2006

Graduation Evaluation

I was evaluated yesterday based on the grades I obtained from my law subjects. The evaluation aimed to assess my strengths and weaknesses on the eight bars subjects. The result of the evaluation showed the following: (with 1st as the strongest and 8th as the weakest).
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1st - Commercial Law (1.25)
2nd - Taxation (1.43)
3rd - Civil Law (1.74)
4th - Labor Law and Social Legislation (1.81)
5th - Political Law (2.0)
6th - Remedial Law (2.0)
7th - Legal Ethics and Practical Exercises (2.01)
8th - Criminal Law (2.02)
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My two highest subjects are Commercial Law and Taxation, maybe because I am a bit familiar with those two since I am a commerce graduate and a CPA practitioneer. Criminal Law and Legal Ethics are my weakest subjects but i was kinda surprised with that cause of all the subjects I find RemedialLaw the hardest. Well, I guess I have to study harder.
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Geez, malapit na graduation.

Tuesday, March 07, 2006

Unclaimed Balance Law






This is going to be brief...

UNCLAIMED BALANCES include credits or deposits of money, bullion, security or other evidence of indebtedness of any kind and interest thereon with banks, buildings and loan associations and trust corporations in favor of any person known to be dead or who has not make further deposits or withdrawals during the preceding 10 years or more.
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ELEMENTS OF UNCLAIMED BALANCES:
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1. There must be a claim or deposit of:
a. money,
b. bullion,
c. security, or
d. other evidence of indebtedeness
2. The credit or deposit must be with a bank, building and loan association, or trust corporation; and
3. The credit or deposit is in favor of a person:
a. who is dead, or
b. who has not made further depsotis or withdrawals during the preceding ten years or more.
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Builidings and Loan Association — are corporations whose capital stock is required or is permitted to be paid in by the stockholders in regular, equal, periodical payments and whose purpose is to accumulate the savings of its stockholders, to repay to said stockholders their accumulated savings and profits upon their surrender of their shares.


* The Solicitor General, when informed of such unclaimed balances, shall commence an action in the name of People of Republic of Philippines in the RTC of the province where the bank is located. Bank and depositors shall be made defendants.

* Summons shall be issued directed to all persons, OTHER THAN THOSE NAMED AS DEFENDANTS, claiming any interest in any unclaimed balance requiring them to appear within 60 days after publication of such summons and show cause why it shall not be deposited with the Treasurer.

* Upon trial, if the court determines that such deposits are unclaimed, judgment shall be rendered declaring that said unclaimed balances be escheated in favor of the government and commending said bank to deposit it with the Treasurer of the Philippines.
* Any bank which shall make any deposit with the Treasurer shall not be liable to any person which the latter may bring against the bank.

Monday, March 06, 2006

The New Central Bank Act

1. The BSP

· The central monetary authority (the Bangko Sentral ng Pilipinas) established under this Act, while being a government-owned corporation, shall enjoy fiscal and administrative autonomy.

· Responsibility of the BSP:

a) provide policy directions in the areas of money, banking, and credit.

b) supervision over the operations of banks

c) exercise such regulatory powers as provided in this Act and other pertinent laws

· Primary objective:

a) maintain price stability conducive to a balanced and sustainable growth of the economy

b) promote and maintain monetary stability and the convertibility of the peso.


2. The Monetary Board

· The powers and functions of the Bangko Sentral shall be exercised by the Bangko Sentral Monetary Board, hereafter referred to as the Monetary Board which is composed of seven (7) members appointed by the President of the Philippines for a term of six (6) years.

· The seven (7) members are: the Governor of the Bangko Sentral, a member of the Cabinet to be designated by the President of the Philippines and five (5) members who shall come from the private sector.

· No member of the Monetary Board may be reappointed more than once.

· Any vacancy in the Monetary Board shall be filled by the appointment of a new member to complete the unexpired period of the term of the member concerned.

· The President may remove any member of the Monetary Board for any of the following reasons:

a) the member falls under the enumeration of disqualifications

b) if he is physically or mentally incapacitated that he cannot properly discharge his duties and responsibilities and such incapacity has lasted for more than 6 months

c) the member is guilty of acts or operations which are of fraudulent or illegal character or which are manifestly opposed to the aims and interests of the BSP

d) the member no longer possesses the qualifications specified in this Act.

3. Operations of the Bangko Sentral

· The Bangko Sentral shall have the authority to request from government offices and instrumentalities, or government-owned or controlled corporations, any data which it may require for the proper discharge of its functions and responsibilities.

· The Bangko Sentral through the Governor or in his absence, a duly authorized representative shall have the power to issue a subpoena for the production of the books and records for the aforesaid purpose.

· Appointment of Conservator:

a) Whenever, the Monetary Board finds that a bank or a quasi-bank is in a state of continuing inability or unwillingness to maintain a condition of liquidity deemed adequate to protect the interest of depositors and creditors,

b) The conservator shall report and be responsible to the Monetary Board and shall have the power to overrule or revoke the actions of the previous management and board of directors of the bank or quasi-bank.
c) The conservator should be competent and knowledgeable in bank operations and management. The conservatorship shall not exceed one (1) year.

d) The conservator shall receive; the Monetary Board may appoint a conservator connected with the Bangko Sentral, in which case he shall not be entitled to receive any remuneration or emolument; the expenses attendant to the conservatorship shall be borne by the bank or quasi-bank concerned.

e) The Monetary Board shall terminate the conservatorship:

1) when it is satisfied that the institution can continue to operate on its own and the conservatorship is no longer necessary

2) when it is determined that the continuance in business of the institution would involve probable loss to its depositors or creditors

· In these cases, the Monetary Board may summarily and without need for prior hearing forbid the institution from doing business in the Philippines and designate the Philippine Deposit Insurance Corporation as receiver of the banking institution:

(a) is unable to pay its liabilities as they become due in the ordinary course of business

· Provided, That this shall not include inability to pay caused by extraordinary demands induced by financial panic in the banking community;

(b) has insufficient realizable assets, as determined by the Bangko Sentral, to meet its liabilities; or

(c) cannot continue in business without involving probable losses to its depositors or creditors; or

(d) has willfully violated a cease and desist order that has become final, involving acts or transactions which amount to fraud or a dissipation of the assets of the institution;

· The actions of the Monetary Board regarding rehabilitation and liquidation shall be final and executory, and may not be restrained or set aside by the court except on petition for certiorari on the ground that the action taken was in excess of jurisdiction or with such grave abuse of discretion as to amount to lack or excess of jurisdiction. The petition for certiorari may only be filed by the stockholders of record representing the majority of the capital stock within ten (10) days from receipt by the board of directors of the institution of the order directing receivership, liquidation or conservatorship.

· The Bangko Sentral shall publish a general balance sheet showing the volume and composition of its assets and liabilities as of the last working day of the month within sixty (60) days after the end of each month except for the month of December, which shall be submitted within ninety (90) days after the end hereof.

4. The Auditor

· The Chairman of the Commission on Audit shall act as the ex officio auditor of the Bangko Sentral and, as such, he is empowered and authorized to appoint a representative who shall be the auditor of the Bangko Sentral.

5. Currency

· The unit of monetary value in the Philippines is the "peso," which is represented by the sign "P."

· The Bangko Sentral shall have the sole power and authority to issue currency, within the territory of the Philippines.

· The Bangko Sentral shall have the authority to investigate, make arrests, conduct searches and seizures in accordance with law, for the purpose of maintaining the integrity of the currency.

· Notes and coins issued by the Bangko Sentral shall be liabilities of the Bangko Sentral and may be issued only against, and in amounts not exceeding, the assets of the Bangko Sentral. Said notes and coins shall be a first and paramount lien on all assets of the Bangko Sentral.

· The Bangko Sentral's holdings of its own notes and coins shall not be considered as part of its currency issue and, accordingly, shall not form part of the assets or liabilities of the Bangko Sentral.

· All notes and coins issued by the Bangko Sentral shall be fully guaranteed by the Government of the Republic of the Philippines and shall be legal tender in the Philippines for all debts, both public and private

· Unless otherwise fixed by the Monetary Board, coins shall be legal tender in amounts not exceeding Fifty pesos (P50.00) for denominations of Twenty-five centavos and above, and in amounts not exceeding Twenty pesos (P20.00) for denominations of Ten centavos or less.

· Rules on Retirement of Old Notes and Coins:

a) The Bangko Sentral may call in for replacement notes of any series or denomination which are more than five (5) years old and coins which are more than (10) years old.

b) Notes and coins called in for replacement in accordance with this provision shall remain legal tender for a period of one (1) year from the date of call.

c) After this period, they shall cease to be legal tender but during the following year, or for such longer period as the Monetary Board may determine, they may be exchanged at par and without charge in the Bangko Sentral and by agents duly authorized by the Bangko Sentral for this purpose.

d) After the expiration of this latter period, the notes and coins which have not been exchanged shall cease to be a liability of the Bangko Sentral and shall be demonetized.

e) The Bangko Sentral shall also demonetize all notes and coins which have been called in and replaced.

6. Demand Deposits

· The term "demand deposits" means all those liabilities of the Bangko Sentral and of other banks which are denominated in Philippine currency and are subject to payment in legal tender upon demand by the presentation of checks.

· Only banks duly authorized to do so may accept funds or create liabilities payable in pesos upon demand by the presentation of checks, and such operations shall be subject to the control of the Monetary Board in accordance with the powers granted it with respect thereto under this Act.

· Checks representing demand deposits do not have legal tender power and their acceptance in the payment of debts, both public and private, is at the option of the creditor:

Provided, however, That a check which has been cleared and credited to the account of the creditor shall be equivalent to a delivery to the creditor of cash in an amount equal to the amount credited to his account.

7. Guiding Principles of Monetary Administration by the Bangko Sentral

Action When Abnormal Movements Occur in the Monetary Aggregates, Credit, or Price Level:

(a) take such remedial measures as are appropriate and within the powers granted to the Monetary Board and the Bangko Sentral under the provisions of this Act; and

(b) submit to the President of the Philippines and the Congress, and make public, a detailed report which shall include, as a minimum, a description and analysis of:

(1) the causes of the rise or fall of the monetary aggregates, of credit or of prices;

(2) the extent to which the changes in the monetary aggregates, in credit, or in prices have been reflected in changes in the level of domestic output, employment, wages and economic activity in general, and the nature and significance of any such changes; and

(3) the measures which the Monetary Board has taken and the other monetary, fiscal or administrative measures which it recommends to be adopted.

· In order to maintain the international stability and convertibility of the Philippine peso, the Bangko Sentral shall maintain international reserves adequate to meet any foreseeable net demands on the Bangko Sentral for foreign currencies.

· The following are situations which are considered threats to the stability of the Peso:

a) whenever the international reserve of the Bangko Sentral falls to a level which the Monetary Board considers inadequate to meet prospective net demands on the Bangko Sentral for foreign currencies, or

b) whenever the international reserve appears to be in imminent danger of falling to such a level, or

c) whenever the international reserve is falling as a result of payments or remittances abroad which, in the opinion of the Monetary Board, are contrary to the national welfare,

· Action When the International Stability of the Peso Is Threatened

(a) take such remedial measures as are appropriate and within the powers granted to the Monetary Board and the Bangko Sentral under the provisions of this Act; and

(b) submit to the President of the Philippines and to Congress a detailed report of the circumstances of the situation

· If the resultant actions fails, the Monetary Board shall propose to the President, with appropriate notice of the Congress, such additional action as it deems necessary to restore equilibrium in the international balance of payments of the Philippines.

8. Rules on Foreign Exchange Holdings of the Banks:

a) the Monetary Board may require the banks to sell to the Bangko Sentral or to other banks all or part of their surplus holdings of foreign exchange.

b) such transfers may be required for all foreign currencies or for only certain of such currencies, according to the decision of the Monetary Board

c) the transfers shall be made at the rates established under the provisions of this Act

NOTE: The Monetary Board may, whenever warranted, determine the net assets and net liabilities of banks

8. Rules on Issue and Negotiation of Bangko Sentral Obligations:

1) Issuance of such certificates of indebtedness shall be made only in cases of extraordinary movement in price levels.

2) Said evidences of indebtedness may be issued directly against the international reserve of the Bangko Sentral or against the securities which it has acquired or may be issued without relation to specific types of assets of the Bangko Sentral.

3) The Monetary Board shall determine the interest rates, maturities and other characteristics of said obligations of the Bangko Sentral, and may, if it deems it advisable, denominate the obligations in gold or foreign currencies.

4) The evidences of indebtedness of the Bangko Sentral may be acquired by the Bangko Sentral before their maturity, either through purchases in the open market or through redemptions at par and by lot if the Bangko Sentral has reserved the right to make such redemptions.

5) The evidences of indebtedness acquired or redeemed by the Bangko Sentral shall not be included among its assets, and shall be immediately retired and cancelled.

9. Bank Reserves

· All banks operating in the Philippines shall be required to maintain reserves against their deposit liabilities:

Provided, That the Monetary Board may, at its discretion, also require all banks and/or quasi-banks to maintain reserves against funds held in trust and liabilities for deposit substitutes.

· The Monetary Board may exempt from reserve requirements deposits and deposit substitutes with remaining maturities of two (2) years or more, as well as interbank borrowings.

Since the requirement to maintain bank reserves is imposed primarily to control the volume of money, the Bangko Sentral shall not pay interest on the reserves maintained with it unless the Monetary Board decides otherwise as warranted by circumstances.

10. BSP as the Banker of the Government

Functions of the Bangko Sentral:

a) shall act as a banker of the Government, its political subdivisions and instrumentalities.

b) shall represent the Government in all dealings, negotiations and transactions with the International Monetary Fund

c) may be authorized by the Government to represent it in dealings with other foreign or international financial institutions

d) shall be the official depository of the Government

e) shall open a general cash account for Treasurer of the Philippines, in which liquid funds of the Government shall be deposited; transfers of funds from this account to other accounts shall be made only upon order of Treasurer of the Philippines

· The Bangko Sentral may engage the services of other government-owned and controlled banks and of other domestic banks for operations in localities at home or abroad in which the Bangko Sentral does not have offices or agencies adequately equipped to perform said operations:

Provided, however, That for fiscal operations in foreign countries, the Bangko Sentral may engage the services of foreign banking and financial institutions.

· The issue of securities representing obligations of the Government, its political subdivisions or instrumentalities, may be made through the Bangko Sentral

Provided, however, That the Bangko Sentral shall not guarantee the placement of said securities, and shall not subscribe to their issue except to replace its maturing holdings of securities with the same type as the maturing securities.





11. BSP as the Financial Advisor of the Government

· The Government, through the Secretary of Finance, shall request the opinion, in writing, of the Monetary Board on the monetary implications of the following actions:

a) Before undertaking any credit operation abroad

b) Before any credit operation abroad is undertaken by all political subdivisions and instrumentalities of the Government.

c) Whenever the Government, or any of its political subdivisions or instrumentalities, contemplates borrowing within the Philippines

12. Privileges and Prohibitions

· The Bangko Sentral shall be exempt for a period of five (5) years from the approval of this Act from all national, provincial, municipal and city taxes, fees, charges and assessments.

· The exemption authorized in the preceding paragraph shall apply:

a) to all property of the Bangko Sentral,

b) to the resources, receipts, expenditures, profits and income of the Bangko Sentral,

c) to all contracts, deeds, documents and transactions related to the conduct of the business of the Bangko Sentral

· Said exemptions shall apply only to such taxes, fees, charges and assessments for which the Bangko Sentral itself would otherwise be liable, and shall not apply to taxes, fees, charges, or assessments payable by persons or other entities doing business with the Bangko Sentral

· Foreign loans and other obligations of the Bangko Sentral shall be exempt, both as to principal and interest, from any and all taxes if the payment of such taxes has been assumed by the Bangko Sentral.

· The importation and exportation by the Bangko Sentral of notes and coins, and of gold and other metals to be used for purposes authorized under this Act, and the importation of all equipment needed for bank note production, minting of coins, metal refining and other security printing operations shall be fully exempt from all customs duties and consular fees and from all other taxes, assessments and charges related to such importation or exportation.

· Appointments in the Bangko Sentral, except as to those which are policy-determining, primarily confidential or highly technical in nature, shall be made only according to the Civil Service Law and regulations

· Officers and employees of the Bangko Sentral, including all members of the Monetary Board, shall not engage directly or indirectly in partisan activities or take part in any election except to vote.

· The Bangko Sentral shall not acquire shares of any kind or accept them as collateral, and shall not participate in the ownership or management of any enterprise, either directly or indirectly.

· The Bangko Sentral shall not engage in development banking or financing: Provided, however, That outstanding loans obtained or extended for development financing shall not be affected by the prohibition



13. Transitory Provisions

· Within a period of three (3) years but in no case longer than five (5) years from the approval of this Act, the Bangko Sentral shall phase out all fiscal agency functions transfer the same to the Department of Finance.

· The Bangko Sentral shall, within a period of five (5) years from the effectivity of this Act, phase out its regulatory powers over finance companies without quasi-banking functions and other institutions performing similar functions as provided in existing laws, the same to be assumed by the Securities and Exchange Commission. .

· No preferential or priority right shall be given to or enjoyed by any personnel for appointment to any position in the new staffing pattern, nor shall any personnel be considered as having prior or vested rights with respect to retention in the Bangko Sentral or in any position which may be created in the new staffing pattern, even if he should be the incumbent of a similar position prior to organization.
All powers, duties and functions vested by law in the Central Bank of the Philippines not inconsistent with the provisions of this Act shall be deemed transferred to the Bangko Sentral ng Pilipinas. All references to the Central Bank of the Philippines in any law or special charters shall be deemed to refer to the Bangko Sentral.

Sunday, March 05, 2006

Malversation

Final point on the crime of malversation: Although the crime of intentional malversation includes malversation committed through negligence, or {rather than neglect of duties}, the crime of technical malversation is not necessarily included in the crime of simple malversation. So if a public officer was charged for simple malversation under Article 217 of the Code, but during the trial, the evidence shows that the missing fund or property was applied to public use, and the crime therefore would be technical malversation, the trial court should then suspend the proceedings, and require the prosecutor to file the proper information for technical malversation. Otherwise, if the trial court will proceed and then render judgment against the accused for technical malversation, the judgment is null and void. The constitutional right of the accused to be informed of the nature and cause of the accusation against him will be violated. This is so because the evidence required for conviction in simple malversation is materially different from the evidence required in technical malversation.

Where the prosecutor therefore had adduced evidence to show that the missing fund supposedly misappropriated by the Accused where in fact applied to public use and thus bring about liability for technical malversation under Article 220 of the RPC, the court should suspend the proceedings and direct the prosecutor to file the proper information for technical malversation.

Where the Accused is in custody, he should not be discharged and set possibly on bail. The original information should not be dismissed until the proper information for technical malversation has been filed. The accused must be re-arraigned for the new information, and his plea thereto must be taken down. The prosecutor and the defense may then stipulate that the evidence already adduced under the original information shall be re-offered as the same evidence in support of the technical malversation. In other words, it is not necessary that the evidence be adduced all over again. Whatever evidences have been taken may by stipulation between the prosecution and the defense counsel be considered as the same evidence presented for the case of technical malversation. Only thereafter may the court render a valid judgment finding the Accused guilty of technical malversation. THIS IS THE PROCEDURAL ASPECT IN A CASE WHERE THE OFFICIAL CHARGED FOR CRIME OF SIMPLE MALVERSATION under Article 220 - that the court where the trial of the accused is pending would show that the fund or property that was missing was not misappropriated for his private use or benefit that would show that this was applied to some other public purpose. So the crime being established by evidence --- Malversation under Article 220 which is the misappropriation of the public fund or property. In such a case, the court will not have jurisdiction over the crime because that is not necessarily included in the information for simple malversation. It is entirely new accusation before the trial court to suspend the proceeding require the prosecution to file the proper information for technical malversation. This is the proper procedure that should be adopted, not for the court to receive with the trial. This is exactly the subject of a bar problem sometime in 1986 or before that, about a crime charged for simple malversation but in the course of the trial, what was proven was technical malversation, and the trial court proceeded to convict the accused on this ground. SC ruled the sentence is null and void.
Under Article 217 on malversation, you have here a presumption that the public officer accountable for the missing fund or property has misappropriated the same IF he could not have the fund or property forthcoming after due demand therefore be made. The presumption arises that he had misappropriated the missing fund or property, hence a case of malversation. The constitutionality of this presumption has been assailed several times, and the SC upheld the constitutionality of the provision. It does not really shift the burden upon the defense to prove that he is {indeed} innocent. The presumption merely calls on the public officer accountable for the missing fund or property to explain what happened thereto. Only if he could not explain would the presumption arise that he had used it for his own private benefit or gain.

Now you get this clear: the presumption DOES NOT ARISE from the mere fact that there was a shortage in the accountability of the public officer. The presumption does not arise from the mere fact that there were funds or property that turned out to be unaccounted for. Before the presumption would arise, it must indubitably shown by proper audit or evidence that the funds or property demanded has not been used for any other government purpose since it may simply be a shortage resulting from inaccurate accounting. So the evidence must show that the missing fund or property should be in the custody of the public officer accountable therefore, but he cannot explain what happen thereto.

If therefore, the public officer accountable for the fund or property had so many accounts, an audit should be conducted of all the accounts. The audit must be complete. A partial audit will not bring about the presumption. The audit must be COMPLETE. It must be THOROUGH, and unquestionably RELIABLE & TRUSTWORTHY.

When there is doubt as to the findings of the auditor, the public officer accused for malversation can only be convicted on the basis of DIRECT evidence of malversation, not on mere presumption.
So if the public officer accountable for the government funds or property had procured using public fund. He had his office in the city, and he has also somebody stationed in the field where it is being incurred by the others. An audit of his account in the city will not be the basis for the presumption to arise that certain city funds which he could not account for has been misappropriated. In this situation, SC said, “What may not be shown by the records in the city, they be in the various station where the accused is also there. So an audit must be conducted also in the various offices. So unless the audit is complete, there can be no conviction indubitably showing that the accused had suffered some falsity in his accountabilities. High court: “Malversation is a crime for wilfull consequences, and so it cannot be taken lightly because the accused here if convicted would be forever barred from employment in the government, aside from the heavy penalty for the crime involved. {Let this be your guide in invoking this crime} The mere fact that the only audit would show shortage does not bring the presumption that the PO accountable therefore had applied this to his private use or benefit. Only an accounting audit would establish beyond doubt that the said public property that he has use to that he cannot explain where it was or what happened there. Only then will the presumption arise because only that public officer can explain what happened to the fund or property under his accountability. If that is not the situation, the direct evidence of malversation is necessary.

*Now under this crime, you have instances where private citizen may incur the crime of Malversation. The Instances are:
1) when the private citizen conspires with the public officer committing malversation;
2) when private citizen cooperates as an accomplice or accessory to a public officer committing malversation;
3) when a private citizen has been named the recipient in whatever capacity of funds or properties accountable to the government, and such private citizen misappropriated the same, whether the fund or property belong to the local government or national government;
4) when the private citizen is constituted as an administrator or depositary of funds or property that has been seized, attached, or deposited by public authorities, even though that funds or property belong to a private individual. {You have this clear provsion in Article 222}

Get it clear that even though the fund or property involved belongs to a private
citizen,for as long the public officer or person in custody thereof is under obligation in law to account for those funds or property to the government, any misappropriation thereof will bring about the crime of malversation, not the crime of theft or estafa. So I emphasize to you last time that the crime of malversation is prosecuted on the relation of the offender to the fund or property involved --- he must be the one accountable therefore, otherwise, he cannot commit the crime of malversation.

Saturday, March 04, 2006

Rules on Notarial Practice

Here is the link to AM No 02-8-13-SC Rules on Notarial Practice of 2004.

Proclamation 1017 Lifted

GMA has lifted Proclamation 1017. Full text follows:
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Presidential Proclamation No. 1021
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WHEREAS, pursuant to Section 18, Article VII and Section 17, Article XII of the Constitution, Proclamation No. 1017 dated February 24, 2006 was issued declaring a state of national emergency;
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WHEREAS, by virtue of General Order No. 5 and No. 6 dated February 24, 2006, which were issued on the basis of Proclamation No. 1017, the Armed Forces of the Philippines (AFP) and the Philippine National Police (PNP) were directed to maintain law and order throughout the Philippines, prevent and suppress all forms of lawless violence as well as any act of rebellion and to undertake such actions as may be necessary;
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WHEREAS, the AFP and PNP have effectively prevented, suppressed and quelled the acts of lawless violence and rebellion;
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NOW, THEREFORE, I, GLORIA MACAPAGAL-ARROYO, President of the Republic of the Philippines, by virtue of the powers vested in me by law, hereby declare that the state of national emergency has ceased to exist.
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City of Manila, March 3, 2006.
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SIGNED:
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Gloria Macapagal-Arroyo
President
Republic of the Philippines
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By the President:
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SIGNED:
Eduardo Ermita Executive Secretary


What now?
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The SC will now have its sweet time deciding on the petitions on this matter because its decision is now moot and academic. However, SC should still resolve on the constitutionality of 1017 just like what it did on the issue of State of Rebellion.

Friday, March 03, 2006

Marriage and Divorce among Filipinos

Marriage between Filipinos and its effects when divorce is initiated by either of the spouses:

1) Both spouses are Filipinos married in Philippines
Man divorces wife in foreign country (Art. 15, CC)
Effects:
Divorce not valid here (Art. 15, CC)
Man cannot remarry (national law)
Woman cannot remarry (same)

2) Both spouses are Filipinos married in Philippines (Llorente case)
Man becomes naturalized citizen of foreign country
Man divorces wife in foreign country
Effects:
Divorce valid as to the husband (Llorente case)
Wife cannot remarry (Art. 26[2] CC, applicable only to originally mixed marriages)

Q: Suppose man goes back to Philippines and remarry here. Is the subsequent marriage valid here?
A: Yes. Valid. (Art. 15, applies by implication with regards to aliens), but he may be liable for bigamy.

3) Both spouses are Filipinos married in foreign country
Man becomes naturalized citizen of foreign country
Man divorces wife in foreign country
Effects:
Divorce valid as to the husband (Llorente case)
Wife cannot remarry (Art. 26[2] CC, applicable only to originally mixed marriages)

4) Both spouses are Filipinos married in foreign country
Man divorces wife in foreign country (Art. 15, CC)
Effects:
Divorce not valid here (Art. 15, 17[3] CC)
Man cannot remarry
Woman cannot remarry

5) Both spouses are Filipinos married in foreign country
Woman becomes naturalized citizen of foreign country
Woman divorces man in foreign country
Effects:
Divorce valid as to the husband (Llorente case)
Wife cannot remarry (Art. 26[2] CC, applicable only to originally mixed marriages)

6) Both spouses are Filipinos married in foreign country
Woman divorces man in foreign country
Effects:
Divorce not valid here (Art. 15, CC)
Man cannot remarry (national law)
Woman cannot remarry (same)

7) Both spouses are Filipinos married in Philippines
Woman becomes naturalized citizen of foreign country
Woman divorces man in foreign country
Effects:
Divorce valid as to the husband (Llorente case)
Wife cannot remarry (Art. 26[2] CC, applicable only to originally mixed marriages)

8) Both spouses are Filipinos married in Philippines
Woman divorces man in foreign country
Effects:
Divorce not valid here (Art. 15, CC)
Man cannot remarry (national law)Woman cannot remarry (same)

Source:Pinoy.law

Thursday, March 02, 2006

A Law Student’s Prayer


A LAW STUDENT'S PRAYER
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Now I lay me down to study,
I pray the Lord I don’t go nutty,
And if I fail to learn this junk,
I pray the Lord I do not flunk.

And if I die, don’t bury me at all,
Just lay my bones in the study hall,
And pile my books upon my chest,
And tell my profs I did my best.

So now I lay me down to rest,
And pray I pass tomorrow’s test,
And if I die before I wake,
That’s one less test I’ll have to take.

Wednesday, March 01, 2006

Reviewer on Corporation

Corporation, definition:
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Within the context of Philippine law, a "corporation" is treated as an artificial being created by operation of law, having the right of succession and the powers, attributes and properties expressly authorized by law or incident to its existence [Sec. 2, Corporation Code].
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Corporation, classes:
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Corporations may be classified as follows:
[a] Stock corporations - [1] capital stock divided into shares; and [2] authorized to distribute profits
[b] Non-stock corporations - organized not for profit
Corporation, kinds by method of creation:
[a] by special law or charter
[b] by being organized under the corporation code
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Corporation, how organized:
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Philippine corporate entities are organized as follows:
[a] Number of incorporators:
Incorporators are required to be not less than five [5] but not more than fifteen [15].
[b] Residency requirement:
Majority of the incorporators are required to be residents of the Philippines.
[c] Qualifications:
All incorporators:
[1] must be natural persons
[2] must be of legal age
A corporation or a partnership cannot be incorporators of a Philippine corporate entity. The only way a corporation or a partnership may become stockholder of a Philippine corporation is by acquiring a stock thereof but only after it shall have been duly incorporated.
[d] Subscription requirement:
All incorporators must subscribe to at least one (1) share of stock of the corporation being organized.
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Corporation, minimum subscription:
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The law requires that the total capital stock to be subscribed at the time of incorporation should at least be twenty five percent [25%] of the authorized capital stock of the corporation being organized.
Corporation, minimum paid-up capital:
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The paid-up capital of a Philippine corporation must not be less than PhP5,000.00. Thus, it is required that at least twenty five percent [25%] of the subscribed capital stock should be fully paid up but the amount of which should not be less than said PhP5,000.00.
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Corporation, incorporation documents:
The following incorporation documents are required:
[a] Articles of Incorporation;
[b] By-laws;
[c] Treasurer's Affidavit which should state compliance with the authorized subscribed and paid-up capital stock requirements.
[d] Bank Certificate that the paid-up capital portion of the authorized capital stock has been deposited with the issuing bank.
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There are "express lane" forms available at the Securities and Exchange Commission [SEC] for certain specified corporate business organizations.
Corporation, where filed:
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The incorporation documents should be filed with the Securities and Exchange Commission [SEC] of the Philippines.
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Corporation, what should be stated:
[a] the name of the corporation which must not be identical or deceptively or confusingly similar to any existing corporation;
[b] the purpose of the corporation;
[c] principal office of the corporation;
[d] the term or life of the corporation which should not exceed fifty [50] years. This corporate lifetime may, however, be extended for another fifty [50] years but the extension must not be effected earlier than five [5] years before the expiration of its term.
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Corporation, limitation on foreign equity holdings:
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The equity requirements should be strictly observed and followed in certain areas of business where the constitution and the laws of the Philippines impose limitation on foreign holdings.
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Generally, however, foreigners may invest as much as one hundred percent [100%] equity in areas not covered by the Negative List under the Foreign Investments Act.
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The following provisions thereof may serve as guide:
List A : Includes those reserved to Philippine nationals by the Constitution of the Philippines.
[a] exploitation of natural resources [100% domestic equity]
[b] operation of public utilities [60% domestic equity]
[c] mass media [100% domestic equity]
[d] educational institution [70% domestic equity]
[e] labor recruitment [65% dom. equity]
[f] retail trade [100% dom. equity]
[g] rural banking [100% dom. equity]
List B : Includes those regulated by law.
[a] defense-related activities
[b] manufacture and distribution of dangerous drugs
[c] nightclubs, bathhouse and similar activities
[d] small and medium-sized domestic market enterprises with paid-in equity capital of less than US$500,000.00
[e] export enterprises utilizing new materials from depleting natural resources with paid-in equity of less than US$500,000.00
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Corporation, when corporate existence commences:
The corporate life or existence of a Philippine corporation commences from the time a Certificate of Incorporation is issued in its favor by the Securities and Exchange Commission [SEC].
Corporation, effect of non-use:
[a] A corporation is deemed dissolved if the corporate charter granted in its favor expires by non-use for a period of at least two [2] years from issuance thereof.
[b] A corporation is deemed suspended or its franchise revoked if it has been duly organized but it failed to operate for a period of five [5] years.
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Corporation, its organization:
A Philippine corporation is organized by electing members to its Board of Directors, by electing the corporate officers thereof and/or by setting up an Executive Committee.
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Board of Directors, qualifications:
The members of the Board of a Philippine corporation must possess the following qualifications:
[1] owner or holder of at least one [1] share of capital stock;
[2] majority of the members must be residents of the Philippines;
[3] they must be elected by the owners/holders of at least the majority of the outstanding capital stock.
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Board of Directors, corporate acts:
For validity and legality of the corporate acts of the Board of Directors, a meeting should be fully convened and the same must be attended by at least a majority of its members. Any and all corporate acts must be duly approved by a majority of the members of the Board except when otherwise provided by Philippine laws or by the By-laws of the corporation.
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Board of Directors, self-dealing rule:
A self-dealing transaction of a member of the Board of Directors becomes voidable except under the following circumstances:
[1] When the presence of such director in the Board meeting is not necessary to constitute a quorum;
[2] When his vote is not necessary for the approval of the contract or transaction
[3] When the terms of the contract are fair and reasonable and had been previously approved by the Board of Directors.
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Corporate Officers, general rule:
As a general rule, the corporate officers of a Philippine corporation consist of the President who is required to be a member of the Board of Directors; the Corporate Treasurer; and the Corporate Secretary who is required to be both a resident and a citizen of the Philippines.
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Other corporate officers may be designated under the By-laws of the corporation without getting afoul with the law.
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The only limitation imposed by law on corporate officers is that no person can be the President and the Corporate Secretary at the same time or the President and Corporate Treasurer at the same time.
.
Corporate Officers, personal liability for damages:
A corporate officer of a Philippine corporation becomes personally liable for certain corporate acts under the following circumstances:
[1] When he willfully and knowingly votes or assents to patently unlawful acts;
[2] When he is guilty of gross negligence or bad faith in the conduct of the corporate affairs; or
[3] When he acquires personal or pecuniary interest which is in conflict with his duty as such officer.
.
Stockholders, limited liability:
The liability of stockholders in Philippine corporations is limited only to the extent of their capital contribution thereto. Other properties, holdings or assets of stockholders are not within the reach of corporate creditors. To discourage abuse of this privilege, the Securities and Exchange Commission [SEC] imposes certain reportorial requirements which should be complied with on a regular basis.
.
Stockholders, kinds of meetings:
The kinds of meetings involving the stockholders of a Philippine corporation are as follows:
[1] Regular meeting which is the equivalent of the annual stockholders' meeting required to be duly provided under the By-laws;
[2] Special meeting which may be called anytime as may be necessary
Stockholders' meeting, requisites for validity:
.
In order to be valid, the stockholders' meeting should comply with the following requisites:
[1] A notice of such meeting must be served to the stockholders
[2] A quorum, [i.e., majority of the outstanding capital stock of the corporation] must be fully established.
[3] Any and all acts of the stockholders in a meeting duly called and constituted, are deemed valid if approved by a majority of the outstanding capital stock or at least two-thirds [2/3] vote in certain cases specified under the law. Corporation, dissolution: As a general rule, the corporate existence of a Philippine corporation may last up to fifty [50] years, renewable for another fifty [50] years. However, such lifetime may be shortened by a vote of 2/3 of the outstanding capital stock thereof through the process called dissolution.
.
lifted from Chan-Robles Library

Reviewer in IPC

Intellectual Property
-those property rights which results from the physical manifestation of an original thought.
(Ballantine’s Law Dictionary)

COVERAGE – Intellectual property rights consists of:
a) Copyrights and related rights;
b) Trademarks and service marks;
c) Geographic indications;
d) Industrial designs;
e) Patents;
f) Layout-designs (Topographies) of Integrated Circuits; and
g) Protection of Undisclosed Information. (Sec. 4)

STATE POLICY IN RESPECT OF INTELLECTUAL PROPERTY RIGHTS (IPR)
-There is a declaration of State Policy that, among others, the State recognizes that an effective intellectual and industrial property system is vital to the development of domestic and creative activity, facilitates transfer of technology, attracts foreign investments and ensures market access for our products, hence it shall protect and secure exclusive rights of scientists, inventors, artists, and other gifted citizens to their intellectual property and creations. (Sec. 2)

INTERNATIONAL CONVENTION AND RECIPROTICY
· Any person who is a national or who is domiciled or has a real and effective industrial establishment in a country which
1) is a party to any convention, treaty, or agreement relating to intellectual property rights or the repression of unfair competition to which the Philippines is also a party, or
2) extends reciprocal rights to nationals of the Philippines by law, shall be entitled to benefits to the extent necessary to give effect to any provision of such convention, treaty, or reciprocal law, in addition to the rights to which any owner of an intellectual property rights is otherwise provided by law. (Sec. 3)

REVERSE RECIPROCITY OF FOREIGN LAWS
Section 231 – making enforceable on nationals of a foreign state all conditions, restrictions, limitations, diminutions, requirements or penalties that may be imposed by such foreign state on a Filipino national seeking intellectual property protection.

v Reciprocal application is not automatic
Rather, the Phils. may apply to the foreign national those restrictions that his country imposes on Filipino applicants

What are “TECHNOLOGY TRANSFER ARRANGEMENTS”?
-contracts or agreements involving the transfer of systematic knowledge for the manufacture of a product, the application of a process, or rendering of a service including management contracts; and the transfer, assignment or licensing of all forms of intellectual property rights, including licensing of computer software except computer software developed for mass market. (Sec. 4)




PRESCRIPTIVE PERIOD OF ACTIONS FOR DAMAGES UNDER THE IPC
-No damages may be recovered after four (4) years from the time the cause of action arose (Sec. 226)

JURISDICTION OVER DISPUTES UNDER IPC
A. Original Jurisdiction
1) Director General (IPO)
-has original jurisdiction to resolve disputes relating to the terms of a license involving the author’s right to public performance or other communication of his work.

2) Bureau of Legal Affairs
-has jurisdiction over the ff:
i. Opposition to applications for registration of marks;
ii. Cancellation of trademarks;
iii. Cancellation of patents, utility models and industrial designs;
iv. Petition for compulsory licensing of patents;
v. Administrative Complaints for violations of laws involving IPR where the total damages claimed is not less than P200,000.00

3) Documentation, Information and Technology Transfer Bureau
-has jurisdiction to settle disputes involving technology transfer payments

B. Appellate Jurisdiction
1) Director General
-over all decisions rendered by the ff:
· Dir. of Legal Affairs
· Dir. of Patents
· Dir. of Trademarks
· Dir. of the Documentation, Information and Technology Transfer

2) Court of Appeals
-over decisions of the Director General in the exercise of his appellate jurisdiction over the decisions of the:
· Dir. of Legal Affairs
· Dir. of Patents
· Dir. of Trademarks

3) Secretary of Trade and Industry
-over decisions of the Director General on the exercise of his appellate jurisdiction of the Director of Documentation, Information and Technology Transfer; AND
-over decisions of the Director General in the exercise of his original jurisdiction relating to the terms of license involving the author’s right.

ADMINISTRATIVE PENALTIES IMPOSED FOR VIOLATIONS OF LAWS INVOLVING IPR
-The Director for Legal Affairs may impose the ff:
a) Issuance of a cease and desist order (CDO);
b) Acceptance of voluntary assurance compliance (VAC) or voluntary assurance of discontinuance (VAD);
c) Condemnation or seizure of products subject of the offense;
d) Forfeiture of properties used in the commission of the offense;
e) Imposition of administrative fines;
f) Cancellation of permit, license, authority or registration;
g) Withholding of permit, license, authority or registration;
h) Assessment of damages;
i) Censure;
j) Analogous penalties or sanctions (Sec. 10.2 [b])


LAW ON PATENTS

PATENT – an exclusive right acquired over an invention, to sell, use, and make the same whether for commerce or industry.

PATENTABLE INVENTIONS
-any technical solution of a problem in any field of human activity which is NEW, involves an INVENTIVE STEP and is INDUSTRIALLY APPLICABLE shall be patentable. The patentable invention may be, or may relate to, a product, or process, or an improvement of any of the foregoing. (Sec. 21)

Requirements:
1) Technical solution of a problem in any field of human activity
2) Novelty – that which does not form part of a prior art consists of:
a) that which has been made available to the public anywhere in the world before the filing date or the priority date of the application
b) that which forms part of an application whether for patent, utility or industrial design, effective in the Philippines, provided that:
i. the inventors or applicants are not the same
ii. the contents of the application are published in accordance with the requirements of patent application rules.
iii. the filing date of the prior art is earlier.



3) Inventiveness/Inventive Step
-an invention involves an inventive step if, having regard to prior art, it is not obvious to a person skilled in the art of the time of the filing date or priority date of the application claiming the invention. (Sec. 26)

4) Industrial Applicability
-an invention that can be produced and used in any industry. (Sec. 27)

NON-PATENTABLE INVENTIONS
The following shall be excluded from patent protection:
a) Discoveries, Scientific Theories and Mathematical Methods;
b) Schemes, rules and methods of performing mental acts, playing games or doing business, and programs for computer;
c) Methods for treatment of the human or animal body by surgery or therapy and diagnostic methods practiced on the human or animal body;
d) Plant varieties or animal breeds of essentially biological process for the production of plants or animals;
e) Aesthetic creations;
f) Anything which is contrary to public order or morality (Sec. 22)



RIGHT TO A PATENT
The right to a patent belongs:
a) to the inventor, his heirs, or assigns
b) when 2 or more persons have made the invention separately and independently – to them jointly
c) if two (2) or more persons have made the invention separately and independently of each other – to the person who filed an application for such invention (FIRST TO FILE RULE)
d) where 2 or more applications are filed for the same invention – to the applicant who has the earliest filing date or the earliest priority date (FIRST TO FILE RULE) (Sec. 29)
e) in case of inventions created pursuant to a commission – to the person who commissions the work UNLESS agreed otherwise.
f) in case an employee made the invention in the course of his employment, the patent shall belong to:
· the employee – if invention not part of his regular duties even if he uses the time, facilities and materials of the employer; OR
· the employer – if the invention is the result of the performance of his regularly assigned duties unless agreed otherwise.

RIGHTS ACQUIRED BY THE PATENTEE
The patentee acquires the following rights under his patent
a) Where the subject matter of a patent is a product, to restrain, prohibit and prevent any unauthorized person or entity from making, using, offering for sale, selling or importing that product;
b) Where the subject matter of a patent is a process, to restrain, prevent or prohibit any unauthorized person or entity from using the process, and from manufacturing, dealing in, using or offering for sale, or importing any product obtained directly or indirectly from such process;
c) to assign, or transfer by succession the patent, and to conclude licensing contracts for the same (Sec. 71)

CONTENTS OF PATENT APPLICATION
A patent application shall contain:
1) a request for the grant of patent;
2) a description of the invention;
-the disclosure of the invention must be in a manner sufficiently clear and complete for it to be carried out by a skilled in the art.
3) Drawings necessary for the understanding of the invention;
4) One or more claims
5) An abstract (Sec. 32)

v must contain relevant information as to the identity of the person (no anonymous person)
v if the applicant is not the inventor; he must show proof of authority to seek application for registration

UNITY OF INVENTION
-every application for patent registration must contain an application over a simple invention or several inventions but must form part of a single general inventive concept

PROCEDURE FOR THE GRANT OF PARENT
a) According a filing date to the application (Sec. 41);
b) Examination of compliance by applicant with the formal requirements specified in Sec. 32, i.e., contents of application (Sec. 42);
c) Classification of application and search for prior art (Sec. 43)
d) Publication of patent application in the IPO Gazette (Sec. 44);
e) Inspection of the application documents by any interested party and written observations by any third party concerning the patentability of the invention (Secs. 44.2 and 47);
f) Written request by the applicant, within 6 months from the date of publication of his patent application, for the substantive examination by the IPO of his application. (Sec 48);
g) Grant of the patent (Sec. 50), or refusal of the examiner to grant the patent (Sec. 51); in the latter case, the refusal may be appealed to the Director of the Bureau of Patents;
h) Publication of the grant of patent in the IPO Gazette (Sec. 52)

TERM OF A PATENT, UTILITY MODEL, INDUSTRIAL DESIGN
a) Patent – 20 yrs from the filing date of application, without renewal
b) Utility model – 7 yrs, w/out renewal
c) Industrial design – 5 yrs, renewable twice

UTILITY MODELS
-models of implement or tools of any industrial product even if not possessed of the quality of invention but which is of “practical utility”

INDUSTRIAL DESIGN
-any composition of lines or colors or any three-dimensional form, whether or not associated with lines or colors provided that such composition or form gives a special appearance to and can serve as pattern for an industrial product or handicraft.

CANCELLATION OF PATENTS
Who may file?
· any person
· IPO motu proprio

Grounds:
a) That the patent is invalid (Sec. 81);
b) That what is claimed as the invention is not new or patentable;
c) 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
d) That the patent is contrary to public order or morality. (Sec. 61)
e) failure to make payments of annual fees or dues

Where to file?
· BLA – if in violation of IPC (administrative)
· RTC – otherwise

INFRINGEMENT
-the making, using, offering for sale, selling or importing a patented product or a product obtained directly or indirectly from a patented process or the use of a patented process without the authorization of the patentee. (Sec. 76)

TEST OF PATENT INFRINGEMENT
1) Literal Infringement – resort is had to the “words” of the claim.
2) Doctrine of Equivalents – if two devices do the same work in substantially the same way, the same result, and produce substantially the same result, they are the same even though they differ in name, form, or shape.

REMEDIES IN CASE OF INFRINGEMENT
A) File civil case for the following purposes:
1) To recover from the infringer such damages as the court may award considering the circumstances of the case provided it shall not exceed 3 times the amount of the actual damages sustained plus attorney’s fees and other expenses of litigation;
2) To secure an injunction for the protection of his rights;
3) To receive a reasonable royalty, if the damages are inadequate or cannot be readily ascertained with reasonable certainty;
4) To have the infringing goods, materials and implements predominantly used in the infringement disposed of outside the channels of commerce, or destroyed without compensation;
5) To hold the contributory infringer jointly and severally liable with the infringer.

B) File criminal case within 3 years from date of commission of the crime for repetition of infringement (Sec. 84)


LAW ON TRADEMARKS

TRADEMARK – anything which is adopted and used to identify the source of origin of goods, and which is capable of distinguishing them from goods emanating from a competitor

SERVICE MARK – distinguishes the services of an enterprise from the service of other enterprises. It performs for services what a trademark does for goods.

COLLECTIVE MARK - any visible sign designated as such in the application for registration and capable of distinguishing the origin or any other common characteristic, including the quality of goods and services of different enterprises which use the sign under the control of the registered owner of the collective mark (Sec. 121.2)

TRADE NAMES – the person (whether natural or juridical) who does business and produces the goods or the services is designated by a trade name.
-Under the law, there is no need to register trade names in order to secure protection for them.

TRADE DRESS – involves the total image of a product, including such features as size, shape, color or color combinations, texture, and/or graphics.

HOW MARKS ARE ACQUIRED
-Under RA 8293, the rights in a mark shall be acquired through registration made validly in accordance with its provisions. (Sec. 122)
-This proposition of law, however, may not be converted for it is not true that where there is no registration, there is no protection.
· Acquisition through use
-Whether or not a registered trademark is employed, when a person has identified in the mind of the public the goods he manufactures or deals in his business or services from those of others, such a person has a property right in the goodwill of said goods or services which will be protected in the same manner as other property rights (Sec. 168.1)

RIGHTS CONFERRED
-the owner of a registered mark shall have the exclusive right to prevent all third parties not having the owner’s consent from using in the course of trade identical or similar signs or containers for goods or services which are identical or similar to those in respect of which the trademark is registered where such use would result in a likelihood of confusion. (Sec. 147)

DURATION
-the certificate of registration of a trademark shall be ten (10) years from the filing date of application provided the registrant shall file a declaration of actual use within a year from the 5th anniversary of registration date (Sec. 145)
-renewable for another 10 yrs. (Sec. 146)

NON-REGISTRABLE TRADEMARKS, TRADE NAMES AND SERVICE MARK

A mark cannot be registered if it:
a) Consists of immoral, deceptive or scandalous matter, or matter which may disparage or falsely suggest a connection with persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt or disrepute;
b) Consists of the flag or coat of arms or other insignia of the Philippines or any of its political subdivisions, or of any foreign nation, or any simulation thereof;
c) Consists of a name, portrait or signature identifying a particular living individual except by his written consent, or the name, signature, or portrait of a deceased President of the Philippines, during the life of his widow, if any, except by written consent of the window;
d) Is identical with a registered mark belonging to a different proprietor or a mark with an earlier filing or priority date, in respect of:
(i) The same gods or services, or
(ii) Closely related goods or services, or
(iii) If it nearly resembles such a mark as to be likely to deceive or cause confusion;
e) Is identical with, or confusingly similar to, or constitutes a translation of a mark which is considered by the competent authority of the Philippines to be well-known internationally and in the Philippines, whether or not it is registered here, as being already the mark of a person other than the applicant for registration, and used for identical or similar goods or services: provided, that in determining whether a mark is well-known, account shall be taken of the knowledge of the relevant sector of the public, rather than of the public at large, including knowledge in the Philippines which has been obtained as a result of the promotion of the mark;
f) Is identical with, or confusingly similar to, or constitutes a translation of a mark considered well-known in accordance with the preceding paragraph, which is registered in the Philippines with respect to goods or services which are not similar to those with respect to which registration is applied for: provided, that use of the mark in relation to those goods or services would indicate a connection between those goods or services, and the owner of the registered trademark: Provided further that the interests of the owner of the registered mark are likely to be damaged by such use;
g) Is likely to mislead the public, particularly as to the nature, quality, characteristics or geographical origin of the goods or services;
h) Consists exclusively of signs that are generic for the goods or services that they seek to identify;
i) Consists exclusively of signs or of indications that have become customary or usual to designate the goods or services in everyday language or in a bonafide and established trade practice;
j) Consists exclusively of signs or indications that may serve in trade to designate the kind, quality, quantity, intended purpose, value, geographical origin, time or production of the goods or rendering of the services, or other characteristics of the goods or services;
k) Consists of shapes that may be necessitated by technical factors or by the nature of the goods themselves or factors that affect their intrinsic value;
l) Consists of color alone, unless defined by a given form; or
m) Is contrary to public order or morality (Sec. 123)

FILING DATE OF AN APPLICATION
-The filing date of an application shall be the date on which the office received the following indications and elements in English or Filipino:
a) An express or implicit indication that the registration of a mark is sought;
b) Indications sufficient to contact the applicant or his representative, if any;
c) Indications sufficient to contact the applicant or his representative, if any;
d) A reproduction of the mark where registration is sought; and
e) The list of the goods or services for which the registration is sought. (Sec. 127.1)

v NO filing date shall be accorded until the required fee is paid (Sec. 127.2)

PROCEDURE FOR REGISTRATION
a) Examination to determine whether the application satisfies the requirements for the grant of a filing date.
b) Examination to determine whether the application meets the requirements of Sec. 124 and the mark is registrable under Sec. 123.
c) Denial of the application or amendment thereof or publication of the application;
d) Opposition to the application; notice; hearing; decision by examiner; appeal to the Director of Bureau of Trademarks; appeal to the IPO Director General; appeal to the CA;
e) Issuance of Certificate of registration
f) Publication in the IPO Gazette of the fact of registration

CANCELLATION OF TRADEMARK OR TRADENAME
Who may file?
· any person who believes that he is and will be damaged by the registration of a mark

Where to file?
· BLA
Grounds:
a) Mark becomes generic for goods for which it is registered;
b) Abandonment of the mark;
c) Registration obtained fraudulently or contrary to provisions of RA 8293;
d) Mark used by, or with permission, or, registrant;
e) Failure to use the mark within the Philippines for 3 uninterrupted years or longer.

EFFECTS OF NON-USE
· may be excused if caused by circumstances arising independently of the will of the trademark owner, such as military coup, or political changes that impede commerce
· Registration is an administrative act declaratory of a pre-existing right that does not, of itself, perfect a trademark, for what does is actual use
· Non-use is a ground for removing a mark from the register

DOCTRINE OF SECONDARY MEANING
-While a generic, indicative or descriptive mark will, as a general rule, be denied registration, there is a circumstance that will allow it to be registered. Under the doctrine of secondary meaning, when a mark has become distinctive of the applicant’s gods in commerce and, in the mind of the public, indicates a single source of consumers, it may be registered.

WHAT CONSTITUTES AN INFRINGEMENT
-Under RA 8293, any person shall, without the consent of the owner of the registered mark:
1) Use in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered mark or the same container or a dominant feature thereof in connection with the sale, offering for sale, distribution, advertising any goods or services including other preparatory steps necessary to carry out the sale of any goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive; or
2) Reproduce, counterfeit, copy or colorably imitate a registered mark or a dominant feature thereof and apply such reproduction, counterfeit, copy, or colorable imitation to labels, signs, prints, packages, wrappers, receptacles, or advertisements intended to be used in commerce upon or in connection with the sale, offering for sale, distribution, or advertising of goods or services on, or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive, shall be liable for infringement. (Sec. 155)

TEST OF TRADEMARK INFRINGEMENT
1) Dominancy Test – consists in seeking out the main, essential or dominant features of a mark.
2) Holistic Test – takes stock of the other features of a mark, taking into consideration the entirety of the marks.

DIFFERENTIATED FROM UNFAIR COMPETITION
1) Cause of action: in infringement, the cause of action is the unauthorized use of a registered trademark; in unfair competition, it is the passing off of one’s goods as those of another merchant.
2) Fraudulent intent is not necessary in infringement, but necessary in UC.
3) Registration of trademarks: in infringement, it is a pre-requisite; in UC, it is not required.
4) Class of goods involved: in infringement, the goods must be of similar class; in UC, the goods need not be of the same class.

v infringement is a form of unfair competition


REMEDIES AVAILABLE IN CASE OF INFRINGEMENT OF A REGISTERED MARK
a) Sue for damages (Sec. 156.1);
b) Have the infringing goods impounded (Sec. 156.2);
c) Ask for double damages (Sec. 156.3)
d) Ask for injunction (156.4)
e) Have the infringing goods disposed of outside the channels of commerce (Sec. 157.1)
f) Have the infringing goods destroyed (Sec. 157.1)
g) File criminal action (Sec. 170);
h) Administrative Sanctions

UNFAIR COMPETITION
-any person who shall employ deception or any other means contrary to good faith by which he shall pass off the goods manufactured by him or in which he deals, or his business, or services for those of the one having established such goodwill, or who shall commit any acts calculated to produce said result, shall be guilty of unfair competition.

How Committed
a) Making one’s goods appear as the goods of another;
b) Use of artifice or device to induce the false belief that one’s goods are those of another;
c) False statements in the course of trade; or
d) Any act contrary to good faith calculated to discredit another’s goods

TEST OF UNFAIR COMPETITION
-The test is whether certain goods have been clothed with an appearance likely to deceive the ordinary purchaser exercising ordinary care.

REMEDIES AGAINST UNFAIR COMPETITION
a) Damages which may either be:
· reasonable profit which would have realized, or
· actual profits collected by the defendant, or
· a certain percentage over the gross sales of defendant in case of the measure of damages cannot be readily ascertained;
b) Damages may be doubled in cases where actual intent to mislead the public or to defraud the complaint is shown;
c) Impounding of sales invoices and other documents evidencing sales;
d) Injunction
e) Destruction of goods found to be infringing, and all paraphernalia.



LAW ON COPYRIGHT

COPYRIGHT – system of legal protection an author enjoys in the form of expression of ideas

BASIC PRINCIPLES
· Works are protected by the sole fact of their creation, irrespective of their mode or form of expression, as well as their content, quality or purpose (Sec. 172.2)
· Protection extends only to the expression of the idea, not to the idea itself or to any procedure, system, method or operation, concept or principle, discovery or mere data.

CREATION OF A WORK
A copyright work is created when the two(2) requirements are met:
1) Originality – does not mean novelty or ingenuity, neither uniqueness nor creativity. It simply means that the work “owes its origin to the author”
2) Expression – there must be “fixation” To be “fixed”, a work must be embodied in a medium sufficiently:
· permanent; or
· stable
to permit it to be perceived, reproduced, or otherwise communicated for a period of more than transitory duration.
-if it is not required that the medium be visible as long as there is a possibility of retrieval, then there is fixation
-it is fixation that defines the time from when copyright subsists. Before fixation, there can be no infringement.

WORKS PROTECTED BY COPYRIGHT
A. Original Work - Literary and artistic works are original intellectual creations in the literary and artistic domain protected from the moment of their creation, irrespective of their mode or form of expression, as well as of their content, quality and purpose, and shall include in particular:
a) Books, pamphlets, articles and other writings
b) Periodicals 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 or any process for making audio-visual recordings
m) Pictorial illustrations and advertisements
n) Computer programs
o) Other literary, scholarly, scientific and artistic works (Sec. 172)

B. Derivative Works – the following derivative works shall also be protected:
a) Dramatizations, translations, adaptations, abridgments, arrangements, and other alterations of literary works
b) Collections of literary, scholarly or artistic works, and compilations of data and other materials which are original by reason of the selection or coordination or arrangement of their contents. (Sec. 173)

WORKS NOT PROTECTED
-The following works are not protected:
1) Any idea, procedure, system, method or operation, concept, principle, discovery or mere data as such, even if expressed, explained, illustrated, or embodied in a work;
2) News of the day and other facts having the character of mere items of press information;
3) Any official text of a legislative, administrative or legal nature, as well as any official translation thereof. (Sec. 175)
4) Any work of the Government of the Philippines. (Sec. 176)
-however, prior approval of the government agency or office wherein the work is created shall be necessary for exploitation of such work for profit. Such agency or office, may, among other things, impose as a condition the payment of royalties
5) Pleadings;
6) Decisions of courts and tribunals.
-This pertains to the “original decisions” not to the SCRA published in volumes since these are protected under derivative works.

RIGHTS OF AN AUTHOR
(Author – a natural person who has created the work.)

A. Economic Rights (Sec. 177)
1) Right to reproduce;
2) Right to create derivative works;
3) Right to first public distribution or first sale;
4) Right to rent out the original or a cop of an audiovisual or cinematographic work;
5) Right to public performance;
6) Right to other communication of the work to the public.

B. Moral Rights (Sec. 193)
1) Right of attribution or paternity right;
2) Right of alteration or non-publication;
3) Right to preservation of integrity
4) Right not to be identified with work of others or with distorted work.
Term of moral right
-lifetime of the author and 50 years after his death
Waiver of moral right
1) by a written instrument (Sec. 195)
2) by contribution to a collective work unless expressly reserved (Sec. 196)

PRINCIPLE OF AUTOMATIC PROTECTION
Under the Berne Convention, the enjoyment and exercise of copyright, including moral rights, shall not be the subject of any formality.

OWNERSHIP OF COPYRIGHT
1. Single creator – copyright belongs to the author of the work, his heirs or assigns.
2. Joint creation – copyright belongs to the co-authors jointly as co-owners. But if the work consists of identifiable parts, the author of each part owns the part that he has created.
3. Employee’s creation – copyright belongs to the employee if the creation is not part of his regular duties even if he uses the time, facilities and materials of the employer; otherwise it belongs to the employer
4. Commissioned work – the work belongs to the person commissioning but the copyright remains with the creator unless there is a written stipulation to the contrary.
5. Cinematographic works – the producer has copyright for purposes of exhibition; for all other purposes, the producer, the author of the scenario, the composer, the film director, the author of the work are the creators.
6. Anonymous and pseudonymous works – the publishers shall be deemed the representative of the author unless:
a. the contrary appears
b. the pseudonyms or adopted name leaves no doubt as to the author’s identity or
c. if the author discloses his identity (Sec. 179).
7. Collective works – the contributor is deemed to have waived his right unless he expressly reserves it. (Sec. 196)
Collective work – a work created by two or more persons at the initiative and under the direction of another with the understanding that it will be disclosed by the latter under his own name and that the contributions of natural persons will not be identified. (Sec. 171.2)
8. In case of transfers, the transferee shall own one or more or all the economic rights transferred provided:
a. the assignment, if inter vivos, be in writing (Sec. 180.2)
b. the assignment be filed with the National Library upon payment of the prescribed fee. (Sec. 182)



DURATION OF COPYRIGHT
· Literary artistic works and derivative works of a SINGLE CREATOR - lifetime of the creator and for 50 years after his death
· Joint creation – lifetime of last surviving co-creator and for 50 years after his death.
· Anonymous or a work under a pseudonym not identifiable with the true name of the creator – 50 years after the date of their first publication.
v Except where, before the expiration of said period, the author's identity is revealed or is no longer in doubt, the rule for single and joint creation shall apply
· Photographic works – 50 years from the publication of the work, or from making the same term is given to audiovisual works produced by photography or analogous processes.
· Work of Applied Art – 25 years from the date of making
· Newspaper Article – lifetime of the author and 50 years after his death
v A pure news report will no longer find protection under he new law, BUT a column or published comment will

· The work of performers not incorporated in RECORDING, PRODUCTS OF SOUND IMAGE RECORDINGS, and BROADCASTS, are protected for periods of 50 years, 50 years, and 20 years, respectively, counted from the end of the year of performance, recording, or broadcasts, respectively.

The term of protection shall be counted from the first day of January of the year following the death or of last publication (Sec. 214)

LIMITATIONS TO THE RIGHTS ON COPYRIGHT
1) Private performance, private and personal use – applicable only “when a work has been lawfully made accessible to the public.”

Personal Use
-making a single reproduction, adaptation, arrangement or other transformation of another’s work exclusively for one’s own individual use in such cases as personal research, learning or amusement

Private Use
-making a reproduction, adaptation or other transformation of it, in a single person as in the case of “personal use” but also for a common purpose by a specific circle of persons only.

2) Fair Use of a Copyrighted Work
Fair Use - A privilege in persons other than the owner of the copyright to use the copyrighted material in a reasonable manner without its consent, notwithstanding the monopoly granted to the owner by the copyright.
-the doctrine of fair use is meant to balance the monopolies enjoyed by the copyright owner with interests of the public and of society.

CRITERIA TO DETERMINE WHETHER USE IS FAIR OR NOT:
a) Purpose and the character of the use
b) Nature of the copyrighted work
c) Amount and substantially of the portions used
d) Effect of the use upon the potential market of the copyrighted work (Sec. 185)

THE “FAIR-USES” OF PROTECTED MATERIAL ARE:
a) Criticizing, commenting, and news reporting;
b) Using for instructional purposes including producing multiple copies of classroom use, for scholarship, research and similar purposes (Sec. 185)

3) WORKING OF ARCHITECTURE (Sec. 186)
-include the right to control the erection of any building which reproduces the whole or a substantial part of the work either in its original or in any form recognizably derived from the original; Provided, that the copyright in any such work shall not include the right to control the reconstruction, or rehabilitation in the same style as the original of a building to which that copyright relates

4) REPRODUCTION OF PUBLISHED WORK
-exclusively for research and private study.

5) REPROGRAPHIC REPRODUCTION BY LIBRARIES
-any library or archive whose activities are not for profit may, without the authorization of the author of copyright owner, make a single copy of the work by reprographic reproduction.

6) REPRODUCTION OF COMPUTER PROGRAMS
-allowed on the ff. conditions:
a) only one copy is made;
b) lawful owner made the copy;
c) purpose of which the reproduction is made is legal like:
· use to which the program is made and for which it was purchased demand the reproduction of a copy; or
· the reproduction of a copy is necessary to guarantee against loss or destruction (Sec. 189.1)

7) IMPORTATION FOR PERSONAL PURPOSES
-The importation of a copy of a work by an individual for his personal purposes shall be permitted without the authorization of the author of, or other owner of copyright in, the work under the following circumstances:
a) Copies of the work are not available in the Philippines and:
i. not more than one copy at one time is imported for strict individual use;
ii. importation is by authority and for the use of Philippine Government; or
iii. Religious, charitable, or educational society imported not more than 3 copies per title provided they are not for sale.
b) Copies form part of libraries and personal baggage belonging to persons or families arriving from foreign countries and are not intended for sale: Provided, that such copies do not exceed three (3). (Sec. 190)

REMEDIES IN CASE OF INFRINGEMENT:
1) Injunction to prevent infringement
2) Damages assessed on the basis of the proof alleged by the plaintiff of sales made by the defendant of the infringing work minus whatever costs the defendant may be able to prove and appreciated by the court.
3) Delivery under oath of all implements employed in the production of the infringing products themselves and the infringing items, for impounding or destruction as the court may order.
4) Payment of moral and exemplary damages in the discretion of court.
5) Criminal Action

DIFFERENCE BETWEEN COPYRIGHT, PATENT AND TRADEMARK
1) Subject Matter of the Right:
Copyright – literary, scientific or artistic work;
Patent – new, useful, and industrially applicable inventions;
Trademark – goods manufactured or produced

2) Where Right Registered:
Copyright – National Library
Patent and Trademark – IPO

3) Duration of Right:
Patent – 20 years from filing or priority date
Trademark – 10 yearsCopyright – Generally up to 50 years after the death of the author.
.
lifted from SLU Bar Ops Reviewer