CONFLICTS OF LAWS; Definition: 1.

That part of the law of each state or nation which determines whether, in dealing with a legal situation, the law or some other state or nation will be recognized, given effect, or applied (16 Am Jur, 2d, Conflict of Laws, 1). 2. That part of municipal law of a state which directs its courts and administrative agencies, when confronted with a legal problem involving a foreign element, whether or not they should apply a foreign law/s (Paras). DISTINGUISHED FROM PUBLIC INTERNATIONAL LAW BASIS 1 Nature 2 Persons involved CONFLICT OF LAW LAW OF NATIONS Municipal in character International in character Dealt with by private individuals; Sovereign states and other entities governs individuals in their private possessing international transactions which involve a personality, e.g., UN; governs foreign element states in their relationships amongst themselves Private transactions between Generally affected by public private individuals interest; those in general are of interest only to sovereign states Resort to municipal tribunals May be peaceful or forcible Peaceful: includes diplomatic negotiation, tender & exercise of good offices, mediation, inquiry & conciliation, arbitration, judicial settlement by ICJ, reference to regional agencies Forcible: includes severance of diplomatic relations, retorsions, reprisals, embargo, boycott, nonintercourse, pacific blockades, collective measures under the UN Charter, and war. SOURCES: Direct: 1. Constitutions 2. Codifications 1. Special Laws

3 Transactions involved 4 Remedies and Sanctions

2. Treaties and Conventions 3. Judicial Decisions 4. International Customs Indirect: 1. Natural moral law 1. Work of writers TERMS: Lex Domicilii law of the domicile; in conflicts, the law of ones domicile applied in the choice of law questions Lex Fori law of the forum; that is, the positive law of the state, country or jurisdiction of whose judicial system of the court where the suit is brought or remedy is sought is an integral part. Substantive rights are determined by the law where the action arose (lex loci) while the procedural rights are governed by the law of the place of the forum (lex fori) Lex Loci law of the place Lex Loci Contractus the law of the place where the contract was made or law of the place where the contract is to be governed (place of performance) which may or may not be the same as that of the place where it was made Lex Loci Rei Sitae law of the place where the thing or subject matter is situated; the title to realty or question of real estate law can be affected only by the law of the place where it is situated Lex Situs - law of the place where property is situated; the general rule is that lands and other immovables are governed by the law of the state where they are situated Lex Loci Actus - law of the place where the act was done Lex Loci Celebrationis law of the place where the contract is made Lex Loci Solutionis law of the place of solution; the law of the place where payment or performance of a contract is to be made Lex Loci Delicti Commissi law of the place where the crime took place Lex Mereatoria law merchant; commercial law; that system of laws which is adopted by all commercial nations and constitute as part of the law of the land; part of common law

Lex Non Scripta the unwritten common law, which includes general and particular customs and particular local laws Lex Patriae - national law Renvoi Doctrine doctrine whereby a jural matter is presented which the conflict of laws rules of the forum refer to a foreign law which in turn, refers the matter back to the law of the forum or a third state. When reference is made back to the law of the forum, this is said to be remission while reference to a third state is called transmission. Nationality Theory - by virtue of which the status and capacity of an individual are generally governed by the law of his nationality. This is principally adopted in the RP Domiciliary Theory in general, the status, condition, rights, obligations, & capacity of a person should be governed by the law of his domicile. Long Arm Statutes Statutes allowing the courts to exercise jurisdiction when there are minimum contacts between the non-resident defendant and the forum. WAYS OF DEALING WITH A CONFLICTS PROBLEM: 1. Dismiss the case for lack of jurisdiction, or on the ground of forum non-conveniens DOCTRINE OF FORUM NON CONVENIENS the forum is inconvenient; the ends of justice would be best served by trial in another forum; the controversy may be more suitably tried elsewhere 1. Assume jurisdiction and apply either the law of the forum or of another state 1. i. A specific law of the forum decrees that internal law should apply 1. APPLY INTERNAL LAW forum law should be applied whenever there is good reason to do so; there is a good reason when any one of the following factors is present: Examples:

Article. 16 of the Civil Code real and personal property subject to the law of the country where they are situated and testamentary succession governed by lex nationalii Article 829 of the Civil Code makes revocation done outside Philippines valid according to law of the place where will was made or lex domicilii Article 819 of the Civil Code prohibits Filipinos from making joint wills even if valid in foreign country

1. ii. The proper foreign law was not properly pleaded and proved NOTICE AND PROOF OF FOREIGN LAW

As a general rule, courts do not take judicial notice of foreign laws; Foreign laws must be pleaded and proved Effect of failure to plead and prove foreign law (3 alternatives) of the forum court:

(a) Dismiss the case for inability to establish cause of action (b) Assume that the foreign law of the same as the law of the forum (c) Apply the law of the forum 1. The case falls under any of the exceptions to the application of foreign law Exceptions to application of foreign law: (a) The foreign law is contrary to the public policy of the forum (b) The foreign law is procedural in nature (c) The case involves issues related to property, real or personal (lex situs) (d) The issue involved in the enforcement of foreign claim is fiscal or administrative (e) The foreign law or judgment is contrary to good morals (contra bonos mores) (f) The foreign law is penal in character (g) When application of the foreign law may work undeniable injustice to the citizens of the forum (h) When application of the foreign law might endanger the vital interest of the state 2. APPLY FOREIGN LAW when properly pleaded and proved THEORIES WHY FOREIGN LAW SHOULD BE GIVEN EFFECT 1. Theory of Comity foreign law is applied because of its convenience & because we want to give protection to our citizens, residents, & transients in our land 2. Theory of Vested Rights we seek to enforce not foreign law itself but the rights that have been vested under such foreign law; an act done in another state may give rise to the existence of a right if the laws of that state crated such right. 3. Theory of Local Law- adherents of this school of thought believe that we apply foreign law not because it is foreign, but because our laws, by applying similar rules, require us to do so; hence, it is as if the foreign law has become part & parcel of our local law 4. Theory of Harmony of Laws theorists here insist that in many cases we have to apply the foreign laws so that wherever a case is decided, that is, irrespective of the forum, the

solution should be approximately the same; thus, identical or similar solutions anywhere & everywhere. When the goal is realized, there will be harmony of laws 5. Theory of Justice the purpose of all laws, including Conflict of Laws, is the dispensing of justice; if this can be attained in may cases applying the proper foreign law, we must do so Rules on Status in General Factual Situation 1 Beginning of personality of natural person 2 Ways & effects of emancipation 3 Age of majority 4 Use of names and surnames 5 Use of titles of nobility 6 Absence 7 Presumptive death & survivorship Point of Contact National law of the child (Article 15, CC) Same Same Same Same Same Lex fori (Article 43, 390, 391, CC; Rule 131 5 [jj], Rules of Court)

Rules on Marriage as a Contract FACTUAL SITUATION Celebrated Between Filipinos Abroad POINT OF CONTACT Lex loci celebrationis is without prejudice to the exceptions under Articles 25, 35 (1, 4, 5 & 6), 36, 37 & 38 of the Family Code (bigamous & incestuous marriages) & consular marriages Lex loci celebrationis EXCEPT if the marriage is: 1. Highly immoral (like bigamous/ polygamous marriages) 2. Universally considered incestuous (between brother-sister, and ascendants-descendants) Mixed Celebrated Between Foreigners in RP Apply 1 (b) to uphold validity of marriage National law (Article 21, FC) PROVIDED the marriage is not highly immoral or universally considered incestuous) Mixed National law of Filipino (otherwise public policy may be militated against) Marriage by proxy (NOTE: a marriage by Lex loci celebrationis (with prejudice to proxy is considered celebrated where the the foregoing rules) proxy appears

Between Foreigners

Rules on Marriage as a Status FACTUAL SITUATION 1 Personal rights & obligations between husband & wife POINT OF CONTACT National of husband (Note: Effect of subsequent change of nationality: 1. If both will have a new nationality the new one 2. If only one will change the last common nationality 3. If no common nationality nationality of husband at the time of wedding) 2 Property relations bet husband & wife National law of husband without prejudice to what the CC provides concerning REAL property located in the RP (Article 80) (NOTE: Change of nationality has NO EFFECT. This is the DOCTRINE OF IMMUTABILITY IN THE MATRIMONIAL PROPERTY REGIME)

Rules on Property FACTUAL SITUATION Real property Exceptions Successional rights POINT OF CONTACT Lex rei sitae (Article 16, CC) National law of decedent (Article 16 par. 2, CC) Capacity to succeed National law of decedent (Article. 1039) Contracts involving real property which The law intended will be the proper law of do not deal with the title thereto the contract (lex loci voluntantis or lex loci intentionis) Contracts where the real property is given The principal contract (usually loan) is as security governed by the proper law oft the contract (lex loci voluntatis or lex loci intentionis) NOTE: the mortgage itself is governed by lex rei sitae. There is a possibility that the principal contract is valid but the mortgage is void; or it may be the other way around. If the principal contract is

void, the mortgage will also be void (for lack of proper cause or consideration), although by itself, the mortgage could have been valid. Tangible personal property (choses in possession) 1 In General Exceptions: same as those for real property Lex rei sitae (Article. 16, CC) EXCEPTION: same as those for real property EXCEPT that in the example concerning mortgage, the same must be changed to pledge of personal property) Law of the flag (or in some cases, place of registry) Law of the depot (storage place for supplies or resting place)

2 Means of Transportation Vessels Other means 3 Things in transitu (these things have a changing status because they move) Loss, destruction, deterioration Validity & effect of the seizure of the goods Disposition or alienage of the goods

Law of the destination (Article. 1753, CC) Locus regit actum (where seized) because said place is their temporary situs Lex loci volutantis or lex loci intentionis because here there is a contract

FACTUAL SITUATION INTangIBLE PERSONAL PROPERTY (CHOSES IN ACTION) 1 Recovery of debts or involuntary assignment of debts (garnishment) 2 Voluntary assignment of debts Other Theories: 1. 2. 3. 4.

POINT OF CONTACT

Where debtor may be effectively served with summons (usually the domicile) Lex loci voluntatis or lex loci intentionis (proper law of the contract)

National law of the debtor or creditor Domicile of the debtor or creditor Lex loci celebrationis Lex loci solutionis Domicile of creditor Lex situs of assets of the debtor (for these assets can be held liable for the debts) The right embodied in the instrument (for example, in the case of a Swedish bill of

3 Taxation of debts 4 Administration of debts 5 Negotiability or non-negotiability of an instrument

exchange, Swedish law determines its negotiability) 6 Validity of transfer, delivery or negotiation In general, situs of the instrument at the of the instrument time of transfer, delivery or negotiation 7 Effect on a corporation of the sale of Law of the place incorporation corporate shares 8 Effect between the parties of the sale of Lex loci voluntatis or lex loci intentionis corporate shares (proper law of the contract) for this is really a contract; usually this is the place where the certificate is delivered) 9 Taxation on the dividends of corporate Law of the place of incorporation shares 10 Taxation on the income from the sale of Law of the place where the sale was corporate shares consummated 11 Franchises Law of the place that granted them 12 Goodwill of the business & taxation Law of the place where the business is thereto carried on 13 Patents, copyrights, trademarks, trade In the absence of a treaty, they are names protected only by the state that granted them NOTE: foreigners may sue for infringement of trademarks and trade names in the RP ONLY IF Filipinos are granted reciprocal concessions in the state of the foreigners Wills, Succession & Administration of Conflict Rules FACTUAL SITUATION Extrinsic Validity of Wills 1 Made by an alien abroad POINT OF CONTACT Lex nationalii OR lex domicilii OR RP law (Article 816, CC), OR lex loci celebrationis (Article 17(1)) Lex nationalii OR lex loci celebrationis (Article 815) Lex nationalii OR lex loci celebrationis (Article 817)

2 Made by a Filipino abroad 3 Made by an alien in the RP

FACTUAL SITUATION Extrinsic Validity of Joint Wills (made in the same instrument)

POINT OF CONTACT

1 Made by Filipinos abroad 2 Made by aliens abroad 3 Made by aliens in the RP

Intrinsic Validity of Wills

Capacity to Succeed Revocation of Wills 1 If done in the RP 2 If done OUTSIDE the RP 1. By a NON-DOMICILIARY

Lex nationalii (void, even if valid where made) (Article 819) Valid if valid according to lex domicilii or lex loci celebrationis (Article 819) Lex loci celebrationis therefore void even if apparently allowed by Article 817 because the prohibition on joint wills is a clear expression of public policy Lex nationalii of the deceased regardless of the LOCATION & NATURE of the property (Article 16 (2)) Lex nationalii of the deceased not of the heir (Article 1039) Lex loci actus (of the revocation) (Article. 829) Lex loci celebrationis (of the making of the will, NOT revocation), OR lex domicilii (Article 829) Lex domicilii (RP law) OR lex loci actus (of the revocation) (Article 17) Lex fori of the RP applies as to the procedural aspects, i.e., the will must be fully probated here & due execution must be shown Lex fori of the RP again applies as to the procedural aspects; must also be probated here, but instead of proving due execution, generally it is enough to ask for the enforcement here of the foreign judgment on the probate abroad Place where domiciled at death or incase of non-domiciliary, where assets are found Co-extensive with the qualifying of the appointing court powers may only be exercised within the territorial jurisdiction of the court concerned NOTE: these rules also apply to principal, domiciliary, or ancillary administrators & receivers even in non-successive cases

1. By a DOMICILIARY of the RP Probate of Wills Made Abroad 1 If not yet probated abroad

2 If already probated abroad

Executors and Administrators 1 Where appointed 2 Powers

Rules on Obligation and Contracts FACTUAL SITUATION Formal or Extrinsic Validity POINT OF CONTACT Lex loci celebrationis (Article 17 {1}) Lex situs (Article 16 [1])

Exceptions
1. Alienation & encumbrance of property 1. Consular contracts Capacity of Contracting Parties

Law of the RP (if made in RP consulates) National law (Article 15) without prejudice to the case of Insular Government v Frank 13 P 236, where the SC adhered to the theory of lex loci celebrationis

Exception

Alienation & encumbrance of property Lex situs (Article 16 {1}) Intrinsic validity (including interpretation of the Proper law of the contract lex contractus instruments, and amt. of damages for breach) (in the broad sense), meaning the lex voluntatis or lex loci intentionis Other Theories are: 1. Lex loci celebrationis (defect: this makes possible the evasion of the national law) 2. Lex nationalii (defect: this may impede commercial transactions) 3. Lex loci solutionis (law of the place of performance) (defect: there may be several places of performance 4. Prof Minors solution: 5. Perfection lex loci celebrationis 6. Cause or consideration lex loci considerations 7. Performance lex loci solutionis (defect: this theory combines the defect of the others)

Rules on Torts FACTUAL SITUATION Liability & damages for torts in general POINT OF CONTACT Lex loci delicti (law of the place where the delict was committed)

NOTE: The locus delicti (place of commission of torts) is faced by the problem NOTE: liability for foreign torts may be of characterization. In civil law countries, enforced in the RP if: the locus delicti is generally where the act began; in common law countries, it is where 1. The tort is not penal in character the act first became effective 2. If the enforcement of the tortious

liability wont contravene our public policy 3. If our judicial machinery is adequate for such enforcement

Rules on Crimes FACTUAL SITUATION Essential elements of a crime and penalties Theories as to what court has jurisdiction: 1. Territoriality theory where the crime was committed 2. Nationality theory country which the criminal is citizen or a subject 3. Real theory any state whose penal code has been violated has jurisdiction, where the crime was committed inside or outside its territory 4. Protective theory any state whose national interests may be jeopardized has jurisdiction so that it may protect itself 5. Cosmopolitan or universality theory state where the criminal is found or which has his custody has jurisdiction 6. Passive personality theory the state of which the victim is a citizen or subject has jurisdiction NOTE: In the RP, we follow the territoriality theory in general; exception: Article 2, RPC, stresses the protective theory The locus delicti of certain crimes 1 Frustrated an consummated, homicide, Where the victim was injured (not where murder, infanticide & parricide the aggressor wielded his weapon) 2 Attempted homicide, etc. Where the intended victim was (not where the aggressor was situated) so long as the weapon or the bullet either touched him or fell inside the territory where he was 3 Bigamy Where the illegal marriage was performed 4 Theft & robbery Where the property was unlawfully taken from the victim (not the place to which the criminal went after the commission of the crime) 5 Estafa or swindling thru false Where the object of the crime was received representation (not where the false representations were made) 6 Conspiracy to commit treason, rebellion, Where the conspiracy was formed (not or sedition where the overt act of treason, rebellion or sedition was committed) NOTE: Other conspiracies are NOT POINT OF CONTACT Generally where committed (locus regit actum)

penalized by our laws 7 Libel 8 Continuing crime 9 Complex crime

Where published or circulated Any place where the offense begins, exists or continues Any place where any of the essential elements of the crime took place

Rules on Juridical Persons FACTUAL SITUATION Corporations Powers and liabilities POINT OF CONTACT General rule: the law of the place of incorporation EXCEPTIONS: 1. For constitutional purposes even of the corporation was incorporated in the RP, it is nor deemed a Filipino corporation & therefore cant acquire land, exploit our natural resources, 7 operate public utilities unless 60% of capital if Filipino owned 2. For wartime purposes we pierce the corporation veil & go to the nationality of the controlling stockholders to determine if the corporation is an enemy (CONTROL TEST) Formation of the corporation (requisites); Law of the place of incorporation kind of stocks, transfer of stocks to bind the corporation, issuance, amount & legality & dividends, powers & duties of members, stockholders and officers Validity of corporate acts & contracts Law of the place of incorporation & law (including ultra vires acts) of the place of performance (the act or contract must be authorized by BOTH laws) Right to sue & amenability to court Lex fori processes & suits against it Manner & effect of dissolution Law of the place of incorporation provided that the public policy of the forum is not militated against

If not fixed by the law creating or recognizing the corporation or by any other provision the domicile is where it is legal representation is established or where it exercises its principal functions (Article. 15) Receivers (appointment & powers) Principal receiver is appointed by the courts of the state of incorporation; ancillary receivers, by the courts of any state where the corporation has assets (authority is CO-EXTENSIVE) w/ the authority of the appointing court NOTE: Theories on the personal and/or governing law of corporations: 1. Law of the place of incorporation (this is generally the RP rule) 2. Law of the place or center of management (center for administration or siege social) (center office principle) 3. Law of the place of exploitation (exploitation centre or siege d exploitation) Partnerships The existence or non-existence of legal personality of the firm; the capacity to contract; liability of the firm & the partners to 3rd persons

Domicile

The personal law of the partnership, i.e., the law of the place where it was created (Article 15 of the Code of Commerce) (Subject to the exceptions given above as in the case of corps.) Creation of branches in the RP; validity & RP law (law of the place where branches effect of the branches commercial were created) (Article 15, Code of transaction; & the jurisdiction of the court Commerce) Dissolution, winding up, & termination of RP law (Article 15, Code of Commerce) branches in the RP Domicile If not fixed by the law creating or recognizing the partnership or by any other provision the domicile is where it is legal representation is established or where it exercises its principal functions (Article. 15) Receivers RP law insofar as the assets in the RP are concerned can be exercised as such only in the RP Foundations (combination of capital Personal law of the foundation (place of independent of individuals, usually not for principal center of administration) profit)

Chapter IV The Lawyer and the Client CANON 14 A Lawyer shall not refuse his services to the needy. Rule 14.01 A lawyer shall not decline to represent a person solely on account of the latters race, sex, creed or status of life, or because of his own opinion regarding the guilt of said person. Rule 14.02 A lawyer shall not decline, except for serious and sufficient cause, an appointment as counsel de oficio or as amicus curae or a request from the Integrated Bar of the Philippines or any of its chapters for rendition of free legal aid. Rule 14.03 A lawyer may refuse to accept representation of a client if: 1. a. He is not in position to carry out the work effectively and competently. 2. b. He labors under conflict of interest between him and the prospective client or between a present client and the prospective client. Rule 14.04 A lawyer who accepts the cause of a person unable to pay his professional fees shall observe the same standard of conduct governing his relations with paying clients.

Duties to Client: owe utmost learning and ability maintain inviolate the confidence of the client disclose all circumstances/interest regarding the controversy undivided loyalty not reject cause of defenseless and oppressed candor, fairness and loyalty hold in trust money or property respond with zeal to the cause of the client Appointment of Amicus Curae

1. 2. 3. 4. 5. 6. 7. 8.

1. by application to the judge 2. the judge on his own initiative may invite the lawyer 3. no right to interfere with or control the condition of the record, no control over the suit

Cannot refuse on the ground of insufficient of compensation or lack of it

CANON 15 A lawyer shall observe candor, fairness and loyalty in all his dealings and transactions with his client.

Rule 15.01 A lawyer in conferring with a prospective client, shall ascertain as soon as practicable whether the matter would involve a conflict with another client or his own interest, and if so, shall forthwith inform the prospective client. Rule 15.02 A lawyer shall be bound by the rule on privilege communication in respect of matters disclosed to him by a prospective client. Rule on Revealing Clients Identity

General Rule: A lawyer may not invoke privilege communication to refuse revealing a clients identity. (Regala vs. Sandiganbayan, 262 SCRA 122, September 20, 1996)

Exceptions: 1. When by divulging such identity, it would implicate the client to that same controversy for which the lawyers services were required. 2. It would open client to civil liability 3. The disclosure of such identity will provide for the only link in order to convict the accused, otherwise, the government has no case.

Requisites of Privileged Communication:

1. Atty.-client relationship (or a kind of consultancy relationship with a prospective client 2. Communication made by client to lawyer in the course of lawyers professional employment 3. Communication is intended to be confidential (see Rule 130, Sec. 21(b), Rules of Court)

When communication is not privileged:

1. after pleading has been filed 2. communication intended by the client to be sent to a third person through his counsel (it loses its confidential character as soon as it reaches the hands of third person)

Even if the communication is unprivileged, the rule of ethics prohibits him from voluntarily revealing or using to his benefit or to that of a third person, to the disadvantage of the client, the said communication unless the client consents thereto. This is applicable to students under the Student Practice Law Program

Rule 15.03 A lawyer shall not represent conflicting interests except by written consent of all concerned given after a full disclosure of the facts.

Rule on Conflicting Interest

It is generally the rule based on sound public policy that an attorney cannot represent adverse interest. It is highly improper to represent both sides of an issue. The proscription against representation of conflicting interest finds application where the conflicting interest arises with respect to the same general matter and is applicable however slight such adverse interest may be. It applies although the attorneys intention and motives were honest and he acted in good faith. However, representation of conflicting interest may be allowed where the parties consent to the representation after full disclosure of facts. (Nakpil vs. Valdez, 286 SCRA 758).

General Rule: An attorney cannot represent adverse interest. Exception: Where the parties consent to the representation after full disclosure of facts. The TEST in determining Conflicting Interest: The test is whether or not the acceptance of a new relation will prevent an attorney from the full discharge of his duty of individual fidelity and loyalty to his client or invite suspicion of unfaithfulness in double-dealing in the performance thereof. (Tiana vs. Ocampo)

Rule 15.04 A lawyer may, with the written consent of all concerned, act as mediator, conciliator or arbitrator in settling disputes. Rule 15.05 A lawyer, when advising his client, shall give a candid and honest opinion on the merits and probable results of the clients case, neither overstating nor understating the prospects of the case. Rule 15.06 A lawyer shall not state nor imply that he is able to influence any public official, tribunal or legislative body. Rule 15.07 A lawyer shall impress upon his client compliance with the laws and the principles of fairness. Rule 15.08 A lawyer who is engaged in another profession or occupation concurrently with the practice of law shall make clear to his client whether he is acting as a lawyer or in another capacity.

Lawyers should refrain from giving any advice unless they have obtained sufficient understanding of their clients cause. A careful investigation and examination of the facts must first be had before any legal opinion be given by the lawyer to the client. To avoid breach of legal ethics, a lawyer should keep any business, in which is engaged in concurrently with the practice of law, entirely separate and apart from the latter.

CANON 16 A lawyer shall hold in trust all moneys and properties of his client that may come into his possession. Rule 16.01 A lawyer shall account for all money or property collected or received for or from the client. Rule 16.02 A lawyer shall keep the funds of each client separate and apart from his own and those of others kept by him.

Rule 16.03 A lawyer shall deliver the funds and property of his client when due or upon demand. However, he shall have a lien over the funds and may apply so much thereof as may be necessary to satisfy his lawful fees and disbursements, giving notice promptly thereafter to his client. He shall also have a lien to the same extent on all judgments and executions he has secured for his client as provided for the Rules of Court. Attorneys Liens an attorney shall have a lien upon the funds, documents and papers of his client which have lawfully come into his possession and may retain the same until his lawful fees and disbursements have been paid, and may apply such finds to the satisfaction thereof. He shall also have a lien to the same extent upon all judgements for the payment of money, and executions issued in pursuance of such judgements which he has secured in a litigation of his client, from and after the time when he shall have caused a statement of his claim of such lien to be entered upon the records of the court rendering such judgement, or issuing such execution, and shall have caused written notice thereof to be delivered to his client and to the adverse party; and he shall have the same right and power over such judgments and executions as his client would have to enforce his lien and secure the payment of his fees and disbursements. (Sec, 37, Rule 138, RRC) Rule 16.04 A lawyer shall not borrow money from his client unless the clients interests are fully protected by the nature of the case or by independent advice. Neither shall a lawyer lend money to a client except, when in the interest of justice, he has to advance necessary expenses in the legal matter he is handling for the client.

Attorneys lien is not an excuse for non-rendition of accounting Cannot disburse clients money to clients creditors without authority. Failure to deliver upon demand gives rise to the presumption that he has misappropriated the funds for his own use to the prejudice of the client and in violation of the trust reposed in him. Notify client if retaining lien shall be implemented When a lawyer enforces a charging lien against his client, the client-lawyer relationship is terminated. The principle behind Rule 16.04 is to prevent the lawyer from taking advantage of his influence over the client or to avoid acquiring a financial interest in the outcome of the case.

CANON 17 A lawyer owes fidelity to the cause of his client and he shall be mindful of the trust and confidence reposed in him.

No fear of judicial disfavor or public popularity should restrain him from full discharge of his duty. It is the duty of the lawyer at the time of retainer to disclose to the client all the circumstances of his relations to the parties and any interest in, or connection with, the controversy which might influence the client in the selection of counsel. The lawyer owes loyalty to his client even after the relation of attorney and client has terminated. It is not good practice to permit him afterwards to defend in another case

other persons against his former client under the pretext that the case is distinct from and independent of the former case. CANON 18 A lawyer shall serve his client with competence and diligence. Rule 18.01 A lawyer shall not undertake a legal service which he knows or should know that he is not qualified to render. However, he may render such service if, with the consent of his client, he can obtain as collaborating counsel a lawyer who is competent on the matter. Rule 18.02 A lawyer shall not handle any legal matter without adequate preparation. Rule 18.03 A lawyer shall not neglect a legal matter entrusted to him and his negligence in connection therewith shall render him liable. Rule 18.04 A lawyer shall keep the client informed of the status of his case and shall respond within a reasonable time to the clients request for information.

Competence: sufficiency of lawyers qualification to deal with the matter in question and includes knowledge and skill and the ability to use them effectively in the interest of the client. A lawyer must keep himself constantly abreast with the trend of authoritative pronouncements and developments in all branches of law. There must be extraordinary diligence in prosecution or defense of his clients cause. If a lawyer errs like any other human being, he is not answerable for every error or mistake, and will be protected as long as he acts honestly and in good faith to the best of his skill and knowledge. Lawyer is not an insurer of the result in a case where he is engaged in the counsel.

CANON 19 A lawyer shall represent his client with zeal within the bounds of the law. Rule 19.01 A lawyer shall employ only fair and honest means to attain the lawful objectives of his client and shall not present, participate in presenting or threaten to present unfounded criminal charges to obtain an improper advantage in any case or proceeding. Rule 19.02 A lawyer who has received information that his client has, in the course of the representation, perpetuated a fraud upon a person or tribunal, shall promptly call upon the client to rectify the same, and failing which he ha to terminate the relationship with such client in accordance with the Rules of Court. Rule 19.03 A lawyer shall not allow his client to dictate the procedure in handling the case.

General Rule: Negligence binds client

Exception: Reckless imprudence (deprives client of due process) Results in outright deprivation of ones property through technicality

Must not present in evidence any document known to be false; nor present a false witness. Negative pregnant is improper since it is an ambiguous pleading (improper if in bad faith and the purpose is to confuse the other party)

In defense: present every defense the law permits.

Lawyer should do his best efforts to restrain and to prevent his clients from perpetrating acts which he himself ought not to do. Or else, withdraw. But lawyer shall not volunteer the information about the clients commission of fraud to anyone counter to duty to maintain clients confidence and secrets.

CANON 20 A lawyer shall charge only fair and reasonable fees. Rule 20.01 A lawyer shall be guided by the following factors in determining his fees: 1. 2. 3. 4. 5. a. The time spent and the extent of the services rendered or required. b. The novelty and difficulty of the questions involved; c. The importance of the subject matter; d. The skill demanded; e. The probability of losing other employment as a result of acceptance of the proffered case; 6. f. The customary charges for similar services and the schedule of fees of the IBP chapter to which he belongs; 7. g. The amount involved in the controversy and the benefits resulting to the client from the services; 8. h. The contingency or certainty of compensation; 9. i. The character of the employment, whether occasional or established; and 10. j. The professional standing of the lawyer.

Kinds of Payment which may be stipulated upon:

1. a fixed or absolute fee which is payable regardless of the result of the case 2. a contingent fee that is conditioned to the securing of a favorable judgment and recovery of money or property and the amount of which may be on a percentage basis 3. a fixed fee payable per appearance 4. a fixed fee computed by the number of hours spent 5. a fixed fee based on a piece of work

Attorneys Fees

1. Ordinary attorneys fee - the reasonable compensation paid to a lawyer by his client for the legal services he has rendered to the latter. The basis for this compensation is the fact of his employment by and his agreement with the client. 2. Extraordinary attorneys fee an indemnity for damages ordered by the court to be paid by the losing party in litigation. The basis for this is any of the cases provided for by law where such award can be made, such as those authorized in Article 2208 of the Civil Code, and is payable NOT to the lawyer but to the client, unless they have agreed that the award shall pertain to the lawyer as additional compensation or as part thereof.

How attorneys fees may be claimed by the lawyer:

1. It may be asserted either in the very action in which the services of a lawyer had been rendered or in a separate action. 2. A petition for attorneys fees may be filed before the judgment in favor of the client is satisfied or the proceeds thereof delivered to the client. 3. The determination as to the propriety of the fees or as to the amount thereof will have to be held in abeyance until the main case from which the lawyers claim for attorneys fees may arise has become final. Otherwise, the determination of the courts will be premature.

Kinds of Retainer Agreements on Attorneys fees:

1. General Retainer or Retaining Fee it is the fee paid to a lawyer to secure his future services as general counsel for any ordinary legal problem that may arise in the ordinary business of the client and referred to him for legal action; 2. Special Retainer that is a fee for a specific case or service rendered by the lawyer for a client

Quantum Meruit - it means as much as he deserves, and is used as the basis for determining the lawyers professional fees in the absence of a contract, but recoverable by him from his client. Quantum Meruit is resorted to where:

1. there is no express contract for payment of attorneys fees agreed upon between the lawyer and the client; 2. when although there is a formal contract for attorneys fees, the stipulated fees are found unconscionable or unreasonable by the court. 3. When the contract for attorneys fees is void due to purely formal matters or defects of execution 4. When the counsel, for justifiable cause, was not able to finish the case to its conclusion 5. When lawyer and client disregard the contract for attorneys fees.

Skill: length of practice is not a safe criterion of professional ability.

Rule 20.02 A lawyer shall, in cases of referral, with the consent of the client, be entitled to a division of fees in proportion to the work performed and responsibility assumed.

Rule 20.03 A lawyer shall not, without the full knowledge and consent of the client, accept any fee, reward, costs, commission, interest, rebate or forwarding allowance or other compensation whatsoever related to his professional employment from anyone other than the client. Rule 20.04 A lawyer shall avoid controversies with clients concerning his compensation and shall resort to judicial action only to prevent imposition, injustice or fraud.

Unauthorized counsel: Not entitled to attorneys fees. Stipulation regarding payments of attorneys fees is not illegal/immoral and is enforceable as the law between the parties provided such stipulation does not contravene law, good morals, etc. When counsel cannot recover full amount despite written contract for attorneys fees:

1. When he withdraws before the case is finished 2. justified dismissal of attorney (payment: in quantum meruit only)

The reason for the award of attorneys fees must be stated in the text of the decision; otherwise, if it is stated only in the dispositive portion of the decision, the same must be disallowed on appeal. Even though the interest or property involved is of considerable value, if the legal services rendered do not call for much efforts there is no justification for the award of high fees. Champertous Contracts (void) Lawyer stipulates with his client that in the prosecution of the case, he will bear all the expenses for the recovery of things or property being claimed by the client and the latter agrees to pay the former a portion of the thing/property recovered as compensation. Compensation to an attorney for merely recommending another lawyer is improper (agents) Attorneys fees for legal services shared or divided to non-lawyer is prohibited. Division of fees is only for division of service or responsibility. A lawyer should try to settle amicably any differences on the subject. A lawyer has 2 options. Judicial action to recover attorneys fees:

1. In same case: Enforce attorneys fees by filing an appropriate motion or petition as an incident to the main action where he rendered legal services. 2. In a separate civil action. CANON 21 A lawyer shall preserve the confidences and secrets of his client even after the attorney-client relation is terminated.

Confidence refers to information protected by the attorney-client privilege (RRC) Secret refers to other information gained in the professional relationship that the client has regulated to be held inviolate or the disclosure of which would be embarrassing or would likely be detrimental to the client.

An attorney cannot, without the consent of his client, be examined as to any communication made by the client to him, or his advice given thereon in the course of professional employment; nor can an attorneys secretary, stenographer, or clerk be examined, without the consent of the client and his employees, concerning any fact the knowledge of which has been acquired in such capacity (Rule 130, Sec. 21 (b), RRC) The mere establishment of a client-lawyer relationship does not raise a presumption of confidentiality. There must be an intent or that the communication relayed by the client to the lawyer be treated as confidential.

Rule 21.01 A lawyer shall not reveal the confidences or secrets of his client except: 1. a. When authorized by the client after acquainting him of the consequences of the disclosure: 2. b. When required by law; 3. c. When necessary to collect his fees or to defend himself, his employees or associates or by judicial action.

When properly authorized after having been fully informed of the consequences to reveal his confidences/secrets, then there is a valid waiver. Art. 209. Betrayal of Trust by an Attorney or Solicitor. Revelation of secrets. In addition to the proper administrative action, the penalty of prision correccional in its minimum period, or a fine ranging from P200 to P1000, or both, shall be imposed upon any attorney at law or solicitor who, by any malicious break of professional duty as inexcusable negligence or ignorance, shall prejudice his client, or reveal any of the secrets of the latter learned by him in his professional capacity.

The same penalty shall be imposed upon an attorney at law or solicitor who, having undertaken the defense of a client, or having received confidential information from said client in a case, shall undertake the defense of the opposing party in the same case, without the consent of his first client (Rule 209, RPC)

General Rule: Obligation to keep secrets covers only lawful purposes Exceptions:

1. announcements of intention of a client to commit a crime 2. client jumped bail and lawyer knows his whereabouts; or client is living somewhere under an assumed name 3. communication involves the commission of future fraud or crime but crimes/frauds already committed falls within the privilege. Rule 21.02 A lawyer shall not, to the disadvantage of his client, use information acquired in the course of employment, nor shall he use the same to his own advantage or that of a third person, unless the client with full knowledge of the circumstances consents thereto.

Rule 21.03 A lawyer shall not, without the written consent of his client, give information from his files to an outside agency seeking such information for auditing, statistical, bookkeeping, accounting, data processing, or any other similar purposes. Rule 21.04 A lawyer may disclose the affairs of a client of the firm to partners or associates thereof unless prohibited by the client. Rule 21.05 A lawyer shall adopt such measures as may be required to prevent those whose services are utilized by him, from disclosing or using confidences or secrets of the client. Rule 21.06 A lawyer shall avoid indiscreet conversation about a clients affairs even with members of his family. Rule 21.07 A lawyer shall not reveal that he has been consulted about a particular case except to avoid possible conflict of interest.

Avoid committing calculated indiscretion accidental revelation of secrets obtained in his professional employment. Prohibition applies, even if the prospective client did not thereafter actually engage the lawyer.

CANON 22 A lawyer shall withdraw his services only for good cause and upon notice appropriate in the circumstances. Rule 22.01 A lawyer may withdraw his services in any of the following cases: 1. a. When the client pursues an illegal or immoral course of conduct in connection with the matter he is handling; 2. b. When the client insists that the lawyer pursue conduct violative of these canons and rules; 3. c. When his inability to work with co-counsel will not promote the best interest of the client; 4. d. When the mental or physical condition of the lawyer renders it difficult for him to carry out the employment effectively; 5. e. When the client deliberately fails to pay the fees for the services or fails to comply with the retainer agreement; 6. f. When the lawyer is elected or appointed to a public office, and 7. g. Other similar cases Rule 22.02 A lawyer who withdraws or is discharged shall subject to a retaining lien, immediately turn over all papers and property to which the client is entitled, and shall cooperate with his successor in the orderly transfer of the matter, including all information necessary for the proper handling of the matter.

1. Nature 2. Basis

3. Coverage

4. When Lien takes effect 5. Notice 6. Applicability

Retaining Lien Passive Lien: It cannot be actively enforced. It is a general lien Lawful possession of papers, documents, property belonging to client. Covers only papers, documents and property in the lawful possession of the attorney by reason of his professional employment As soon as the attorney gets possession of the papers documents or property Client need not be notified to make it effective May be exercised before judgment or execution or regardless thereof.

Charging Lien Active Lien: It can be enforced by execution. It is a special lien. Securing of a favorable money judgment for the client. Covers all judgments for the payment of money and executions issued in pursuance of such judgments. As soon as the claim for attorneys fees had been entered into the records of the case Client and adverse party must be notified to make it effective Generally, it is exercisable only when the attorney had already secured a favorable judgment for his client

In withdrawal as counsel for a client, an attorney may only retire from a case either by written consent of his client or by permission of the court after due notice and hearing, in which event the attorney should see to it that the name of the new attorney is recorded in the case. An attorney who could not get the written consent of his client must make an application to the court, for the relation does not terminate formally until there is a withdrawal of record. Counsel has no right to presume that the court would grand his withdrawal and therefore must still appear on the date of hearing. Requirements for the Substitution of Counsel in a Case: written application written consent of client written consent of attorney to be substituted if the consent of the attorney to be substituted cannot be obtained, there must be at least a proof of notice that the motion for substitution has been served upon him, in the manner prescribed by the rules. A lawyer cannot recover compensation from one who did not employ or authorize his employment, however valuable the results of his services may have been to such person. In similar cases, no compensation when:

1. 2. 3. 4.

1. client conducts himself in a manner which tends to degrade his attorney; 2. client refuses to extend cooperation; 3. client stops having contact with him.

The right of a client to terminate a lawyer is absolute. Such termination may be with or without cause.

LEGAL ETHICS is a branch of moral science, which treats of the duties which an attorney owes to the court, to the client, to his colleagues in the profession and to the public as embodied in the Constitution, Rules of Court, the Code of Professional Responsibility, Canons of Professional Ethics, jurisprudence, moral laws and special laws. Original Bases of Legal Ethics: 1. 2. 3. 4. 5. Canons of Professional Ethics Supreme court Decisions Statistics Constitution Treatises and publications

Present Basis of the Philippine Legal System: Code of Professional Responsibility. BAR V. BENCH BAR Refers to the whole body of attorneys and body of judges. BENCH denotes the whole body of counselors, collectively the members of the legal profession. Practice of Law any activity, in or out of court which requires the application of law, legal procedure, knowledge, training and experience. To engage in the practice of law is to give notice or render any kind of service, which or devise or service requires the use in any degree of legal knowledge or skill (Cayetano v. Monsod, 201 SCRA 210). Attorney-at-law/Counsel-at-law/Attorney/Counsel/ Abogado/Boceros: that class of persons who are licensed officers of the courts, empowered to appear prosecute and defend and upon whom peculiar duties, responsibilities, and liabilities are developed by law as a consequence (Cui v. Cui, 120 Phil. 729). Attorney in fact an agent whose authority is strictly limited by the instrument appointing him, though he may do things not mentioned in his appointment necessary to the performance of the duties specifically required of him by the power of attorney appointing him, such authority being necessarily implied. He is not necessarily a lawyer. Counsel de Oficio a counsel, appointed or assigned by the court, from among members of the Bar in good standing who, by reason of their experience and ability, may adequately defend the accused. Note: In localities where members of the Bar are not available, the court may appoint any person, resident of the province and good repute for probity and ability, to defend the accused. Sec. 7, Rule 116, Rules of Court.

Attorney ad hoc a person named and appointed by the court to defend an absentee defendant in the suit in which the appointment is made (Bienvenu v. Factors of Traders Insurance Cp., 33 La.Ann.209) Attorney of Record one who has filed a notice of appearance and who hence is formally mentioned in court records as the official attorney of the party. Person whom the client has named as his agent upon whom service of papers may be made. (Reynolds v. Reynolds, Cal.2d580). Of Counsel to distinguish them from attorneys of record, associate attorneys are referred to as of counsel (5 Am. Jur. 261). Lead Counsel The counsel on their side of a litigated action who is charged with the principal management and direction of a partys case. House Counsel Lawyer who acts as attorney for business though carried as an employee of that business and not as an independent lawyer. Bar Association an association of members of the legal profession. Advocate The general and popular name for a lawyer who pleads on behalf of someone else. Barrister (England) a person entitled to practice law as an advocate or counsel in superior court. Proctor (England) Formerly, an attorney in the admiralty and ecclesiastical courts whose duties and business correspond to those of an attorney at law or solicitor in Chancery. Titulo de Abogado it means not mere possession of the academic degree of Bachelor of Laws but membership in the Bar after due admission thereto, qualifying one for the practice of law. Admission to the Practice of Law The Supreme Court has the power to control and regulate the practice of law. Thus, the Constitution, under Article VIII, Sec. 5 (5) provides: Sec. 5. The Supreme Court shall have the following powers: (5) Promulgate rules concerning the protection and enforcement of constitutional rights, pleading, practice and procedure in all courts, the admission to the practice of law, the Integrated Bar, and legal assistance to the under privileged. The Supreme Court acts through a Bar Examination Committee in the Exercise of his judicial function to admit candidates to the legal profession.

The Bar Examination Committee:

Composed of (1) member of the Supreme Court who acts as Chairman and eight (8) members of the bar. The 8 members act as examiners for the 8 bar subjects with one subject assigned to each. The Bar Confidant acts as a sort of liason officer between the court and the Bar Chairman on the other hand, and the individual members of the committee on the other. He is at the same time a deputy clerk of court. Admission of examinees is always subject to the final approval of the court.

Practice of Law The practice of law is a privilege granted only to those who possess the STRICT INTELLECTUAL AND MORAL QUALIFICATIONS required of lawyers who are instruments in the effective and efficient administration of justice. (In Re: Argosino, 1997). Requirements for admission to the Bar: 1. 2. 3. 4. 5. citizen of the Philippines at least 21 years old of good moral character Philippine resident Production before the supreme court satisfactory evidence of: 1. good moral character 2. no charges against him, involving moral turpitude, have been filed or are pending in any court in the Philippines.

Requirement of Good Moral Character: a continuing requirement; good moral character is not only a condition precedent for admission to the legal profession, but it must also remain intact in order to maintain ones good standing in that exclusive and honored fraternity. (Tapucar vs. Tapucar, 1998) Academic Requirements for Candidates: 1. a bachelors degree in arts and sciences (pre-law course) 2. a completed course in: 1. civil law 2. commercial law 3. remedial law 4. public international law 5. private international law 6. political law 7. labor and social legislation 8. medial jurisprudence 9. taxation 10. legal ethics

Non-lawyers who may be authorized to appear in court: 1. Cases before the MTC: Party to the litigation, in person OR through an agent or friend or appointed by him for that purpose (Sec. 34, Rule 138, RRC) 2. Before any other court: Party to the litigation, in person (Ibid.) 3. Criminal case before the MTC in a locality where a duly licensed member of the Bar is not available: the judge may appoint a non-lawyer who is: 1. resident of the province 2. of good repute for probity and ability to aid the accused in his defense (Rule 116, Sec. 7, RRC). 4. Legal Aid Program A senior law student, who is enrolled in a recognized law schools clinical education program approved by the supreme Court may appear before any court without compensation, to represent indigent clients, accepted by the Legal Clinic of the law school. The student shall be under the direct supervision and control of an IBP member duly accredited by the law school. 5. Under the Labor code, non-lawyers may appear before the NLRC or any Labor Arbiter, if 1. they represent themselves, or if 2. they represent their organization or members thereof (Art 222, PO 442, as amended). 6. Under the Cadastral Act, a non-lawyer can represent a claimant before the Cadastral Court (Act no. 2259, Sec. 9). Public Officials who cannot engage in the private practice of Law in the Philippines: 1. 2. 3. 4. 5. 6. 7. 8. Judges and other officials as employees of the Supreme Court (Rule 148, Sec. 35, RRC). Officials and employees of the OSG (Ibid.) Government prosecutors (People v. Villanueva, 14 SCRA 109). President, Vice-President, members of the cabinet, their deputies and assistants (Art. VIII Sec. 15, 1987 Constitution). Members of the Constitutional Commission (Art IX-A, Sec. 2, 1987 Constitution) Ombudsman and his deputies (Art. IX, Sec. 8 (2nd par), 1987 Constitution) All governors, city and municipal mayors (R.A. No. 7160, Sec. 90). Those prohibited by special law

Public Officials with Restrictions in the Practice of Law: 1. 1. No Senator as member of the House of Representative may personally appear as counsel before any court of justice as before the Electoral Tribunals, as quasi-judicial and other administration bodies (Art. VI, Sec. 14, 1987 Constitution). 2. Under the Local Government Code (RA 7160, Sec. 91)Sanggunian members may practice their professions provided that if they are members of the Bar, they shall not: 1. appear as counsel before any court in any civil case wherein a local government unit or any office, agency, or instrumentality of the government is the adverse party;

2. appear as counsel in any criminal case wherein an officer or employee of the national or local government is accused of an offense committed in relation to his office; 3. collect any fee for their appearance in administrative proceedings involving the local government unit of which he is an official; 4. use property and personnel of the government except when the Sanggunian member concerned is defending the interest of the government. 3. Under RA 910, Sec. 1, as amended, a retired justice or judge receiving pension from the government, cannot act as counsel in any civil case in which the Government, or any of its subdivision or agencies is the adverse party or in a criminal case wherein an officer or employee of the Government is accused of an offense in relation to his office. Attorneys Oath: I, __________________, do solemnly swear that I will maintain allegiance to the Republic of the Philippines; I will support its constitution and obey the laws as well as the legal orders of the duly constituted authorities therein; I will do no falsehood, nor consent to the doing of any in court; I will not willingly nor wittingly promote or sue any groundless, false or unlawful suit, or give aid nor consent to the same; I will delay no man for money or malice, and will conduct myself as a lawyer according to the best of my knowledge and discretion, with all good fidelity as well to the court as to my clients; and I impose upon myself this voluntary obligations without any mental reservation or purpose of evasion. So help me God. (Form 28, RRC) Nature of Lawyers Oath

The lawyers oath is not mere facile words, drift and hollow, but a sacred trust that must be upheld and kept inviolable. (Sebastian vs. Calis, 1999) It is NOT a mere ceremony or formality for practicing law. Every lawyer should at all times weigh his actions according to the sworn promises he made when taking the lawyers oath. (In Re: Argosino, 1997, In Re: Arthur M. Cuevas, 1998).

Code of Professional Responsibility Chapter 1: Lawyer and Society CANON 1 A lawyer shall uphold the constitution, obey the laws of the land and promote respect for law and for legal processes

Duties of Attorneys:

1. to maintain allegiance to the Republic of the Philippines and to support the Constitution and obey the laws of the Philippines; 2. to observe and maintain the respect due to the courts of justice and judicial officers;

3. to counsel or maintain such actions or proceedings only as appear to him as just, and such defenses only as he believes to be honestly debatable under the laws; 4. to employ, for the purpose of maintaining the causes confided to him, such means only as are consistent with truth and honor, and never seek to mislead the judge or any judicial officer by an artifice or false statement of fact or law; 5. to maintain inviolate the confidence, and at every peril to himself, to preserve the secrets of his client, and to accept no compensation in connection with his clients business except from him or with his knowledge and approval; 6. to abstain from all offensive personality and to advance no fact prejudicial to the honor or reputation of a party or witness, unless required by the justice of the cause with which he is charged; 7. not to encourage either the commencement or the continuance of an action or proceeding, or delay any mans cause for any corrupt motive or interest; 8. never to reject, for any consideration personal to himself, the cause of the defenseless or oppressed; 9. in the defense of a person accused of a crime, by all fair and honorable means, regardless of his personal opinion as to the guilt of the accused, to present every defense that the law permits, to the end that no person may be deprived of life or liberty, but by due process of law. Rule 1.01 A lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct.

Conviction for crimes involving moral turpitude a number of lawyers have been suspended or disbarred for conviction of crimes involving moral turpitude such as: estafa bribery murder seduction abduction smuggling falsification of public documents Morality as understood in law - This is a human standard based on natural moral law which is embodied in mans conscience and which guides him to do good and avoid evil. Moral Turpitude: any thing that is done contrary to justice, honesty, modesty or good morals. Immoral Conduct: that conduct which is willful, flagrant, or shameless and which shows a moral indifference to the opinion of the good and respectable members of the community (Arciga vs. Maniwag, 106 SCRA 591). Grossly Immoral Conduct: One that is so corrupt and false as to constitute a criminal act or so unprincipled or disgraceful as to be reprehensible to a high degree; it is a WILLFUL, FLAGRANT or SHAMELESS ACT which shows a MORAL

1. 2. 3. 4. 5. 6. 7.

INDIFFERENCE to the opinion of respectable members of the community. (Narag vs. Narag, 1998) Rule 1.02 A lawyer shall not counsel or abet activities aimed at defiance of the law or at lessening confidence in the legal system. Rule 1.03 A lawyer shall not, for any corrupt motive or interest, encourage any suit or proceeding or delay any mans cause. Rule 1.04 A lawyer shall encourage his clients to avoid, end or settle the controversy if it will admit of a fair settlement.

If a lawyer finds that his clients cause is defenseless, it is his burden/duty to advise the latter to acquiesce and submit, rather than traverse the incontrovertible. It is unprofessional for a lawyer to volunteer advice to bring a lawsuit, except in rare cases where the blood, relationship or trust makes it his duty to do so. Temper clients propensity to litigate. Should not be an instigator of controversy but a mediator for concord and conciliator for compromise. The law violated need not be a penal law. Moral Turpitude everything which is done contrary to justice, honesty, modesty or good morals. Give advice tending to impress upon the client and his undertaking exact compliance with the strictest principles of moral law. Until a statute shall have been construed and interpreted by competent adjudication, he is free and is entitled to advise as to its validity and as to what he conscientiously believes to be its just meaning and extent. A lawyer has the obligation not to encourage suits. This is so as to prevent barratry and ambulance chasing. Barratry offense of frequently exciting and stirring up quarrels and suits, either at law or otherwise; Lawyers act of fomenting suits among individuals and offering his legal services to one of them. Ambulance Chasing Act of chasing victims of accidents for the purpose of talking to the said victims (or relatives) and offering his legal services for the filing of a case against the person(s) who caused the accident(s).

CANON 2 A lawyer shall make his legal services available in an efficient and convenient manner compatible with the independence, integrity and effectiveness of the profession.
Rule 2.01 A lawyer shall not reject, except for valid reasons, the cause of the defenseless or oppressed. Rule 2.02 In such a case, even if a lawyer does not accept a case, he shall not refuse to render legal advise to the person concerned if only to the extent necessary to safeguard latters rights.

Rule 2.03 a lawyer shall not do or permit to be done any act designed primarily to solicit legal business.

Primary characteristics which distinguish the legal profession from business;

1. duty of service, of which the emolument is a by product, and in which one may attain the highest eminence without making such money; 2. a relation as an officer of court to the administration of justice involving thorough sincerity, integrity and reliability; 3. a relation to clients in the highest degree of fiduciary; 4. a relation to colleagues at the bar characterized by candor, fairness and unwillingness to resort to current business methods of advertising and encroachment on their practice or dealing with their clients.

Defenseless not in the position to defend themselves due to poverty, weakness, ignorance or other similar reasons. Oppressed victims of acts of cruelty, unlawful exaction, domination or excessive use of authority.

Rule on Advertisements

General Rule: No advertisements allowed. The most worthy and effective advertisement possible is the establishment of a well-merited reputation for professional capacity and fidelity to trust.

Lawyers may not advertise their services or expertise nor should not resort to indirect advertisements for professional employment, such as furnishing or inspiring newspaper comments, or procuring his photograph to be published in connection with causes in which the lawyer has been engaged or concerning the manner of their conduct, the magnitude of the interest involved, the importance of the lawyers position, and all other self-laudation.

Exceptions/ Permissible advertisements:

1. Reputable law lists, in a manner consistent with the standards of conduct imposed by the canons, of brief biographical and informative data, are allowed. 2. Ordinary simple professional Card. It may contain only a statement of his name, the name of the law firm which he is connected with, address, telephone number and the special branch of law practiced. 3. A simple announcement of the opening of a law firm or of changes in the partnership, associates, firm name or office address, being for the convenience of the profession, is not objectionable. 4. Advertisements or simple announcement of the existence of a lawyer or his law firm posted anywhere it is proper such as his place of business or residence except courtrooms and government buildings. 5. Advertisements or announcement in any legal publication, including books, journals, and legal magazines.

Rule 2.04 A lawyer shall not charge rates lower than those customarily or prescribed, unless circumstances so warrant.

A lawyer cannot delay the approval of a compromise agreement entered into between parties, just because his attorneys fees were not provided for in the agreement. Rule: A lawyer cannot compromise the case without clients consent (special authority). Exception: Lawyer has exclusive management of the procedural aspect of the litigation (e.g. Submission for decision on the evidence so far presented. But in case where lawyer is confronted with an emergency and prompt/urgent action is necessary to protect clients interest and theres no opportunity for consultation, the lawyer may compromise. Rule: Refrain from charging rates lower than the customary rates.

Valid Justification: relatives, co-lawyers, too poor CANON 3 A lawyer in making known is legal services shall use only true, honest, fair dignified and objective information or statement of facts. Rule 3.01 A lawyer shall not use or permit the use of any false, fraudulent, misleading, deceptive, undignified, self-auditory or unfair statement or claim regarding his qualifications or legal services.

Violation of Rule 3.01 is unethical, whether done by him personally or through another with his permission.

Rule 3.02 In the choice of a firm name, no false, misleading, or assumed name shall be used. The continued use of the name of a deceased partner is permissible provided that the firm indicates in all its communication that said partner is deceased. Rule 3.03 Where a partner accepts public office, he shall withdraw from the firm and his name shall be dropped from the firm name unless the law allows him to practice law concurrently. Rule 3.04 A lawyer shall not pay or give anything of value to representatives of the mass media in anticipation of, or in return for, publicity to attract legal business.

It is unethical to use the name of a foreign firm. Death of a partner does not extinguish attorney-client relationship with the law firm. Negligence of a member in the law firm is negligence of the firm.

CANON 4 A lawyer shall participate in the improvement of the legal system by initiating or supporting efforts in law reform and in the administration of justice.

Examples: Presenting position papers or resolutions for the introduction of pertinent bills in congress; Petitions with the Supreme Court for the amendment of the Rules of Court.

CANON 5 A lawyer shall keep abreast of legal developments, participate in continuing legal education programs, support efforts to achieve high standards in law schools as well as in the practical training of students and assist in disseminating information regarding the law and jurisprudence.

Objectives of integration of the Bar

To elevate the standards of the legal profession To improve the administration of justice To enable the Bar to discharge its responsibility more effectively.

The three-fold obligation of a lawyer

First, he owes it to himself to continue improving his knowledge of the laws; Second, he owes it to his profession to take an active interest in the maintenance of high standards of legal education; Third, he owes it to the lay public to make the law a part of their social consciousness.

CANON 6 These canons shall apply to lawyers in government service in the discharge of their official tasks.

Public Officials include elective and appointive officials and employees, permanent or temporary, whether in the career or non-career service, including military and police personnel, whether or not they receive compensation, regardless of amount. (Sec. 3 (b), RA 6713). The law requires the observance of the following norms of conduct by every public official in the discharge and execution of their official duties: commitment to public interest professionalism justness and sincerity political neutrality responsiveness to the public nationalism and patriotism commitment to democracy simple living (Sec. 4, RA 6713)

1. 2. 3. 4. 5. 6. 7. 8.

Rule 6.01 The primary duty of a lawyer engaged in public prosecution is not to convict but to see that justice is done. The suppression of facts or the concealment of witnesses capable of establishing the innocence of the accused is highly reprehensible and is cause of disciplinary action. Rule 6.02 A lawyer in the government service shall not use his public position to promote or advance his private interest, nor allow the latter to interfere with his public duties.

Rule 6.03 A lawyer shall not, after leaving government service, accept engagements or employment in connection with any matter in which he had intervened while in said service.

Various ways a government lawyer leaves government service: retirement resignation expiration of the term of office dismissal abandonment Q: What are the pertinent statutory provisions regarding this Rule?

1. 2. 3. 4. 5.

A: Sec. 3 (d) RA 3019 as amended and Sec. 7 (b), RA 6713 Sec 3. Corrupt practice of Public Officers. In addition to acts or omission of public officers already penalized by existing law, the following shall constitute corrupt practice of any public officer and are hereby declared to be unlawful: (d) accepting or having any member of his family accept employment in a private enterprise which has pending official business with him during the pendency thereof or within one year after termination. Section 7 (b) of RA 6713 prohibits officials from doing any of the following acts: 1. own, control, manage or accept employment as officer, employee, consultant, counsel, broker, agent, trustee or nominee in any private enterprise regulated, supervised or licensed by their office unless expressly allowed by law. These prohibitions shall continue to apply for a period of one (1) year after resignation, retirement, or separation from public office, except in the case of subparagraph (b) (2) above, but the professional concerned cannot practice his profession in connection with any matter before the office he used to be with, in which case the one year prohibition shall likewise apply.

Lawyers in the government service are prohibited to engage in the private practice of their profession unless authorized by the constitution or law, provided that such practice will not conflict or tend to conflict with their official functions. Misconduct in office as a public official may be a ground for disciplinary action (if of such character as to affect his qualification as lawyer or to show moral delinquency). Should recommend the acquittal of the accused whose conviction is on appeal, IF he finds no legal basis to sustain the conviction. Includes restriction is representing conflicting interest (e.g. Accepting engagements vs. former employer, PNB) The OSG is not authorized to represent a public official at any state of a criminal case.

TITLE ONE I. CRIMES AGAINST NATIONAL SECURITY

Article 114

ELEMENTS OF TREASON: That the offender owes allegiance to the Government of the Philippines That there is a war in which the Philippines is involved That the offender either Levies war against the government, breech of allegiance actual assembling of men for the purpose of executing a reasonable design breech of allegiance adherence giving aid or comfort to the enemy

1. 2. 3. 4. 1. 2. 3. 4. 5. 6.

5. Adheres to the enemies, giving them aid and comfort

Ways of proving treason:

1. 2 witnesses testifying to same overt act Example: X saw arms landed in La Union and loaded into a motor vehicle. At this stage, not sufficient to convict yet. Y later saw the arms unloaded in a warehouse. Will X + Y be sufficient witnesses to convict? Answer: NO. Because the law requires that 2 witnesses see the SAME OVERT ACT. 2. Confession of the accused in open court. Arraignment, pre-trial, trial OK. 1. If he has pleaded NOT guilty already during arraignment, he can still confess in open court by stating the particular acts constituting treason. 2. During trial, simply saying Im guilty is not enough. 3. Withdrawing plea of not guilty during arraignment not necessary 4. If during arraignment he pleads guilty, court will ask if the accused understands is plea. Submission of affidavit during trial, even if assisted by counsel is not enough.

Treason: breach of allegiance to the government, committed by a person who owes allegiance to it. Allegiance: obligation of fidelity and obedience. It is permanent or temporary depending on whether the person is a citizen or an alien.

Evident premeditation, superior strength and treachery are circumstances inherent in treason, and are, therefore, not aggravating. Treason cannot be committed in times of peace, only in times of war actual hostilities. But no need for declaration of war Levying of war: a) that there be an actual assembling of men; b) for the purpose of executing a treasonable design by force (deliver the country in whole or in part to the enemy)

Not Treasonous:
1. Acceptance of public office and discharge of official duties under the enemy does not constitute per se the felony of treason (exception: when it is policy determining) 2. Serving in a puppet government (ministerial functions) and in order to serve the populace is NOT treasonous. But it is treason if: a) there is discretion involved; b) inflicts harm on Filipinos; c) it is disadvantageous to them. 3. Purpose of offender: to deliver the Philippines to enemy country; if merely to change officials not treason 4. Filipino citizens can commit treason outside the Philippines. But that of an alien must be committed in the Philippines. 5. Only Filipino citizens or permanent resident aliens can be held liable 6. Alien: with permanent resident status from the BID it is neither the length of stay in the Philippines nor the marriage with a Filipino that matters.

On Citizenship
Treason cannot be proved by circumstantial evidence or by extra-judicial confession of the accused Actual hostilities may determine the date of the commencement of war No such thing as attempted treason; mere attempt consummates the crime Giving aid or comfort material element, enhances forces of the enemy country. Acts which strengthen or tend to strengthen the enemy in the conduct of war against the traitors country or that which weaken and tend to weaken the power of the same.

Example: Financing arms procurement of enemy country. But giving of shelter is not necessarily giving aid and comfort.

Adherence and giving aid or comfort must concur together. Adherence: when a citizen intellectually or emotionally favors the enemy and harbors convictions disloyal to his countrys policy. But membership in the police force during the occupation is NOT treason.

Example: Giving information to, or commandeering foodstuffs for the enemy.

Adherence may be proved by: (1) one witness; (2) from the nature of the act itself; (3) from the circumstances surrounding the act. Treason is a CONTINUING CRIME. Even after the war, offender can be prosecuted.

If you convict a person for treason by reason of irresistible force or uncontrollable fear, you may use Art.12. No treason through negligence When killings and other common crimes are charged as overt act of treason, they cannot be regarded as (1) separate crimes or (2) as complex with treason.

Article 115 CONSPIRACY TO COMMIT TREASON

ELEMENTS:

1. In time of war 2. 2 or more persons come to an agreement to 1. levy war against the government, or 2. adhere to the enemies and to give them aid or comfort, 1. They decide to commit it

ELEMENTS OF PROPOSAL TO COMMIT TREASON

1. In time of war 2. A person who has decided to levy war against the government, or to adhere to the enemies and to give them aid or comfort, proposes its execution to some other person/s.

Mere agreement and decisions to commit treason is punishable Mere proposal even without acceptance is punishable too. If the other accepts, it is already conspiracy.

Article 116
MISPRISION OF TREASON

ELEMENTS:

1. That the offender must be owing allegiance to the government, and not a foreigner 2. That he has knowledge of any conspiracy (to commit treason) against the government 3. That he conceals or does not disclose and make known the same as soon as possible to the governor or fiscal of the province or the mayor or fiscal of the city in which he resides

Offender is punished as an accessory to the crime of treason This crime does not apply if the crime of treason is already committed Crime of omission To report within a reasonable time depends on time, place and circumstance the RPC did not fix time.

RPC states 4 individuals, what if you report to some other high-ranking government official? Ex. PNP Director? Judge Pimentel says any govt official of the DILG is OK.

Article 117
Espionage by entering, without authority therefor, warship, fort, or naval or military establishments or reservation to obtain any information, plans, photographs or other data of a confidential nature relative to the defense of the Philippines.

ELEMENTS:

1. 1. That the offender enters any of the places mentioned therein 1. 2. That he has no authority therefore;

2. That his purpose is to obtain information, plans, photographs or other data of a confidential nature relative to the defense of the Philippines Espionage by disclosing to the representative of a foreign nation the contents of the articles, data, or information referred to in paragraph 1 of Article 117, which he had in his possession by reason of the public office holds 1. ELEMENTS: That the offender is a public officer 2. That he has in his possession the articles, data or information referred to in par 1 of art 117, by reason of the public office he holds 3. That he discloses their contents to a representative of a foreign nation

Purpose: to gather data Espionage: the offense of gathering, transmitting, or losing information respecting the national defense with the intent or reason to believe that the information is to be used to the injury of the Philippines or the advantage of any foreign nation. It is not conditioned on citizenship. Not necessary that Philippines is at war with the country to which the information was revealed. What is important is that the information related is connected with the defense system of the Philippines. Wiretapping is NOT espionage if the purpose is not something connected with the defense See CA 616

II. CRIMES AGAINST LAWS OF NATIONS

Article 118

INCITING TO WAR OR GIVING MOTIVES FOR REPRISALS

ELEMENTS:

1. That the offender performs unlawful or unauthorized acts 2. That such acts provoke or give occasion for a war involving or liable to involve the Philippines or expose Filipino citizens to reprisals on their persons or property

Crime is committed in time of peace, intent is immaterial Inciting to war offender is any person Reprisals is not limited to military action, it could be economic reprisals, or denial of entry into their country. Example. X burns Chinese flag. If China bans the entry of Filipinos into China, that is already reprisal.

Article 119
VIOLATION OF NEUTRALITY ELEMENTS: 1. That there is war in which the Philippines is not involved 2. That there is a regulation issued by competent authority for the purpose of enforcing neutrality 3. That the offender violates such regulation

Govt must have declared the neutrality of the Phil in a war between 2 other countries It is neutrality of the Phil that is violated Congress has the right to declare neutrality

Article 120 CORRESPONDENCE WITH HOSTILE COUNTRY ELEMENTS: 1. That it is in time of war in which the Philippines is involved 2. That the offender makes correspondence with an enemy country or territory occupied by enemy troops 3. That the correspondence is either 1. prohibited by the government, or 2. carried on in ciphers or conventional signs, or 3. containing notice or information which might be useful to the enemy

Circumstances qualifying the offense:

a. notice or information might be useful to the enemy b. offender intended to aid the enemy

Hostile country exist only during hostilities or after the declaration of war Correspondence to enemy country correspondence to officials of enemy country even if related to you. It is not correspondence with private individual in enemy country If ciphers were used, no need for prohibition If ciphers were not used, there is a need for prohibition In any case, it must be correspondence with the enemy country Doesnt matter if correspondence contains innocent matters if prohibited, punishable

Article 121
FLIGHT TO ENEMYS COUNTRY

ELEMENTS That there is a war in which the Philippines is involved That the offender (Filipino or resident alien) must be owing allegiance to the government That the offender attempts to flee or go to enemy country That going to enemy country is prohibited by competent authority Mere attempt consummates the crime There must be a prohibition. If none, even if went to enemy country no violation Alien resident may be guilty here.

1. 2. 3. 4.

Article 122
PIRACY

2 Ways of Committing Piracy

1. By attacking or seizing a vessel on the high seas or in the Philippine waters (PD 532) 2. By seizing the whole or part of the cargo of said vehicles, its equipment or personal belongings of its complement or passengers

Elements:

1. That a vessel is on the high seas/Philippine waters 2. That the offenders are not members of its complement or passengers of the vessel 3. That the offenders

1. attack or seize that vessel or (hence, if committed by crew or passengers, the crime is not piracy but robbery in the high seas) 2. seize the whole or part of the cargo of said vessel, its equipment or personal belongings of its complement or passengers

High seas: any waters on the sea coast which are without the boundaries of the low water mark although such waters may be in the jurisdictional limits of a foreign govt PD 532 has been already repealed Piracy in high seas jurisdiction is with any court where offenders are found or arrested Piracy in internal waters jurisdiction is only with Philippine courts For purpose of Anti-Fencing Law, piracy is part of robbery and theft

Piracy

Mutiny

Robbery or forcible degradation on the Unlawful resistance to a superior officer, or the high seas, without lawful authority and raising of commotion and disturbances on done with animo furandi and in the spirit board a ship against the authority of its and intention of universal hostility. commander Intent to gain is an element. Attack from outside. Offenders are Attack from the inside. strangers to the vessel. (this is the standing rule with the repeal of PD 532 which made it possible for any person to commit piracy including a passenger or complement of the vessel).

Article 123 QUALIFIED PIRACY

CIRCUMSTANCES:

1. Whenever they have seized a vessel by boarding or firing upon the same 2. Whenever the pirates have abandoned their victims without means of saving themselves 3. Whenever the crime is accompanied by murder, homicide, physical injuries, or rape. (the above may result to qualified mutiny)

Parricide/infanticide should be included (Judge Pimentel) Note the new rape law. Death is imposed in certain types of rape There is a conflict between this provision and the provision on rape. Ex. If rape is committed on someone below 7 death under the new rape law. But if rape committed on someone below 7 during the time of piracy RP to death. Irreconcilable. Murder/rape/homicide/physical injuries must have been committed on the passengers or complement

Salient changes in the Revised Rules on Criminal Procedure Rule 110 Prosecution of Offenses 1. The institution of allcriminal actions, including cases governed by the Rule on Summary Procedure, shall now be the same. 1. Preliminary investigation is now required for an offense punishable by imprisonment of at least 4 years, 2 months and 1 day. Except lawful warrantless arrests provided for under Section 7. Thus, preliminary investigation is required for all offenses cognizable by the RTC and for some cases cognizable by the MTC. 3. The institution of the criminal action shall interrupt the running of the prescriptive period of the offense except for offenses punishable by special laws. This is in accordance with the ruling in Zaldivia vs. Reyes, which stated that the Rules of Court cannot amend special laws, and under Act no. 3326**, the prescriptive period for violation of special laws and municipal ordinances was interrupted only upon the filing of the complaint or information in court. 1. Qualifying and aggravating circumstances is now required to be alleged in the complaint or information. The failure to specifically allege either circumstance, even if proved, cannot be taken into account. 1. Rape is removed from the list of private offenses since it is now classified as a crime against persons under R.A. 8353. 2. Any amendment before plea, which 1. Downgrades the nature of the offense charged in the complaint or information OR 2. Excludes any accused from the complaint or information can only be made upon motion by the prosecutor, with 1. Notice to the offended party AND ii. With leave of court The court shall state its reasons in resolving the motion and copies of its order shall be furnished all parties, especially the offended party. This amendment is intended to prevent the prosecution from abusing the process of amendment before plea by dropping any of the accused from the information or reducing the

offense charged, whether the accused had been arraigned or not and whether it was due to a reinvestigation of the fiscal or a review by the Secretary of Justice (Crespo vs. Mogul). Rule 111 Prosecution of Civil Action 1. Only the civil liability arising from the offense charged is deemed instituted (not merely impliedly) with the criminal unless the offended party: 1. Waives the civil action 2. Reserves his right to institute it separately OR 3. Institutes the civil action prior to the criminal action. 2. The independent civil actions under Articles 32, 33, 34 and 2176 are no longer deemed or impliedly instituted with the criminal action or considered as waived Even if there is no reservation.

They may proceed independently of the criminal action and shall require only a preponderance of evidence. 3. The reservation applies only to the civil liability arising from the offense charged. The employer may not longer be held civilly liable for quasi-delict in the criminal action as ruled in Maniago vs. Court of Appeals since quasi-delict is not deemed instituted with the criminal. If at all, the only civil liability of the employer in the criminal action would be his subsidiary liability under the Revised Penal Code. 4. The present rule has also done away with third-party complaints and counterclaims in criminal actions. These claims must have to be ventilated in a separate civil action. Thus, even if a counterclaim or cross-claim of the accused arises out of or is connected with the transaction or occurrence which is the subject matter of the offended partys claim, it is NOT compulsory. 5. The extinction of the civil liability refers exclusively to civil liability arising from crime; Whereas, the civil liability for the same act considered as quasi-delict only and not as a crime is not extinguished even by a declaration in the criminal case that the criminal act charged has not happened or has not been committed by the accused. Both actions may proceed separately, the only limitation is the prohibition to recover damages twice based on the same act or omission.

6. Except for civil actions provided for in Articles 32, 33, 34 and 2176 of the Civil Code, the civil action which has been reserved cannot be instituted until final judgment has been rendered in the criminal action. The action contemplated herein is a civil action arising from a crime if reserved or filed separately and if a criminal case is filed, it has to be suspended. During the pendency of the criminal action, the period of prescription of the civil action which cannot be instituted separately or whose proceeding has been suspended shall not run. 7. The death of the accused after arraignment and during the pendency of the criminal action shall extinguish the civil liability arising from the delict. This rule would only apply if any of the civil actions under section 3 is consolidated with the criminal action, otherwise, since the actions under section 3 are purely civil actions, the effects of death of a party are to be governed by the Rules on Civil Procedure. 8. A prejudicial question is limited to a previously instituted civil action in order to minimize possible abuses by the subsequent filing of a civil action as an after thought for the purpose of suspending the criminal action. Rule 112 Preliminary Investigation 1. Preliminary investigation now includes offenses punishable by at least 4 years, 2 months and 1 day, even if the same is cognizable by the Municipal Trial Court. 2. The complaint should be accompanied by affidavits of the complainant and his witnesses as well as other supporting papers relied upon by the complainant to establish probable cause. 3. A motion to dismiss is now a prohibited pleading during preliminary investigation. 4. The respondent is now required to submit counter-affidavits and other supporting documents relied upon by him for his defense. 5. The respondent now has the right to examine the evidence submitted by the complainant of which he may not have been furnished and to obtain copies thereof at his expense. If the records are voluminous, the complainant may be required to identify those which he intends to present to support his charge and these shall be made available for examination, copying or photographing by respondent at his expense. 1. The prosecutor is required to resolve the complaint based on the evidence presented by the complainant, in the event that: 1. The respondent cannot be subpoenaed OR 2. The respondent, if subpoenaed, does not submit a counter-affidavit within the 10day period. 3. The clarificatory hearing shall only to limited to facts and issues which the investigating officer believes need to be clarified.

The clarificatory hearing shall be held within 10 days from: 1. The submission of the counter-affidavit and other documents, OR 2. The expiration of the period for their submission.

The clarificatory hearing shall be terminated within 5 days. 1. After the clarificatory hearing:

The investigation shall be deemed concluded AND

The hearing officer shall determine whether there is sufficient ground to hold the respondent for trial upon the evidence adduced, within 10 days. 1. Whether the recommendation of the investigating officer is to file or dismiss the case, he shall, within 5 days from his resolution, forward the records to: 1. The provincial or city prosecutor or chief state prosecutor 2. The ombudsman or his deputy, for offenses cognizable by the Sandiganbayan in the exercise of its original jurisdiction Who shall taken appropriate action within 10 days from receipt and immediately inform the parties of said action. 1. A party has the right to appeal to the Secretary of Justice and require that the parties be notified of the recommendation of the action to be taken therefrom. 2. The judge must determine the existence of probable cause within 10 days from the filing of the information. If the accused has already been arrested, the judge must determine within 10 days the existence of probable cause and issue an order of commitment. The judge may disregard the prosecutors report and require the submission of additional evidence to determine the existence of provable case. If he still finds no probable cause, he shall dismiss the case. 1. Two types of offenses may be filed in the Municipal Trial Court for preliminary investigation: 1. A case is cognizable by the RTC may be filed with the MTC for preliminary investigation. 2. Even if it is cognizable by the MTC because it is an offense where the penalty prescribed by law is at least 4 years, 2 months and 1 day without regard to the fine. The MTC is authorized in either case to issue a warrant of arrest if there is necessity of placing the respondent under immediate custody, in order not to frustrate the ends of justice.

1. Outline on Issuance of Warrants of Arrest by Municipal Trial Judge 1. During preliminary investigation Searching questions and answers is mandatory. 1. In exercise of its original jurisdiction, distinguish: 1. Cases which require Preliminary Investigation even if it falls within its original jurisdiction After searching questions and answers, determine probable cause and necessity of placing accused in custody in order not to frustrate the ends of justice. 1. Cases investigated by MTC but remanded by the prosecutor The necessity rule inapplicable iii. No warrants: (1) If one already issued OR (2) The complaint or information filed under Section 7 (order of detention must be issued) OR (3) Offenses punishable by fine. 1. Cases which do not require preliminary investigation 1. Evaluate evidence OR ii. Conduct searching questions or answers or require additional evidence. 1. No warrants 1. If the judge is satisfied that there is no necessity for placing the accused under custody (issues summons instead) ii. Cases under the Revised Rules on Summary Procedure (no warrants except for failure to appear) iii. Rule on necessity It is only in the issuance of warrants of arrest during preliminary investigation and in cases which do not require preliminary investigation, that the Municipal Trial Judge is called upon to apply the principle of necessity. The principle does not apply to cases remanded by the Prosecutor. 1. In case a person is arrested without a warrant, a complaint or information may only be filed after an inquest conducted in accordance with existing rules.

 Provided that in the absence or unavailability of an inquest prosecutor, the complaint may be filed by the offended party or a peace officer directly with the proper court on the basis of the affidavit of the offended party or arresting officer or person. 1. Before the filing of a complaint or information, the person arrested without a warrant may ask for a preliminary investigation by a proper officer, but he must sign a waiver of the provisions of Article 125 of the Revised Penal Code. The waiver may be made only in the presence of his counsel pursuant to R.A. no. 7438. In case the case has been filed in court without a preliminary investigation, the accused may, within 5 days from the time he learns of its filing, ask for a preliminary investigation with the same right to adduce evidence in his defense. The request for preliminary investigation must be made before plea, otherwise the right to ask for a preliminary investigation shall be deemed waived. 1. The court must evaluate the resolution of the investigating prosecutor and the supporting evidence adduced during the preliminary investigation, and such evidence must be included in filing the information. 2. Issuance of warrants of arrest by the MTC for actions filed in the exercise of its original jurisdiction provides for two distinct situations: Case may be filed 1. Directly in the MTC OR 2. By the prosecutor in Metro Manila or other chartered cities. 3. If complaint is filed with the prosecutor for offenses which do not require a preliminary investigation, the procedure is as follows: 1. The complaint shall state the known address of the respondent 2. Accompanied by: 1. Affidavits of the complainant and his witness AND 2. Other supporting documents relied upon by the complainant to establish probable cause 3. Affidavits must be sworn before any prosecutor, state prosecutor or government official authorized to administer oath, or a notary public (in their absence or unavailability) 4. The prosecutor, et. al., must certify that he personally examined the affiants and that he is satisfied that they voluntarily executed and understood their affidavits. 5. The prosecutor shall take appropriate action based on the affidavits and other supporting documents submitted by the complainant within 10 days from its filing. He may either dismiss the case or file it in court 1. If complaint is filed directly with the MTC for an offense punishable by less than 4 years, 6 months and 1 day, the procedure is similar to (18).

The judge should then personally examine in writing and under oath the complainant. 1. No warrant of arrest shall issue for cases covered by the Revised Rules on Summary Procedure.

Rule 113 Arrest 1. Instances of valid warrantless arrests: 1. When, in his presence, the person to be arrested has committed, is actually committing, or is attempting to commit an offense; 2. When an offense has just been committed and he has probable cause to believe based on personal knowledge of facts or circumstances that the person to be arrested has committed it; AND 3. When the person to be arrested is a prisoner who has escaped from a penal establishment or place where he is serving final judgment or is temporarily confined while his case is pending, or has escaped while being transferred from one confinement to another. 4. 1(b) removed the requirement that an offense must have in fact been committed and clarified that probable cause to believe based on personal knowledge of facts and circumstances that the person to be arrested has committed it would be sufficient to justify a warrantless arrest for an offense that has just been committed. 5. Indubitable existence of a crime is not necessary to justify a warrantless arrest and that personal knowledge of facts in arrests without warrant must be based upon probable cause, which means an actual belief or reasonable grounds of suspicion. The grounds of suspicion are reasonable when, in the absence of actual belief of the arresting officers, the suspicion that the person to be arrested is probably guilty of committing the offense, is based on actual facts, i.e., supported by circumstances sufficiently strong in themselves to create the probable cause of guilt of the person to be arrested. A reasonable suspicion therefore must be founded on probable cause, coupled with good faith on the part of the peace officers making the arrest. Rule 114 Bail 1. Bail is a matter of right 1. Before or after conviction by the MTC AND 2. Before conviction by the RTC of an offense not punishable by death, reclusion perpetua or life imprisonment 3. 2. Bail is a matter of discretion after conviction by the RTC of an offense not punishable by death, reclusion perpetua or life imprisonment. 4. Photos taken recently means photos taken within the last six months. 5. The application for bail may be filed and acted upon by the trial court despite the filing of a notice of appeal, provided it has not transmitted the original record to the appellate court.

 However, if the decision of the trial court convicting the accused changed the nature of the offense from non-bailable to bailable, the application for bail can only be filed with and resolved by the appellate court. This provision modified the ruling in Obosa vs. Court of Appeals in the sense that except for decisions which changed the nature of an offense from bailable to non-bailable cases, the trial court may still act on the application of bail even if a notice of appeal have been filed. Even if there is no notice of appeal if the decision of the trial court convicting the accused changed the nature of the offense from non-bailable to bailable, the application for bail can only be filed with and resolved by the appellate court. 5. Bail may be filed with: 1. The court where the case is pending OR 2. Another judge of the same court within the province or city In the absence or unavailability of the judge thereof. 6. When the presence of the accused is required by the court or these Rules, his bondsmen shall be notified to produce him before the court on a given date and time. 7. An application for bail by the accused shall NOT be considered as a waiver of his right to challenge the legality of his arrest or the absence of a preliminary investigation. Provided such objections are raised before plea. Rule 116 Arraignment and Plea 1. When the accused pleads guilty but presents exculpatory evidence, his plea shall be deemed withdrawn and a plea of not guilty shall be entered for him. This refers to a situation where an accused pleads guilty but invokes the mitigating circumstance of incomplete self-defense under Article 13, paragraph 1 of the Revised Penal Code as amended. If the accused, after being allowed to present evidence, however adduces proof, not only to establish incomplete self-defense, but that he acted with complete legal justification, his earlier plea of guilty shall be deemed withdrawn and a plea of not guilty shall be entered for him. 1. While R.A. No. 8493 or the Speedy Trial Act provides that the accused shall be arraigned within 30 days from the time a court acquires jurisdiction over his person, Rule 116, 1(e) provides for a shorter time within which an accused who is under preventive detention should be arraigned.

 Where an accused is detained, his case should be raffled within 3 days from the filing of the information or complaint against him, and the judge to whom his case is raffled shall have him arraigned within 10 days from receipt by the judge of the records of the case. The pre-trial conference shall be held within 10 days after the arraignment. 1. The consent of both the prosecutor and the offended party is required before an accused may be allowed by the court to plead guilty to a lesser offense. The conviction for the lower offense would not give rise to double jeopardy if the plead of guilty for the lower offense was without the consent of the offended party. 1. The presence of the offended party is now required at the arraignment and also to discuss the matter of accuseds civil liability. In case the offended party fails to appear despite due notice, the trial court may allow the accused to plead guilty to a lower offense with solely the conformity of the trial prosecutor. 1. The arraignment shall be held within 30 days from the date the court acquires jurisdiction over the person of the accused. Unless a shorter period is provided by special law or Supreme Court circular. The time of the pendency of a motion to quash or for a bill of particulars or other causes justifying suspension of the arraignment shall be excluded in computing the period. 1. Certain laws and SC Circulars provide for a shorter time within which the accused should be arraigned: 1. Republic Act no. 4908 In criminal cases where the complainant is about to depart form the Philippines with no definite date of return, the accused should be arraigned without delay and his trial should commence within 3 days from the arraignment and that no postponement of the initial hearing should be granted except on the ground of illness on the part of the accused or other grounds beyond the control of the court. 1. Republic Act no. 7610 or the Child Abuse Act The trial of cases falling under said law shall be commenced within 3 days from arraignment. 1. Dangerous Drugs Law 2. Cases falling under the SC Admin Order No. 104-96, i.e., heinous crimes, violations of the Intellectual Property Rights Law These cases must be tried continuously until terminated within 60 days from commencement of the trial and to be decided within 30 days from the submission of the case.

1. A plea of guilty to a lesser offense may be allowed only if the lesser offense is necessarily included in the offense charged. Consent of the prosecutor and offended party must be obtained. 1. A counsel de oficio who is appointed to defend the accused at the arraignment is given a reasonable time to consult with the accused as to his plea before proceeding with the arraignment. Rule 117 Motion to Quash 1. Grounds for motion to quash a complaint or information: 1. The facts charged do not constitute an offense 2. The court has no jurisdiction over the offense charged 3. The court has no jurisdiction over the person of the accused 4. The officer who filed the information had no authority to do so 5. It does not conform substantially to the prescribed form 6. More than one offense is charged Except when a single punishment for various offenses is prescribed by law. 1. The criminal action or liability has been extinguished 2. It contains averments which, if true, would constitute a legal excuse or justification AND 3. The accused has been previously convicted or acquitted of the offense charged, or the case against him was dismissed or otherwise terminated without his express consent. 4. Conviction of an accused shall not be a bar to another prosecution for an offense which necessarily includes the offense charged in the former complaint or information under the following instances: 1. The graver offense developed due to supervening facts arising from the same act or omission constituting the former charge 2. The facts constituting the graver charge became known or were discovered only after a plea was entered in the former complaint or information OR 3. The plea of guilty to the lesser offense was made without the consent of the prosecutor and of the offended party except as provided in 1(f) of Rule 116. 4. A case may not be provisionally dismissed without: 1. The express consent of the accused AND 2. Notice to the offended party 3. The provisional dismissal of offenses punishable by imprisonment not exceeding 6 years shall become final after 1 year from the issuance of the order without the case being revived. 4. The provisional dismissal of offenses punishable by imprisonment exceeding 6 years shall become permanent 2 years from the issuance of the order without the case having been revived.

Rule 118 Pre-Trial

1. In all criminal cases cognizable by the (1) Sandiganbayan, (2) Regional Trial Court, (3) Metropolitan Trial Courts, (4) Municipal Trial Court in Cities, (5) Municipal Trial Court and (6) Municipal Circuit Trial Court The court shall order a pre-trial conference (this must be held within 30 days from the date the court acquires jurisdiction over the person of the accused, unless a shorter period is provided for in special laws or circulars of the Supreme Court) 2. The following shall be considered during the pre-trial conference: 1. 2. 3. 4. 5. Plea bargaining Stipulation of facts Marking for identification of evidence of the parties Waiver of objections to admissibility of evidence Modification of the order of trial if the accused admits the charge but interposes a lawful defense; AND 6. Such matters as will promote a fair and expeditious trial of the criminal and civil aspects of the case 3. All agreements or admissions made or entered during the pre-trial conference shall be: 1. Reduced to writing and 2. Signed by the accused and counsel Otherwise, they cannot be used against the accused. The agreements covering the matters referred to in section 1 of this Rule shall be approved by the court. 4. If the counsel for the accused or the prosecutor does not appear at the pre-trial conference and does not offer an acceptable excuse for his lack of cooperation The court may impose proper sanction or penalties. Rule 119 Trial 1. After a plea of not guilty is entered The accused shall have at least 15 days to prepare for trial 2. The trial shall commence within 30 days from receipt of the pre-trial order. 3. Other laws, rules and regulations prescribe speedy trial for a shorter period for other offenses:

1. Criminal cases covered by the Rule on Summary Procedure or where the penalty prescribed by law does not exceed 6 months imprisonment, or a fine of P1,000 or both, irrespective of other imposable penalties Governed by Rule 123 2. R.A. No. 4908, An Act Requiring Judges of Courts to Speedily Try Criminal Cases Wherein the Offended Party is a Person About to Depart from the Philippines with No Definite Date of Return Requires such cases to take precedence over all other cases before our courts except election and habeas corpus cases The trial in these cases shall commence within 3 days from the date the accused is arraigned and no postponement of the initial hearing shall be granted except on the ground of illness on the part of the accused, or other grounds beyond the control of the accused 3. Speedy Trial of Child Abuse cases The trial of child abuse cases shall take precedence over all other cases before our courts except election and habeas corpus cases The trial in these cases shall commence within 3 days from the date the accused is arraigned and no postponement of the initial hearing shall be granted except on account of the illness of the accused or other grounds beyond his control (Sec. 21, Rules and Regulations on the Reporting and Investigation of Child Abuse cases issued pursuant to Sec. 32 of R.A. No. 1610, The Child Abuse Act) 4. Violations of the Dangerous Drugs Law 5. Under Administrative Order No. 104-96 4. Trial once commenced Shall continue from day to day as far as practicable until terminated May be postponed for a reasonable period of time for good cause

5. After consultation with the prosecutor and defense counsel

The court shall set the case for continuous trial on a weekly or other short term trial calendar at the earliest possible time so as to ensure speedy trial 6. In no case shall the entire trial period exceed 180 days from the first day of trial, except as otherwise authorized by the Supreme Court.

7. The time limitations provided under this section and the preceding section shall not apply where special laws or circulars of the Supreme Court provide for a shorter period of trial. 8. The following periods of delay shall be excluded in computing the time within which trial must commence: a. Any period of delay resulting from other proceedings concerning the accused, including but not limited to the following: 1. Delay resulting from an examination of the physical and mental condition of the accused; 2. Delay resulting from proceedings with respect to other criminal charges against the accused; 3. Delay resulting from extraordinary remedies against interlocutory orders; 4. Delay resulting from pre-trial proceedings; provided, that the delay does not exceed 30 days; 5. Delay resulting from order of inhibition, or proceedings relating to change of venue of cases or transfer from other courts; 6. Delay resulting from a finding of the existence of a prejudicial question; and 7. Delay reasonably attributable to any period, not to exceed 30 days, during which any proceeding concerning the accused is actually under advisement. b. Any period of delay resulting from the absence or unavailability of an essential witness. (An essential witness shall be considered absent when his whereabouts are unknown or his whereabouts cannot be determined by due diligence. He shall be considered unavailable whenever his whereabouts are known but his presence for trial cannot be obtained by due diligence.) 1. Any period of delay resulting from the mental incompetence or physical inability of the accused to stand trial. 2. If the information is dismissed upon motion of the prosecution and thereafter a charge is filed against the accused for the same offense Any period of delay from the date the charge was dismissed to the date the time limitation would commence to run as to the subsequent charge had there been no previous charge 1. A reasonable period of delay when the accused is joined for trial with a co-accused over whom the court has not acquired jurisdiction; or, as to whom the time for trial has not run and no motion for separate trial has been granted. 2. Any period of delay resulting from a continuance granted by any court motu proprio, or on motion of either the accused or his counsel, or the prosecution, if the court granted the continuance on the basis of its findings set forth in the order that the ends of justice served by taking such action outweigh the best interest of the public and the accused in a speedy trial. 9. The following factors, among others, shall be considered by a court in determining whether to grant continuance under section 3(f) of this Rule.

1. Whether or not the failure to grant a continuance in the proceeding would likely make a continuation of such proceeding impossible or result in a miscarriage of justice; and 2. Whether or not the case taken as a whole is so novel, unusual and complex, due to the number of accused or the nature of the prosecution, or that it is unreasonable to expect adequate preparation within the periods of time established therein 10. No continuance under section 3(f) of this Rule shall be granted because of 1. Congestion of the courts calendar or 2. Lack of diligent preparation or 3. Failure to obtain available witnesses on the part of the prosecutor 11. The general rule is that motions for postponement are granted only upon meritorious grounds and no party has the right to assume that his motion will be granted. The grant or denial of a motion for postponement is addressed to the sound discretion of the court. Unless grave abuse of discretion is shown, such discretion will not be interfered with either by mandamus or appeal. 12. If the accused is to be tried again pursuant to an order for a new trial The trial shall commence within 30 days from notice of the order (provided that if the period becomes impractical due to unavailability of witnesses and other factors, the court may extend it but not to exceed 180 days from notice of said order for a new trial 13. Notwithstanding the provisions of section 1(g), Rule 116 and the preceding section 1, for the first twelve-calendar-month period following its effectivity on September 15, 1998 The time limit with respect to the period from arraignment to trial imposed by said provision shall be 180 days. For the second twelve-month period, the time limit shall be 120 days, and for the third twelve-month period, the time limit shall be 80 days. 14. If the public attorney assigned to defend a person charged with a crime knows that the latter is preventively detained, either because he 1. Is charged with a bailable crime but has no means to post bail, or 2. Is charged with a non-bailable crime, or 3. Is serving a term of imprisonment in any penal institution It shall be his duty to do the following: 1. Shall promptly undertake to obtain the presence of the prisoner for trial or cause a notice to be served on the person having custody of the prisoner requiring such person to so advise the prisoner of his right to demand trial. 2. Upon receipt of that notice, the custodian of the prisoner shall promptly advise the prisoner of the charge and of his right to demand trial. If at anytime thereafter the prisoner informs his custodian that he demands such trial, the latter shall cause notice to that effect to be sent promptly to the public attorney.

3. Upon receipt of such notice, the public attorney shall promptly seek to obtain the presence of the prisoner for trial. 4. When the custodian of the prisoner receives from the public attorney a properly supported request for the availability of the prisoner for purposes of trial, the prisoner shall be made available accordingly. 15. In any case in which private counsel for the accused, the public attorney, or the prosecutor: 1. Knowingly allows the case to be set for trial without disclosing that a necessary witness would be unavailable for trial; 2. Files a motion solely for delay which he knows is totally frivolous and without merit; 3. Makes a statement for the purpose of obtaining continuance which he knows to be false and which is material tot he granting of a continuance; or 4. Willfully fails to proceed to trial without justification consistent with the provisions hereof The court may punish such counsel, attorney, or prosecutor, as follows: 1. By imposing on a counsel privately retained in connection with the defense of an accused, a fine not exceeding P20,000. 2. By imposing on any appointed counsel de oficio, public attorney, or prosecutor a fine not exceeding P5,000; and 3. By denying any defense counsel or prosecutor the right to practice before the court trying the case for a period not exceeding 30 days. The punishment provided for by this section shall be without prejudice to any appropriate criminal action or other sanction authorized under these Rules. 16. If the accused is not brought to trial within the time limit required by section 1(g), Rule 116 and section 1, as extended by section 6 of this Rule The information may be dismissed on motion of the accused on the ground of denial of his right to speedy trial 17. The accused shall have the burden of proving the motion but the prosecution shall have the burden of going forward with the evidence to establish the exclusion of time under section 3 of this Rule. 18. The dismissal shall be subject to the rules on double jeopardy. 19. No provision of law on speedy trial and no rule implementing the same shall be interpreted as a bar to any charge of denial of the right to speedy trial guaranteed by section 14(2) , Article III, of the 1987 Constitution. 20. After the prosecution rests its case The court may dismiss the action on the ground of insufficiency of evidence

1. On its own initiative after giving the prosecution the opportunity to be heard or 2. Upon demurrer to evidence filed by the accused with or without leave of court 21. If the court denies the demurrer to evidence filed with leave of court The accused may adduce evidence in his defense 22. When the demurrer to evidence is filed without leave of court The accused waive the right to present evidence and submits the case for judgment on the basis of the evidence for the prosecution 23. The motion for leave of court to file demurrer to evidence Shall specifically state its grounds and shall be filed within a non-extendible period of 5 days after the prosecution rests its case Prosecution may oppose the motion within a non-extendible period of 5 days from its receipt 24. If leave of court is granted The accused shall file the demurrer to evidence within a non-extendible period of 10 days from notice Prosecution may oppose the demurrer to evidence within a similar period from its receipt 25. The order denying the motion for leave of court to file demurrer to evidence or the demurrer itself Shall not be reviewable by appeal or by certiorari before judgment 26. The present rule liberally deviates from the rigid structures of Rule 119 of the 1985 Rules on Criminal Procedure denying the accused the chance to present evidence by considering a defendants motion to dismiss a waiver of his right to present evidence. 27. The current rule allows the accused in a criminal case to present evidence even after a motion to dismiss provided the demurrer was made within the express consent of the court. 28. At any time before finality of the judgment of conviction The judge may, motu proprio or upon motion, with hearing in either case, reopen the proceedings to avoid a miscarriage of justice The proceedings shall be terminated within 30 days from the order granting it. Rule 120 Judgment

1. Judgment Adjudication by the court that the accused is guilty or not guilty of the offense charged and the imposition on him of the proper penalty and civil liability, if any Must 1. Be written in the official language 2. Personally and directly prepared by the judge and signed by him and 3. Contain clearly and distinctly a statement of the facts and the law upon which it is based 2. If the judgment is of conviction It shall state 1. The legal qualification of the offense constituted by the acts committed by the accused and the aggravating or mitigating circumstances which attended its commission 2. The participation of the accused in the offense, whether as principal, accomplice, or accessory 3. The penalty imposed upon the accused and 4. The civil liability or damages caused by his wrongful act or omission to be recovered from the accused by the offended party, if there is any, unless the enforcement of the civil liability by a separate civil action has been reserved or waived 3. In case the judgment is of acquittal It shall state whether the evidence of the prosecution absolutely failed to prove the guilt of the accused or merely failed to prove his guilt beyond reasonable doubt ( in either case, the judgment shall determine if the act or omission from which the civil liability might arise did not exist) 4. The judgment is promulgated by reading it in the presence of the accused and any judge of the court in which it was rendered. 5. If the conviction is for a light offense The judgment may be pronounced in the presence of his counsel or representative 6. When the judge is absent or outside the province or city The judgment may be promulgated by the clerk of court 7. If the accused is confined or detained in another province or city

 The judgment may be promulgated by the executive judge of the Regional Trial Court having jurisdiction over the place of confinement or detention upon request of the court which rendered the judgment 8. The court promulgating the judgment shall have authority to accept the notice of appeal and to approve the bail bond pending appeal; provided, that if the decision of the trial court convicting the accused changed the nature of the offense from non-bailable to bailable, the application for bail can only be filed and resolved by the appellate court. 9. The proper clerk of court shall give notice to the accused personally or through his bondsman or warden and counsel, requiring him to be present at the promulgation of the decision. 10. If the accused was tried in absentia because he 1. Jumped bail or 2. Escaped from prison The notice to him shall be served at his last known address. 11. In case the accused fails to appear at the scheduled date of promulgation of judgment despite notice The promulgation shall be made by recording the judgment in the criminal docket and serving him a copy thereof at his last known address or thru his counsel 12. If the judgment is for conviction and the failure of the accused to appear was without justifiable cause, he shall 1. Lose the remedies available in these Rules against the judgment and 2. The court shall order his arrest 13. However, within 15 days from promulgation of judgment The accused may surrender and file a motion for leave of court to avail of these remedies He shall state the reasons for his absence at the scheduled promulgation and if he proves that his absence was for a justifiable cause, he shall be allowed to avail of said remedies within 15 days from notice 14. Under the former rule, even if the accused fails to appear without justifiable cause, he shall be allowed to appeal within 15 days from notice of the decision to him or his counsel. 15. Under the new rule, if the judgment is of conviction and the failure of the accused to appear was without justifiable cause, he shall lose not only his right to appeal but also other legal remedies against the judgment as well and the court shall order his arrest.

Rule 124 Procedure in the Court of Appeals 1. The provisions of Rules 42, 44 to 46 and 48 to 56 relating to procedure in the Court of Appeals and in the Supreme Court in original and appealed cases Shall be applied to criminal cases insofar as they are applicable and not inconsistent with the provisions of this Rule 2. The provisions of Rule 47 of the Rules of Court (Annulment of Judgments of Final Judgment and Resolutions) are no longer applicable in criminal cases. The appropriate remedy for lack of jurisdiction or extrinsic fraud being either: 1. Certiorari under Rule 65 or 2. Habeas corpus under Rule 102 Rule 126 Search and Seizure 1. An application for search warrant shall be filed with the following: 1. Any court within whose territorial jurisdiction a crime was committed. 2. For compelling reasons stated in the application, any court within the judicial region where the crime was committed if the place of the commission of the crime is known, or any court within the judicial region where the warrant shall be enforced. 2. If the criminal action has already been filed The application shall only be made in the court where the criminal action is pending 3. Section 2, Rule 126 is new. It fixes the venue in the filing of applications for the issuance of a search warrant. Section 2 modifies the Malaloan guidelines (Malaloan vs. CA) which allow any judge to issue a search warrant prior to the filing of a criminal action, and even if one had already been filed, any judge for compelling reasons may still issue a search warrant. 4. The officer must forthwith deliver the property seized to the judge who issued the warrant, together with a true inventory thereof duly verified under oath. 5. 10 days after issuance of the search warrant The issuing judge shall ascertain if the return has been made, and if none, shall summon the person to whom the warrant was issued and require him to explain why no return was made 6. If the return has been made The judge shall

1. Ascertain whether section 11 of this Rule has been complied with and 2. Require that the property seized be delivered to him 7. The return on the search warrant shall be filed and kept by the custodian of the log book on search warrants who shall enter therein the date of the return, the result, and other actions of the judge. A violation of this section shall constitute contempt of court. 8. A motion to quash a search warrant and/or to suppress evidence obtained thereby May be filed in and acted upon only by the court where the action has been instituted 9. If no criminal action has been instituted The motion may be filed in and resolved by the court that issued the search warrant (if such court failed to resolve the motion and a criminal case is subsequently filed in another court, the motion shall be resolved by the latter court 10. Section 14 is intended to resolve what is perceived as conflicting decisions on where to file a motion to quash a search warrant or to suppress evidence seized by virtue thereof.

* The following pages are culled from Justice Oscar Herreras book on the relevant amendments in the Revised Rules of Criminal Procedure and from Justice Jose Ferias article in the Lawyers Review (February, 2001) on the Notable Amendments in Revised Rules of Criminal Procedure. ** An Act To Establish Periods of Prescription for Violations Penalized By Special Laws and Municipal Ordinances and to Provide When Prescription Shall Begin To Run. Criminal Law A branch of municipal law which defines crimes, treats of their nature and provides for their punishment. Limitations on the power of Congress to enact penal laws (ON) 1. 2. 3. 4. Must be general in application. Must not partake of the nature of an ex post facto law. Must not partake of the nature of a bill of attainder. Must not impose cruel and unusual punishment or excessive fines.

Characteristics of Criminal Law:

1. General the law is binding to all persons who reside in the Philippines 2. Territorial the law is binding to all crimes committed within the National Territory of the Philippines Exception to Territorial Application: Instances enumerated under Article 2. 3. Prospective the law does not have any retroactive effect. Exception to Prospective Application: when new statute is favorable to the accused. Effect of repeal of penal law to liability of offender Total or absolute, or partial or relative repeal. As to the effect of repeal of penal law to the liability of offender, qualify your answer by saying whether the repeal is absolute or total or whether the repeal is partial or relative only. A repeal is absolute or total when the crime punished under the repealed law has been decriminalized by the repeal. Because of the repeal, the act or omission which used to be a crime is no longer a crime. An example is Republic Act No. 7363, which decriminalized subversion. A repeal is partial or relative when the crime punished under the repealed law continues to be a crime inspite of the repeal. This means that the repeal merely modified the conditions affecting the crime under the repealed law. The modification may be prejudicial or beneficial to the offender. Hence, the following rule: Consequences if repeal of penal law is total or absolute (1) If a case is pending in court involving the violation of the repealed law, the same shall be dismissed, even though the accused may be a habitual delinquent. (2) If a case is already decided and the accused is already serving sentence by final judgment, if the convict is not a habitual delinquent, then he will be entitled to a release unless there is a reservation clause in the penal law that it will not apply to those serving sentence at the time of the repeal. But if there is no reservation, those who are not habitual delinquents even if they are already serving their sentence will receive the benefit of the repealing law. They are entitled to release. If they are not discharged from confinement, a petition for habeas corpus should be filed to test the legality of their continued confinement in jail. If the convict, on the other hand, is a habitual delinquent, he will continue serving the sentence in spite of the fact that the law under which he was convicted has already been absolutely repealed. This is so because penal laws should be given retroactive application to favor only those who are not habitual delinquents.

Consequences if repeal of penal law is partial or relative (1) If a case is pending in court involving the violation of the repealed law, and the repealing law is more favorable to the accused, it shall be the one applied to him. So whether he is a habitual delinquent or not, if the case is still pending in court, the repealing law will be the one to apply unless there is a saving clause in the repealing law that it shall not apply to pending causes of action. (2) If a case is already decided and the accused is already serving sentence by final judgment, even if the repealing law is partial or relative, the crime still remains to be a crime. Those who are not habitual delinquents will benefit on the effect of that repeal, so that if the repeal is more lenient to them, it will be the repealing law that will henceforth apply to them. Under Article 22, even if the offender is already convicted and serving sentence, a law which is beneficial shall be applied to him unless he is a habitual delinquent in accordance with Rule 5 of Article 62. Consequences if repeal of penal law is express or implied (1) If a penal law is impliedly repealed, the subsequent repeal of the repealing law will revive the original law. So the act or omission which was punished as a crime under the original law will be revived and the same shall again be crimes although during the implied repeal they may not be punishable. (2) If the repeal is express, the repeal of the repealing law will not revive the first law, so the act or omission will no longer be penalized. These effects of repeal do not apply to self-repealing laws or those which have automatic termination. An example is the Rent Control Law which is revived by Congress every two years. Theories of Criminal Law 1. Classical Theory Man is essentially a moral creature with an absolute free will to choose between good and evil and therefore more stress is placed upon the result of the felonious act than upon the criminal himself. 1. Positivist Theory Man is subdued occasionally by a strange and morbid phenomenon which conditions him to do wrong in spite of or contrary to his volition. Eclectic or Mixed Philosophy This combines both positivist and classical thinking. Crimes that are economic and social and nature should be dealt with in a positivist manner; thus, the law is more compassionate. Heinous crimes should be dealt with in a classical manner; thus, capital punishmen

BASIC MAXIMS IN CRIMINAL LAW Doctrine of Pro Reo Whenever a penal law is to be construed or applied and the law admits of two interpretations one lenient to the offender and one strict to the offender that interpretation which is lenient or favorable to the offender will be adopted. Nullum crimen, nulla poena sine lege There is no crime when there is no law punishing the same. This is true to civil law countries, but not to common law countries. Because of this maxim, there is no common law crime in the Philippines. No matter how wrongful, evil or bad the act is, if there is no law defining the act, the same is not considered a crime. Actus non facit reum, nisi mens sit rea The act cannot be criminal where the mind is not criminal. This is true to a felony characterized by dolo, but not a felony resulting from culpa. This maxim is not an absolute one because it is not applied to culpable felonies, or those that result from negligence. Utilitarian Theory or Protective Theory The primary purpose of the punishment under criminal law is the protection of society from actual and potential wrongdoers. The courts, therefore, in exacting retribution for the wronged society, should direct the punishment to potential or actual wrongdoers, since criminal law is directed against acts and omissions which the society does not approve. Consistent with this theory, the mala prohibita principle which punishes an offense regardless of malice or criminal intent, should not be utilized to apply the full harshness of the special law. Sources of Criminal Law 1. The Revised Penal Code 2. Special Penal Laws Acts enacted of the Philippine Legislature punishing offenses or omissions. Construction of Penal Laws 1. Criminal Statutes are liberally construed in favor of the offender. This means that no person shall be brought within their terms who is not clearly within them, nor should any act be pronounced criminal which is not clearly made so by statute. 2. The original text in which a penal law is approved in case of a conflict with an official translation. 3. Interpretation by analogy has no place in criminal law

MALA IN SE AND MALA PROHIBITA Violations of the Revised Penal Code are referred to as malum in se, which literally means, that the act is inherently evil or bad or per se wrongful. On the other hand, violations of special laws are generally referred to as malum prohibitum. Note, however, that not all violations of special laws are mala prohibita. While intentional felonies are always mala in se, it does not follow that prohibited acts done in violation of special laws are always mala prohibita. Even if the crime is punished under a special law, if the act punished is one which is inherently wrong, the same is malum in se, and, therefore, good faith and the lack of criminal intent is a valid defense; unless it is the product of criminal negligence or culpa. Likewise when the special laws requires that the punished act be committed knowingly and willfully, criminal intent is required to be proved before criminal liability may arise. When the act penalized is not inherently wrong, it is wrong only because a law punishes the same. Distinction between crimes punished under the Revised Penal Code and crimes punished under special laws 1. As to moral trait of the offender

In crimes punished under the Revised Penal Code, the moral trait of the offender is considered. This is why liability would only arise when there is dolo or culpa in the commission of the punishable act. In crimes punished under special laws, the moral trait of the offender is not considered; it is enough that the prohibited act was voluntarily done. 2. As to use of good faith as defense

In crimes punished under the Revised Penal Code, good faith or lack of criminal intent is a valid defense; unless the crime is the result of culpa In crimes punished under special laws, good faith is not a defense 3. As to degree of accomplishment of the crime

In crimes punished under the Revised Penal Code, the degree of accomplishment of the crime is taken into account in punishing the offender; thus, there are attempted, frustrated, and consummated stages in the commission of the crime.

In crimes punished under special laws, the act gives rise to a crime only when it is consummated; there are no attempted or frustrated stages, unless the special law expressly penalize the mere attempt or frustration of the crime. 4. As to mitigating and aggravating circumstances

In crimes punished under the Revised Penal Code, mitigating and aggravating circumstances are taken into account in imposing the penalty since the moral trait of the offender is considered. In crimes punished under special laws, mitigating and aggravating circumstances are not taken into account in imposing the penalty. 5. As to degree of participation

In crimes punished under the Revised Penal Code, when there is more than one offender, the degree of participation of each in the commission of the crime is taken into account in imposing the penalty; thus, offenders are classified as principal, accomplice and accessory. In crimes punished under special laws, the degree of participation of the offenders is not considered. All who perpetrated the prohibited act are penalized to the same extent. There is no principal or accomplice or accessory to consider. Test to determine if violation of special law is malum prohibitum or malum in se Analyze the violation: Is it wrong because there is a law prohibiting it or punishing it as such? If you remove the law, will the act still be wrong? If the wording of the law punishing the crime uses the word willfully, then malice must be proven. Where malice is a factor, good faith is a defense. In violation of special law, the act constituting the crime is a prohibited act. Therefore culpa is not a basis of liability, unless the special law punishes an omission. When given a problem, take note if the crime is a violation of the Revised Penal Code or a special law. Art. 1. This Code shall take effect on January 1, 1932. Art. 2. Except as provided in the treaties and laws of preferential application, the provisions of this Code shall be enforced not only within the Philippine Archipelago including its atmosphere, its interior waters and Maritime zone, but also outside of its jurisdiction, against those who: 1. Should commit an offense while on a Philippine ship or airship;

2. Should forge or counterfeit any coin or currency note of the Philippine Islands or obligations and securities issued by the Government of the Philippine Islands; 3. Should be liable for acts connected with the introduction into these islands of the obligations and securities mentioned in the preceding number; 4. While being public officers or employees, should commit an offense in the exercise of their functions; or (Some of these crimes are bribery, fraud against national treasury, malversation of public funds or property, and illegal use of public funds; e.g., A judge who accepts a bribe while in Japan.) 5. Should commit any crimes against the national security and the law of nations, defined in Title One of Book Two of this Code. (These crimes include treason, espionage, piracy, mutiny, and violation of neutrality)

Rules as to crimes committed aboard foreign merchant vessels:

1. French Rule Such crimes are not triable in the courts of that country, unless their commission affects the peace and security of the territory or the safety of the state is endangered. 1. English Rule Such crimes are triable in that country, unless they merely affect things within the vessel or they refer to the internal management thereof. (This is applicable in the Philippines) two situations where the foreign country may not apply its criminal law even if a crime was committed on board a vessel within its territorial waters and these are: (1) When the crime is committed in a war vessel of a foreign country, because war vessels are part of the sovereignty of the country to whose naval force they belong; (2) When the foreign country in whose territorial waters the crime was committed adopts the French Rule, which applies only to merchant vessels, except when the crime committed affects the national security or public order of such foreign country.

Requirements of an offense committed while on a Philippine Ship or Airship

1. Registered with the Philippine Bureau of Customs 2. Ship must be in the high seas or the airship must be in international airspace. Under international law rule, a vessel which is not registered in accordance with the laws of any country is considered a pirate vessel and piracy is a crime against humanity in general, such that wherever the pirates may go, they can be prosecuted. US v. Bull

A crime which occurred on board of a foreign vessel, which began when the ship was in a foreign territory and continued when it entered into Philippine waters, is considered a continuing crime. Hence within the jurisdiction of the local courts. As a general rule, the Revised Penal Code governs only when the crime committed pertains to the exercise of the public officials functions, those having to do with the discharge of their duties in a foreign country. The functions contemplated are those, which are, under the law, to be performed by the public officer in the Foreign Service of the Philippine government in a foreign country.

Exception: The Revised Penal Code governs if the crime was committed within the Philippine Embassy or within the embassy grounds in a foreign country. This is because embassy grounds are considered an extension of sovereignty. Paragraph 5 of Article 2, use the phrase as defined in Title One of Book Two of this Code. This is a very important part of the exception, because Title I of Book 2 (crimes against national security) does not include rebellion. Art 3. Acts and omissions punishable by law are felonies.

Acts an overt or external act Omission failure to perform a duty required by law. Example of an omission: failure to render assistance to anyone who is in danger of dying or is in an uninhabited place or is wounded abandonment. Felonies acts and omissions punishable by the Revised Penal Code Crime - acts and omissions punishable by any law

What requisites must concur before a felony may be committed? There must be (1) an act or omission; (2) punishable by the Revised Penal Code; and (3) the act is performed or the omission incurred by means of dolo or culpa.

How felonies are committed:

1. by means of deceit (dolo) There is deceit when the act is performed with deliberate intent. Requisites: 1. freedom 2. intelligence 3. intent

Examples: murder, treason, and robbery Criminal intent is not necessary in these cases: (1) When the crime is the product of culpa or negligence, reckless imprudence, lack of foresight or lack of skill; (2) When the crime is a prohibited act under a special law or what is called malum prohibitum. In criminal law, intent is categorized into two: (1) (2) General criminal intent; and Specific criminal intent.

General criminal intent is presumed from the mere doing of a wrong act. This does not require proof. The burden is upon the wrong doer to prove that he acted without such criminal intent. Specific criminal intent is not presumed because it is an ingredient or element of a crime, like intent to kill in the crimes of attempted or frustrated homicide/parricide/murder. The prosecution has the burden of proving the same. Distinction between intent and discernment Intent is the determination to do a certain thing, an aim or purpose of the mind. It is the design to resolve or determination by which a person acts. On the other hand, discernment is the mental capacity to tell right from wrong. It relates to the moral significance that a person ascribes to his act and relates to the intelligence as an element of dolo, distinct from intent. Distinction between intent and motive Intent is demonstrated by the use of a particular means to bring about a desired result it is not a state of mind or a reason for committing a crime. On the other hand, motive implies motion. It is the moving power which impels one to do an act. When there is motive in the commission of a crime, it always comes before the intent. But a crime may be committed without motive. If the crime is intentional, it cannot be committed without intent. Intent is manifested by the instrument used by the offender. The specific criminal intent becomes material if the crime is to be distinguished from the attempted or frustrated stage.

1. by means of fault (culpa) There is fault when the wrongful act results from imprudence, negligence, lack of foresight, or lack of skill. 1. Imprudence deficiency of action; e.g. A was driving a truck along a road. He hit B because it was raining reckless imprudence. 2. Negligence - deficiency of perception; failure to foresee impending danger, usually involves lack of foresight 3. c. Requisites: 1. Freedom 2. Intelligence 3. Imprudence, negligence, lack of skill or foresight 4. Lack of intent The concept of criminal negligence is the inexcusable lack of precaution on the part of the person performing or failing to perform an act. If the danger impending from that situation is clearly manifest, you have a case of reckless imprudence. But if the danger that would result from such imprudence is not clear, not manifest nor immediate you have only a case of simple negligence.

Mistake of fact is a misapprehension of fact on the part of the person who caused injury to another. He is not criminally liable.

a. Requisites: 1. that the act done would have been lawful had the facts been as the accused believed them to be; 2. intention of the accused is lawful; 3. mistake must be without fault of carelessness. Example: United States v. Ah Chong. Ah Chong being afraid of bad elements, locked himself in his room by placing a chair against the door. After having gone to bed, he was awakened by somebody who was trying to open the door. He asked the identity of the person, but he did not receive a response. Fearing that this intruder was a robber, he leaped out of bed and said that he will kill the intruder should he attempt to enter. At that moment, the chair struck him. Believing that he was attacked, he seized a knife and fatally wounded the intruder. Mistake of fact would be relevant only when the felony would have been intentional or through dolo, but not when the felony is a result of culpa. When the felony is a product of culpa, do not discuss mistake of fact. Art. 4. Criminal liability shall be incurred: 1. By any person committing a felony, although the wrongful act done be different from that which he intended.

Article 4, paragraph 1 presupposes that the act done is the proximate cause of the resulting felony. It must be the direct, natural, and logical consequence of the felonious act.

Causes which produce a different result:

1. Mistake in identity of the victim injuring one person who is mistaken for another (this is a complex crime under Art. 48) e.g., A intended to shoot B, but he instead shot C because he (A) mistook C for B. In error in personae, the intended victim was not at the scene of the crime. It was the actual victim upon whom the blow was directed, but he was not really the intended victim. How does error in personae affect criminal liability of the offender? Error in personae is mitigating if the crime committed is different from that which was intended. If the crime committed is the same as that which was intended, error in personae does not affect the criminal liability of the offender. In mistake of identity, if the crime committed was the same as the crime intended, but on a different victim, error in persona does not affect the criminal liability of the offender. But if the crime committed was different from the crime intended, Article 49 will apply and the penalty for the lesser crime will be applied. In a way, mistake in identity is a mitigating circumstance where Article 49 applies. Where the crime intended is more serious than the crime committed, the error in persona is not a mitigating circumstance 2. Mistake in blow hitting somebody other than the target due to lack of skill or fortuitous instances (this is a complex crime under Art. 48) e.g., B and C were walking together. A wanted to shoot B, but he instead injured C. In aberratio ictus, a person directed the blow at an intended victim, but because of poor aim, that blow landed on somebody else. In aberratio ictus, the intended victim as well as the actual victim are both at the scene of the crime. aberratio ictus, generally gives rise to a complex crime. This being so, the penalty for the more serious crime is imposed in the maximum period. 3. Injurious result is greater than that intended causing injury graver than intended or expected (this is a mitigating circumstance due to lack of intent to commit so grave a wrong under Art. 13) e.g., A wanted to injure B. However, B died. praeter intentionem is mitigating, particularly covered by paragraph 3 of Article 13. In order however, that the situation may qualify as praeter intentionem, there must be a notable disparity between the means employed and the resulting felony

In all these instances the offender can still be held criminally liable, since he is motivated by criminal intent.

Requisites: 1. the felony was intentionally committed 2. the felony is the proximate cause of the wrong done

Doctrine of Proximate Cause such adequate and efficient cause as, in the natural order of events, and under the particular circumstances surrounding the case, which would necessarily produce the event.

Requisites: 1. 2. 3. 4.

the direct, natural, and logical cause produces the injury or damage unbroken by any sufficient intervening cause without which the result would not have occurred Proximate Cause is negated by:

1. Active force, distinct act, or fact absolutely foreign from the felonious act of the accused, which serves as a sufficient intervening cause. 2. Resulting injury or damage is due to the intentional act of the victim. proximate cause does not require that the offender needs to actually touch the body of the offended party. It is enough that the offender generated in the mind of the offended party the belief that made him risk himself.

Requisite for Presumption blow was cause of the death Where there has been an injury inflicted sufficient to produce death followed by the demise of the person, the presumption arises that the injury was the cause of the death. Provided:

1. victim was in normal health 2. death ensued within a reasonable time The one who caused the proximate cause is the one liable. The one who caused the immediate cause is also liable, but merely contributory or sometimes totally not liable. 2. By any person performing an act which would be an offense against persons or property, were it not for the inherent impossibility of its accomplishment or on account of the employment of inadequate or ineffectual means.

Requisites: (IMPOSSIBLE CRIME)

1. Act would have been an offense against persons or property 2. Act is not an actual violation of another provision of the Code or of a special penal law 3. There was criminal intent

4. Accomplishment was inherently impossible; or inadequate or ineffectual means were employed.

Notes:

1. Offender must believe that he can consummate the intended crime, a man stabbing another who he knew was already dead cannot be liable for an impossible crime. 2. The law intends to punish the criminal intent. 3. There is no attempted or frustrated impossible crime.

Felonies against persons: parricide, murder, homicide, infanticide, physical injuries, etc. Felonies against property: robbery, theft, usurpation, swindling, etc. Inherent impossibility: A thought that B was just sleeping. B was already dead. A shot B. A is liable. If A knew that B is dead and he still shot him, then A is not liable.

When we say inherent impossibility, this means that under any and all circumstances, the crime could not have materialized. If the crime could have materialized under a different set of facts, employing the same mean or the same act, it is not an impossible crime; it would be an attempted felony.

Employment of inadequate means: A used poison to kill B. However, B survived because A used small quantities of poison frustrated murder. Ineffectual means: A aimed his gun at B. When he fired the gun, no bullet came out because the gun was empty. A is liable.

Whenever you are confronted with a problem where the facts suggest that an impossible crime was committed, be careful about the question asked. If the question asked is: Is an impossible crime committed?, then you judge that question on the basis of the facts. If really the facts constitute an impossible crime, then you suggest than an impossible crime is committed, then you state the reason for the inherent impossibility. If the question asked is Is he liable for an impossible crime?, this is a catching question. Even though the facts constitute an impossible crime, if the act done by the offender constitutes some other crimes under the Revised Penal Code, he will not be liable for an impossible crime. He will be prosecuted for the crime constituted so far by the act done by him. this idea of an impossible crime is a one of last resort, just to teach the offender a lesson because of his criminal perversity. If he could be taught of the same lesson by charging him with some other crime constituted by his act, then that will be the proper way. If you want to play safe, you state there that although an impossible crime is constituted, yet it is a principle of criminal law that he will only be penalized for an impossible crime if he cannot be punished under some other provision of the Revised Penal Code. Art 5. Whenever a court has knowledge of any act which it may deem proper to repress and which is not punishable by law, it shall render the proper decision and shall report to the Chief

Executive, through the Department of Justice, the reasons which induce the court to believe that said act should be made subject of legislation. In the same way the court shall submit to the Chief Executive, through the Department of Justice, such statement as may be deemed proper, without suspending the execution of the sentence, when a strict enforcement of the provisions of this Code would result in the imposition of a clearly excessive penalty, taking into consideration the degree of malice and the injury caused by the offense. When a person is charged in court, and the court finds that there is no law applicable, the court will acquit the accused and the judge will give his opinion that the said act should be punished.

Paragraph 2 does not apply to crimes punishable by special law, including profiteering, and illegal possession of firearms or drugs. There can be no executive clemency for these crimes.

Art. 6. Consummated felonies, as well as those which are frustrated and attempted, are punishable. A felony is consummated when all the elements necessary for its execution and accomplishment are present; and it is frustrated when the offender performs all the acts of execution which would produce the felony as a consequence but which, nevertheless, do not produce it by reason of causes independent of the will of the perpetrator. There is an attempt when the offender commences the commission of a felony directly by overt acts, and does not perform all the acts of execution which should produce the felony by reason of some cause or accident other than his own spontaneous desistance.

Development of a crime

1. Internal acts intent and plans; usually not punishable 2. External acts 1. Preparatory Acts acts tending toward the crime 2. Acts of Execution acts directly connected the crime Stages of Commission of a Crime Frustrated

Attempt Overt acts of execution are started Not all acts of execution are present Due to reasons other than the spontaneous desistance of the perpetrator

Consummated

All acts of execution are present Crime sought to be committed is not achieved Due to intervening causes independent of the will of the perpetrator All the acts of execution are present The result sought is achieved

Stages of a Crime does not apply in:

1. 2. 3. 4.

Offenses punishable by Special Penal Laws, unless the otherwise is provided for. Formal crimes (e.g., slander, adultery, etc.) Impossible Crimes Crimes consummated by mere attempt. Examples: attempt to flee to an enemy country, treason, corruption of minors. 5. Felonies by omission 6. Crimes committed by mere agreement. Examples: betting in sports (endings in basketball), corruption of public officers. Desistance Desistance on the part of the offender negates criminal liability in the attempted stage. Desistance is true only in the attempted stage of the felony. If under the definition of the felony, the act done is already in the frustrated stage, no amount of desistance will negate criminal liability. The spontaneous desistance of the offender negates only the attempted stage but not necessarily all criminal liability. Even though there was desistance on the part of the offender, if the desistance was made when acts done by him already resulted to a felony, that offender will still be criminally liable for the felony brought about his act In deciding whether a felony is attempted or frustrated or consummated, there are three criteria involved: (1) (2) (3) The manner of committing the crime; The elements of the crime; and The nature of the crime itself.

Applications:

1. A put poison in Bs food. B threw away his food. A is liable attempted murder.[1] 2. A stole Bs car, but he returned it. A is liable (consummated) theft. 3. A aimed his gun at B. C held As hand and prevented him from shooting B attempted murder. 4. A inflicted a mortal wound on B. B managed to survive frustrated murder. 5. A intended to kill B by shooting him. A missed attempted murder. 6. A doused Bs house with kerosene. But before he could light the match, he was caught attempted arson. 7. A cause a blaze, but did not burn the house of B frustrated arson. 8. Bs house was set on fire by A (consummated) arson. 9. A tried to rape B. B managed to escape. There was no penetration attempted rape. 10. A got hold of Bs painting. A was caught before he could leave Bs house frustrated robbery.[2] The attempted stage is said to be within the subjective phase of execution of a felony. On the subjective phase, it is that point in time when the offender begins the commission of an overt act until that point where he loses control of the commission of the crime already. If he has reached that point where he can no longer control the ensuing consequence, the crime has already passed the subjective phase and, therefore, it is no longer attempted. The moment the execution of the crime has already gone to that point where the felony should follow as a consequence, it is either already frustrated or consummated. If the felony does not follow as a consequence, it is already frustrated. If the felony follows as a consequence, it is consummated. although the offender may not have done the act to bring about the felony as a consequence, if he could have continued committing those acts but he himself did not proceed because he believed that he had done enough to consummate the crime, Supreme Court said the subjective phase has passed NOTES ON ARSON; The weight of the authority is that the crime of arson cannot be committed in the frustrated stage. The reason is because we can hardly determine whether the offender has performed all the acts of execution that would result in arson, as a consequence, unless a part of the premises has started to burn. On the other hand, the moment a particle or a molecule of the premises has blackened, in law, arson is consummated. This is because consummated arson does not require that the whole of the premises be burned. It is enough that any part of the premises, no matter how small, has begun to burn. ESTAFA VS. THEFT In estafa, the offender receives the property; he does not take it. But in receiving the property, the recipient may be committing theft, not estafa, if what was transferred to him was only the physical or material possession of the object. It can only be estafa if what was transferred to him is not only material or physical possession but juridical possession as well.

When you are discussing estafa, do not talk about intent to gain. In the same manner that when you are discussing the crime of theft, do not talk of damage. Nature of the crime itself In crimes involving the taking of human life parricide, homicide, and murder in the definition of the frustrated stage, it is indispensable that the victim be mortally wounded. Under the definition of the frustrated stage, to consider the offender as having performed all the acts of execution, the acts already done by him must produce or be capable of producing a felony as a consequence. The general rule is that there must be a fatal injury inflicted, because it is only then that death will follow. If the wound is not mortal, the crime is only attempted. The reason is that the wound inflicted is not capable of bringing about the desired felony of parricide, murder or homicide as a consequence; it cannot be said that the offender has performed all the acts of execution which would produce parricide, homicide or murder as a result. An exception to the general rule is the so-called subjective phase. The Supreme Court has decided cases which applied the subjective standard that when the offender himself believed that he had performed all the acts of execution, even though no mortal wound was inflicted, the act is already in the frustrated stage. The common notion is that when there is conspiracy involved, the participants are punished as principals. This notion is no longer absolute. In the case of People v. Nierra, the Supreme Court ruled that even though there was conspiracy, if a co-conspirator merely cooperated in the commission of the crime with insignificant or minimal acts, such that even without his cooperation, the crime could be carried out as well, such co-conspirator should be punished as an accomplice only. Art. 7. Light felonies are punishable only when they have been consummated with the exception of those committed against persons or property.

Examples of light felonies: slight physical injuries; theft; alteration of boundary marks; malicious mischief; and intriguing against honor. In commission of crimes against properties and persons, every stage of execution is punishable but only the principals and accomplices are liable for light felonies, accessories are not.

Art. 8. Conspiracy and proposal to commit felony are punishable only in the cases in which the law specially provides a penalty therefore. A conspiracy exists when two or more persons come to an agreement concerning the commission of a felony and decide to commit it.

There is proposal when the person who has decided to commit a felony proposes its execution to some other person or persons.

Conspiracy is punishable in the following cases: treason, rebellion or insurrection, sedition, and monopolies and combinations in restraint of trade. Conspiracy to commit a crime is not to be confused with conspiracy as a means of committing a crime. In both cases there is an agreement but mere conspiracy to commit a crime is not punished EXCEPT in treason, rebellion, or sedition. Even then, if the treason is actually committed, the conspiracy will be considered as a means of committing it and the accused will all be charged for treason and not for conspiracy to commit treason. Conspiracy and Proposal to Commit a Crime Conspiracy Proposal Agreement among 2 or more persons to commit a crime They decide to commit it A person has decided to commit a crime He proposes its commission to another

Elements

Crimes

1. Conspiracy to commit sedition 2. Conspiracy to commit rebellion 3. Conspiracy to commit treason 4. Proposal to commit treason 5. Proposal to commit rebellion

Mere conspiracy in combination in restraint of trade (Art. 186), and brigandage (Art. 306).

Two ways for conspiracy to exist: (1) There is an agreement.

(2) The participants acted in concert or simultaneously which is indicative of a meeting of the minds towards a common criminal goal or criminal objective. When several offenders act in a synchronized, coordinated manner, the fact that their acts complimented each other is indicative of the meeting of the minds. There is an implied agreement. Two kinds of conspiracy:

(1) (2)

Conspiracy as a crime; and Conspiracy as a manner of incurring criminal liability

When conspiracy itself is a crime, no overt act is necessary to bring about the criminal liability. The mere conspiracy is the crime itself. This is only true when the law expressly punishes the mere conspiracy; otherwise, the conspiracy does not bring about the commission of the crime because conspiracy is not an overt act but a mere preparatory act. Treason, rebellion, sedition, and coup detat are the only crimes where the conspiracy and proposal to commit to them are punishable. When the conspiracy is only a basis of incurring criminal liability, there must be an overt act done before the co-conspirators become criminally liable. For as long as none of the conspirators has committed an overt act, there is no crime yet. But when one of them commits any overt act, all of them shall be held liable, unless a co-conspirator was absent from the scene of the crime or he showed up, but he tried to prevent the commission of the crime. As a general rule, if there has been a conspiracy to commit a crime in a particular place, anyone who did not appear shall be presumed to have desisted. The exception to this is if such person who did not appear was the mastermind. For as long as none of the conspirators has committed an overt act, there is no crime yet. But when one of them commits any overt act, all of them shall be held liable, unless a coconspirator was absent from the scene of the crime or he showed up, but he tried to prevent the commission of the crime As a general rule, if there has been a conspiracy to commit a crime in a particular place, anyone who did not appear shall be presumed to have desisted. The exception to this is if such person who did not appear was the mastermind. When the conspiracy itself is a crime, this cannot be inferred or deduced because there is no overt act. All that there is the agreement. On the other hand, if the co-conspirator or any of them would execute an overt act, the crime would no longer be the conspiracy but the overt act itself. conspiracy as a crime, must have a clear and convincing evidence of its existence. Every crime must be proved beyond reasonable doubt. it must be established by positive and conclusive evidence, not by conjectures or speculations. When the conspiracy is just a basis of incurring criminal liability, however, the same may be deduced or inferred from the acts of several offenders in carrying out the commission of the crime. The existence of a conspiracy may be reasonably inferred from the acts of the offenders when such acts disclose or show a common pursuit of the criminal objective.

mere knowledge, acquiescence to, or approval of the act, without cooperation or at least, agreement to cooperate, is not enough to constitute a conspiracy. There must be an intentional participation in the crime with a view to further the common felonious objective. When several persons who do not know each other simultaneously attack the victim, the act of one is the act of all, regardless of the degree of injury inflicted by any one of them. All will be liable for the consequences. A conspiracy is possible even when participants are not known to each other. Do not think that participants are always known to each other. Conspiracy is a matter of substance which must be alleged in the information, otherwise, the court will not consider the same. Proposal is true only up to the point where the party to whom the proposal was made has not yet accepted the proposal. Once the proposal was accepted, a conspiracy arises. Proposal is unilateral, one party makes a proposition to the other; conspiracy is bilateral, it requires two parties. SEDITION; Proposal to commit sedition is not a crime. But if Union B accepts the proposal, there will be conspiracy to commit sedition which is a crime under the Revised Penal Code. Composite crimes Composite crimes are crimes which, in substance, consist of more than one crime but in the eyes of the law, there is only one crime. For example, the crimes of robbery with homicide, robbery with rape, robbery with physical injuries. In case the crime committed is a composite crime, the conspirator will be liable for all the acts committed during the commission of the crime agreed upon. This is because, in the eyes of the law, all those acts done in pursuance of the crime agreed upon are acts which constitute a single crime. As a general rule, when there is conspiracy, the rule is that the act of one is the act of all. This principle applies only to the crime agreed upon. The exception is if any of the co-conspirator would commit a crime not agreed upon. This happens when the crime agreed upon and the crime committed by one of the co-conspirators are distinct crimes. Exception to the exception: In acts constituting a single indivisible offense, even though the co-conspirator performed different acts bringing about the composite crime, all will be liable for such crime. They can only evade responsibility for any other crime outside of that agreed upon if it is proved that the particular conspirator had tried to prevent the commission of such other act.

Art. 9. Grave felonies are those to which the law attaches the capital punishment or penalties which in any of their are afflictive, in accordance with Article 25 of this Code. Less grave felonies are those which the law punishes with penalties which in their maximum period are correctional, in accordance with the above-mentioned article. Light felonies are those infractions of law for the commission of which he penalty of arresto mayor or a fine not exceeding 200 pesos, or both is provided.

Capital punishment death penalty. Penalties (imprisonment): Grave six years and one day to reclusion perpetua (life); Less grave one month and one day to six years; Light arresto menor (one day to 30 days).

CLASSIFICATION OF FELONIES This question was asked in the bar examination: How do you classify felonies or how are felonies classified? What the examiner had in mind was Articles 3, 6 and 9. Do not write the classification of felonies under Book 2 of the Revised Penal Code. That was not what the examiner had in mind because the question does not require the candidate to classify but also to define. Therefore, the examiner was after the classifications under Articles 3, 6 and 9. Felonies are classified as follows: (1) According to the manner of their commission

Under Article 3, they are classified as, intentional felonies or those committed with deliberate intent; and culpable felonies or those resulting from negligence, reckless imprudence, lack of foresight or lack of skill. (2) According to the stages of their execution

Under Article 6., felonies are classified as attempted felony when the offender commences the commission of a felony directly by overt acts, and does not perform all the acts of execution which should produce the felony by reason of some cause or accident other than his own spontaneous desistance; frustrated felony when the offender commences the commission of a felony as a consequence but which would produce the felony as a consequence but which nevertheless do not produce the felony by reason of causes independent of the perpetrator; and, consummated felony when all the elements necessary for its execution are present. (3) According to their gravity

Under Article 9, felonies are classified as grave felonies or those to which attaches the capital punishment or penalties which in any of their periods are afflictive; less grave felonies or those

to which the law punishes with penalties which in their maximum period was correccional; and light felonies or those infractions of law for the commission of which the penalty is arresto menor. Why is it necessary to determine whether the crime is grave, less grave or light? To determine whether these felonies can be complexed or not, and to determine the prescription of the crime and the prescription of the penalty. In other words, these are felonies classified according to their gravity, stages and the penalty attached to them. Take note that when the Revised Penal Code speaks of grave and less grave felonies, the definition makes a reference specifically to Article 25 of the Revised Penal Code. Do not omit the phrase In accordance with Article 25 because there is also a classification of penalties under Article 26 that was not applied. If the penalty is fine and exactly P200.00, it is only considered a light felony under Article 9. If the fine is imposed as an alternative penalty or as a single penalty, the fine of P200.00 is considered a correctional penalty under Article 26. If the penalty is exactly P200.00, apply Article 26. It is considered as correctional penalty and it prescribes in 10 years. If the offender is apprehended at any time within ten years, he can be made to suffer the fine. This classification of felony according to gravity is important with respect to the question of prescription of crimes. In the case of light felonies, crimes prescribe in two months. If the crime is correctional, it prescribes in ten years, except arresto mayor, which prescribes in five years. Art. 10. Offenses which are or in the future may be punishable under special laws are not subject to the provisions of this Code. This Code shall be supplementary to such laws, unless the latter should specially provide the contrary.

For Special Laws: Penalties should be imprisonment, and not reclusion perpetua, etc. Offenses that are attempted or frustrated are not punishable, unless otherwise stated. Plea of guilty is not mitigating for offenses punishable by special laws. No minimum, medium, and maximum periods for penalties. No penalty for an accessory or accomplice, unless otherwise stated.

Provisions of RPC applicable to special laws:

1. Art. 16 Participation of Accomplices 2. Art. 22 Retroactivity of Penal laws if favorable to the accused 3. Art. 45 Confiscation of instruments used in the crime

SUPPLETORY APPLICATION OF THE REVISED PENAL CODE In Article 10, there is a reservation provision of the Revised Penal Code may be applied suppletorily to special laws. You will only apply the provisions of the Revised Penal Code as a supplement to the special law, or simply correlate the violated special law, if needed to avoid an injustice. If no justice would result, do not give suppletorily application of the Revised Penal Code to that of special law. For example, a special law punishes a certain act as a crime. The special law is silent as to the civil liability of one who violates the same. Here is a person who violated the special law and he was prosecuted. His violation caused damage or injury to a private party. May the court pronounce that he is civilly liable to the offended party, considering that the special law is silent on this point? Yes, because Article 100 of the Revised Penal Code may be given suppletory application to prevent an injustice from being done to the offended party. Article 100 states that every person criminally liable for a felony is also civilly liable. That article shall be applied suppletory to avoid an injustice that would be caused to the private offended party, if he would not be indemnified for the damages or injuries sustained by him. In People v. Rodriguez, it was held that the use of arms is an element of rebellion, so a rebel cannot be further prosecuted for possession of firearms. A violation of a special law can never absorb a crime punishable under the Revised Penal Code, because violations of the Revised Penal Code are more serious than a violation of a special law. But a crime in the Revised Penal Code can absorb a crime punishable by a special law if it is a necessary ingredient of the crime in the Revised Penal Code In the crime of sedition, the use of firearms is not an ingredient of the crime. Hence, two prosecutions can be had: (1) sedition; and (2) illegal possession of firearms. But do not think that when a crime is punished outside of the Revised Penal Code, it is already a special law. For example, the crime of cattle-rustling is not a mala prohibitum but a modification of the crime theft of large cattle. So Presidential Decree No. 533, punishing cattlerustling, is not a special law. It can absorb the crime of murder. If in the course of cattle rustling, murder was committed, the offender cannot be prosecuted for murder. Murder would be a qualifying circumstance in the crime of qualified cattle rustling. This was the ruling in People v. Martinada. The amendments of Presidential Decree No. 6425 (The Dangerous Drugs Act of 1972) by Republic Act No. 7659, which adopted the scale of penalties in the Revised Penal Code, means that mitigating and aggravating circumstances can now be considered in imposing penalties. Presidential Decree No. 6425 does not expressly prohibit the suppletory application of the Revised Penal Code. The stages of the commission of felonies will also apply since suppletory application is now allowed. Circumstances affecting criminal liability There are five circumstances affecting criminal liability:

(1) (2) (3) (4) (5)

Justifying circumstances; Exempting circumstances; Mitigating circumstances; Aggravating circumstances; and Alternative circumstances.

There are two others which are found elsewhere in the provisions of the Revised Penal Code: (1) (2) Absolutory cause; and Extenuating circumstances.

In justifying and exempting circumstances, there is no criminal liability. When an accused invokes them, he in effect admits the commission of a crime but tries to avoid the liability thereof. The burden is upon him to establish beyond reasonable doubt the required conditions to justify or exempt his acts from criminal liability. What is shifted is only the burden of evidence, not the burden of proof. Justifying circumstances contemplate intentional acts and, hence, are incompatible with dolo. Exempting circumstances may be invoked in culpable felonies. Absolutory cause The effect of this is to absolve the offender from criminal liability, although not from civil liability. It has the same effect as an exempting circumstance, but you do not call it as such in order not to confuse it with the circumstances under Article 12. Article 20 provides that the penalties prescribed for accessories shall not be imposed upon those who are such with respect to their spouses, ascendants, descendants, legitimate, natural and adopted brothers and sisters, or relatives by affinity within the same degrees with the exception of accessories who profited themselves or assisting the offender to profit by the effects of the crime. Then, Article 89 provides how criminal liability is extinguished: Death of the convict as to the personal penalties, and as to pecuniary penalties, liability therefor is extinguished if death occurs before final judgment; Service of the sentence; Amnesty;

Absolute pardon; Prescription of the crime; Prescription of the penalty; and Marriage of the offended woman as provided in Article 344.

Under Article 247, a legally married person who kills or inflicts physical injuries upon his or her spouse whom he surprised having sexual intercourse with his or her paramour or mistress in not criminally liable. Under Article 219, discovering secrets through seizure of correspondence of the ward by their guardian is not penalized. Under Article 332, in the case of theft, swindling and malicious mischief, there is no criminal liability but only civil liability, when the offender and the offended party are related as spouse, ascendant, descendant, brother and sister-in-law living together or where in case the widowed spouse and the property involved is that of the deceased spouse, before such property had passed on to the possession of third parties. Under Article 344, in cases of seduction, abduction, acts of lasciviousness, and rape, the marriage of the offended party shall extinguish the criminal action. Absolutory cause has the effect of an exempting circumstance and they are predicated on lack of voluntariness like instigation. Instigation is associated with criminal intent. Do not consider culpa in connection with instigation. If the crime is culpable, do not talk of instigation. In instigation, the crime is committed with dolo. It is confused with entrapment. Entrapment is not an absolutory cause. Entrapment does not exempt the offender or mitigate his criminal liability. But instigation absolves the offender from criminal liability because in instigation, the offender simply acts as a tool of the law enforcers and, therefore, he is acting without criminal intent because without the instigation, he would not have done the criminal act which he did upon instigation of the law enforcers. Difference between instigation and entrapment In instigation, the criminal plan or design exists in the mind of the law enforcer with whom the person instigated cooperated so it is said that the person instigated is acting only as a mere instrument or tool of the law enforcer in the performance of his duties. On the other hand, in entrapment, a criminal design is already in the mind of the person entrapped. It did not emanate from the mind of the law enforcer entrapping him. Entrapment

involves only ways and means which are laid down or resorted to facilitate the apprehension of the culprit. The element which makes instigation an absolutory cause is the lack of criminal intent as an element of voluntariness. If the instigator is a law enforcer, the person instigated cannot be criminally liable, because it is the law enforcer who planted that criminal mind in him to commit the crime, without which he would not have been a criminal. If the instigator is not a law enforcer, both will be criminally liable, you cannot have a case of instigation. In instigation, the private citizen only cooperates with the law enforcer to a point when the private citizen upon instigation of the law enforcer incriminates himself. It would be contrary to public policy to prosecute a citizen who only cooperated with the law enforcer. The private citizen believes that he is a law enforcer and that is why when the law enforcer tells him, he believes that it is a civil duty to cooperate. If the person instigated does not know that the person is instigating him is a law enforcer or he knows him to be not a law enforcer, this is not a case of instigation. This is a case of inducement, both will be criminally liable. In entrapment, the person entrapped should not know that the person trying to entrap him was a law enforcer. The idea is incompatible with each other because in entrapment, the person entrapped is actually committing a crime. The officer who entrapped him only lays down ways and means to have evidence of the commission of the crime, but even without those ways and means, the person entrapped is actually engaged in a violation of the law. Instigation absolves the person instigated from criminal liability. This is based on the rule that a person cannot be a criminal if his mind is not criminal. On the other hand, entrapment is not an absolutory cause. It is not even mitigating. In case of somnambulism or one who acts while sleeping, the person involved is definitely acting without freedom and without sufficient intelligence, because he is asleep. He is moving like a robot, unaware of what he is doing. So the element of voluntariness which is necessary in dolo and culpa is not present. Somnambulism is an absolutory cause. If element of voluntariness is absent, there is no criminal liability, although there is civil liability, and if the circumstance is not among those enumerated in Article 12, refer to the circumstance as an absolutory cause. Mistake of fact is an absolutory cause. The offender is acting without criminal intent. So in mistake of fact, it is necessary that had the facts been true as the accused believed them to be, this act is justified. If not, there is criminal liability, because there is no mistake of fact anymore. The offender must believe he is performing a lawful act.

Extenuating circumstances

The effect of this is to mitigate the criminal liability of the offender. In other words, this has the same effect as mitigating circumstances, only you do not call it mitigating because this is not found in Article 13.

Illustrations: An unwed mother killed her child in order to conceal a dishonor. The concealment of dishonor is an extenuating circumstance insofar as the unwed mother or the maternal grandparents is concerned, but not insofar as the father of the child is concerned. Mother killing her new born child to conceal her dishonor, penalty is lowered by two degrees. Since there is a material lowering of the penalty or mitigating the penalty, this is an extenuating circumstance. The concealment of honor by mother in the crime of infanticide is an extenuating circumstance but not in the case of parricide when the age of the victim is three days old and above. In the crime of adultery on the part of a married woman abandoned by her husband, at the time she was abandoned by her husband, is it necessary for her to seek the company of another man. Abandonment by the husband does not justify the act of the woman. It only extenuates or reduces criminal liability. When the effect of the circumstance is to lower the penalty there is an extenuating circumstance. A kleptomaniac is one who cannot resist the temptation of stealing things which appeal to his desire. This is not exempting. One who is a kleptomaniac and who would steal objects of his desire is criminally liable. But he would be given the benefit of a mitigating circumstance analogous to paragraph 9 of Article 13, that of suffering from an illness which diminishes the exercise of his will power without, however, depriving him of the consciousness of his act. So this is an extenuating circumstance. The effect is to mitigate the criminal liability. Distinctions between justifying circumstances and exempting circumstances In justifying circumstances (1) The circumstance affects the act, not the actor;

(2) The act complained of is considered to have been done within the bounds of law; hence, it is legitimate and lawful in the eyes of the law; (3) Since the act is considered lawful, there is no crime, and because there is no crime, there is no criminal; (4) liability. Since there is no crime or criminal, there is no criminal liability as well as civil

In exempting circumstances

(1)

The circumstances affect the actor, not the act;

(2) The act complained of is actually wrongful, but the actor acted without voluntariness. He is a mere tool or instrument of the crime; (3) Since the act complained of is actually wrongful, there is a crime. But because the actor acted without voluntariness, there is absence of dolo or culpa. There is no criminal; (4) Since there is a crime committed but there is no criminal, there is civil liability for the wrong done. But there is no criminal liability. However, in paragraphs 4 and 7 of Article 12, there is neither criminal nor civil liability. When you apply for justifying or exempting circumstances, it is confession and avoidance and burden of proof shifts to the accused and he can no longer rely on weakness of prosecutions evidence.

[1]The difference between murder and homicide will be discussed in Criminal Law II. These crimes are found in Articles 248 and 249, Book II of the Revised Penal Code. [2] The difference between theft and robbery will be discussed in Criminal Law II. These crimes are found in Title Ten, Chapters One and Three, Book II of the Revised Penal Code. ARTICLE VII. THE EXECUTIVE DEPARTMENT Section 1. EXECUTIVE POWER Scope: 1) Executive power is vested in the President of the Philippines. 2) The scope of this power is set forth in Art. VII of the Constitution. But this power is not limited to those set forth therein. The SC, in Marcos v. Manglapus, referred to the RESIDUAL powers of the President as the Chief Executive of the country, which powers include others not set forth in the Constitution. EXAMPLE: The President is immune from suit and criminal prosecution while he is in office. 3) Privilege of immunity from suit is personal to the President and may be invoked by him alone. It may also be waived by the President, as when he himself files suit. 4) BUT The President CANNOT dispose of state property unless authorized by law. Section 2. QUALIFICATIONS

1) Natural-born citizen of the Philippines 2) Registered voter; 3) Able to read and write; 4) At least 40 years old on the day of election 5) Philippine resident for at least 10 years immediately preceding such election. Note: The Vice-President has the same qualifications & term of office as the President. He is elected with & in the same manner as the President. He may be removed from office in the same manner as the President. Section 4. MANNER OF ELECTION/ TERM OF OFFICE Manner of Election 1) The President and Vice-President shall be elected by direct vote of the people. 2) Election returns for President and Vice-President, as duly certified by the proper Board of Canvassers shall be forwarded to Congress, directed to the Senate President. 3) Not later than 30 days after the day of the election, the certificates shall be opened in the presence of both houses of Congress, assembled in joint public session. 4) The Congress, after determining the authenticity and due execution of the certificates, shall canvass the votes. 5) The person receiving the highest number of votes shall be proclaimed elected. 6) In case of a tie between 2 or more candidates, one shall be chosen by a majority of ALL the members of both Houses, voting separately. In case this results in a deadlock, the Senate President shall be the acting President until the deadlock is broken. 7) The Supreme Court en banc shall act as the sole judge over all contests relating to the election, returns, and qualifications of the President or Vice-President and may promulgate its rules for the purpose. Term of Office 1) President a) 6 years beginning at noon on 30 June immediately following the election and ending at noon on the same day 6 years later.

b) Term limitation: Single term only; not eligible for any reelection. c) Any person who has succeeded as President, and served as such for more than 4 years shall NOT be qualified for election to the same office at any time. 2) Vice-President: a) 6 years, starting and ending the same time as the President. b) Term limitation: 2 successive terms. c) Voluntary renunciation of the office for any length of time is NOT an interruption in the continuity of service for the full term for which the Vice-President was elected. Section 6. SALARIES AND EMOLUMENTS 1) Official salaries are determined by law. 2) Salaries cannot be decreased during the TENURE of the President and the Vice-President. 3) Increases take effect only after the expiration of the TERM of the incumbent during which the increase was approved. 4) Prohibited from receiving any other emolument from the government or any other source during their TENURE Sections 7-12, PRESIDENTIAL SUCCESSION 1. Vacancies at the beginning of the term VACANCY SUCCESSOR President-elect fails to qualify or to be VP-elect will be Acting President until chosen someone is qualified/chosen as President. President-elect dies or is permanently VP becomes President. disabled. Both President and VP-elect are not chosen 1. Senate President or or do not qualify or both die, or both become 2. In case of his inability, the Speaker of permanently disabled. the House shall act as President until a President or a VP shall have been chosen and qualified. In case of death or disability of (1) and (2), Congress shall determine, by law, who will be the acting President. 2. Vacancies after the office is initially filled:

VACANCY President dies, is permanently disabled, is impeached, or resigns. Both President and Vice-President die, become permanently disabled, are impeached, or resign.

SUCCESSOR Vice-President becomes President for the unexpired term. 1. Senate President or 2. In case of his inability, the Speaker of the House shall act as President until the President or VP shall have been elected and qualif

3) Vacancy in office of Vice-President during the term for which he was elected: a) President will nominate new VP from any member of either House of Congress. b) Nominee shall assume office upon confirmation by majority vote of ALL members of both Houses, voting separately. (Nominee forfeits seat in Congress) 4) Election of President and Vice-President after vacancy during tem a) Congress shall convene 3 days after the vacancy in the office of both the President and the VP, without need of a call. The convening of Congress cannot be suspended. b) Within 7 days after convening, Congress shall enact a law calling for a special election to elect a President and a VP. The special election cannot be postponed. c) The special election shall be held not earlier than 45 days not later than 60 days from the time of the enactment of the law. d) e) The 3 readings for the special law need not be held on separate days. The law shall be deemed enacted upon its approval on third reading.

BUT: No special election shall be called if the vacancy occurs within 18 months before the date of the next presidential election. 5) Temporary disability of the President: The temporary inability of the President to discharge his duties may be raised in either of two ways: a) By the President himself, when he sends a written declaration to the Senate President and the Speaker of the House. In this case, the Vice-President will be Acting President until the President transmits a written declaration to the contrary. b) When a majority of the Cabinet members transmit to the Senate President and the Speaker their written declaration.

(i)

The VP will immediately be Acting President.

(ii) BUT: If the President transmits a written declaration that he is not disabled, he reassumes his position. (iii) If within 5 days after the President re-assumes his position, the majority of the Cabinet retransmits their written declaration, Congress shall decide the issue. In this event, Congress shall reconvene within 48 hours if it is not in session, without need of a call. (iv) Within 10 days after Congress is required to assemble, or 12 days if Congress is not in session, a 2/3 majority of both Houses, voting separately, is needed to find the President temporarily disabled, in which case, the VP will be Acting President. 6) Presidential Illness: a) If the President is seriously ill, the public must be informed thereof.

b) Even during such illness, the National Security Adviser, the Secretary of Foreign Affairs, and the Chief of Staff of the AFP are entitled to access to the President Section 13. DISQUALIFICATIONS SUBJECT SOURCE OF DISQUALIFICATION President, Vice-President, Cabinet Prohibited from: Members, Deputies or Assistants of Cabinet Members 1. Holding any office or employment during their tenure, UNLESS:

1. otherwise provided in the Constitution (e.g. VP can be appointed a Cabinet Member, Sec. of Justice sits on Judicial and Bar Council); or 2. the positions are ex-officio and they do not receive any salary or other emoluments therefor (e.g. Sec. of Finance is head of Monetary Board).

1. Practicing, directly or indirectly, any other profession during their tenure;

1. Participating in any business;

1. Being financially interested in any contract with, or in any franchise, or special privilege granted by the government or any subdivision, agency or instrumentality thereof, including GOCCs or their subsidiaries.

Spouses and 4th degree relatives of the President (consanguinity or affinity)

N.B. The rule on disqualifications for the President and his Cabinet are stricter than the normal rules applicable to appointive and elective officers under Art. IX-B, Sec. 7. Cannot be appointed during Presidents tenure as:

1. 2. 3. 4. 5.

Members of the Constitutional Commissions; Office of the Ombudsman; Department Secretaries; Department under-secretaries; Chairman or heads of bureaus or offices including GOCCs and their subsidiaries.

N.B. 1. If the spouse, etc., was already in any of the above offices at the time before his/her spouse became President, he/she may continue in office. What is prohibited is appointment and reappointment, NOT continuation in office. 2. Spouses, etc., can be appointed to the judiciary and as ambassadors and consuls.

Sections 14-16. POWER TO APPOINT Principles: 1) Since the power to appoint is executive in nature, Congress cannot usurp this function.

2) While Congress (and the Constitution in certain cases) may prescribe the qualifications for particular offices, the determination of who among those who are qualified will be appointed is the Presidents prerogative. Scope: The President shall appoint the following: 1) Heads of executive departments (CA confirmation needed): 2) Ambassadors, other public ministers, and consuls (CA confirmation needed). 3) Officers of AFP from rank of colonel or naval captain (CA confirmation needed). 4) Other officers whose appointment is vested in him by the Constitution (CA confirmation needed), such as: a) Chairmen and members of the COMELEC, COA and CSC. b) Regular members of the Judicial and Bar Council. c) The Ombudsman and his deputies; d) Sectoral representatives in Congress.

N.B. President also appoints members of the Supreme Court and judges of the lower courts, but these appointments do not need CA confirmation.

5) All other officers whose appointments are not otherwise provided for by law; and those whom he may be authorized by law to appoint. a) This includes the Chairman and members of the Commission on Human Rights, whose appointments are provided for by law NOT by the Constitution. b) Congress may, by law, vest the appointment of other officers lower in rank in the President alone or in the courts, or in the heads of departments, agencies, boards or commissions. c) BUT: Congress cannot, by law, require CA confirmation of the appointment of other officers for offices created subsequent to the 1987 Constitution (e.g. NLRC Commissioners, Bangko Sentral Governor). d) ALSO: Voluntary submission by the President to the CA for confirmation of an appointment which is not required to be confirmed does not vest the CA with jurisdiction. The President cannot extend the scope of the CAs power as provided for in the Constitution. Procedure:

1) CA confirmation needed: a) Nomination by President b) Confirmation by CA c) Appointment by President; and d) Acceptance by appointee. Note: At any time before all four steps have been complied with, the President can withdraw the nomination/appointment. 2) No CA confirmation: a) Appointment; and b) Acceptance. Note: Once appointee accepts, President can no longer withdraw the appointment. Ad-interim appointments: 1) When Congress is in recess, the President may still appoint officers to positions subject to CA confirmation. 2) These appointments are effective immediately, but are only effective until they are disapproved by the CA or until the next adjournment of Congress. 3) Appointments to fill an office in an acting capacity are NOT ad-interim in nature and need no CA approval. Appointments by an Acting President: These shall remain effective UNLESS revoked by the elected President within 90 days from his assumption or re-assumption of office. Limitation 1) 2 months immediately before the next Presidential elections, and up to the end of his term, the President or Acting President SHALL NOT make appointments. This is to prevent the practice of midnight appointments. 2) EXCEPTION: a) Can make TEMPORARY APPOINTMENTS

b) To fill EXECUTIVE POSITIONS; c) If continued vacancies therein will prejudice public service or endanger public safety.

Section 17. Power of Control and Supervision Power of Control: The power of an officer to alter, modify, or set aside what a subordinate officer has done in the performance of his duties, and to substitute the judgment of the officer for that of his subordinate. Thus, the President exercises control over all the executive departments, bureaus, and offices. The Presidents power over government-owned corporations comes not from the Constitution but from statute. Hence, it may be taken away by statute. Qualified Political Agency: 1) Since all executive and administrative organizations are adjuncts of the Executive Department, the heads of such departments, etc. are assistants and agents of the President. 2) Thus, generally the acts of these department heads, etc, which are performed and promulgated in the regular course of business, are presumptively the acts of the President. 3) Exception: If the acts are disapproved or reprobated by the President. 4) Under Administrative Law, decisions of Department Secretaries need not be appealed to the President in order to comply with the requirement of exhaustion of administrative remedies. 5) Qualified political agency does NOT apply if the President is required to act in person by law or by the Constitution. Example: The power to grant pardons must be exercised personally by the President. Disciplinary Powers: 1) The power of the President to discipline officers flows from the power to appoint the, and NOT from the power control. 2) BUT While the President may remove from office those who are not entitled to security of tenure, or those officers with no set terms, such as Department Heads, the officers, and employees entitled to security of tenure cannot be summarily removed from office. Power of Supervision: 1) This is the power of a superior officer to ensure that the laws are faithfully executed by subordinates.

2) The power of the president over local government units is only of general supervision. Thus, he can only interfere with the actions of their executive heads if these are contrary to law. 3) The execution of laws is an OBLIGATION of the President. He cannot suspend the operation of laws. 4) The power of supervision does not include the power of control; but the power of control necessarily includes the power of supervision. Section 18. COMMANDER-IN-CHIEF POWERS Scope: 1) The President is the Commander-in-Chief of the Armed Forces. 2) Whenever necessary, the President may call out the AFP to PREVENT or SUPPRESS: a) b) Lawless violence; Invasion; or

c) Rebellion. 3) The President may also: a) Suspend the privilege of the writ of habeas corpus; and b) Proclaim a state of martial law. Suspension of the privilege of the writ of habeas corpus and declaring martial law; 1. Grounds 1. Invasion or 2. Rebellion; and 3. Public safety requires it. 1. The invasion or rebellion must be ACTUAL and not merely imminent. 1. Limitations: 1. Suspension or proclamation is effective for only 60 days. 1. Within 48 hours from the declaration or suspension, the President must submit a report to Congress.

1. Congress, by majority vote and voting jointly, may revoke the same, and the President cannot set aside the revocation. 1. In the same manner, at the Presidents initiative, Congress can extend the same for a period determined by Congress if: i. Invasion or rebellion persist and ii. Public safety requires it. NOTE: Congress CANNOT extend the period motu propio. 1. Supreme Court review: i. The appropriate proceeding can be filed by any citizen. ii. The SC can review the FACTUAL BASIS of the proclamation or suspension. iii. Decision is promulgated within 30 days from filing. 1. f. Martial Law does NOT:

i. Suspend the operation of the Constitution. ii. Supplant the functioning of the civil courts or legislative assemblies. iii. Authorize conferment of jurisdiction on military courts over civilians where civil courts are able to function and iv. Automatically suspend the privilege of the writ. 1. Suspension of privilege of the writ: i. Applies ONLY to persons judicially charged for rebellion or offenses inherent in or directly connected with invasion. ii. Anyone arrested or detained during suspension must be charged within 3 days. Otherwise he should be released. Note: While the suspension of the privilege of writ and the proclamation of martial law is subject to judicial review, the actual use by the President of the armed forces is not. Thus, troop deployments in times of war is subject to the Presidents judgment and discretion. Section 19: EXECUTIVE CLEMENCY Scope:

1.) The President may grant the following: [ Pa R C Re] 1. 2. 3. 4. Pardons (conditional or plenary) Reprieves Commutations Remittance of fines and forfeitures

2.) These may only be granted AFTER conviction by final judgment. 3.) ALSO: The power to grant clemency includes cases involving administrative penalties. 4.) Where a conditional pardon is granted, the determination of whether it has been violated rests with the President. Limitations: 1.) As to scope: Cannot be granted: a.) Before conviction b.) In cases of impeachment

c.) For violations of election laws, rules, and regulation without the favorable recommendation of the COMELEC d.) In cases of civil or legislative contempt

2.) As to effect: a.) Does not absolve civil liabilities for an offense. b.) Does not restore public offices already forfeited, although eligibility for the same may be restored. Amnesty: 1.) An act of grace concurred in by Congress, usually extended to groups of persons who commit political offenses, which puts into oblivion the offense itself. 2.) President alone CANNOT grant amnesty. Amnesty needs concurrence by a majority of all the members of Congress.

3.) When a person applies for amnesty, he must admit his guilt of the offense which is subject to such amnesty. If his application is denied, he can be convicted based on this admission of guilt. 4.) Amnesty V. Pardon AMNESTY Addressed to POLITICAL offenses Granted to a CLASS of persons Need not be accepted Requires concurrence of majority of all members of Congress A public act. Subject to judicial notice Extinguishes the offense itself PARDON Addressed to ORDINARY offenses Granted to INDIVIDUALS Must be accepted No need for Congressional concurrence Private act of President. It must be proved. Only penalties are extinguished. May or may not restore political rights. Absolute pardon restores. Conditional does not. Civil indemnity is not extinguished. Only granted after conviction by final judgement

May be granted before or after conviction

Section 20. Power to Contract or Guarantee Foreign Loans Limitations: (1) The President may contract or guarantee foreign loans on behalf of the Republic of the Philippines with the prior concurrence of the Monetary Board; and (2) Subject to such limitations as may be provided by law. Section 21. Foreign Relations Powers include: (1) Power to negotiate treaties and other international agreements (a) BUT: Such treaty of international agreement must be concurred in by at least 2/3 of all Senators in order to be valid and effective in our country. (b) Options of Senate when a treaty is submitted for its approval: (i) (ii) Approve with 2/3 majority; Disapprove outright; or

(iii)

Approve conditionally, with suggested amendments.

(c) If treaty is not re-negotiated, no treaty (d) If treaty is re-negotiated and the Senates suggestions are incorporated, the treaty will go into effect without need of further Senate approval. Note: While our municipal law makes a distinction between international agreements and executive agreements, with the former requiring Senate approval and the latter not needing the same, under international law, there is no such distinction. Note: The President cannot, by executive agreement, undertake an obligation which indirectly circumvents a legal prohibition. (e) Conflict between treaty and municipal law. (i) Philippine court: The later enactment will prevail, be it treaty or law, as it is the latest expression of the States will. (ii) International tribunal Treaty will always prevail. A State cannot plead its municipal law to justify noncompliance with an international obligation. (2) Power to appoint ambassadors, other public ministers, and consuls. (3) Power to receive ambassadors and other public ministers accredited to the Philippines. (4) Power to contract and guarantee foreign loans on behalf of the Republic (5) Power to deport aliens (a) This power is vested in the President by virtue of his office, subject only to restrictions as may be provided by legislation as regards the grounds for deportation. (b) In the absence of any legislative restriction to authority, the President may still exercise this power. (c) The power to deport aliens is limited by the requirements of due process, which entitles the alien to a full and fair hearing. BUT: The alien is not entitled to bail as a matter of right.

ARTICLE VI THE LEGISLATIVE DEPARTMENT

Sec. 1. The legislative power shall be vested in the Congress of the Philippines, which shall consist of a Senate and a House of Representatives, except to the extent reserved to the people by the provision on initiative and referendum.

Definition of Legislative Power: The authority to make laws and to alter or repeal them. Classification of legislative power: (O De CO) 1. Original Possessed by the people in their sovereign capacity 2. Delegated Possessed by Congress and other legislative bodies by virtue of the Constitution 3. Constituent The power to amend or revise the Constitution 4. Ordinary The power to pass ordinary laws Note: The original legislative power of the people is exercised via initiative and referendum. In this manner, people can directly propose and enact laws, or approve or reject any act or law passed by Congress or a local government unit.

Limits on the legislative power of Congress: 1. Substantive limitations on the content of laws. E.g. no law shall be passed establishing a state religion. 1. Procedural limitations on the manner of passing laws. E.g. generally a bill must go through three readings on three separate days. Note: Provided that these two limitations are not exceeded, Congress legislative power is plenary.

Corollaries of legislative power:

1. Congress cannot pass irrepealable laws. Since Congress powers are plenary, and limited only by the Constitution, any attempt to limit the powers of future Congresses via an irrepealable law is not allowed. 1. Congress, as a general rule, cannot delegate its legislative power. Since the people have already delegated legislative power to Congress, the latter cannot delegate it any further. EXCEPTIONS: 1. Delegation of legislative power to local government units; 2. Instances when the Constitution itself allows for such delegation [see Art. VI Sec. 23(2)] What may Congress delegate: Congress can only delegate, usually to administrative agencies, RULE-MAKING POWER or LAW EXECUTION. This involves either of two tasks for the administrative agencies: 1. Filling up the details on an otherwise complete statute; or 2. Ascertaining the facts necessary to bring a contingent law or provision into actual operation.
Sections 2-4. SENATE

Composition 24 senators who shall be elected at large by the qualified voters of the Philippines, as may be provided by law. Qualifications 1. 2. 3. 4. 5. Natural-born citizen; At least 35 years old on the day of election; Able to read and write; A registered voter; and Philippine resident for at least 2 years immediately preceding the day of the election.

Note: The qualifications of both Senators and Members of the House are limited to those provided by the Constitution. Congress cannot, by law, add or subtract from these qualifications. Term of Office: 6 years, commencing (unless otherwise provided by law) at noon, 30 June next following their election. Term Limitations:

1. No Senator shall serve for more than 2 consecutive terms. 2. Voluntary renunciation of office for any length of time shall not be considered as an interruption in the continuity of his service for the full term for which he was elected.
Sections 5-7. HOUSE OF REPRESENTATIVES

Composition: 1. Not more than 25 members, unless otherwise fixed by law; and 2. Party-list Representative Election of 250 members 1. They shall be elected from legislative districts apportioned among the provinces, cities and the Metropolitan Manila area. 2. Legislative districts are apportioned in accordance with the number of inhabitants of each area and on the basis of a uniform and progressive ratio. 1. Each district shall comprise, as far as practicable, contiguous, compact and adjacent territory; 2. Each city with at least 250,000 inhabitants will be entitled to at least one representative. 3. Each province will have at least one representative. 4. Legislative districts shall be re-apportioned by Congress within 3 years after the return of each census. According to Jack, however, while the apportionment of districts is NOT a political question, the judiciary CANNOT compel Congress to do this. 5. The standards used to determine the apportionment of legislative districts is meant to prevent gerrymandering, which is the formation of a legislative district out of separate territories so as to favor a particular candidate or party. Qualifications 1. 2. 3. 4. 5. Natural born citizen of the Philippines; At least 25 years old on the day of the election; Able to read and write; Registered voter in the district he seeks to represent; and A resident of such district for at least one year immediately preceding the day of the election.

Term of Office 1. Each member of the House shall be elected for a term of three (3) years which shall commence (unless otherwise provided for by law) at noon on 30 June next following their election. 2. Voluntary renunciation of office for any length of time shall not be considered as an interruption in the continuity of his service for the full term for which he was elected.

Term Limitations No member of the House of Representatives shall serve for more than three (3) consecutive terms. Distinctions between Term and Tenure 1. Definition 1. Terms means the period during which the elected officer is legally authorized to assume his office and exercise the powers thereof. 2. Tenure is the actual period during which such officer actually holds his position. 1. Limitation/Possible Reduction 1. Term CANNOT be reduced. 2. Tenure MAY, by law, be limited. Thus, a provision which considers an elective office automatically vacated when the holder thereof files a certificate of candidacy for another elective office (except President and Vice-President) is valid, as it only affects the officers tenure and NOT his constitutional term. Party-List Representatives 1. Constitute 20% of the total number of representatives, including those under the party-list system (thus a maximum of 50 party-list members of the House) 1. However, for 3 consecutive terms from 2 February 1987 (i.e., the 1987-92, 92-95 and 9598 terms), 25 seats shall be allotted to sectoral representatives. Under Art. XVIII, Sec. 7, the sectoral representatives are to be appointed by the President until legislation otherwise provides. 1. Mechanics of the party-list system: 1. Registered organizations submit a list of candidates in order of priority. 2. During the elections, these organizations are voted for at large. 3. The number of seats that each organization gets out of the 20% allotted to the system depends on the number of votes they get. 1. Qualifications 1. Natural born citizen of the Philippines 2. At least 25 years of age on the day of the election 3. Able to read and write Sec. 9. In case of vacancy in the Senate or in the House of Representatives, a special election may be called to fill such vacancy in the manner prescribed by law, but the Senator or Member of the House of Representatives thus elected shall serve only for the unexpired term.

Sec. 10. Salaries of Senators and Members of the House Determination of Salaries: Salaries of Senators and Members of the House of Representatives shall be determined by law. Rule on increase in salaries: No increase in their salaries shall take effect until after the EXPIRATION OF THE FULL TERM (NOT TENURE) OF ALL THE MEMBERS OF THE SENATE AND THE HOUSE OF REPRESENTATIVES APPROVING SUCH INCREASE. Note: Since the Constitution provides for rules on salaries and not on emoluments, our distinguished legislators can appropriate for themselves other sums of money such as travel allowances, as well as other side benefits. Sec. 11: CONGRESSIONAL IMMUNITIES 1.) Immunity from arrest: 1. Legislators are privileged from arrest while Congress is in session with respect to offenses punishable by up to 6 years of imprisonment. Thus, whether Congress is in regular or special session, the immunity from arrest applies. 2. If Congress is in recess, members thereof may be arrested. 3. The immunity is only with respect to arrests and NOT to prosecution for criminal offenses. 2.) Legislative privilege: 1. No member shall be questioned or held liable in any forum other than his/her respective Congressional body for any debate or speech in the Congress or in any Committee thereof. 1. Limitation on the privilege: (i) Protection is only against forum other than Congress itself. Thus for inflammatory remarks which are otherwise privileged, a member may be sanctioned by either the Senate or the House as the case may be. (ii) The speech or debate must be made in performance of their duties as members of Congress. This includes speeches delivered, statements made, votes cast, as well as bills introduced, and other activities done in performance of their official duties. (iii) Congress need NOT be in session when the utterance is made, as long as it forms part of legislative action, i.e. part of the deliberative and communicative process used to

participate in legislative proceedings in consideration of proposed legislation or with respect to other matters with Congress jurisdiction. Sec. 12. All Members of the Senate and the House of Representatives shall, upon assumption of office, make a full disclosure of their financial and business interests. They shall notify the House concerned of a potential conflict of interest that may arise from the filing of a proposed legislation of which they are authors.

Sec. 13-14: CONGRESSIONAL DISQUALIFICATIONS: Disqualifications: DISQUALIFICATION 1. Senator/Member of the House cannot hold any other office or employment in the Government or any subdivision, agency or Instrumentality thereof, including GOCCS or their subsidiaries. 2. Legislators cannot be appointed to any office. WHEN APPLICABLE During his term. If he does so, he forfeits his seat.

3. Legislators cannot personally appear as counsel before any court of justice, electoral tribunal, quasi-judicial and administrative bodies. 4. Legislators cannot be financially interested During his term of office. directly or indirectly in any contract with or in any franchise, or special privilege granted by the Government, or any subdivision, agency or instrumentality thereof, including any GOCC or its subsidiary. 5. Legislators cannot intervene in any matter When it is for his pecuniary benefit or where before any office of the government. he may be called upon to act on account of his office.

IF the office was created or the emoluments thereof increased during the term for which he was elected. During his term of office.

Sec. 15: REGULAR AND SPECIAL SESSIONS Regular Sessions: 1.) Congress convenes once every year on the 4th Monday of July (unless otherwise provided for by law)

2.) Continues in session for as long as it sees fit, until 30 days before the opening of the next regular session, excluding Saturdays, Sundays, and legal holidays. Special Sessions: Called by the President at any time when Congress is not in session. Sec. 16. Officers: 1.) Senate President; 2.) Speaker of the House; and 3.) Each House may choose such other officers as it may deem necessary. Election of Officers By a majority vote of all respective members. Quorum to do business: 1. Majority of each House shall constitute a quorum. 2. A smaller number may adjourn from day to day and may compel the attendance of absent members. 3. In computing a quorum, members who are outside the country and thus outside of each Houses coercive jurisdiction are not included. Internal Rules: 1. Each House shall determine its own procedural rules. 2. Since this is a power vested in Congress as part of its inherent powers, under the principle of separation of powers, the courts cannot intervene in the implementation of these rules insofar as they affect the members of Congress. 3. Also, since Congress has the power to make these rules, it also has the power to ignore them when circumstances so require. Discipline: 1.) Suspension 1. Concurrence of 2/3 of ALL its members and 2. Shall not exceed 60 days. 2.) Expulsion 1. Concurrence of 2/3 of ALL its members.

Congressional Journals and Records: 1.) The Journal is conclusive upon the courts. 2.) BUT an enrolled bill prevails over the contents of the Journal. 3.) An enrolled bill is the official copy of approved legislation and bears the certifications of the presiding officers of each House. Thus where the certifications are valid and are not withdrawn, the contents of the enrolled bill are conclusive upon the courts as regards the provision of that particular bill. Adjournments: 1.) Neither House can adjourn for more than 3 days during the time Congress is in session without the consent of the other House. 2.) Neither can they adjourn to any other place than that where the two houses are sitting, without the consent of the other. Section 17: THE ELECTORAL TRIBUNAL The Senate and the House shall each have an Electoral Tribunal which shall be composed of: 1. 3 Supreme Court Justices to be designated by the Chief Justice; & 2. 6 Members of the Senate or House, as the case may be. The senior Justice in the Electoral Tribunal shall be its Chairman. Note: The congressional members of the ETs shall be chosen on the basis of proportional representation from the political parties and party-list organizations. Jurisdiction: 1.) Each ET shall be the sole judge of all CONTESTS relating to the election, returns, and qualifications of their respective members. This includes determining the validity or invalidity of a proclamation declaring a particular candidate as the winner. 2.) An election contest is one where a defeated candidate challenges the qualification and claims for himself the seat of a proclaimed winner. 3.) In the absence of an election contest, the ET is without jurisdiction. However, the power of each House to expel its own members or even to defer their oath-taking until their qualifications are determined may still be exercised even without an election contest. Issues regarding the Electoral Tribunals:

1.) Since the ETs are independent constitutional bodies, independent even of the House from which the members are respectively taken, neither Congress nor the Courts may interfere with procedural matters relating to the functions of the ETs, such as the setting of deadlines or filing their election contests with the respective ETs. 2.) The ETs being independent bodies, its members may not be arbitrarily removed from their positions in the tribunal by the parties which they represent. Neither may they be removed for not voting according to party lines, since they are acting independently of Congress. 3.) The mere fact that the members of either the Senate or the House sitting on the ET are those which are sought to be disqualified due to the filing of an election contest against them does not warrant all of them from being disqualified from sitting in the ET. The Constitution is quite clear that the ET must act with both members from the SC and from the Senate or the House. If all the legislator-members of the ET were to be disqualified, the ET would not be able to fulfill its constitutional functions. 4.) Judicial review of decisions of the ETs may be had with the SC only insofar as the decision or resolution was rendered without or in excess of jurisdiction or with grave abuse of discretion constituting denial of due process. Section 18: THE COMMISSION ON APPOINTMENTS Composition: 1.) Senate President as ex-officio chairman; 2.) 12 Senators; and 3.) 12 Members of the House. Note: The 12 Senators and 12 Representatives are elected on the basis of proportional representation from the political parties and party-list organizations. Voting/Action 1.) The chairman shall only vote in case of a tie. 2.) The CA shall act on all appointments within 30 session days from their submission to Congress. 3.) The Commission shall rule by a majority vote of all the Members. Jurisdiction 1.) CA shall confirm the appointments by the President with respect to the following positions:

1. Heads of the Executive Departments (except if it is the Vice-President who is appointed to the post). 2. Ambassadors, other public ministers or consuls. 3. Officers of the AFP from the rank of Colonel or Naval Captain: and 4. Other officers whose appointments are vested in him by the Constitution (e.g. COMELEC members). 2.) Congress CANNOT by law prescribe that the appointment of a person to an office created by such law shall be subject to confirmation by the CA. 3.) Appointments extended by the President to the above-mentioned positions while Congress is not in session shall only be effective until disapproval by the CA or until the next adjournment of Congress. Meetings of the CA 1.) CA meets only while Congress is in session. 2.) Meetings are held either at the call of the Chairman or a majority of all its members. 3.) Since the CA is also an independent constitutional body, its rules of procedure are also outside the scope of congressional powers as well as that of the judiciary. Note: The ET and the CA shall be constituted within 30 days after the Senate and the House of Representative shall have been organized with the election of the President and the Speaker. Sections 21-22: LEGISLATIVE INQUIRIES Scope: 1. Either House or any of their committees may conduct inquires in aid of legislation. 2. In aid of legislation does not mean that there is pending legislation regarding the subject of the inquiry. In fact, investigation may be needed for purposes of proposing future legislation. 3. If the stated purpose of the investigation is to determine the existence of violations of the law, the investigation is no longer in aid of legislation but in aid of prosecution. This violates the principle of separation of powers and is beyond the scope of congressional powers. Enforcement: 1. Since experience has shown that mere requests for information does not usually work, Congress has the inherent power to punish recalcitrant witnesses for contempt, and may have them incarcerated until such time that they agree to testify.

1. The continuance of such incarceration only subsists for the lifetime, or term, of such body. Once the body ceases to exist after its final adjournment, the power to incarcerate ceases to exist as well. Thus, each Congress of the House lasts for only 3 years. But if one is incarcerated by the Senate, it is indefinite because the Senate, with its staggered terms, is a continuing body. 1. BUT, in order for a witness to be subject to this incarceration, the primary requirement is that the inquiry is within the scope of Congress powers. i.e. it is in aid of legislation. 1. The materiality of a question is determined not by its connection to any actually pending legislation, but by its connection to the general scope of the inquiry. 1. The power to punish for contempt is inherent in Congress and this power is sui generis. It cannot be exercised by local government units unless they are expressly authorized to do so. Limitations: 1. The inquiry must be conducted in accordance with the duly published rules of procedure of the House conducting the inquiry; and 1. The rights of persons appearing in or affected by such inquiries shall be respected. Ex. The right against self-incrimination. Appearance by department heads before Congress: 1. Since members of the executive department are co-equals with those of the legislative department, under the principle of separations of powers, department heads cannot be compelled to appear before Congress. Neither may the department heads impose their appearance upon Congress. 1. Department heads may appear before Congress in the following instances. 1. Upon their own initiative, with the consent of the President (and that of the House concerned); or 1. Upon the request of either House (which cannot compel them to attend) 1. The appearance will be conducted in EXECUTIVE SESSION when: 1. Required by the security of state or required by public interest; and 2. When the President so states in writing Sections 23-24. DECLARATION OF WAR/EMERGENCY POWERS Vote requirement: (to declare the existence of a state of war)

1. 2/3 of both Houses, in joint session 2. Voting separately Emergency powers: 1. During times of war or other national emergency, Congress may, BY LAW, authorize the President to exercise powers necessary and proper to carry out a declared national policy. 1. Limitations: 1. Powers will be exercised for a limited period only; and 2. Powers will be subject to restrictions prescribed by Congress 1. Expiration of emergency powers 1. By resolution of Congress or 2. Upon the next adjournment of Congress Sections 24-27, 30-31 LEGISLATION Bills that must originate from the House of Representatives (Section 24) CODE: A R T Pu Lo P 1. 2. 3. 4. 5. 6. Appropriation bills Revenue bills Tariff bills Bills authorizing the increase of public debt Bills of local application Private bills

Note: The Senate may, however, propose or concur with amendments. Appropriation bills 1. The primary and specific aim of an appropriation bill is to appropriate a sum of money from the public treasury. 1. Thus, a bill enacting the budget is an appropriations bill. 1. BUT: A bill creating a new office, and appropriating funds therefor is NOT an appropriation bill. Revenue Bill 1. A revenue bill is one specifically designed to raise money or revenue through imposition or levy.

1. Thus, a bill introducing a new tax is a revenue bill, but a provision in, for instance, the Videogram Regulatory Board law imposing a tax on video rentals does not make the law a revenue bill. Bills of local application A bill of local application, such as one asking for the conversion of a municipality into a city, is deemed to have originated from the House provided that the bill of the House was filed prior to the filing of the bill in the Senate even if, in the end, the Senate approved its own version. Limitations: 1. For appropriation bills: 1. Congress cannot increase the appropriations recommended by the President for the operation of the Government as specified in the budget. 1. Each provision or enactment in the General Appropriations Bill must relate specifically to some particular appropriation therein and any such provision or enactment must be limited in its operation to the appropriation to which it relates. 1. The procedure in approving appropriations for Congress shall strictly follow the procedure for approving appropriations for other departments and agencies. 1. A special appropriations bill must specify the purpose for which it is intended and must be supported by funds actually available as certified by the National Treasurer or to be raised by a corresponding revenue proposal therein. 1. Transfer of appropriations: 1. Rule: No law shall be passed authorizing any transfer of appropriations 2. BUT the following may, BY LAW, be authorized to AUGMENT any item in the general appropriations law for their respective offices from savings in other items of their respective appropriations President President of the Senate Speaker of the House of Representatives Chief of Justice of the Supreme Court Heads of the Constitutional Commissions 1. Discretionary funds appropriated for particular officials shall be:

1. Disbursed only for public purposes; 2. Should be supported by appropriate vouchers; and 3. Subject to guidelines as may be prescribed by law. 1. If Congress fails to pass General Appropriations Bill (GAB) by the end of any fiscal year: i. The GAB for the previous year is deemed reenacted ii. It will remain in full force and effect until the GAB is passed by Congress. 1. For law granting tax exemption It should be passed with the concurrence of a MAJORITY of ALL the members of Congress. 1. For bills in general 1. Every bill shall embrace only one (1) subject, as expressed in the title thereof i. As a mandatory requirement

ii. The title does not have to be a complete catalogue of everything stated in the bill. It is sufficient if the title expresses the general subject of the bill and all the provisions of the statute are germane to that general subject. iii. A bill which repeals legislation regarding the subject matter need not state in the title that it is repealing the latter. Thus, a repealing clause in the bill is considered germane to the subject matter of the bill. 1. Readings 1. In order to become a law, each bill must pass three (3) readings in both Houses. 2. General rule: Each reading shall be held on separate days & printed copies thereof in its final form shall be distributed to its Members three (3) days before its passage. 3. Exception: If a bill is certified as urgent by the President as to the necessity of its immediate enactment to meet a public calamity or emergency, the 3 readings can be held on the same day. 4. First reading only the title is read; the bill is passed to the proper committee Second reading Entire text is read and debates are held, and amendments introduced. Third reading only the title is read, no amendments are allowed. Vote shall be taken immediately thereafter and the yeas and nays entered in the journal. Veto power of President: 1. Every bill, in order to become a law, must be presented to and signed by the President.

1. If the President does not approve of the bill, he shall veto the same and return it with his objections to the House from which it originated. The House shall enter the objections in the Journal and proceed to reconsider it. 1. The President must communicate his decision to veto within 30 days from the date of receipt thereof. If he fails to do so, the bill shall become a law as if he signed it. 1. This rule eliminates the pocket veto whereby the President would simply refuse to act on the bill.

1. To OVERRIDE the veto, at least 2/3 of ALL the members of each House must agree to pass the bill. In such case, the veto is overriden and becomes a law without need of presidential approval. 1. Item veto 1. The President may veto particular items in an appropriation, revenue or tariff bill. 1. This veto will not affect items to which he does not object. 1. Definition of item TYPE OF BILL 1. Revenue/tax bill 2. Appropriations bill 1. Veto of RIDER 1. A rider is a provision which does not relate to a particular appropriation stated in the bill. 2. Since it is an invalid provision under Section 25(2), the President may veto it as an item. Specific limitations on legislation 1. No law shall be enacted increasing the Supreme Courts appellate jurisdiction without the SCs advice and concurrence. 1. No law shall be enacted granting titles of royalty or nobility. Section 28. POWER TO TAX Limitations: ITEM Subject of the tax and the tax rate imposed thereon Indivisible sum dedicated to a stated purpose

1) 2) 3)

The rule of taxation should be UNIFORM It should be EQUITABLE Congress should evolve a PROGRESSIVE system of taxation.

4) The power to tax must be exercised for a public purpose because the power exists for the general welfare 5) The due process and equal protection clauses of the Constitution should be observed.

Delegation of power to fix rates 1) a) b) c) d) Congress may, BY LAW, authorize the President to fix the following: Tariff rates Import and Export Quotas Tonnage and wharfage dues Other duties and imposts

Within the framework of the national development program of the Government 2) The exercise of such power by the President shall be within the specified limits fixed by Congress and subject to such limitations and restrictions as it may impose. Constitutional tax exemptions: 1) The following properties are exempt from REAL PROPERTY taxes

(CODE: Cha Chu M- CA) a) b) c) d) Charitable institutions Churches, and parsonages or convents appurtenant thereto Mosques Non-profit cemeteries; and

e) All lands, buildings and improvements actually, directly and exclusively used for religious, charitable, or educational purposes.

2) All revenues and assets of NON-STOCK NON-PROFIT EDUCATIONAL institutions are exempt from taxes and duties PROVIDED that such revenues and assets are actually, directly and exclusively used for educational purposes. (Art. XIV Sec 4 (3)) 3) Grants, endowments, donations or contributions used actually, directly and exclusively for educational purposes shall be exempt from tax. This is subject to conditions prescribed by law. (Art. XIV. Sec 4 (4)) Section 29. Power of the Purse 1) No money shall be paid out of the National Treasury EXCEPT in pursuance of an appropriation made by law. a) This places the control of public funds in the hands of Congress.

b) BUT: This rule does not prohibit continuing appropriations. e.g. for debt servicing. This is because the rule does not require yearly, or annual appropriation. 2) a) b) (i) (ii) Limitations. Appropriations must be for a PUBLIC PURPOSE Cannot appropriate public funds or property, directly or indirectly, in favor of Any sect, church, denomination, or sectarian institution or system of religion or Any priest, preacher, minister, or other religious teacher or dignitary as such.

EXCEPT if the priest, etc is assigned to: the Armed Forces; or any penal institution; or government orphanage; or leprosarium

c) BUT the government is not prohibited from appropriating money for a valid secular purpose, even if it incidentally benefits a religion, e.g. appropriations for a national police force is valid even if the police also protects the safety of clergymen. d) ALSO, the temporary use of public property for religious purposes is valid, as long as the property is available for all religions 3) Special Funds

a) Money collected on a tax levied for a special purpose shall be treated as a special fund and paid out for such purpose only. b) Once the special purpose is fulfilled or abandoned, any balance shall be transferred to the general funds of the Government Section 32. INITIATIVE AND REFERENDUM 1) Through the system of initiative and referendum, the people can directly propose and enact laws or approve or reject any act or law or part thereof passed by the Congress or local legislative body. 2) a) b) c) Required Petition Should be signed by at least 10% of the total number of registered voters Every legislative district should be represented by at least 3% of the registered voters Petition should be registered

CODE OF COMMERCE COMMERCE branch of human activity; purpose is to bring products to the consumer through operations habitually and with intent of gain COMMERCIAL LAW branch of private law which regulates the juridical relations arising from commercial acts CHARACTERISTICS OF COMMERCIAL LAW: 1. 2. 3. 4. 5. 1. 2. 3. 4. 5. universal uniform equitable customary progressive

PORTIONS OF CODE OF COMMERCE STILL APPLICABLE: 1. 2. 3. 4. 1. 2. 3. 4. merchants; book of merchants and general provision of contracts joint account association commercial barter transfers of non-negotiable credits

5. 5. 6. 6. 7. 7. OTHERS: 1. 1. 1. 2.

commercial contracts of overland transportation letters of credit maritime commerce

Commerce bringing products from the manufacturers to the consumers Characteristics of Commerce: 1. a. habituality 2. b. rapidity if period is fixed, debtor in delay without need of demand; if contract does not fix period, 10 days 3. c. intent to join Merchant: 1. a. Individuals legal capacity, 21 years, or subject to parental authority, habitually engaged in commerce 2. b. Juridical Persons commercial and industrial company organized in accordance with law, habitually engaged in business General Rule: Minors cannot engage in commerce

1. 3.

1. 4.

Exceptions: 1. a. 2. b. 3. c. 1. 5. to continue business of deceased parents through guardian court authorizes guardian to place minor and property in business minor is an alien and his national law allows him to be a merchant Which persons are not allowed to engage in commerce? 1. a. suffering accessory penalty of civil interdiction (reclusion perpetua and reclusion temporal) 2. b. those judicially declared insolvent until they can obtain their discharge 3. c. prohibited by Constitution and special laws Aliens 1. a. capacitated under his national law to engage in business 2. b. engaged in the business in the Philippines not reserved for the Filipinos 3. c. after securing license and BOI certificate

1. 6.

1. 7. Family Code: Either spouse may engage in business; when objected to by the other, court will look into valid grounds, i.e. serious and moral grounds 1. 8. BOI Certificate must be obtained by: 1. a. alien 2. b. foreign firm

1. 9.

Meaning of Philippine National 1. a. citizen 2. b. domestic corporation wholly owned and organized by Filipinos in the Philippines 3. c. Filipino corporation where Filipino capital entitled to vote is at least 60%

1. 10. Query: If a corporation is a shareholder of another corporation, how do you determine whether the latter corporation is a Filipino national? Answer: The following must concur 1. a. At least 60% of the outstanding capital stock and entitled to vote of both corporations are held by citizens of the Philippines 2. b. At least 60% of the Board of Directors of both corporations are Filipinos 1. 11. Tenor of BOI Certificate 1. a. Business or activity to be engaged is consistent with the Investment Priorities Plan 2. b. Business will contribute to the sound and balanced development of the national economy in a self-sustaining basis 3. c. Business will not conflict with the Constitution and local laws 4. d. Business is not adequately exploited by Filipino nationals 5. e. No danger of monopolies/combinations in restraint of trade 1. 12. Basic Principles/Conditions laid down by BOI 1. a. resident agent of foreign firm is a Filipino citizen 2. b. establishment of office in the Philippines 3. c. bringing assets tot he Philippine office as capital 4. d. complete set of accounting records 1. 13. Merger and Consolidation subject to BOI requirements for the issuance of certificate: When merger and consolidation result in ownership and control of non-Filipino nationals over more than 40% of the capital of a consolidated corporation. 1. 14. SEC License issued upon compliance with the following requirements: 1. a. proof of compliance with principle of reciprocity 2. b. BOI certificate 3. c. Applicant for license gives required information n articles of incorporation n by-laws n names and addresses of resident agents

n principal place of business in the Philippines 1. d. 2. e. proof of solvency deposit acceptable securities to protect future creditors RETAIL TRADE NATIONALIZATION LAW (Note: Material on the Retail Trade Liberalization Law will not be included in this reviewer. Supplement to follow) 1. 1. Retail Trade any act, occupation, or calling of habitually selling direct to the general public, merchandise, commodities, or goods for consumption Jurisprudence has held that the term retail should be associated with and limited to goods for personal, family or household use, consumption and utilization. The Retail Trade Nationalization Law refers to consumption goods or consumer goods which directly satisfy human wants and desires and are needed for home and daily life. Excluded from the law are those goods which are considered generally raw material used in the manufacture of other goods, or if not, as one of the component raw material, or at least as elements utilized in the process of production and manufacturing. 1. 2. Elements of What Constitutes Retail Trade: 1. a. The seller habitually engages in selling; 2. b. The sale is direct to the general public; and 3. c. The object of the sale is limited to merchandise, commodities or goods for consumption.

1. 3. General Rule: After 1964, only Filipinos or corporations whose capital is 100% Filipino may engage in retail trade. 1. 4. Exceptions, that is, instances when aliens may engage in retail trade in the Philippines: 1. a. manufacturer or processor if capital does not exceed P5,000.00; 2. b. farmer or agriculturist when selling his products; 3. c. manufacturer or processor selling to industrial or commercial users or consumers who use the produce to render service to the general public or to produce or manufacture goods which are sold by them to the public; 4. d. hotel owners or keepers of restaurants included or incidental to the hotel business; 5. e. sale by a manufacturer or processor to the Government or its agencies, including government owned and controlled corporations. 1. 5. Query: How to determine citizenship of shares of the corporation when they are not held directly by individuals, but in turn held by another entity? Answer: apply the GRANDFATHER RULE, to wit:

Shares belonging to corporations or partnerships at least 60% of the capital of which is owned by Filipino citizens shall be considered as Philippine nationality, but if the percentage of Filipino ownership in the corporation or partnership is less than 60%, only the number of shares corresponding to such percentage shall be counted as of Philippine nationality. Thus, if 100,000 shares are registered in the name of a corporation or partnership at least 60% of the capital stock or capital respectively, of which belong to Filipino citizens, all of the said shares shall be recorded as owned by Filipinos. But, if lets say, 50% of the capital stock belongs to Filipino citizens, only 50,000 shares shall be counted as owned by Filipinos and the other 50,000 shares shall be recorded as belonging to aliens. However, while a corporation with 60% Filipino and 40% foreign equity ownership is considered a Philippine national for purposes of investment, it is not qualified to invest in or enter into a joint venture agreement with corporations or partnerships, the capital or ownership of which under the Constitution or other special laws are limited to Filipino citizens only. Hence, for purposes of the law, whatever the percentage of Filipino ownership in the owning corporation, the foreign ownership would always render a portion of its holding in the company as foreign equity and would disqualify the corporation to engage in retail trade. ANTI-DUMMY ACT 1. 1. The Act penalizes Filipinos who permit aliens to use them as nominees or dummies to enjoy privileges reserved for Filipinos or Filipino corporations. Criminal sanctions are imposed on the president, manager, board member or persons in charge of the violating entity and causing the latter to forfeit its privileges, rights and franchises. 1. 2. Disqualified aliens cannot intervene in the management, operation, administration or control of the business reserved to Filipinos whether as an officer, employee or laborer, with or without remuneration, except when: 1. a. alien takes part in technical aspects; 2. b. provided that no Filipino can do such technical work; and 3. c. with express authority from the President, upon the recommendation of the department head concerned. 1. 3. By way of exception, the following may participate in management: 1. a. Aliens may be elected to the Board of Directors to the extent of their allowable share in the capital of the corporation (in partially nationalized industries). 2. b. A registered enterprise may employ foreign nationals in supervisory, technical, and advisory positions for a period of 5 years subject to extension. 3. c. Where majority of stocks of a pioneer enterprise is owned by foreign investors, the following positions may be held by foreign nationals:

n president n treasurer

n general manager n equivalent positions 1. 4. A Filipino common-law wife of an alien is not barred from engaging in the retail business provided she uses capital exclusively derived from her paraphernal properties; however, allowing her common-law alien husband to take part in the management of the retail business would be a violation of the law. 1. 5. What doing business means: 1. a. soliciting orders, purchases, service contracts; 2. b. opening offices whether called liaison offices or branches; 3. c. appointing representatives or distributors who are domiciled in the Philippines or who in any calendar year stay in the country for a period totaling 180 days or more; 4. d. participating in the management or supervision or control of any domestic firm, entity or corporation in the Philippines; 5. e. any other act or acts that imply continuity in commercial dealings

1. 6. When commissioned merchants/investors or commercial brokers act in their own name in selling foreign products, the foreign firm manufacturing these products is not doing business in the Philippines. 1. 7. When a local corporation or person acts in the name of a foreign firm, the latter is doing business in the Philippines. 1. 8. The following are NOT doing business: 1. a. mere investment as a shareholder by a foreign entity in domestic corporations duly registered to do business; 2. b. exercise of rights as such investor; 3. c. having a nominee director or officer to represent interests in such corporation; 4. d. appointing a representative or distributor domiciled in the Philippines which transacts business in its own name and for its own accounts. 2. 1. Purpose: 1. a. to encourage use of and to promote transactions based on trust receipts; 2. b. to regulate the use of trust receipts TRUST RECEIPTS LAW 1. 2. Definition:

A written/printed document signed by the ENTRUSTEE in favor of the ENTRUSTER whereby the latter releases the goods, documents or instruments tot he possession of the former upon the ENTRUSTEES promise to hold said goods in trust for the ENTRUSTER, and to sell the goods, etc. WITH THE OBLIGATION TO TURN OVER THE PROCEEDS THEREOF TO THE

EXTENT OF WHAT IS OWING TO THE ENTRUSTER; or to return the goods if UNSOLD, or for other purposes. 1. 3. Trust receipts are denominated in Philippine currency or acceptable and eligible foreign currency. 1. 4. ENTRUSTER is not liable as principal or vendor under any sale or contract to sell made by the ENTRUSTEE. 1. 5. Risk of loss is borne by the ENTRUSTEE.

1. 6. Pending the duration of the trust agreement, the ENTRUSTERS security interest cannot be prejudiced by claims of creditors of the ENTRUSTEE. 1. 7. Loss of goods pending the dispossession shall not extinguish the obligation to the ENTRUSTER for the value thereof. LETTERS OF CREDIT 1. 1. Kinds: 1. a. Commercial Letters of Credit 2. b. Travelers Letters of Credit No protest required in case of dishonor. Issued to definite persons and not to order, thus, non-negotiable. Limited to a fixed account. PRICE TAGS LAW 1. 1. It requires articles of commerce sold at retail to bear prices. JOINT ACCOUNTS 1. 1. It exists when a merchant interests himself in the transaction of another merchant, contributing thereto the amount of capital they may agree upon, and participating in the favorable or unfavorable results thereof in the proportion they may determine. 1. 2. Joint accounts do not adopt a firm name.

1. 2. 1. 3. 1. 4.

1. 3. No suit may be maintained investor and third persons dealing with the merchant conducting business. 1. 4. It is not subject to any formal requirement for validity; it may be oral.

BULK SALES LAW 1. 1. Purpose: meant to protect creditors of businessmen against preferential or fraudulent transfers 1. 2. The law covers all transactions, whether done in good faith or not, or whether or not the seller is in a state of insolvency, that fall within the description of what is a bulk sale. 1. 3. Types of transactions which are treated as bulk sales: 1. a. Sale, transfer, mortgage or assignments of a stock of goods, wares, merchandise, provisions, or materials otherwise than in the ordinary course of trade; 2. b. Sale transfer, mortgage or assignments of all, or substantially all, of the business of the vendor, mortgagor, transferor, or assignor; 3. c. Sale, transfer, mortgage, or assignment of all, or substantially all, of the fixtures and equipment used in the business of the vendor, mortgagor, transferor, or assignor.

1. 4. Only creditors at the time of the sale in violation of the law are within the protection of the laws and creditors subsequent to the sale are not covered. 1. 5. Even if the transaction falls within the definition of bulk sale, the following are not deemed covered by the law: 1. a. If the vendor, mortgagor, transferor or assignor produces and delivers a written waiver of the provisions of the law from his creditors as shown by verified statements; 2. b. The law does not apply to executors, administrators, receivers, assignees in insolvency, or public officers, acting under process. 1. 6. Obligations when transaction is a bulk sale: 1. a. The vendor must deliver to such vendee a written statement of:

n names and addresses of all creditors to whom said vendor or mortgagor may be indebted; n amount of indebtedness due or owing to each of said creditors 1. b. The vendor must apply the purchase money to the pro-rata payment of bona fide claims of the creditors as shown in the verified statement. 2. c. The seller, at least 10 days before the sale, shall: n make a full detailed inventory of the goods, merchandise, etc., cost price of each article to be included in the sale n notify every creditor at least 10 days before transferring possession of the goods, of the price, terms and conditions of the sale

1. 7.

Consequences of Violation of Requirements under #6 above stated: 1. a. When 6(a) above is not complied with, the sale itself is void; the seller will be criminally liable. 2. b. When 6(b) above is not complied with, the sale itself is also void; seller is also criminally liable. 3. c. When 6(c) is not complied with, the sale is not void; no criminal liability on the seller. INSURANCE LAW

1. 1.

Laws applicable to insurance in the order of priority: 1. a. Insurance Code 2. b. Civil Code 3. c. General Principles prevailing on the subject in the US

1. 2. Contract of Insurance an agreement whereby one undertakes for a consideration to indemnify another against loss, damage or liability arising from an unknown contingent event. 1. 3. Contract of Suretyship deemed to be an insurance contract within the meaning of the Insurance Code, only if made by a surety who or which, as such, is doing an insurance business 1. 4. Definition of doing an insurance business: 1. a. making or proposing to make, as insurer, any insurance contract; 2. b. making or proposing to make as a surety, any contract of suretyship as a vocation and not merely incidental to any other legitimate business or activity of the surety; 3. c. doing reinsurance business; 4. d. doing or proposing to do any business in the substance equivalent to any of the foregoing in a manner designed to evade the provisions of the Insurance Code. Requisites of Insurance: a. existence of an insurable interest; b. risk of loss; c. assumption of risk; d. scheme to distribute losses; and e. payment of premiums

1. 5. 1. 2. 3. 4. 5.

Note: If only a, b, and c are present, it is not a contract of insurance but a risk shifting device. Characteristics of an insurance contract: 1. a. consensual 2. b. voluntary

1. 6.

3. c. aleatory depends upon some contingent event; however, it is not a wagering nor a gambling contract 4. d. executed as to the insured after payment of the premium 5. e. executory as to insurer not executed until payment for a loss 6. f. personal each party takes into account the character, credit and the conduct of the other 7. g. conditional liability is based on the happening of the event insured against 1. 7. Parties to a contract of Insurance: 1. a. insurer party who assumes the risk or undertakes to indemnify the insured or to pay a certain sum on the happening of a specified contingency 2. b. insured person in whose favor the contract is operative, and who is indemnified against, or is to receive a certain sum upon the happening of a specified contingency 3. c. beneficiary may or may not be the same as the insured

What perils may be insured?

(a) any contingent or unknown event, whether past or future, which may damnify a person having an insurable interest; or (b) any contingent or unknown event, whether past or future, which may create a liability against the person insured. 1. 8. Every person has an insurable interest in the life and health of: 1. a. himself, his spouse and his children 2. b. any person on whom he depends wholly or in part for education or support, or in whom he has a pecuniary interest 3. c. any person under a legal obligation to him for the payment of money, or respecting property or services, of which death or illness might prevent the performance or delay it 4. d. any person upon whose life any estate or any interest vested in him depends Insurable Interest in Property may consist of: 1. a. an existing interest 2. b. an inchoate interest, founded on an existing interest 3. c. an expectancy, coupled with an existing interest out of which the expectancy arises

1. 9.

Definition of Insurable Interest in Property: Interest in property, whether real or personal, or any relation thereto, or liability in respect thereof, of such nature that a contemplated peril might directly damnify the insured.

1. 10. Instances when Insurable Interest must exist: 1. a. Interest in Property insured must exist when the insurance takes effect and when the loss occurs, but need not exist in the meantime. 2. b. Interest in the Life or Health of a Person Insured must exist when the insurance takes effect, but need not exist thereafter or when the loss occurs. 3. c. Beneficiaries of Life Insurance need not have insurable interest in the life of the insured. 4. d. Beneficiaries of Property Insurance must have insurable interest in the property insured. Insurable Interest in Life Insurable Interest in Property Insurance 1. basis may be based on pecuniary based purely on pecuniary interest, affinity, or interest consanguinity 2. when interest must exist at the time the policy takes at the time the policy takes effect EXCEPT: life insurance effect and at the time of the loss taken by the creditor on the life of the debtor wherein interest must also exist at the time of the loss 3. amount of insurable interest no limit EXCEPT: if insurable limited to the actual value of interest is based on creditordamage/injury/loss debtor relationship (only to the extent of the credit or debt) 1. 11. General Rule: A change of interest in any part of a thing insured unaccompanied by a corresponding change in interest in the insurance suspends the insurance to an equivalent extent, until the interest in the thing and the interest in the insurance are vested in the same person. Exceptions: a. In case of life, health, and accident insurance 1. b. when the change in interest results after the occurrence of an injury which results in a loss 2. c. a change of interest in one or more several distinct things, separately insured by one policy 3. d. a change in the interest by will or succession on the death of the insured (interest passes to the heirs) 4. e. a transfer of interest by one of several partners, joint owners in common who are jointly insured to the others (even though it has been agreed that the insurance shall seize upon the alienation of the thing insured) 1. 12. Revocation of Beneficiaries

Category

General Rule: Insurance contracts are revocable.

Exception: Any person who is forbidden to receive any donation under Article 739 of the Civil Code cannot be named beneficiary of a life insurance policy by the person who cannot make the donation to him. The following donations shall be void:

1. a. those made between persons who were guilty of adultery or concubinage at the time of the donation; 2. b. those made by persons found guilty of the same criminal offense, in consideration thereof; 3. c. those made to a public officer or his wife, descendants, ascendants, by reason of his office.

Other Pertinent Provisions on Revocation:

(a) The termination of a subsequent marriage shall allow the innocent spouse to revoke the designation of the other spouse who acted in bad faith as beneficiary in any insurance policy, even if such designation be stipulated as irrevocable. (b) After the finality of the decree of legal separation, the innocent spouse may revoke the donations as well as the designation of the latter as a beneficiary in any insurance policy, even if such designation is irrevocable. The revocation of or change in the designation shall take effect upon written notification thereof to the insured. The action to revoke the donation under this article must be brought within 5 years from the time the decree of legal separation has become final. (c) The interest of a beneficiary in a life insurance policy shall be forfeited when the beneficiary is the principal, accomplice or accessory in willfully bringing about the death of the insured, in which event, the nearest relative of the insured shall receive the proceeds of said insurance if not otherwise disqualified. 1. 13. Suspension a change of interest in any part of a thing insured unaccompanied by a corresponding change of interest in the insurance suspends the insurance to an equivalent extent until the interest in the thing and the interest in the insurance are vested in the same person. 1. 14. Concealment a neglect to communicate that which the party knows or ought to communicate

General Rule: The insured is not required to communicate the nature (or kind) or the amount of his insurable interest in the life or property insured to the insurer. Exception: a. When the insurer makes inquiry from the insured of the nature or amount of the latters insurable interest, whether in life or property insurance;

1. b. insurance policy must specify the interest of the insured in the property insured, if he is not the absolute owner thereof.

A concealment, whether intentional or not, entitles the injured party to rescind a contract of insurance. Requisites:

(a) the party concealing must have knowledge of the facts concealed; (b) the facts concealed must be material to the risk; (c) the party is duty bound to disclose such fact to the other;

(d) the party concealing makes no warranty as to the facts concealed; (e) the other party has no other means of ascertaining the facts concealed.

Note: An insured need not die of the very disease he failed to reveal to the insurer. It is sufficient that the non-revelation has misled the insurer in forming his estimate of the disadvantages of the proposed policy or in making his inquiries in order to entitle the insurance company to avoid the contract. Note: The insured is under an obligation to disclose not only such material facts as are known to him, but also those known to his agent where:

1. a. it was the duty of the agent to acquire and communicate information of the facts in question; 2. b. it was possible for the agent, in the exercise of reasonable diligence, to have made the communication before the making of the insurance contract. n Failure on the part of the insured to disclose such facts known to his agent, or wholly due to the fault of the agent, will avoid the policy, despite the good faith of the insured. 1. 15. Neither party to the insurance contract is bound to communicate information on the following matters except in answer to the inquiries of the other: 1. a. those of which the other knows; 2. b. that which, in the exercise of ordinary care, the other ought to know and of which the former has no reason to suppose his ignorance, i.e. political situation, general usages of trade; 3. c. those of which the other waives communication; 4. d. those which prove or tend to prove the existence of the risk excluded by a warranty and which are not otherwise material; 5. e. those which relate to a risk excepted from the policy and which are not otherwise material.

Neither party is bound to communicate his mere opinion, even upon inquiry, because such opinion would add nothing to the appraisal of the application. Waiver of material facts may be:

(a) by the terms of the insurance; or

(b) by the neglect to make inquiry as to such facts, where they are distinctly implied in other facts which information is communicated

Materiality is to be determined not by the events but solely upon the probable and reasonable influence of the facts on the party to whom the communication is due in forming his estimate of the disadvantages of the proposed contract or in making his inquiries. Concealment, whether intentional or not, entitles the other party to rescind the contract.

1. 16. Representation It is a factual statement made by the insured at the time of, or prior to, the issuance of the policy, to give information to the insurer and otherwise induce him to enter into the insurance contract.

It may be made orally or in writing. It may be made at the time of, or before, the issuance of the policy. It may be altered or withdrawn before the insurance is effected, but not afterwards. A representation cannot qualify an express provision in a contract of insurance but it may qualify an implied warranty. A representation as to the future is to be deemed a promise unless it appears that it was merely a statement of belief or an expectation. (must be susceptible of present, actual knowledge) The statement of an erroneous opinion, belief or information, or of an unfulfilled intention, will not avoid the contract of insurance, unless fraudulent. Right to rescind because of false representation:

1. a. must be exercised previous to the commencement of an action on the contract (the action referred to is that to collect a claim on the contract) 2. b. misrepresentation, whether intentional or not, gives the right to rescind

Incontestable Clause: After a policy of life insurance made payable on the death of the insured shall have been in force during the lifetime of the insured for a period of 2 years from the date of its issue or of its last reinstatement, the insurer cannot prove that the policy is void ab initio or is rescindable by reason of the fraudulent concealment or misrepresentation of the insured or his agent. Exceptions: (a) absence of insurable risk

(b) cause of loss is an unexpected risk (c) fraud

(d) non-payment of premium (e) violation of conditions relating to naval or military services (f) failure to comply with conditions subsequent to the occurrence of the loss

1. 17. Warranties:

General Rule: Non-performance of a promissory warranty avoids a contract of insurance. Exceptions:

1. a. when before the time for performance of the promissory warranty, a loss insured against occurs; 2. b. when before the time of the performance of the warranty, the act becomes unlawful; 3. c. when before the time of the performance of the warranty, said performance becomes impossible.

A statement or a promise set forth in the policy or by reference incorporated therein, the non-fulfillment of which in any respect and without reference to whether the insurer was in fact prejudiced by such non-fulfillment, renders the policy voidable by the insurer, wholly irrespective of the materiality of such statement or promise. Representation collateral inducement maybe oral or written materiality must be proved requires substantial truth may be made by insurer or insured

Warranty part of the insurance contract always written on the policy conclusively presumed material must be strictly complied with made by the insured

Note: If there is a breach of warranty, even if the cause of the loss is a different risk, the insurer is entitled to rescind the contract of insurance. Breach must refer to a material warranty, whether intentional or not.

1. 18. Policy

What is a Rider? It is an additional provision in a policy not part of the body of the printed form. Cover Note: written memorandum of the most important terms of a preliminary contract of insurance, intended to give temporary protection pending the investigation of the risk by the insurer, or until the issuance of a formal policy. General Rule: Cover notes bind insurer temporarily pending the issuance of the policy. Exception: Where it is merely an acknowledgment on behalf of the company that the latters branch office had received from the applicant the insurance premium and accepted the application subject for processing by the insurance company and that the latter will either approve or reject the same. Kinds of Policies:

1. a. Open the value of the thing insured is not agreed upon, but is left to be ascertained at the time of the loss 2. b. Valued expresses on its face an agreement that the thing insured shall be valued at a specific sum

3. c. Running contemplates successive insurance which provides that the object of the policy may be from time to time defined especially as to the subject of insurance by additional statements or endorsements n Note: If an amount is written on the face of an open policy, it is merely a determination of the maximum limit of recovery and not as the value of the policy. Category what needs to be proven in order to be able to claim determining value of loss Open Policy value of property upon loss value of property is to be ascertained upon loss Valued Policy no need for proof of value of property upon loss value of property upon loss is conclusively stipulated to a specified amount

Period for commencing an action against the policy: Within 1 year from the time the cause of action accrues, i.e., from the time of rejection of the claim by the insurer. Any condition, stipulation, or agreement limiting the time to less than 1 year is void. Grounds for Cancellation of a Policy by the Insurer:

For Policies Other than Life: (1) prior notice of the cancellation to insured (2) notice must be based on the ff. occurrences after effective date of the policy (a) non-payment of premiums (b) conviction of a crime arising out of acts increasing the hazard insured against (c) discovery of fraud or material misrepresentation

(d) discovery of willful or reckless acts or omissions increasing the hazard insured against (e) physical changes in the property insured which results in the property becoming uninsurable (f) determination by the Commissioner that the continuation of the policy would violate or would place the insurer in violation of the Insurance Code (3) notice must be in writing (4) it must be mailed or delivered to the insured at the address shown in the policy (5) notice must state the ground relied upon and that upon written request of the insured, the insurer will furnish facts on which the cancellation is based

Renewal of the Policies Other than Life:

Insurer must mail or deliver to the insured notice of its intention not to renew the policy or to condition its renewal upon reduction of limits or elimination of coverages within 45 days before the policy ends. Otherwise, insured entitled to renew the policy upon payment of the premium due on the effective date of the renewal. 1. 19. Premium

General Rule: No policy is binding until the premium thereof has been paid. Exceptions: (a) in case of life or industrial life policy, whenever the grace period applies

(b) in case of estoppel

Insurer is entitled to payment of premiums as soon as the thing insured is exposed to the perils insured against. When insurer entitled to Return of Premiums

1. a. when the contract is voidable on account of fraud or misrepresentation of the insurer; 2. b. when on account of facts, the existence of which the insured was ignorant without his fault 3. c. when by any default of the insured other than actual fraud, the insurer never incurred any liability under the policy 4. d. when the insured has become a public enemy and the policy automatically canceled (on the ground of equity) 5. e. in case of over-insurance by several insurers (ratable return of premiums, proportioned to the amount by which the aggregate sum insured in all policies exceed the insurable value of the thing at risk) 1. 20. Loss

When Insurer is Liable:

1. a. where the peril insured against was the proximate cause, although a peril not contemplated by the contract may have been the remote cause or even the immediate cause of the loss 2. b. where the thing insured is rescued from the peril insured against that would otherwise have caused a loss, if, in the course of such rescue, the thing is exposed to a peril not insured against, which permanently deprives the insured of its possession in whole or in part 3. c. where loss is caused by efforts to rescue the thing insured from a peril insured against 4. d. insurer is not exonerated by a loss caused by simple negligence of the insured if the proximate cause of the loss is a peril insured against

5. e. loss, the immediate cause of which is a peril insured against except when the proximate cause is an excepted peril

When Insurer Not Liable:

1. a. where the peril insured against was only a remote cause 2. b. where the peril is specifically excepted, a loss which would not have occurred but for such peril is thereby excepted 3. c. loss caused by the connivance of the insured 4. d. loss caused by the willful act of insured 5. e. loss caused by insureds negligence, if it amounts to bad faith

General Rule: The insurer is not liable for a loss caused by the willful act of the insured. Exception: Suicide Clause in Life Insurance: Insurer liable in case insured committed suicide after the policy has been in force for a period of 2 years from the date of its issue or last reinstatement. If insured kills himself within a period of 2 years, insurer is not liable. Exception to Exception: If suicide is committed in a state of insanity, regardless of the time of commission, the insurer is liable.

1. 21. Double Insurance exists where the same person is insured by several insurers separately in respect to the same subject and interest

Requisites: a. person insured must be the same b. c. d. e. existence of several insurers subject matter insured must be the same interest the same risk insured against also the same Double Insurance must be 2 or more insurers insurance may or may not exceed the value of insurable interest

1. 2. 3. 4.

Over Insurance may be only one insurer insurance covers more than the value of insurable interest

The Code prohibits double insurance without the consent of the insurer. Liability of Insurer:

Insurance taken from each insurer - x insurance value of property received = liability of insurer total

1. 22. Reinsurance: A process by which an insurer procures a third person to insure him against loss or liability by reason of such original insurance. The original insured cannot recover from this insurance unless there is a specific grant, or assignment of, the reinsurance contract in favor of the insured, or a manifest intention of the contracting parties to the reinsurance contract to favor the insured.

General Rule: The insurer who obtains reinsurance must communicate:

1. a. all the representations of the original insured; and 2. b. all the knowledge and information he possesses, whether previously or subsequently acquired which are material to the risk

Exception: under automatic reinsurance treaties Double Insurance

Reinsurance 1. 1. insurer becomes the insured 2. 2. subject matter is the insured risk or liability 3. 3. different risks and interests of insured 4. 4. there must be consent of original 5. 5. one who is original insured has no interest in the contract of reinsurance which is independent of the original contract of insurance 6. 1. insurer remains the insurer 7. 2. subject matter is property 8. 3. the same interest and risk are insured 9. 4. insured has to give his consent 10. 5. insured is the party in interest in all contracts

1. 23. Marine Insurance: insures against perils of the sea, not of the ship Perils of the Sea Perils of the Ship covered by marine insurance not covered by marine insurance denote nature accidents peculiar to the sea damage or losses resulting from: which do not happen by intervention of man nor are to be prevented by human prudence 1. 1. natural and inevitable action of the sea 2. 2. ordinary wear and tear of a ship, or 3. 3. negligent failure of the ship owner

to provide the vessel with proper equipment to convey the cargo under ordinary conditions

Owner of the Ship has Insurable Interest:

1. a. in the ship even if it has been chartered by one who promises to pay him in value in case of loss (insurer is liable for what insured cannot recover from the charterer), even when hypothecated by bottomry (only the excess of its value over the amount secured by bottomry) and 2. b. in the freightage, which according to the ordinary and probable course of things he would have earned but for the intervention of a peril insured against or other peril incident to the voyage

Charterer has insurable interest in the ship to the extent that he is liable to be damnified by its loss. Barratry: Any willful misconduct on the part of the masters or crew, in pursuance of some unlawful or fraudulent purpose, without the consent of the owners and to the prejudice of the owners interest. Jettison: Intentional casting overboard of any part of a venture exposed to a peril, whether it be of the cargo, or the ships furniture or tackle, in the hope of saving the rest of the venture. Insurable Interest in Marine Insurance: Determined when one will sustain loss from the destruction of the subject matter or derive benefit from its preservation. Charter Party: Contract by virtue of which the owner or the agent of a vessel binds himself to transport merchandise or persons for a fixed price. It has also been defined as a contract by virtue of which the owner or the agent of the vessel for the transportation of goods or persons from one port to another. Loan on Bottomry: Contract in the nature of a mortgage whereby the owner of a ship borrows money for the use, equipment or repair of the vessel for a definite term, and pledges the ship as a security for repayment, with maritime or extraordinary interest on the account of the maritime risks to be borne by the lender. It is stipulated in such a contract that if the ship be lost in the course of the specific voyage or during a specified limited time caused by any of the perils enumerated in the contract, the lender shall resolutely lose his money. Loan on Respondentia: Contract akin to that of mortgage made on the goods on board the ship, and which are to be sold or exchanged in the course of the voyage. The goods serve as the principal security.

Freightage: Signifies all the benefits derived by the owner, carriage of his own goods, or those of others. Concealment: In marine insurance, information or the belief or expectation of a 3rd person, in reference to a material fact is material.

n Concealment of the following merely exonerates the insurer from the resulting loss therefrom: 1. 2. 3. 4. 5.

a. b. c. d. e.

national character of the insured liability of the thing insured to capture and detention liability to seizure from breach of foreign laws of trade want of necessary documents use of false and simulated papers

Implied Warranties:

1. a. that the ship is seaworthy complied with if the ship is seaworthy at the time of commencement of risk, except: (a) insurance for a specified length of time at the commencement of every voyage it undertakes during that time; (b) cargo to be transshipped at indeterminate port each vessel upon which cargo is shipped is seaworthy at the commencement of each particular voyage 2. b. that the vessel shall not engage in illegal venture 3. c. that the vessel shall not deviate from the course of the voyage insured 4. d. where the nationality or neutrality of a ship or cargo is expressly warranted, it is implied that the ship will carry the requisite documents to show such nationality or neutrality and that it will not carry any documents which may cast reasonable suspicion thereon

Seaworthiness depends on: nature of the ship nature of the voyage nature of the service

1. a. 2. b. 3. c.

n Seaworthiness of the vessel is required only at the commencement of the risk n Exceptions: 1. a. 2. b. 3. c.

in a Time Policy commencement of every voyage that must be undertaken in a Cargo Policy commencement of each particular voyage in a Voyage Policy commencement of each portion of the voyage

Deviation a departure from the course of the voyage insured unreasonable delay in pursuing the voyage

1. a. 2. b.

3. c.

commencement of an entirely different voyage

When is Deviation proper?

1. a. when caused by circumstances over which neither the master not the owner of the ship has any control 2. b. when necessary to comply with a warranty or to avoid a peril whether it is insured against or not 3. c. when made in good faith for the purpose of saving human life or relieving another vessel in distress 4. d. when made in good faith and upon reasonable grounds of belief in its necessity to avoid a peril

Loss Actual Total Loss

1. a.

n a total destruction of the thing insured n the irretrievable loss of the thing by sinking or by being broken up n any damage to the thing which renders it valueless tot he owner for which he held it n any other event which effectively deprives the owner of possession, at the port of destination, of the thing insured 1. b.

Constructive Total Loss gives to the person insured the right to abandon

Average any extraordinary or additional expense incurred during the voyage for the preservation of the vessel, cargo, or both and all damages to the vessel and cargo from the time it is loaded and the voyage commenced until it ends and the cargo unloaded General Average an expense or damage suffered deliberately in order to save the vessel, its cargo, or both from the real or known risk Abandonment act of the insured by which, after a constructive total loss, he declares the relinquishment to the insured of his interest in the thing insured (where the cause of loss is a peril insured against)

(a) more than thereof in value is actually lost or would have been expended to recover it from the peril (b) it is injured to such an extent as to reduce its value by more than

(c) if the thing insured is the ship and the voyage cannot be lawfully performed without incurring an expense of more than of the whole, or a risk which a prudent man would not undertake under the circumstances (d) if the thing insured is cargo or freightage, and the voyage cannot be performed on another ship procured by the master within a reasonable time and with reasonable diligence to forward the cargo without incurring an expense or a risk as stated above

Freightage cannot be abandoned unless ship is also abandoned. Requisites of a Valid Abandonment: a. b. c. d. must be total and conditional made within a reasonable time explicit notice coupled with actual abandonment

1. 2. 3. 4.

Requisites for Valid Valuation in the Valued Marine Policy: insured must have interest at risk there must be no fraud on the insureds part

1. a. 2. b.

Notice of Abandonment:

1. a. may be oral or in writing (if oral, written notice must be submitted within 7 days from oral notice) 2. b. must be explicit 3. c. must specify the particular cause for abandonment 4. d. need not be accompanied by proof of interest or loss

Acceptance of Abandonment may be express or implied (i.e. silence for unreasonable length of time) conclusive upon the parties and admits the loss and sufficiency of abandonment irrevocable, unless the ground on which it is made is proved to be unfounded

1. a. 2. b. 3. c.

If insurer refuses to accept a valid abandonment liable as upon actual total loss Upon actual abandonment freightage earned before loss belongs to the insurer of freightage freightage earned after loss belongs to insurer of ship

1. a. 2. b.

Co-insurance: form of insurance in which the person who insures his property for less than the entire value is understood to be his own insurer for the difference which exists between the true value of the property and the amount of insurance

Co-insurance applies only where the: insurance taken is less than the actual value of the thing insured loss is partial

1. a. 2. b.

Primage increase in freightage

1. 24. Fire Insurance Insurer is liable for loss or damage caused by hostile fire (fire that escapes from the place where it was intended to burn and ought to be in) and not that caused by friendly fire (fire which burns in a place where it is intended to burn).

Scope of Fire Insurance: a. b. c. d. e. f. fire lightning windstorms tornado earthquake other allied risks

1. 2. 3. 4. 5. 6.

When does alteration in the use or condition entitle the insurer to rescind the contract? such alteration violates a provision in the policy it was made without the insurers consent it is done within the insureds control, and it increases the risk of loss or damage

1. a. 2. b. 3. c.

Rules:

1. a. policy shall not protect the insured from injury consequent upon his negligent use or management of fire, so long as it is confined to the place where it ought to be 2. b. if it escapes, even though the insured was negligent, the insurer is liable 3. c. even though a fire may remain in its proper place, it may become hostile if it by accident, becomes so extensive as to be beyond control

Options of the Insurer

1. a. purchase the property at appraised valuation 2. b. restore the property damaged contract of insurance is discharged and parties enter into a new contract of insurance 1. 25. Casualty Insurance: Any injury that is intended, unexpected and unusual, even though it results from an act or even which was intelligently done.

Insurer is Liable for death/injury to insured:

1. a. by his own hand while insane 2. b. by taking poison by mistake 3. c. by overdoes of drugs administered or taken by mistake, by ignorance or material pathological conditions 4. d. by unexpected bacterial infection consequent upon doing acts, even though such acts were intentionally done 5. e. by unprovoked violence of others

Compulsory Motor Vehicle Liability Insurance

Persons subject to CMVLI: 1. a. motor vehicle owner or one who is the actual legal owner of a motor vehicle in whose name such vehicle is registered with the LTO 2. b. land transport operator or one who is the owner of a motor vehicle or vehicles being used for conveying passengers for compensation (including school buses)

No Fault Indemnity Clause: The insurance company shall pay any claim for death or bodily injuries sustained by a passenger or 3rd party without the necessity of proving fault or negligence of any kind subject to certain conditions. This does not apply to property damage.

1. 26. Suretyship an agreement whereby the surety guarantees the performance of the principal or obligor of an obligation or undertaking in favor of a 3rd party called the obligee 1. 27. Life Insurance: an insurance in human life and insurance appertaining thereto or connected therewith may be payable: 1. a. on the death of the insured 2. b. on his surviving a specified period 3. c. otherwise, contingently on the continuance or cessation of life (b and c refer to endowment or annuities)

Uses and Common Kinds of Life Insurance:

1. a. Whole Life or Ordinary Policies here, the insured agrees to pay annual, semiannual or quarterly premiums while he lives. The insurer agrees to pay the face value of the policy upon the death of the insured. 2. b. Limited Payment Life Policy premiums paid only for a specified period of years. 3. c. Term Policy insurers liability arises only upon the death of the insured within the agreed term as period. If the latter survives the period, the contract terminates and the insurer is not liable 4. d. Endowment Policy insurer agrees to pay a certain sum to the insured if the latter outlives a designated period; if he dies before that time, the proceeds are paid to the beneficiary

5. e. Life Annuity debtor binds himself to pay an annual pension or income during the life of one or more persons in consideration of a capital consisting of money or other property, whose ownership is transferred to him with the burden of income 1. 28. The Business of Insurance 1. a. Life or Endowment Policies Grace Period 30 days for the payment of any premium due after the first premium has been paid Period of Incontestability after the lapse of 2 years from the date of issue or date of approval of last reinstatement Reinstatement of Policy within 3 years from the date of default of premium, upon: 1. a. production of evidence of insurability, and 2. b. payment of all overdue premiums and any indebtedness to the company upon said policy Exceptions: 1. a. 2. b. 1. b. if cash surrender value has been paid if period of extension has expired Claims Settlement

Unfair Claims Settlement Practices: (a) knowingly misrepresenting to claimants pertinent facts or policy provisions relating to coverage at issue (b) failing to acknowledge with reasonable promptness pertinent communications with respect to claims arising under its policies (c) failing to adopt or implement reasonable standards for the prompt investigation of claims arising under its policies (d) no attempt in good faith to effectuate prompt, fair and equitable settlement of claims submitted in which liability has become reasonably clear (e) compelling policy holders to institute suits to recover the amount due under its policies by offering with no justifiable reason an amount substantially less than that ultimately recovered in suits brought by them Proceeds of Life Insurance payable within 60 days after:

(a) presentation of claims, and (b) filing of proof of death (upon failure to pay interest, at the rate of 2 times the ceiling prescribed by the Monetary Board unless based on the ground that the rate is fraudulent) Proceeds of Policies other than Life payable: (a) upon proof of loss (b) upon ascertainment of loss or damage (if not made within 60 days of proof of loss, payable in 90 days) 1. c. Power of Commissioner to Suspend/Revoke License

(a) if insurance contract is in unsound condition (b) if it has failed to comply with the provisions of law or regulations obligatory upon it (c) its conditions or methods of business s such as to render its proceedings hazardous to the public or to its policy holders (d) that its paid up capital stock, or its available cash assets, or its security deposits, as the case may be, is impaired or deficient (e) that the margin of solvency required of each company is deficient Insurance Agent any person who for compensation solicits or obtains insurance on behalf of any insurance company or transacts for a person other than himself an application for a policy or contract of insurance to or from such company or offers or assumes to act in negotiating of such insurance. He must be first licensed as such before doing any acts as insurance agent. Insurance Broker any person for any compensation, commission or any other thing of value, acts, or aids in any manner in soliciting, negotiating or procuring the making of any insurance contract or in placing risk or taking out insurance, on behalf of an insured other than himself. A license is required. WAREHOUSE RECEIPTS LAW 1. 1. Warehouse a building or place where goods are deposited and stored for profit.

1. 2. Warehouseman person lawfully engaged in the business of storing goods for profit.

Only a warehouseman may issue warehouse receipts.

1. 3. Warehouse Receipt written acknowledgment by a warehouseman that he has received and holds certain goods therein described in store for the person to whom it is issued. 1. 4. 1. 5. 1. 6. Non-negotiable Receipt receipt deliverable to a specified person. Negotiable Receipt receipt deliverable to order or to bearer. Essential Terms which MUST be embodied in a Warehouse Receipt: a. location of the warehouse b. date of the issue of the receipt c. consecutive number of the receipt d. statement whether the goods received will be delivered to bearer, or a specified person, or his order 5. e. rate of storage charges 6. f. description of the goods or packages containing them for identification purposes 7. g. signature of the warehouseman 8. h. statement of the amount of advances made and of liabilities incurred for which the warehouseman claims as lien 1. 2. 3. 4. Effect of omission of any of the essential terms: 1. a. The validity of the warehouse receipt is not affected. 2. b. The warehouseman shall be held liable for damages to those injured by his omission. 3. c. The negotiability of the warehouse receipt is not affected. 4. d. The issuance of a warehouse receipt in the form provided by the law is merely permissive and directory and not mandatory in the sense that if the requirements are not observed, then the goods delivered for storage become ordinary deposits.

1. 7.

1. 8. Terms which may be inserted in a Warehouse Receipt: Any other terms except (a) those contrary to the provisions of this Act; (b) those that would impair a warehousemans obligation to exercise that degree of care in the safekeeping of the goods entrusted to him 1. 9. Marks to be made on a warehouse receipt: 1. a. A non-negotiable receipt must be clearly marked non-negotiable or not negotiable, otherwise, the holder of the receipt who purchased it for value and who supposed it to be negotiable, may treat it as negotiable. 2. b. Duplicate receipts must be so marked, otherwise, the warehouseman is held liable for all damages suffered by a holder believing the same to be the original.

1. 10. Warranties of a warehouseman as to duplicate receipts: 1. a. The duplicate is an accurate copy of the original receipt. 2. b. Such original receipt is uncancelled at the date of the issue of the duplicate.

1. 11. Effects of alteration on the liability of the warehouseman: 1. a. If the alteration is IMMATERIAL (the tenor of the receipt is not changed), whether fraudulent or not, authorized or not, the warehouseman is liable on the altered receipt according to its original tenor. 2. b. If the alteration is MATERIAL but AUTHORIZED, the warehouseman is liable according to the terms of the altered receipt. 3. c. If the alteration is MATERIAL, UNAUTHORIZED but INNOCENTLY MADE, the warehouseman is liable on the altered receipt according to its original tenor. 4. d. If the alteration is MATERIAL and FRAUDULENTLY MADE, the warehouseman is liable: (1) to the purchaser of the receipt for value and without notice of the alteration according to the tenor of the altered receipt (2) to the alterer, according to the terms of the original receipt (3) to subsequent purchasers with notice of the alteration, according to the terms of the original receipt 1. 12. Effects of misdescription of goods: 1. a. A warehouseman is under the obligation to deliver the identical property stored with him and if he fails to do so, he is liable directly to the owner. 2. b. As against a bona fide purchaser of a warehouse receipt, the warehouseman is estopped from denying that he has received the goods described in the receipt. 3. c. If the description consists merely of marks or label upon the goods or upon the packages containing them, the warehouseman is not liable even if the goods are not of the kind as indicated in the marks or labels. 1. 13. Principal Obligations of a Warehouseman: 1. a. To take care of the goods entrusted to his safekeeping

General Rule: A warehouseman is required to exercise such degree of care which a reasonable careful owner would exercise over similar goods of his own. He shall be liable for any loss or injury to the goods caused by his failure to exercise such care. Exception: He shall not be liable for any loss or injury which could not have been avoided by the exercise of such care. Exception to the Exception: He may limit his liability to an agreed value of the property received in case of loss. He cannot stipulate that he will not be responsible for any loss caused by his negligence.

1. b. To deliver the goods to the holder of the receipt or the depositor upon demand, provided demand is accompanied with: (1) an offer to satisfy the warehousemans lien;

(2) an offer to surrender the negotiable receipt properly endorsed. If the receipt is nonnegotiable, any person lawfully entitled to the possession of the goods may be entitled to delivery without surrender of the receipt. (3) a readiness and willingness to sign an acknowledgment that the goods have been delivered if such is requested by the warehouseman. 1. 14. Persons to whom goods must be delivered: 1. A. Persons lawfully entitled to the possession of the goods or his agent: a. persons to whom a competent court has ordered the delivery of the goods (1) where a negotiable instrument has been lost or destroyed, the court may order delivery to a person upon satisfactory proof of such loss or destruction and upon proper posting of a bond to protect the warehouseman from any liability or expense which he may incur by reason of the original receipt remaining outstanding. (2) where more than one person claims title or possession of the goods the warehouseman may require all claimants to interplead. The court will then order delivery to the person having a better right. 1. b. an attaching creditor Goods, while in the possession of the warehouseman and covered by a negotiable receipt, cannot be attached or levied upon under an execution unless: (I) (ii) the negotiable receipt is first surrendered to the warehouseman, or its negotiation is enjoined, or

(iii) the receipt is impounded by the court c. to the purchaser in case of sale of the goods by the warehouseman to enforce his lien 1. d. to the purchaser where perishable or hazardous goods are sold at private or public sale 1. B. If goods are covered by a non-negotiable receipt: 1. a. a person entitled to the delivery by the terms of the receipt, or 2. b. one who has written authority from letter a

1. C. If goods are covered by a negotiable receipt, a person in possession of the receipt, the terms of which the goods are deliverable: 1. a. to him or order 2. b. to bearer 3. c. indorsed to him 4. d. indorsed in blank by the person whom delivery was promised

1. 15. When is there Misdelivery? When the warehouseman delivers the goods to a person who is not in fact lawfully entitled to the possession of the goods because: 1. a. the person does not fall under letter B or C above; or 2. b. the person falls under letter B or C but prior to delivery, the warehouseman had either: (1) been requested by the person lawfully entitled to the delivery not to make such delivery, or (2) had information that the delivery about to be made was to one not lawfully entitled to the possession of the goods 1. 16. Effects of Misdelivery: The warehouseman shall be liable for conversion to all having a right to property or possession of the goods. 1. 17. What happens if there is proper delivery or partial delivery but the warehouseman fails to cancel the receipt or record on the receipt of such partial delivery? 1. a. If goods covered by a negotiable warehouse receipt are delivered by a warehouseman but he fails to take the receipt and cancel it, then he is still liable to one who purchases for value and in good faith such receipt. 2. b. If he makes partial delivery of the goods but fails to record the partial delivery on the receipt then he may still be held liable for the entire receipt to one who purchases for value and in good faith such receipt. 1. 18. Lawful excuses for refusal to deliver goods: 1. a. The warehouseman can refuse to deliver the goods if he has acquired title or right to the possession of the goods: (1) directly or indirectly from a transfer made by the depositor at the time of the deposit for storage or subsequent thereto; or (2) from the warehousemans lien 1. b. If someone other than the depositor or person claiming under the depositor has a claim to the title or possession of the goods and the warehouseman has information of such claim, the warehouseman shall be excused from liability for refusing to deliver the goods either to the depositor or person claiming under him until he has had a reasonable time to ascertain the validity of the adverse claim or to bring legal proceedings to compel all claimants to interplead. 1. c. The warehouseman will not be required to deliver the goods if such had been lost. But this is without prejudice to liabilities which may be incurred by him due to such loss.

1. d. The warehouseman having a valid lien against the person demanding the goods may refuse to deliver the goods to him until the lien is satisfied. 1. e. If goods have been lawfully sold or disposed of because of their perishable or hazardous nature, the warehouseman shall not be liable for failure to deliver the goods. 1. 19. A warehouseman cannot refuse to deliver goods to the depositor or to a person claiming under him on the ground that adverse title to the goods belongs to a third person. 1. 20. Rules as regards Co-mingling of Deposited Goods:

General Rule: A warehouseman may not co-mingle goods belonging to different depositors or belonging to the same depositor for which separate receipts had been issued. Exception: A warehouseman may co-mingle fungible goods of the same kind and grade provided he is authorized by agreement or by custom.

1. 21. Effect of Co-mingling of Goods: 1. a. The different owners become co-owners of the whole mass. 2. b. The warehouseman shall be severally liable to each depositor for the care and redelivery of his share of such mass to the same extent and under the same circumstances as if the goods had been kept separate. 1. 22. Remedies of a Creditor: (the debtor being the owner of the negotiable receipt) Creditors of the depositors, before negotiation, may protect themselves by obtaining a writ of preliminary injunction and serve the same on the depositor before he has a chance to negotiate the receipt. Once enjoined, there will be no longer a danger that a 3rd person will be prejudiced so the goods may now be attached, levied upon, or that the vendors lien or the right of stoppage in transit be exercised. 1. 23. Warehousemans Lien

Extent of Warehousemans Lien:

A warehouseman shall have a lien on goods deposited or on the proceeds thereof in his hands for: 1. a. all lawful charges for storage and preservation of the goods 2. b. all lawful claims for money advances, interest, insurance, transportation, labor, weighing, cooperating and other charges and expenses in relation to such goods 3. c. all reasonable charges and expenses for notice and advertisements of sale and for sale of the goods where default has been made in satisfying the warehouse lien

Goods Subject to lien:

1. a. goods belonging to the depositor who is liable to the warehouseman as debtor whenever such goods are deposited and 2. b. goods belonging to other persons stored by the depositor who is liable to the warehouseman as debtor with authority to make a valid pledge

How is a lien enforced?

1. a. by refusing to deliver the goods until the lien is satisfied 2. b. by causing the extrajudicial sale of the property and applying the proceeds to the value of the lien 3. c. by filing a civil action for unpaid charges or by way of counterclaim in an action to recover the property from him

How is a lien lost?

1. a. when the warehouseman voluntarily surrenders possession of the goods without requiring payment of his lien; or 2. b. when the warehouseman wrongfully refuses to deliver the goods when a demand is made with which he is bound to comply 1. 24. Negotiation and Transfer of Receipts

How do we negotiate a receipt deliverable to order?

1. a. by indorsing it in blank thereby making it deliverable to bearer or 2. b. by special indorsement which would require further indorsements for further negotiations. In both cases, the indorsements must be coupled with delivery.

How do we negotiate a receipt deliverable to bearer?

There is no need to indorse for negotiation. Physical delivery of the instrument will suffice. But if the instrument is indorsed specially, the bearer character of the receipt is destroyed and for further negotiation, there will be a need for indorsement.

Who may negotiate warehouse receipts? the owner of the receipt, or the person to whom possession of the receipt was entrusted to by the owner

1. a. 2. b.

Rights acquired by a person to whom the receipt has been negotiated:

1. a. the title of the person negotiating the receipt over the goods covered by the receipt 2. b. the title of the person (depositor or owner) to whose order by the terms of the receipt the goods were to be delivered

3. c. the direct obligation of the warehouseman to hold possession of the goods for him, as if the warehouseman directly contracted with him

May non negotiable receipts be negotiated?

No, even if the receipt is indorsed, the transferee acquires no additional right. That is why they are called non negotiable receipts. But they may be transferred or assigned by delivery.

Rights of a person to whom a non negotiable receipt has been transferred:

1. a. the title to the goods as against the transferor 2. b. the right to notify the warehouseman of the transfer thereof and 3. c. the right thereafter to acquire the obligation of the warehouseman to hold the goods for him

Distinction between a non negotiable receipt from a negotiable receipt with regard to attachment or execution upon goods:

Non-negotiable Receipt Negotiable Receipt Prior to notification of the warehouseman by the The goods cannot be attached or levied under an transferor or transferee, the warehouseman is execution unless the receipt be first surrendered not bound to the transferee whose right may be to the warehouseman or its negotiation enjoined. defeated by a levy of an attachment or execution upon the goods by the creditor of the transferor or by a notification to such warehouseman of the subsequent sale of the goods.

Rights of a person to whom a negotiable receipt has been transferred, not indorsed:

1. a. the right to the goods as against the transferor 2. b. the right to compel the transferor to indorse the receipt. But if the intention of the parties is that the receipt should merely be transferred, the transferee has no right to require the transferor to indorse the receipt. Note: Negotiation takes effect as of the time when the indorsement is actually made.

Warranties of a person negotiating or transferring a receipt: a. b. c. d. the receipt is genuine he has a legal right to negotiate or transfer it he has knowledge that would impair the validity or worth of the receipt and he has a right to transfer the title to the goods and that the goods are merchantable

1. 2. 3. 4.

A holder for security of a receipt (mortgagee or pledgee) who in good faith accepts payment of the debt from a person does not warrant the genuineness of the receipt not the quality or quantity of the goods therein described.

It is the duty of the purchaser, mortgagee or pledgee of goods for which a negotiable receipt has been issued to require the negotiation of the receipt to him, otherwise his failure will have the same effect as an express authorization on his part to the seller, mortgagor, or pledgor in possession of such receipt to make any subsequent negotiation. The subsequent purchaser must have taken the receipt in good faith and for value. A bona fide purchaser of a negotiable warehouse receipt acquires title to the goods where he purchases from the owners agent within the actual or apparent scope of his authority. In sum, negotiation is valid despite having been made in breach of trust. Distinctions between a negotiable instrument and a negotiable warehouse receipt: Negotiable Warehouse Receipt When a warehouse receipt is altered, it is still valid but it may be enforced only in accordance with its original tenor. If a warehouse receipt, payable to bearer, is indorsed specially, it will be converted into a receipt deliverable to order and can only be negotiated further by indorsement and delivery. An indorsee even if a holder in due course obtains only such title as the person negotiating has over the goods. The indorsement of a warehouse receipt amounts merely to a conveyance by the indorser. Accordingly, an indorser of a receipt shall not be liable to the holder if, for example, the warehouseman fails to deliver the goods because they were lost due to his fault or negligence.

Negotiable Instrument When a negotiable instrument is altered deliberately, it becomes null and void. If a negotiable instrument is originally payable to bearer, it will always remain so payable regardless of the way it is indorsed, whether specially or in blank. A holder in due course may be able to obtain a title better than that which the party who negotiated the instrument to him had. The indorsement of a negotiable instrument has a double effect. It is at the same time a conveyance of the instrument and a contract the indorser has with the indorsee that on certain conditions, the indorser will pay the instrument if the party primarily liable fails to do so.

GENERAL BONDED WAREHOUSE LAW

Any warehouseman receiving commodities for (a) storage; (b) milling; (c) co-mingling must:

1. a. obtain prior license from the Bureau of Commerce 2. b. file a bond in an amount equivalent to 33 1/3 % of the capacity of the warehouse against which bond depositors may sue directly 3. c. open to the public, no discrimination allowed 4. d. liable for double market value should he accept goods in excess of the capacity of warehouse if goods are damaged or destroyed

Note: for palay and corn license, a bond with the National Grains Authority is required; also an insurance cover is required.

Uniform Currency Law 1. 1. Obligations Null and Void 1. a. obligations payable in gold/foreign currency 2. b. obligations payable in Philippine currency but measured in gold/foreign currency Exempt Transactions 1. a. government to government transactions or with international banking institutions 2. b. transactions affecting high priority economic projects 3. c. forward exchange transactions between banks 4. d. import and export and other international banking, financial, investment and industrial transactions Merchants and Commercial Transactions

1. 2.

1. 3.

Classes of Investments:

1. a. Permitted one allowed without need of prior authority from the Philippine Government. If registered status, invest up to extent as not to affect its registered status. If enterprise not registered, investment not to exceed 40%. 2. b. Permissible invest in excess of 40% in unregistered enterprise but with prior approval of BOI 3. c. Pioneer Area (a) involves manufacturing, processing, production of product not produced at all/produced in non-commercial scale; (b) uses a design, scheme, formula that is new and untried in the Phils.; (c) agricultural activities/services essential to the attainment of food sufficiency; (d) produces non-conventional fuels/utilizes nonconventional sources of energy (all others are non-pioneer) 1. 4. Absolutely Disqualified to become Merchants 1. a. serving penalty of civil interdiction 2. b. insolvent 3. c. absolutely disqualified by special laws Relatively Disqualified 1. a. judicial and prosecuting officials in active service 2. b. administrative, economic, military chiefs 3. c. government collection agents and custodian of funds 4. d. stock and commercial brokers 5. e. by special laws cannot trade in specified territories Books a Merchant must keep 1. a. book of inventories and balances, statement of assets, liabilities and capital 2. b. journal of day to day operations 3. c. ledger for classifying accounts

1. 5.

1. 6.

4. d. copying book for letters and telegrams; if juridical person, include book of minutes and stock and transfer book 1. 7. Probative Value of Merchants Book 1. a. evidence against merchants themselves 2. b. in case of conflicts between 2 books that which s properly kept prevails 3. c. if one keeps books and the other does not and cannot explain why, the former prevails 4. d. if both books are properly kept and there is a conflict, other proofs can be resorted to

1. 8. Commercial Contracts by Correspondence are perfected from the moment the offeree accepts the offer, even before knowledge of said acceptance by the offeror. This does not apply to deposit, guaranty, sales, loan, agency, partnership. 1. 9. Joint Account Partnership business arrangement whereby 2 or more persons interest themselves in the business of another by making contributions thereto and participating in the results thereof 1. a. only one member is ostensible, others are silent 2. b. no common name 3. c. only ostensible partners can sue/be sued 4. d. no juridical personality Transportation Law 1. 1. Contract of Transportation contract whereby a certain person or association of persons obligate themselves to transport persons, things, news, from one place to another for a fixed price 1. 2. Parties to the Contract of Transportation: 1. a. Shipper one who gives rise to the contract of transportation by agreeing to deliver the things or news to be transported, or to present his own person or those of other or others in the case of transportation of passengers 2. b. Carrier/Conductor one who binds himself to transport persons, things, or news, as the case may be, or one employed in or engaged in the business of carrying goods for others for hire

1. 3. Common Carrier person, corporation, firm, association engaged in the business of carrying or transporting passengers, goods or both, by land, water, air, for compensation, offering services to the public; must exercise extraordinary diligence Private Carrier not engaged in the business of carrying; no public employment; undertakes to deliver goods/passengers for compensation; requires only ordinary diligence 4. Requisites of Caso Fortuito

1. 2. 3. 4.

a. b. c. d.

event independent of human will occurrence makes it impossible for debtor to perform in normal manner debtor free from aggravation/participation impossible to foresee or avoid

1. 5. Contributory negligence does not entitle passengers to recover moral/exemplary damages. 1. 6. Bill of Lading written acknowledgment of receipt of goods and agreement to transport them to a specific place to a person named or his carrier It is not indispensable to the creation of a contract of carriage. The contract itself arises from the moment goods are delivered by shipper to carrier and the carrier agrees to carry them. The function of the Bill of Lading: the legal basis of the contract between the shipper and carrier shall be the bills of lading, by the contents of which all disputes which may arise with regard to their execution and fulfillment shall be decided, no exceptions being admissible other than forgery or material errors in the drafting thereof. Carriers responsibility starts from the moment he receives unconditionally the merchandise personally or through an agent and lasts until he delivers them actually or constructively to the consignee or his agent. Mere delay in the delivery of goods to consignee does not give right to refuse goods only breach of contract, ergo damages. If delay is unreasonable, then he may refuse to accept and make carrier liable for conversion. 1. 7. Vessels those engaged in navigation, whether coastwise or on the high seas, including floating docks, pontoons, dredges, scows and any other floating apparatus destined for the services of the industry or maritime commerce 1. 8. 1. 2. 3. 4. 1. 9. Persons Participating in Maritime Commerce: a. ship owner and/or ship agent b. captain or master c. other officers of the vessel d. supercargo

Liability of Ship owners and Ship agents: 1. a. civil liability for the acts of the captain 2. b. civil liability for contracts entered into by the captain to repair, equip and provision the vessel, provided that the amount claimed was invested for the benefit of the vessel 3. c. civil liability for indemnities in favor of 3rd persons which may arise from the conduct of the captain in the care of the goods which the vessel carried, as well as for the safety of the passengers transported

Ship owner/ship agent not liable for the obligations contracted by the captain if the latter exceeds his powers and privileges inherent in his position of those which may have been conferred upon him by the former. However, if the amount claimed were made use of for the benefit of the vessel, the ship owner or ship agent is liable.

1. 10. Doctrine of Limited Liability liability of shipowners is limited to amount of interest in said vessel because of the real and hypothecary nature of maritime law such that where the vessel is entirely lost, the obligation is extinguished. Exceptions: (1) vessel is not abandoned (2) claims under workmens compensation (3) injury/damage due to shipowners fault (4) vessel is insured

The doctrine also applies for claims due to death or injuries to passengers, aside from claims for goods. In abandoning the vessel, there is no procedure to be followed. There is neither a prescriptive period within which the ship owner can make the abandonment. He may do so for so long as he is not estopped from invoking the same or do acts inconsistent with abandonment.

1. 11. Roles of the Captain: 1. a. general agent of the ship owner 2. b. technical director of the vessels 3. c. represents the government of the country under whose flag he navigates 1. 12. Loan on Bottomry made by shipowner/ship agent guaranteed by vessel itself, repayable upon arrival at destination 1. 13. Loan In Respondentia taken on security of the cargo repayable upon the safe arrival at cargo destination 1. 14. Accidents and Damages in Maritime Commerce: 1. a. Averages 2. b. Arrivals Under Stress 3. c. Collisions 4. d. Shipwrecks 1. 15. Average: 1. a. all extraordinary or accidental expenses which may be incurred during the voyage for the preservation of the vessel or cargo or both 2. b. all damages or deterioration which the vessel may suffer from the time it puts to sea at the port of departure until it casts anchor at the port of destination,

and those suffered by the merchandise from the time they are loaded in the port of shipment until they are unloaded in the port of their consignment 1. 16. Simple Average expenses/damages caused to the vessel/cargo not inured to common benefit and profit of all the persons interested in the vessel and her cargo; borne by respective owners 1. 17. General Average expenses/damages deliberately caused in order to save the vessel, its cargo or both from a real and known risk Requisites: 1. 2. 3. 4. a. b. c. d. deliberately incurred intended to save vessel and cargo or both from real and known risk there is success

1. 18. Formalities for Incurring Gross Average: 1. a. there must be an assembly of the sailing mate and other officers with the captain including those with interests in the cargo 2. b. there must be a resolution of the captain 3. c. the resolution shall be entered in the log book, with the reasons and motives and the votes for and against the resolution 4. d. the minutes shall be signed by the parties 5. e. within 24 hours upon arrival at the first port the captain makes, he shall deliver one copy of these minutes to the maritime judicial authority thereat 1. 19. Arrivals under Stress arrival of the vessel at a port not of destination on account of (a) lack of provisions; (b) well-founded fear of seizure; (c) by reason of accident of the sea disabling it to navigate When Not Lawful: 1. 2. 3. 4. a. b. c. d. lack of provisions due to negligence to carry according to usage and customs risk of enemy not well known or manifest defect of vessel due to improper repair malice, negligence, lack of foresight or skill of captain

1. 20. Collision impact of 2 vessels both of which are moving 1. 21. Allision striking of a moving vessel against one that is stationary 1. 22. Cases of Collision: 1. a. due to the fault, negligence or lack of skill of the captain, sailing mate or the complement of the vessel ship owner liable for the losses and damages (Culpable Fault)

2. b. due to fortuitous event or force majeure each vessel and its cargo shall bear its own damages (Fortuitous) 3. c. it cannot be determined which of the 2 vessels caused the collision each vessel shall suffer its own damages, and both shall be solidarily responsible for the losses and damages occasioned to their cargoes (Inscrutable Fault) 1. 23. Error in Extremis sudden movement made by a faultless vessel during the 3rd zone of collision with another vessel which is at fault, even if the said movement is wrong, no responsibility will fall on said vessel 1. 24. Shipwreck denotes all types of loss/ wreck of a vessel at sea either by being swallowed up by the waves, by running against another vessel or thing at sea or on coast where the vessel is rendered incapable of navigation 1. 25. Salvage the compensation allowed to persons by whose voluntary assistance a ship at sea or her cargo or both have been saved in whole or in part from an impending peril, or such property recovered from actual peril or loss, in cases of shipwrecks, derelict or recapture; a service which one person renders to the owner of a ship or goods by his own labor, preserving the goods or ship which the owner or those entrusted with the care of them either abandoned in distress at sea or are unable to protect and secure; a permit is required to engage in the salvage business 1. 26. Derelict a ship or cargo which is abandoned and deserted at sea by those who are in charge of it, without any hope of recovering it, or without any intention of returning it 1. 27. Elements of a Valid Salvage: 1. a. a marine peril 2. b. service voluntarily rendered when not required as an existing duty or from special contract 3. c. success, in whole or in part, or that the services rendered contributed to such success 1. 28. Contract of Towage contract whereby a vessel usually motorized pulls another from one place to another for compensation. It is a contract of services. 1. 29. Difference between Towage and Salvage: Salvage Towage crew of salvaging ship is entitled to salvage, and crew of the towing ship does not have any can look to the salvaged vessel for its share interest or rights with the remuneration pursuant to the contract salvor takes possession and may retain tower has no possessory lien; only an action for possession until he is paid recovery of sum of money court has power to reduce the amount of court has no power to change amount in towage remuneration if unconscionable even if unconscionable

Carriage of Goods by Sea Act 1. 1. When Applicable: 1. a. contracts for the carriage of goods 2. b. by sea 3. c. to and from Philippine ports 4. d. in foreign trade

1. 2. Notice of Loss or damage must be given in writing to the carrier or his agent at the port of discharge or at the time of the removal of the goods into the custody of the person entitled to delivery. If the loss or damage is not apparent, the notice must be given within 3 days of delivery. However, the carrier shall be discharged from all liability in respect of loss or damage of goods unless suit is brought within 1 year after delivery of the goods or the date when the goods should have been delivered. Notice of loss, if not given, that fact shall not affect or prejudice the right of the shipper to bring suit within the 1 year prescriptive period. Warsaw Convention 1. 1. When Applicable: 1. a. international transport by air 2. b. transport of persons, baggage, or goods Liabilities under the Convention: 1. a. damage sustained in the event of the death or wounding of a passenger taking place on board the aircraft or in the course of any of the operations of embarking or disembarking 2. b. loss or damage to any check baggage or goods sustained during the transport by air 3. c. delay in the transport by air of passengers, baggage, or goods

1. 2.

Enumeration of causes of action as above stated is not an exclusive list. (Northwest Airlines vs. Cancer)

1. 3. Meaning of Transport by Air period during which the baggage or goods are in charge of the carrier, whether in an airport or on board an aircraft, or in the case of landing outside an airport, in any place whatsoever 1. 4. Action for damages must be brought at the option of the plaintiff, either: 1. a. before the court of the domicile of the carrier; 2. b. court of principal place of business of carrier; 3. c. court where he has a place of business through which the contract has been made; 4. d. before the court at the place of destination Convention provides for a limitation of liability:

1. 5.

1. a. 2. b. 3. c.

for each passenger limited to 125,000 francs for goods and checked in baggage limited to 250 francs per kilogram for hand carry limited to 5,000 francs per passenger

When can you not avail of this limitation?

(1) willful misconduct (2) default amounting to willful misconduct (3) accepting passengers without ticket (4) accepting goods without airway bill or baggage without baggage chec 1. 6. The right to damages shall be extinguished if an action is not brought within 2 years from the date of arrival at the destination, or from the date on which the aircraft ought to have arrived, or from the date on which the transportation stopped. 1. 7. Notice requirement: damage to baggage : within 3 days from receipt

damage to goods: within 7 days from receipt delay: within 21 days from receipt

Failure to file written notice, no action shall lie against the carrier, save in the case of fraud on his part. Notice Requirements: COGSA protest at time of receipt of goods protest within 3 days from delivery Code of Commerce protest at time of receipt of goods protest within 24 hours after receipt Warsaw Convention

1. 8.

loss/damage apparent loss/damage not apparent damage of baggage damage of goods delay

protest within 3 days from receipt within 7 days from receipt within 21 days from receipt

Public Service Act 1. 1. Every person that may own, operate, manage, control in the Philippines, for hire/compensation with general/limited clientele whether permanent, occasional,

accidental, and done for a general business purpose any common carrier, shipyard, electric light, heat and power and public utility. 1. 2. Public Utility business or service engaged in regularly supplying the public with some commodity or service of public consequence such as electricity, gas, water, transportation, telephone or telegraph service. 1. 3. Prior Operator Rule before permitting a new operator to invade the territory of another already established, the prior operator must be given an opportunity to extend its service to meet the public needs in the matter of transportation. 1. 4. Prior Applicant Rule presupposes a situation where two interested persons apply for a CPC in the same community over which no person has yet been granted a CPC to operate. If both applicants equal, then the applicant who applied first will be given the CPC. 1. 5. Distinctions between CPCs and CPCNs

Certificate of Public Convenience and Necessity any authorization to operate a public service issued by the appropriate government agency to issued by the appropriate government agency a public service to which any political subdivision has granted a franchise an authorization issued by the proper an authorization issued by the proper government agency for the operation of public government agency for the operation of public services for which no franchise, either services for which a franchise is required by law municipal or legislative is required by law 1. 6. Requirements of CPC and franchise: 1. a. Filipino citizenship 2. b. financial capacity 3. c. public convenience

Certificate of Public Convenience

Corporation Law 1. 1. Doctrine of Corporate Opportunity a director is made to account to his corporation, gains and profits from transactions entered into by him/another competing corporation in which he has substantial interest, which should have been a transaction undertaken by the corporation. This s a breach of fiduciary relationship. 1. 2. Doctrine of Piercing the Veil of Corporate Entity it is to disregard for justifiable reasons by the state the fiction of juridical personality of the corporation separate and distinct from the persons composing it 1. 3. De Jure Corporation corporation formed with all the requirements of law

1. 4. De Facto Corporation corporation defectively formed from a bona fide attempt to incorporate under the existing law and exercises corporate powers 1. 5. Corporation by Estoppel a group of persons which holds itself out as a corporation and enters into a contract with 3rd persons on the strength of such appearance cannot be permitted to deny its existence in an action under said contract 1. 6. Corporation by Prescription body not lawfully organized as a corporation but has been recognized by immemorial usage as a corporation with rights and duties maintainable by law (ex. Roman Catholic) 1. 7. Trust Fund Doctrine the subscribed capital stock of the corporation is a trust fund for the payment of debts of the corporation which the creditors have the right to look up to satisfy their credits. Corporations may not dissipate this and the creditors may sue the stockholders directly for their unpaid subscriptions 1. 8. Voting Shares 1. a. Founders Shares given rights and privileges not enjoyed by owners of other stocks; right to vote/be voted in the election of directors shall not exceed 5 years

Non-Voting Shares 1. a. Preferred Shares issued only with par value; given preference in distribution of assets in liquidation and in payment of dividends and other preferences stated in the articles of incorporation 2. b. Redeemable Shares expressly provided in articles; have to be purchased/taken up upon expiration of period of said shares purchased whether or not there is unrestricted retained earnings 3. c. Treasury Stocks stocks previously issued and fully paid for and reacquired by the corporation through lawful means (purchase, donation, etc.) 1. 9. 1. 2. 3. 4. 5. 6. 7. 8. Exceptions where holders of non-voting shares may vote: a. amendments of articles of incorporation b. adoption/amendment of by-laws c. increase/decrease of bonded indebtedness d. increase/decrease of capital stock e. sale/disposition of all/substantially all corporate property f. merger/consolidation of corporation g. investment of funds in another corporation/another business purpose h. corporate dissolution

1. 10. Preferred Cumulative Participating Share of Stock share entitling its holder to preference in the payment of dividends ahead of common stockholders and to be paid the dividends ahead of common stockholders and to be paid the dividends due for prior years and to participate further with common stockholders in dividend declarations

1. 11. Promotion Stock for Services Rendered Prior to Incorporation Escrow Stock stock deposited with a 3rd person to be delivered to stockholder/assignor after complying with certain conditions usually payment of full subscription price 1. 12. Over-issued Stock stock issued in excess of authorized capital stock; null and void 1. 13. Watered Stock stock issued gratuitously, money/property less than par value, services less than par value, dividends where no surplus profits exist 1. 14. Certificate of Stock written acknowledgment by the corporation of the stockholders interest in the corporation. It is the personal property and may be mortgaged/pledged. Transfer binds the corporation when it is recorded in the corporate books. A stockholder who does not pay his subscription is not entitled to the issue of a stock certificate. The total par value of the stocks subscribed by him should first be paid. 1. 15. Chattel mortgage of shares registered with the Registrar of Deeds need not be registered in corporate books to bind third parties because corporate books only cover absolute transfers. But the pledgee/mortgagee may not have voting rights unless stated in the contract and registered in the corporate name. 1. 16. Methods of Collection of Unpaid Subscription 1. a. call, delinquency and sale at public auction of delinquent shares 2. b. ordinary civil action 3. c. collection from cash dividends and other amounts due to stockholders if allowed by by-laws/agreed to by him 1. 17. A corporation can reacquire stocks in the following cases: 1. a. eliminate fractional shares 2. b. corporate indebtedness arising from unpaid subscriptions 3. c. purchase delinquent shares 4. d. exercise of appraisal right 1. 18. Right of Appraisal 1. a. amending articles, changing, restricting, enlarging stockholders rights/extending, shortening corporate life 2. b. sale/disposition of all/substantially all of corporate assets 3. c. merger and consolidation 4. d. investment of funds in another corporation/for a different purpose 1. 19. Grounds for Rejection of Registration 1. a. not in prescribed form 2. b. purpose illegal, inimical 3. c. treasurers affidavit false 4. d. non-compliance with required Filipino stock ownership

1. 20. Corporation must organize within 2 years from issuance of certificate of incorporation. How to organize? 1. a. 2. b. 3. c. adoption of by-laws election of Board of Directors election of officers

But from issuance of certificate, it acquires juridical personality 1. 21. Merger one corporation absorbs the other and remains in existence while the other is dissolved 1. 22. Consolidation a new corporation is created and the consolidating corporations are extinguished 1. 23. Theory of General Capacity a corporation is said to hold such powers as are not prohibited/withheld from it by general law 1. 24. Theory of Special Capacity the corporation cannot exercise powers except those expressly/impliedly given 1. 25. Concession Theory a group of persons wanting to create a corporation will have to execute documents and comply with requirements set by the state before being given corporate personality; merely a privilege; state may provide causes for which the privilege may be withdrawn 1. 26. Acts requiring majority vote of stockholder: 1. a. filing of issue value of no par value share 2. b. adoption, amendment, repeal of by-laws 3. c. compensation and other per diems for directors 1. 27. Where similar acts have been approved by the directors as a matter of general practice, custom and policy, the general manager may bind the company even without formal authorization of the board of directors 1. 28. Powers of stockholders: 1. a. a direct participation in management where his vote is needed to approve certain corporate actions 2. b. indirect participation in management to vote or remove directors 3. c. proprietary rights 4. d. remedial rights

1. 29. Voting Trust Agreement an agreement between a group of stockholders and trustee for a term not exceeding 5 years in which control over the stocks is lodged in the trustee. The purpose is for controlling the voting. 1. a. in writing, notarized and filed with the SEC and the corporation 2. b. period not exceeding 5 years 3. c. cannot be entered into to circumvent the laws against monopolies, illegal combinations in restraint of trade in fraud 1. 30. Cumulative Voting the number of votes that a shareholders number of shares multiplied by the number of directors may give all said votes to one candidate or he may distribute them as he may deem fit. Cumulative voting is a matter of right in a stock corporation. In a non-stock corporation, it cannot be utilized unless allowed by the bylaws/articles 1. 31. The power of removal of directors that may be exercised with or without cause cannot apply to the director representing the minority shareholders. He may only be removed with cause. 1. 32. General Rule: If surplus profits exceed the requirements the corporation shall declare dividends. This is compulsory if the surplus is equal/or more than the paid-up capital. Exceptions: 1. a. 2. b. 3. c. justified by approved expansion projects prohibited by creditor to declare dividends retention is necessary under existing circumstances

1. 33. Business Judgment Rule decisions made by a corporations management body shall not be interfered with even by the courts unless such acts are oppressive/unconscionable as to violate the rights of the minority 1. 34. Individual Suit one brought to assert a right of a stockholder peculiar to himself 1. 35. Representative Suit brought by the stockholder in his own behalf and in behalf of other stockholders similarly situated, having common cause against the corporation 1. 36. Derivative Suit brought by a stockholder for and in behalf of the corporation to protect/vindicate corporate rights after he has exhausted intra-corporate remedies Requisites: 1. a. 2. b. 3. c. cause of action in favor of the corporation refusal of corporation to sue injury to the corporation

Although corporations dissolved have 3 years to wind up, they can convey their properties to a trustee who can continue the suit beyond the 3 year period. The lawyer who handled the case in the trial court may be considered as trustee for the dissolved corporation with respect to the matter in litigation only even if no appointment was extended to him. (Selano vs. CA) In a case filed before dissolution, it may continue even beyond the 3 year period until final determination of litigation. Otherwise, the corporation in liquidation would lose what justly belongs to them/be exempt from payment of obligations because of a technicality.

1. 37. Foreign Corporations 1. a. Doing Business continuity of commercial dealings incident to prosecution of purpose and object of the organization. Isolated, occasional or casual transactions do not amount to engaging in business. But where the isolated act is not incidental/casual but indicates the foreign corporations intention to do other business, said single act constitutes engaging in business in the Philippines 2. b. Instances when unlicensed foreign corporations can sue: (1) isolated transactions (2) action to protect good name, goodwill, and reputation of a foreign corporation (3) contracts provide that Phil. Courts will be venue to controversies (4) license subsequently granted enables foreign corporation to sue on contracts executed before the grant of the license (5) recovery of misdelivered property (6) where the unlicensed foreign corporation has a domestic corporation 1. 38. Religious Corporations 1. a. Corporation Sole special form of corporation; associated with the clergy and consists of 1 person only and his successors; incorporated by law giving them legal capacity and advantage 2. b. Close Corporations one whose articles provide that its shares shall not be held by more than 20 persons; its issued stock shall be subject to one or more restrictions on transfer and shall not be listed in any stock exchange/make public offering 3. c. Non-stock Corporation one where no part of its income is distributable to its members and shall be used in furtherance of the purpose of which it was organized 1. 39. SEC Jurisdiction 1. a. original and exclusive jurisdiction

(1) fraudulent devices and schemes employed by directors detrimental to public interest (2) intra-corporate disputes and with the state in relation to their franchise and right to exist as such (3) controversies in the election, appointment of directors, trustees, etc. (4) petition to be declared in a state of suspension of payments 1. b. Grounds for Suspension/Revocation of Certificate of Registration

(1) fraud in procuring registration (2) serious misrepresentation as to objectives of corporation (3) refusal to comply with lawful order of SEC (4) continuous inoperation for at least 5 years (5) failure to file by-laws within the required period (6) failure to file reports (7) other similar grounds Revised Securities Act (Material on the Securities Regulation Code of 2000 to follow) 1. 1. General Rule: All securities before being offered for sale/actual sale to the public must first be registered and have the proper permit. Exception: 1. a. 2. b. 1. 2. exempt securities securities emanating from exempt transactions Exempt Securities 1. a. issued by the government subdivisions/instrumentalities 2. b. issued by foreign government which the Philippines has diplomatic relations 3. c. issued by receiver/trustee of an insolvent approved by the court 4. d. issued by building and loan association 5. e. issued by receiver/trustee of an insolvent approved by the court 6. f. policy of insurance issued by insurance corporation supervised by the insurance commission

7. g. security/right/interest in real property including subdivision lot/condominium supervised by the Ministry of Human Settlements 8. h. pension plans regulated by BIR/Insurance Commission 1. 3. Exempt Transactions 1. a. judicial sale by execution, etc. in insolvency 2. b. sale of pledged property/foreclosed property to liquidate an obligation 3. c. isolated transactions on securities done by owner/agent 4. d. stock transfers emanating from mergers and consolidations 5. e. pre-incorporation subscription 6. f. securities issued by public service operator to broaden equity base Grounds for Rejection of Registration 1. a. application incomplete/untruthful/omits to state a material fact 2. b. issuer/registrant insolvent, violated code/ SEC rules, engages in fraudulent transactions 3. c. issuers business not sound 4. d. officer, director, stockholders of issuers is disqualified 5. e. issue would prejudice the public Grounds for Revocation 1. a. issuer insolvent 2. b. violated of Code/SEC rules 3. c. fraudulent transaction 4. d. dishonesty by issuer/misrepresented prospectus 5. e. does not conduct business in accordance with law Acts Prohibited a. manipulation of security prices b. manipulation of deceptive devices c. artificial measures of price control d. fraudulent transactions e. insider trading f. false prospectus, communications, reports

1. 4.

1. 5.

1. 6. 1. 2. 3. 4. 5. 6.

Secrecy if Back Deposits 1. 1. Deposits in banks, including government banks, may not be inquired into by any person, except: 1. a. if depositor agrees in writing 2. b. impeachment cases 3. c. by court order in cases of bribery and dereliction of duty against public officials 4. d. deposit is subject of litigation 5. e. anti-graft cases

6. f. general and special examination of bank order of the Monetary Board of bank fraud or serious irregularity 7. g. re-examination made by an independent auditor hired by a bank to conduct its regular trust Laws on Intellectual Creation Copyright 1. 1. What Works are not Protected: 1. a. any idea, procedure, system, method or operation, concept, principle, discovery, or mere data as such, even if they are expressed, explained, illustrated or embodied in a work; news of the day or other miscellaneous facts, having the character of mere items of press information, or any official text of a legislative, administrative or legal nature as well as any official translation thereof 2. b. works of the government 3. c. statutes, rules, and regulations of government agencies and offices 4. d. speeches, lectures, sermons, addresses and dissertations, pronounced or rendered in courts of justices or nay administrative agencies in deliberative assemblies and meetings of public character Fair Use of a Copyrighted Work is not Infringement 1. a. for criticism, comment, news reporting, teaching, research, scholarship, and similar purposes 2. b. decompilation: the reproduction of the code and translation of the forms of the computer program with other programs Factors to Consider in Determining Fair Use: 1. a. purpose and character of the use, including whether such use is of a commercial nature or for no profit or educational purposes 2. b. nature of the copyrighted work 3. c. amount and substantiality of the portion used in relation to the copyrighted work as a whole 4. d. effect of use upon the potential market for a value of the copyrighted work Terms of the Protection 1. a. copyrighted work: lifetime of creator plus 50 years after death (to be computed on the 1st day of January of the year following the death) 2. b. performances not incorporated in recordings: 50 years from end of year in which the performance took place 3. c. sound or image and sound recordings and performances incorporated therein: 50 years from end of the year in which the recording took place 4. d. broadcasts: 20 years from the date the broadcast took place Remedies for Infringement 1. a. injunction

1. 2.

1. 3.

1. 4.

1. 5.

2. b. actual damages, including legal costs and other expenses, as he may have incurred due to the infringement as well as the profits the infringer may have made due to such infringement 3. c. impounding of articles during pendency of the action 4. d. destruction of all infringing copies and/or devices 5. e. moral and exemplary damages 1. 6. Criminal Penalties 1. a. imprisonment of 1 to 3 years plus fine of P50,000 to P150,000 for the first offense 2. b. imprisonment of 3 years and 1 day to 6 years plus fine ranging from P150,000 to P500,000 for the 2nd offense 3. c. imprisonment of 6 years and 1 day to 9 years plus fine of P500,000 to P1,000,000 for the 3rd/subsequent offenses

IN ALL CASES, subsidiary imprisonment in cases of insolvency 1. 7. Presumptions: 1. a. Presumption of copyright in the work of other subject matter to which the action related 2. b. Plaintiff is presumed to be the owner of the copyright 3. c. The natural person whose name is indicated on a work in the usual manner as the author shall, in the absence of proof to the contrary, be presumed to be the author of the work. This is applicable even if the name is a pseudonym, where the pseudonym leaves no doubt as to the identity of the author.

1. 8. Prescription: No damages may be recovered after 4 years from time the cause of action arose. Patents 1. 1. Patentable Inventions any technical solution of a problem in any field o human activity that is new, involve an inventive step and is industrially applicable shall be patentable. It may be or may relate to as product, or process or an improvement of any of the foregoing. 1. 2. Non-Patentable Inventions 1. a. discoveries, scientific theories and mathematical methods 2. b. schemes, rules and methods of performing mental acts, playing games or doing business, and programs for computers 3. c. methods for treatment of the human or animal body by surgery or therapy and diagnostic methods practiced on the human or animal body

Exception: products and composition for use in any of these methods

1. d. plant varieties or animal breeds or essentially biological process for the production of plants and animals Exception: micro-organisms and non-biological and micro-biological processes 1. e. 2. f. 1. 3. aesthetic creations contrary to public order or morality Requisites of Patentability 1. a. new, novelty 2. b. involves an inventive step; 3. c. is industrially applicable Novelty

1. 4.

The novelty requirement in the Code is absolute. Thus, an invention is not considered new if it forms part of a prior art. A prior art consists of: 1. a. anything which has been made available to the public anywhere in the world before the filing date or the priority date of the application, or 2. b. the whole contents of an application for a patent, utility model, or industrial design registration, published in the IPO gazette, filed or effective in the Philippines, with a filing or priority date that is earlier than the filing or priority date of the application, provided that the application which has validly claimed the filing date of an earlier application (priority date) is prior art with effect as of the filing date of such earlier application, and provided further, that the applicant and the inventor identified in both applications are not one and the same 1. 5. Inventive Step an invention involves an inventive step, if having regard to the prior art, it is not obvious to a person skilled in the art at the time of the filing date of priority date of the application claiming the invention 1. 6. Industrial Applicability an invention is considered industrially applicable if it can be produced and used in the industry 1. 7. The First-to-File System if 2 or more persons have made the invention separately and independently of each other, the right to the patent belongs to the person who filed an application for such invention, or where 2 or more applications are filed for the same invention, the right of the patent belongs to the person who has the earliest filing date or the earliest priority date Under this system, the patent is granted to the inventor who filed his patent application earlier than others thus simplifying the determination of who is entitled to own the patent. The First-to-File System increases the rights of the inventor by:

1. a. guaranteeing the confidentiality of the application prior to its publication 2. b. giving the inventor inchoate rights against an infringer after the publication of the application and before the grant of the patent and 3. c. expanding the rights of the inventor to institute cancellation proceedings for the duration of the term of the patent. Cancellation proceedings may be filed at any time during the term of the patent. Under this system, the applicant declared by final court order as having the right to the patent may: 1. 2. 3. 4. a. b. c. d. prosecute the application as his own application in place of the original applicant file a new patent application in respect of the same invention request that the application be refused or seek the cancellation of the patent, if one has already been issued What is the difference between novelty in patents and originality in copyright?

1. 8.

Novelty in Patents even if you do not know of any previous creation, as long as a patent on the same creation has already been published anywhere in the world, you cannot claim novelty. No access tot he other creation is no defense. Originality in Copyright even if there is same creation, as long as you do not copy your own creation, it is still considered an original creation. No access to the previous creation is a defense. 1. 9. Non-Prejudicial Disclosure

The disclosure of information contained in the application during the 12 months preceding the filing date or the priority date of the application shall not prejudice the applicant on the ground of lack of novelty if such disclosure was made by (a) inventor; (b) a patent office and the information was contained 1. 10. Term of Patent 20 years from the filing date of the application 1. 11. Grounds for Compulsory Licensing: 1. a. national emergency or other circumstances of extreme urgency 2. b. where public interest, national security, health or the development of other vital sectors of the national economy as determined by the appropriate agency of the government so requires 3. c. where a judicial or administrative body has determined that the manner of exploitation by the owner of the patent or his licensee is anti-competitive 4. d. in case of public non-commercial use of the patent by the patentee, without satisfactory reason 5. e. if not being worked in the Philippines on a commercial scale

1. 12. In case of Compulsory Licensing of Patents involving Semi-conductor Technology, the license may be granted only in case of public non-commercial use or to remedy a practice determined after judicial or administrative process to be anti-competitive 1. 13. Utility Models an invention qualifies for registration as a utility model if it is new and industrially applicable - no inventive step required for registration - no search and examination required 1. 14. Term Protection 7 years after the filing date of application without possibility of renewal 1. 15. Industrial Design any composition of lines or colors or any 3 dimensional form, whether or not associated with lines or colors Industrial Designs essentially dictated by technical or functional considerations to obtain a technical result or those that are contrary to public order, health or morals shall not be protected 1. 16. Term of Protection 5 years from filing date of application, renewable for not more than 2 consecutive periods of 5 years each Insolvency Law 1. 1. Distinguish Suspension of Payment and Insolvency

Suspension of Payment Insolvency debtor has enough assets to meet liabilities but debtor has more liabilities than assets cannot meet them as they fall due always initiated by debtor initiated by creditors/other persons if involuntary; initiated by debtor if voluntary 1. 2. Fraudulent Preference any act of insolvent which gives rise/has tendency to give preference to a creditor to the assets of the insolvent prejudicial to the right of other creditors of said insolvent 1. 3. Effect on Actions Upon Adjudication of Insolvency 1. a. suits pending in court

(1) secured obligations suspended until assignee appointed (2) unsecured obligations terminated except to fix amount of obligation (3) foreclosure suits pending continue

1. b. suit not yet filed cannot be filed anymore, but claims may be presented to assignee 1. 4. 1. 2. 3. 4. 5. 6. Debts and Obligations not Affected by Discharge of Insolvent a. assessments due to national and local government b. debts due to fraud/embezzlement c. debts in which he is bound solidarily d. alimony e. corporate debts f. debts not included in the schedule submitted by debtor

Chattel Mortgage Law 1. 1. The law primarily governs chattel mortgage. Provisions on pledge of NCC in so far as not in conflict with CML also govern chattel mortgages. 1. 2. 1. 3. Chattel Mortgage may be rescinded for being in fraud of creditors. Growing fruits are covered by chattel mortgage but they may not be pledged.

1. 4. Machinery placed on plant or building owned by another can be the object of chattel mortgage. 1. 5. 1. 6. General Rule: Chattel Mortgage cannot cover debts subsequently contracted. Rules: Chattel Mortgage cannot cover debts subsequently contracted 1. a. registered in place where mortgagor resides and where property (chattel) is located. If mortgagor resides abroad, register in place where property is located. 2. b. Motor Vehicles: register also in Land Transportation Office 3. c. Shares of Stock: place of domicile of corporation and shareholder. No need for notation in books of corporation 4. d. Vessels: Phil. Coastguard To be valid against 3rdpersons: 1. a. affidavit of good faith 2. b. contract must be registered General Rule: In Chattel Mortgage, there is recovery of deficiency judgment.

1. 7.

1. 8.

Exception: when Recto Law applies 1. 9. Requisites of CML: 1. a. constituted to secure the fulfillment of principal obligation 2. b. mortgagor is absolute owner of the thing mortgaged 3. c. persons constituting the mortgage have the free disposal of the property and in the absence thereof, they be legally authorized for the purpose

4. d.

recorded to bind 3rd persons

1. 10. Formal Requisites of CM: 1. a. substantial compliance with form in Sec. 5 of CML 2. b. signed by at least 2 witnesses 3. c. must contain an affidavit of good faith 4. d. certificate of oath (notarial acknowledgment) 1. 11. Affidavit of Good Faith where the parties severally swear that the mortgage is made for the purpose of securing the obligation specified and for no other purpose and that the same is a just and valid obligation and not one entered into for fraud - property given in CM must be described to enable the parties or any other person after reasonable inquiry and investigation to identify it 1. 12. Future property may not be covered by CM but when such property is a: 1. a. renewal of, or in substitution for goods on hand when the mortgage was executed, or 2. b. purchased with proceeds (not of your own money) of said goods, said property may be covered by CM 1. 13. Criminal Acts removal of chattel to another city or province without written consent of mortgagee, selling property already pledged, or mortgaged without written consent of mortgagee 1. 14. A chattel mortgage may be foreclosed judicially or extra-judicially, in the latter case, before a notary or sheriff, or creditor or mortgagee when stipulated, even without need of notice (when mortgagee forecloses) 15. Pactum Commissorium applies to Chattel Mortgage