COMMERCIAL LAW – DIMAAPAO QUESTIONS

RA 11232 – REVISED CORPORATION CODE

 No policy of fire insurance shall be pledged, hypothecated, or transferred to any person, firm
or company who acts as agent for or otherwise represents the issuing company, and any
such pledge, hypothecation, or transfer hereafter made shall be void and of no effect insofar
as it may affect other creditors of the insured.

I. Corporation
1) Define Corporation
2) Enumerate the attributes of a corporation
3) Juan is a stockholder of AAA Corporation with controlling interest in the said
corporation. For several years, AAA Corporation has been incurring liabilities to the
charging of its creditors. Alarmed, Juan wants to know if the creditors can go after his
own properties should AAA Corporation be unable to fulfill its obligations to its creditors
a) As his lawyer, what advice will you give him?
b) What is the principle of limited liability?
4) Mr. Okada, controlling stockholder and President of Hashtag Holdings (Hashtag), was
able to convince Tom, Dick, and Harry to lend / invest money with Hashtag. For the
money loaned, Mr. Okada issued postdated checks (representing the principal amount
with interest) to the investors. Mr. Okada claims that said money will be invested in
Hashtag’s sister company Girl Trends Realty (GT Realty). Unfortunately, the coronavirus
pandemic swept across the globe causing a global financial crisis. As a result, Hashtag
defaulted in the payment of its loans/ investments and the posted checks issued to the
investors were dishonored.
Tom, Dick and Harr filed charges against Hashtag and Mr. Okada making them solidarily
liable for the investments that were not recovered. And it was also discovered that as
the pandemic was ravaging the economy, Mr. Okada was able to withdraw a substantial
amount of money invested by Tom, Dick and Harry for the formers personal account
and entered into the books of Hashtag as advances to stockholders. Mr. Okada alleges
for his defense that he cannot be made personally liable on the claim of the investors
under the doctrine of separate juridical personality and limited liability.
a) What are the doctrine of “Separate Juridical Personality” and “Limited Liability”?
b) Is Mr. Okada’s defense against being made liable for Hashtag’’s obligations
tenable?
5) BPO bank extended loan in favor of LU Corporation. The loan was secured by a real
estate mortgage. The obligation matured and LU Corporation was unable to pay upon
maturity. Hence, BPO bank filed a collection suit against LU Corporation.
A,B,C stockholders of LU Corporation seek to invervene in the suit alleging that the loan
transaction between BPO Bank and LU Corporation was not by the stockholders
representing at least 2/3 of the corporate capital. Is the contention of stockholders
A,B,C tenable?
6) PR Company owns a beach resort with several cottages. Jaime, the President of PR,
occupied one of the cottages for residential purposes. After Jaime’s term expired, PR
wanted to recover possession of the cottage. Jaime refused to surrender the cottage,
contending that as stockholder and former president, he has the right to possess and
enjoy the properties of the corporation. Is Jaime’s contention correct?
7) Marulas Creative Technology Inc. an e-business enterprise engaged in the manufacture
of computer media accessories, rents an office and store space at a commercial building
owned by X. Being a start-up company, Marulas enjoyed some leniency in his rent
payments; but after three years, X put a stop to it and asked Marulas and Y, its president
and General Manager, to pay back rentals amounting to One Hundred Thousand Pesos
(P100,0000) or to vacate the premises at the end of the month. Marulas neither paid its
debt nor vacated the premises. X sued Marulas and Y for the collection of the unpaid
 rentals, plus interest and cost of litigation. Will the suit prosper against Marulas Creative
Technology Inc? Against Y?
8) Explain the Doctrine of Separate Juridical Personality
9) Yeti Corporation (YC) through its President negotiated for Yahoo Bank (YB) to issue a
letter of credit to course the importation of electronic parts from China to be sold and
distributed to various electronic manufacturing companies in Manila. YB issued letter of
credit thereafter, the electronic parts arrived in Manila. YB released them to the custody
of YC as an entrustee under trust receipt. When YC unpacked the imported parts in its
warehouse, it found that they were not only of inferior quality but also did not fit the
descriptions contained in the bill of lading. YC refused to pay YB the amount owned
under the trust receipt. Thus, YBM commenced a criminal suit against both YC and its
President for estafa and sought the payment of the amount covered in the trust receipt.
For his defense, the President of YC averred that he cannot be held liable under the
trust receipt, which was entered into the name of YC and pursuant to YC’s corporate
purposes. He cited as his legal ground the Doctrine of Separate Juridical Personality. Is
his contention meritorious?
10) May stockholders of a corporation enjoy the tax exemption enjoyed by the latter?
11) May a corporation be held liable for tort? For crime?
12) May a stockholder be held criminally liable for acts committed by a corporation?
13) May a corporation seek moral damages?
14) Enumerate the classes of corporations and define each
15) A corporation was created by a special law. Later, the law creating it was declared
invalid. May such corporation claim to be a de facto corporation?
16) Mamuhunan was invited by his friends to invest in A Corporation, a newly organized
firm engaged in money market and financing operation. Because of his heavy
investments, Mamuhunan became the firm’s president and as such, purchased a big
number of computers, typewriters and other equipment from Tatak Corporation. A
Corporation paid the down payment and Tatak Corporation issued the corresponding
receipts. To this charging, Mamuhunan discovered that the Articles of Incorporation had
not been filed by his friends. A Corporation became bankrupt three months later. Upon
being sued by Tatak Corporation in its personal capacity, Mamuhunan raised the
doctrines of de facto corporation and corporation by estoppel among his defenses. Can
these two defenses be validly raised?
17) What is the doctrine of piercing the veil of corporate entity?
18) X was hired by A company, a sole proprietorship, as a security guard. After 17 years of
service, he was asked to tender his resignation and was made to fill up an application
form for the same position, this time with B corporation. X was hired by B corporation
but after several months, A Company informed him not to report back to work again.
Claiming that he as illegally dismissed. X theorizes that A Company and B corporation
should be treated as one entity so that his 17 years of service with the former should be
credited in the computation of his benefits. He insisted that A company and B
corporation have the same place of business and the same set of employees; that C, the
sole proprietor of A Company was also an officer of B corporation; and that B
corporation was managed by the children of C
a) What is a sole proprietorship?
b) May the corporate veil of the two entities be pierced even if A Company is a sole
proprietorship, not a corporation?
19) Nelson owned and controlled Sonnel Construction Company. Acting for the company,
Nelson ordered the construction of a building adjacent to Sonnel’s main branch.
Without first installing a protective net atop the sidewalks adjoining the construction
site, the company proceeded with construction work. One day, a heavy piece of lumber
fell from the building. It smashed a taxicab which at that time had gone off the road and
ono the sidewalk in order to avoid the traffic. The taxicab passenger died as a result.
 a) Assume that the company had no more account and property in its name. As
counsel for the heirs of the victim, whom will you sue for damages, and what
theory will you adopt?
b) If you were the counsel for Sonnel Construction, how would you defend your
clients? What would be your theory?
20) Pablo a rich merchant in his early forties was a defendant in a lawsuit which could
subject him to taxes and substantial damages. A year before the court rendered
judgment, Pablo sought his lawyer’s advice on how to plan his estate to avoid taxes. His
lawyer suggested that he should form a corporation with himself, his wife and his
children (all students and unemployed) as stockholders and then transfer all his assets
and liabilities to his corporation. Pablo followed the recommendation of his lawyer. One
year later, the court rendered judgment against Pablo and the plaintiff sought to
enforce judgment. The sheriff, however could not locate any property in the name of
Pablo and therefore returned the writ of execution unsatisfied. What remedy, if any, is
available to the plaintiff?
21) Pablo, a neophyte entrepreneur, was a defendant in a lawsuit which could subject him
to a hefty amount of damages and the possible disclosure of his new business. Having
learned that the RCC was now in effect, he asked Atty. Juan about the effect of putting
up OPC on his looming legal troubles. If you were Atty. Juan, what advice would you give
to Pablo?
22) Explain the Alter Ego Theory, otherwise known as the Instrumentality theory used to
determine whether the corporate veil may be pierced
23) Under the Doctrine of Piercing the veil of Corporate Fiction, is a subsidiary corporation
liable for the obligation of its parent corporation?
24) DBP and PNB both banking institutions acquired their assets of MMIC Corporation. DBP
and PNB reorganized MMIC and named it as NMIC. Soon, NMIC contracted with HRCC
for the construction of a road within its premises. NMIC, however failed to pay its
obligation prompting HRCC to sue NMIC, DBP and PNB. HRCC averred that NMIC was
owned by DBP and PNB, the officers of DBP and PNB are also officers of NMIC and DBP
and PNB financed the operations of NMIC. HRCC argued that a parent corporation may
be held liable for the contracts or obligations of its subsidiary corporation where the
latter was mere agency, instrumentality, or adjunct of the parent corporation. Rule on
HRCC’s contention
25) Ronald Sham doing business under the name of SHAMRON Machineries (Shamron) sold
to Turtle Mercantile (Turtle) a diesel farm tractor. In payment, Turtle’s President and
Manager Dick Sheldon issued a check for P50,000.00 in favor of Shamron. A week later,
Turtle sold the tractor to Briccio Industries for P60,000.00. Bricco discovered that the
engine of the tractor was reconditioned so he refused to pay Turtle. As a result, Dick
Sheldon ordered stop payment of the check issued to Shamron. Shamron sued Turtle
and Dick Sheldon. Shamron obtained a favorable judgment holding co-defendants Turtle
and Dick Sheldon jointly and severally liable. Comment on the decision of the trial court.
Discuss fully.
26) Richard owns 90% of the shared of the capital stock of GOM Co. On one occasion, GOM
represented by Richard as President and General Manager executed a contract to sell a
subdivision lot in favor of Tomas. For failure of GOM to develop the subdivision, Tomas
filed an action for recission and damages against GOM and Richard. Will the action
prosper? Explain
27) How does one pierce the veil of corporate fiction?
28) Plaintiffs filed a collection action against X corporation. Upon execution of the court’s
decision, X corporation was found to be without assets. Thereafter, plaintiffs filed an
action against Y Corporation which owned substantially all of the stocks of X
Corporation. The two corporations have the same board of directors who controlled,
financed and managed their operations. May Y corporation be held liable for the debts
of X corporation? Why?
29) Atty. Jose Magtangol a lessee to 2 buildings owned by Carreon owed the latter rental
arrears and his share in the payment of realty taxes. Consequently, Carreon filed a
complaint for unlawful detainer against Magtanggol before the MeTC of Manila. The
MeTC ruled in Carreon’s favor and ordered Magtanggol to vacate the Carreon
Apartments and to pay various sums of money representing unpaid arrears, realty taxes,
penalty and attorney’s fees. Magtanggol failed to appeal and the case became final and
executory. Before the sheriff was able to levy on his real property as a result of his
failure to satisfy the judgment of the MeTC, Magtanggol suddenly remembered the key
concepts in Corporation Law and decided to form a non-stock corporation Cato Institute
Foundation Inc. with Magtanggol as President and registered his real property in the
name of CIFI. Magtanggol believes that the doctrine of piercing the veil of corporate
fiction applies only to stock corporations and not to non-stock, non-profit corporations
such as CIFI since there are no stockholders to be held liable in such a situation but only
members. Moreover, he also believes that piercing the corporate veil cannot be applied
to a natural person since as a human being, there is no corporate veil shrouding his
person. At a loss on what to do next, Carreon consults his lawyer, Atty. Chevy Chase and
ask him whether the real property of Magtanggol which is now in the name of CIFI is
safe from writ of execution. If you were Atty. Chevy Chase, what legel advise will you
give Carreon?
30) Explain the concept of Reverse Piercing of the Corporate Veil?
31) Explain the following concepts:
a) Outsider reverse piercing
b) Insider reverse piercing
c) What type of reverse piercing is applicable in the case of Magtanggol and
Carreon?
32) How do you determine the nationality of a corporation?
33) Does corporate capital mean the total outstanding capital stock, whether voting or non-
voting?
34) X filed a suit to nullify the sale of shares of stock of PLDT, a corporation granted with
telecommunication franchise, which was sold by the Government to FP, Inc. a
Bermunda registered, Hongkong based firm. X claimed that the sale increased foreign
ownership in the common shared on PLDT to as much as 64.27%. This contravened Sec
11 Art XII of the 1987 Constitution which mandated that no franchise for the operation
of a public utility shall be granted except to citizens of the Philippines or to corporations
or association organized under the laws of the Philippines, at least 60 percentum of
whose capital is owned by such citizens. The government insisted on the validity of the
sale arguing that Filipinos still owned 99.4% of PLDT’s preferred shares of stock. To this,
X countered that the bylaws and AOI of PLDT deprived preferred shares of voting rights.
Resolve the suit
35) XY Corporation is engaged in the exploration and development of natural resources. The
law requires that 60% of the capital of a corporation engaged in the utilization of natural
resources be owned by Filipino citizens and 40% by foreign equity. If XY has 100
common shares owned by foreigners and 1,000,000 non-voting preferred shares owned
by Filipinos, with both classes of share having par value of one peso per share, is there a
violation of the aforesaid law?
36) The SEC through its chairperson issued on May 20, 2013 SEC-MC No. 8 entitled
Guidelines on Compliance with the Filipino Foreign Ownership Requirements Prescribe
in the Constitution. Given that Gamboa Decision which attained finality on October 18,
2012 held that the term capital refers only to shares of stock entitled to vote in the
election of directors (only to common shares) and not to the total outstanding capital
stock (common and preferred shares), Atty. Roy impugned the validity of SEC MC 8 for
not conforming to the letter and spirit of the Gamboa Decision. Resolve.
37) A Korean national joined a corporation which is engaged in the furniture manufacturing
business. He was elected to the BOD. To complement its furniture manufacturing
 business, the corporation also engaged in the logging business. With the additional
logging activity, can the Korean national still be member of the BOD? Explain
38) Bell Philippines Inc is a public utility company, duly incorporated and registered with the
SEC. Its authorized capital stock consists of voting common shares and non-voting
preferred shares with equal par value of 100 per share. Currently, the issued and
outstanding capital stock of Bell Philippines consists only of common shares between
Bayani Cruz, a Filipino with 60% of the issued common shares and Bernard Fleet, a
Canadian with 40%. To secure additional working fund, Bell Philippines issued preferred
shares to Bernard Fleet equivalent to the currently outstanding common shares. A suit
was filed questioning the corporate action on the ground that the foreign equity
holdings in the company would now exceed the 40% foreign equity limit allowed under
the Constitution for public utilities. Rule on the legality of Bernard Fleet’s current
holdings.
39) Are Narra, Tesoro, and McArthur Filipino corporations?

II. Incorporation and Organization

40) Define promoter. Is the corporation liable for contracts entered into by the promoter?
41) What are the qualifications of an incorporator?
42) May a corporation be incorporated in just one person?
43) State the persons composing a corporation
44) What is the term of office of a director? How about that of a trustee?
45) Define independent director
46) How are independent directors elected
47) What are the corporation that are required to have independent directors
48) Distinguish incorporator from corporator
49) What is the minimum and maximum number of incorporators required to incorporate a
stock corporation? Is this also the same minimum and maximum number of directors
required in a stock corporation?
50) Should all incorporators and directors be residents of the Philippines?
51) May a corporation validly exist if all the stockholders are foreigners?
52) When does a corporation acquire its corporate existence?
53) Enumerate the contents of the Articles of Incorporation
54) You have been asked to incorporate a new company to be called FSB Savings and
Mortgage Bank Inc. List the documents that you must submit to the SEC to obtain a
certificate of incorporation of FSB Savings and Mortgage Bank Inc.
55) Outline the procedure for the amendment of the Articles of Incorporation. Enumerate
items in the AOI which may not be amended
56) State the rules on adoption of corporate name
57) What can the SEC do if the corporation does not comply with the foregoing?
58) The AOI to be registered in the SEC contained the following provisions: a. First Article:
The name of the corporation shall be Taho Marketing Company b. Third Article. The
principal office of the corporation shall be located in Region III, in such municipality
therein as its BOD may designate c. Seventh Article. The capital stok of the corporation
is one million pesos Philippine currency. What are your comments and suggested
changes to the proposed articles?
59) Explain the principle of priority of adoption of corporate name
60) Resolve.
61) Can the second corporation be compelled to change its name?
62) Within what period may a corporation exists?
63) Jennifer Lopez, president of ABCEN, a corporation whose term has expired, asked you as
its legal counsel if it may apply for revival of its corporate existence under the RCC.
What will your legal advice be?
64) Does the RCC require a minimum capital stock for corporations?
 65) Define bylaws and enumerate the requisites for valid bylaws
66) What are the binding effects of bylaws?
67) State the rules on amendment or repeal of bylaws
68) Is a bylaw provision of X corporation rendering ineligible or if elected, subject to
removal, a director if he is also a director in a corporation whose business is in
competition with or is antagonistic to said corporation valid and legal? State your
reasons
69) Is the stockholder’s petition tenable?
70) Marlo enriquez brought a suit against Bayan Corporation to question amendments.
Would the action prosper?
71) As of January 30, 2013, 60 members had been admitted by the board
a) Can the foundation use the funds donated to it by its members for the purchase
of food and medicine for distribution to the victims of flood?
b) Can the foundation operate a specialty restaurant that caters to the general
public in order to augment its funds?
72) Give the effects of non-use of corporate charter and continuous inoperation

III. Corporate powers

73) State the express or general powers of a corporation (Theory of General Capacity)
74) Enumerate specific powers of a corporation (Theory of specific capacity)
75) Is XY a stock corporation? Give reasons for your answer.
76) Explain an ultra vires act
77) May ultra vires act be ratified
78) Enumerate instances when concurrence of the stockholders is necessary for the exercise
of corporate powers
79) Are the resolutions binding on the corporation and its stockholders including Jimmy
Morato, the dissenting stockholder?
80) Is the transaction a sale of all or substantially all of the assets requiring concurrence of
stockholders representing 2/3 of the outstanding capital stock?
81) Can it be considered sale of substantially all of the assets of the corporation?
82) How would you classify the transaction? Can Divine Corporation sell the aforesaid items
to its competitor, Top Grade Fashion Corporation? What are the requirements to validly
sell the items? Explain
83) Is a corporations goodwill considered in the sale of all or substantially all its assets? How
do you determine the sale of all or substantially all the corporations properties?
84) What corporate approvals or votes are needed for the proposed investments? Explain.
Describe the procedure in securing these approvals.
85) What is the Nell Doctrine? State the exceptions thereto.
86) X Corporation declared cash dividends, upon approval of the BOD. A, a stockholder
questions the declaration on the ground that the approval of the stockholders
representing not less than 2/3 of the outstanding capital stock is necessary for such act.
Is A correct?
87) Elucidate the trust fund doctrine
88) Rule on the suit filed by printwell
89) What is cumulative participating preferred share? Can Manny compel the BOD of XY
corporation to declare and pay his dividends?
90) As chairman of the meeting, how would you rule on the motion to declare stock
dividends?

IV. Board of Directors and Trustees

91) Elaborate on the Doctrine of corporate democracy
92) Explain the Business Judgment Rule and state its exceptions
 93) Enumerate the qualifications of directors or trustees
94) How are directors or trustees voted upon?
95) What constitutes quorum in board meetings?
96) When must corporate officers be elected?
97) What is the duty of the corporation after the election of the directors, trustees, and
officers of the corporation?
98) What if there is non-holding of elections?
99) Enumerate the requisites for removal and filling up of vacancies in the Board
100) Give the periods within which the vacancies in the Board must be filled
101) What do you understand by emergency board and when does it occur?
102) As ABC’s corporate counsel and longing to receive bonus from the company, will
you approve of this decision”? The board turns to you for advice, what will it be?
103) Greenville corporations directors defended the legality of their action, claiming
as well that stockholder X ‘s derivative suit was improper. Rule on the issues raised.
104) The minority block of XY Corporation was able to elect only one director, A. The
stockholders held a meeting and mustered the required 2/3 vote to remove A. Was the
removal of A proper?
105) Expound the doctrine of Corporate opportunity
106) Did Schiera and Jaz violate the principle of corporate opportunity? Explain
107) Elucidate the status of a contract entered into by a corporation with its
director / trustee or officer
108) Explain the concept of an interlocking director. Are contracts entered between
corporations with interlocking directors valid?
109) In order that the contract will not be voidable, what conditions will have to be
complied with? Explain. If these conditions are not met, how may this contract be
ratified?
110) Is the dealership agreement valid? Explain
111) Corporate powers are exercised only by the board, except when delegated to an
executive committee. State the corporate powers that may not be delegated
112) Explain briefly the doctrine of apparent authority
113) Is arma traders liable to pay the loans?
114) LH claimed that PR Corporation cannot deny the authority of X, its general
manager with whom it delt with. Rule on the contention of LH Inc.

V. Stocks, Stockholders and members

115) Classify shares of stocks
116) Explain the concept of watered stocks and the liability arising from its issuance
117) Will the issuance of watered stocks be a violation of the trust fund doctrine?
118) Define certificate of stocks. May it be issued if the stockholder is delinquent?
119) What do you understand by the doctrine of equality of shares?
120) How are shares of stock transferred?
121) Will mandamus lie to compel the corporate secretary to register a valid transfer
of stocks in the corporations stock and transfer book?
122) Does Magella have a course of action to file a petition for Mandamus to compel
the corporation to register 500 shares in her name in the corporation books? Who is
liable to pay the remaining unpaid 50% balance?
123) ABC refused to recognize and register Steven’s ownership. Is the refusal
justified?
124) Can A claim the shares of stock from X? If A lost the stock certificate in question
or if it was stolen from him, what is his right of recourse?
125) What are the rights of a stockholder?
126) Discuss the stockholder’s right to vote
127) What do you mean by voting trust agreement?
 128) Enumerate the shares which may be deprived on voting rights. Is the prohibition
to vote absolute?
129) May the stockholder demand that the corporation declare dividends?
130) Should CI’s Board heed the demand of its preferred shareholders?
131) Is corporation x guilty of violating a law? If in the affirmative, state the basis. Are
there instances when a corporation shall not be held liable for not declaring dividends?
132) For how many shares is Ace Cruz entitled to be paid cash dividends? Explain On
December 1, 2012, can Ace Cruz compel JP Development Corporation to issue to him
the stock certificate corresponding to the P25,000.00 paid to by him?
133) Within what period should payment of unpaid subscription be collected?
134) Enumerate the effects of nonpayment of subscription on the right of
shareholders
135) State the remedies of a corporation to enforce payment of stocks
136) Enumerate the various considerations for the issuance of stock
137) Was the action of the board of directors on each of the foregoing matters valid?
138) What is meant by appraisal right of a stockholder?
139) Enumerate the instances where appraisal right may be exercised
140) Outline the procedure for the exercise of appraisal right
141) When is the right of appraisal extinguished?
142) Discuss the stockholders preemptive right
143) When is preemptive right not available to a stockholder
144) Can FC AOI be formally amended to remove the right of appraisal on all
dissenting stockholders in all matters under the law which requires a ratification vote of
the stockholder?
145) Would A have preemptive right to 200 of the newly issued 1000 shares? Why?
146) Would mr x, a stockholder holding 4,000 shares have preemptive right to the
remaining 10,000 shares? Assuming that the existing stockholders are entitled to
preemtive rights, at what price will the share be offered? Assuming a stockholder
disagrees with the issuance of new shares and the pricing for the shares, may the
stockholder invoke his appraisal right and demand payment for his shareholdings?
147) Explain the stockholders right to sue
148) State the requisites for derivative suit
149) Can A bring a derivative suit to question the issuance of the shares to x?
assuming that A filed the suit in court, can X question the right of A to sue him in behalf
of the corporation and in the ground that A has only one share in his name?
150) Pursuant to said resolution, the corporate counsel filed a motion to dismiss in
the name of MOP Corporation. Should the motion be granted or denied? Reason out
151) What are the conditions laid down by the RCC with respect to the right to
inspect corporate books and records?
152) What is a party’s remedy if the corporation denies or does not act on a demand
for inspection and / or reproduction of corporate books and records?

VI. Merger and Consolidation:

153) Explain the concepts of merger and consolidation; constituent corporation and
consolidated corporation
154) State the contents of the plan for merger or consolidation
155) What are the effects of merger or consolidation
156) Outline the procedure for the merger or consolidation
157) What would happen to the absorbed corporation?
158) Must the absorbed corporation undertake dissolution and winding up
procedure? Pending approval of the merger by the SEC, may the surviving corporation
institute suits to collect all receivables due to the absorbed corporation from its
customers?
 159) Explain the meaning of de facto merger

VII. Dissolution and Liquidation

160) How are corporations dissolved?
161) How is the voluntary dissolution of a corporation undertaken?
162) May the corporation shorten its corporate term?
163) How is the involuntary dissolution of a corporation effected? Enumerate the
grounds for involuntary dissolution
164) Enumerate the effects of dissolution
165) Define liquidation
166) Does corporate life cease to exist immediately upon dissolution?
167) What are the methods of liquidation?
168) If the 3-year extended life expires without a trustee or receiver being
designated by the corporation, how, if at all, can a final settlement of the corporate
affairs be made?
169) If the creditors sought your professional help on whether their cases could be
pursued beyond May 30, 2012, what would be your advice?
170) What are the administrative sanctions that the SEC may impose if after due
notice and hearing, it finds that any provision of the RCC rules and regulations or any of
the SEC’s orders has been violated?

VIII. Other corporations

171) Define close corporation
172) Enumerate the corporations which may not qualify as close corporation
173) Discuss the characteristics of a close corporation
174) May the transfer of stock in a close corporation be subjected to restrictions?
175) What do you mean by deadlock in close corporation?
176) Discuss the powers exercised by SEC in case of deadlock
177) Define provisional director
178) When may stockholder in a close corporation exercise preemptive right?
179) On what grounds may a stockholder file a petition for the dissolution of a close
corporation?
180) Define nonstock corporation
181) Discuss the right to vote in a nonstock corporation
182) Is membership in a nonstock corporation transferrable?
183) May a nonstock corporation be converted into a stock corporation by a mere
amendment of the articles of incorporation? Conversely, may a stock corporation be
converted into a nonstock corporation?
184) How are the assets of a nonstock corporation distributed on dissolution?
185) Define foreign corporation
186) Discuss the underlying reason un requiring foreign corporation to obtain license
to do business in the Philippines
187) Expound on the Doctrine of Doing Business
188) May the acts of entering into film distribution contract.. Philippines that will
require Tiger Pictures to register as a foreign corporation and obtain a license to do
business in the Philippines? Will your answer be the same if tiger pictures exercise the
option becomes substantial shareholder and is able to elect 2 directors in the Board of
Eagle Movies?
189) Give at least 3 examples of the acts or activities that ate specifically identified
under our foreign investment law as constitution doing business in the Philippines
190) Aside from Filipino citizens, what entities would fall under the definition of
Philippine National under Foreign Investment Act? What would be your response?
 191) When is a foreign corporation deemed to be doing business in the Philippines?
192) What are the jurisprudential test to determine doing business in the
Philippines?
193) Define isolated transactions
194) Pinoy filed a motion to dismiss contending that x corporation is a foreign
corporation doing business in the Philippines without the requisite license. Is the suit
dismissible?
195) Cite transactions which may not be considered doing business in the Philippines
196) Is doing business in the Philippines without the required license and thus it has
no personality to sue in our court. Is the contention tenable?

IX. One Person Corporation

197) What is a One Person Corporation?
198) Give practical reasons for forming a one person corporation
199) Which activities may not organize as OPC?
200) What is the minimum capital stock required for an OPC?
201) Is an OPC required to file AOI and bylaws?
202) How shall an OPC be identified?
203) Give the corporate structure and officers of an OPC
204) What are the functions of a corporate secretary designated by the OPC?
205) What are the contingency measures provided under the RCC in case of death or
incapacity of a single stockholder?
206) Is the OPC required to maintain and keep minutes and records?
207) What is the liability of a single shareholder?
208) AAA excited about the latest development.. discuss the legalities of AAA and
AAA Food OPC’s act
209) Discuss the process of converting an ordinary corporation to a OPC
210) Explain the procedure of converting a OPC to an ordinary corporation.
 LAW ON INSURANCE - RA 10607 of 2012

I. Insurance:
1) Explain the concept of insurance
2) Enumerate and explain the nature and characteristics of a contract of insurance
3) Who is legally entitled to receive the insurance proceeds? Explain
4) Eternal insist that the policy became effective the moment Joseph purchased the lot on
installment basis. Resolve
5) Enumerate the elements of insurance
6) Is philamcare engaged in the insurance business?
7) When is a contract of insurance perfected?
8) The civil code adopts the theory of cognition, while the code of commerce generally
recognizes the theory of manifestation in the perfection of contracts. How do these two
theories differ?
9) Was the contract of insurance perfected? May the estate of Joaquin recover the
premium paid?
10) Enumerate the kinds or types of insurance contract
11) What risk may be insured against
12) Enumerate the parties to a contract of insurance
13) May a member of the MILF be insured with a company license to do business under the
insurance code?
14) Is the policy valid and binding?
15) How much is the prevailing paid up capital requirement for life or non-life insurance
companies engaged in the business in the Philippines?

X. Insurable interest
16) Explain the concept of insurable interest
17) What is insurable interest in life?
18) Is it necessary for the beneficiary to have insurable interest in the life of the insured?
19) Will the policy be rendered void if the designated beneficiary is disqualified by la to
receive proceeds?
20) Is c entitled to the proceeds?
21) To whom should the proceeds of the insurance policy be awarded?
22) Should the proceeds of the policy be automatically given to the legitimate wife and
children
23) Will the claim of Vicenta and the legitimate children prosper?
24) Can he make all or any of them the beneficiary or beneficiaries in the insurance policy?
25) If A dies, can B successfully claim against the policy?
26) X filed his insurance claim insisting he has insurable interest over Y. Should the insurer
pay? Reason
27) What will be your advice?
28) Is the insurer bound to pay John the insurance proceeds? May the heirs of Peter claim
the proceeds?
29) May the insured change the beneficiary he has designated in the policy?
30) Explain the effects of irrevocable designation of a beneficiary
31) Decide and give reasons for your answer
32) Is Q’s contention correct?
33) Can Jacob still add Yod and Jojo as his beneficiaries?
34) Can SOS Insurance Corp avoid liability by setting up as a defense the participation of
Gemma..
35) What does insurable interest in property consist of?
36) What is the test to determine insurable interest in property?
37) Decide the case
 38) Does BD have an insurable interest over the bank deposit?
39) Does jose have insurable interest over the mansion?
40) When must insurable interest exist?
41) What are the rights of Alpha on the life and fire insurance policies?
42) What is the jurisprudential test in determining the insurable interest in the property?
43) Does ABC have insurable interest in the house? May ABC recover under the policies?
44) Who may recover on the policy?
45) Is garapal insurance legally justified in refusing payments to Benjie? Is nat entitled to
collect on the policy?
46) Distinguish insurable interest in life from insurable interest in property
47) Is the contract of insurance valid?
48) They asserted that the insurance policy proceeds should form part of the estate of the
insured. Resolve
49) With abc insurance company having refused to pay, Alfred filed a complaint against rodil
and sued insurance company. Decide

XI. Right of mortgagor and mortgagee

50) May the mortgagor and mortgagee separately insure the mortgaged property?
51) How much is the insurable interest of the mortgagor? Of the mortgagee?
52) Explain the effect of the standard or union mortgage clause and the open or loss-
payable clause in a fire insurance policy?
53) Given the circumstances, is there double insurance? Can Armando recover from either
or both insurance companies?
54) May the businessman and the creditor obtain separate insurance coverages over the
same stocks-in-trade? Explain
55) Will the claim of x and y prosper?

XII. Change of interest in the thing insured

56) State the legal effect when the change of interest in the thing insured is unaccompanied
by a change of interest in insurance. Enumerate the exceptions
57) Can charmane or bing collect the proceeds of the policy? Explain

XIII. Premium
58) Define fir
59) Is payment of premium an essential element for the validity of the insurance contract?
State the rule and its exception
60) Is smpc entitled to recover for the loss of SIC?
61) Will a post-dated check produce the effect of valid payment if it remains unencashed at
the time of loss?
62) May alfredo recover on the insurance policy?
63) Is the insurer liable under the insurance coverage? Why or why not?
64) Could the insurer be made liable under the insurance coverage?
65) Can Francis recover from the Peninsula Insurance company?
66) Can x claim the insurance proceeds? Reason
67) When is the insured entitled to a return of the premium?
68) Is the ruling of the trial court in accord with the prevailing jurisprudence?

XIV. Policy
69) Enumerate the kinds of property insurance policy
 70) May the policy be in electronic form?
71) How are contracts of insurance construed?
72) Explain the concept of cover note
73) Did ALAC’s issuance of cover note result in the perfection of an insurance contract
between Quirino and Alac?
74) Does a binding receipt constitute temporary contract of insurance?
75) Explain what is a rider and its binding effect on the insured
76) Enumerate the grounds for the cancellation of non-life policy
77) Enumerate the requisites for a valid cancellation of the policy

XV. Devices to delimit or control risk and loss

78) Enumerate the devices that may be used by the insurer to ascertain and control risk and
losses
79) Is alpha insurance correct?
80) What is the effect of concealment or misrepresentation or breach of warranty or
condition?
81) What is the test to determine whether the fact concealed or misrepresented is
material?
82) For concealment to be material, should the fact concealed be the cause of the loss?
83) Is good faith a defense in concealment?
84) May the insured raise the defense that the insurer is barred from raising concealment as
it did not require medical examination on the health and condition of the insured?
85) Explain the incontestability clause
86) May the two year period in the incontestability clause be shortened or extended by
stipulation?
87) Elucidate the rationale behind the incontestability clause
88) If you were the judge how would you decide the case?
89) If you are the judge confronted with the conflicting claims of the parties how would you
resolve the case?
90) Enumerate the defenses that are not barred by incontestability clause?
91) Is manuel guilty of concealing his illness when he kept blank and did not answer
questions in his pension plan application regarding the ailments he suffered from?
92) Is bing guilty of concealment?
93) Was the insurance company correct?
94) Will petra’s suit prosper?
95) Is the insurer liable considering that the fact concealed had no bearing on the cause of
death of the insured? Why?
96) Is the contention of the beneficiaries tenable?

XVI. Other insurance clause: double, over, reinsurance

97) Explain other insurance clause
98) What do you mean by double insurance
99) How much may the insured claim if there is double insurance and over insurance?
100) Rule on the contentions
101) Is there double insurance? Is this legally valid? In case of damage, can x and ccc
bank separately claim for the insurance proceeds?
102) May the businessman and the creditor obtain separate insurance coverages
over the stocks in trade?
103) Is the owner’s taking of insurance for the building with 3 insurers valid?
104) What is the nature of the liability of several insurers in double insurance?
105) Is the contention of Julie tenable?
106) Elucidate the concept of reinsurance
 107) Distinguish double insurance from reinsurance
108) Discuss briefly the meaning of bancassurance

XVII. Loss and liability of insurer

109) For what losses may the insurer be held liable? Not liable?
110) Immediate cause of loss and there is no excepted peril under the policy
111) Within what period do actions arising from insurance contract prescribe?
112) When does the prescriptive period commence to run?
113) Is the period tolled by the pending motion for reconsideration?
114) Discuss the principle of subrogation and state its basis.
115) Is the non presentation of the policy fatal?
116) If you were the judge how would you decide the case?

XVIII. Marine Insurance

117) Who has the insurable interest in marine insurance?
118) Define perils of the sea
119) What do you mean by perils of the ship
120) Is rustling of steel pipes covered by marine insurance?
121) Xlc now seeks your legal advice to know if its claim was sustainable
122) In marine insurance, what peril may be insured against? State the rule and the
exception
123) Enumerate the implied warranties in maritime insurance
124) When is a vessel seaworthy?
125) Is the insurance company liable? Why or why not? What is barratry in maritime
insurance?
126) What is meant by deviation and when is it proper?
127) Can the insurer deny the claim on the ground of improper deviation?
128) Explain the concept of general average and particular average. Enumerate the
requisites to claim under general average contribution
129) In marine insurance, when is the loss considered actual total? When is it
considered constructive total?
130) Define abandonment in marine insurance and enumerate its requisites
131) Was there constructive total loss to entitle the ship owner to recover from the
insurance company?

XIX. Fire insurance

132) Enumerate the perils covered under fire insurance
133) Distinguish friendly fire from hostile fire
134) May the insurer rescind the fire insurance policy should the insured alter the
use or condition of the thing insured from that provided under the policy?
135) Was the refusal of Malayan justified?
136) What is the rationale behind the incorporation of the other insurance clause in
fire insurance policies?

XX. Casualty insurance

137) What is the purpose of the compulsory third party liability?
138) What do you understand by the no fault indemnity provision?
139) Is the contention of the insurer correct?
140) Will jose claim for the death of maria against the insurers of said three motor
vehicle prosper and up to what amount
141) Explain the authorize drivers clause
142) Is the insurer correct?
143) Discuss briefly the theft clause in motor vehicle insurance
144) Y insured his car with abc.. decide the case
145) Define contract of suretyship
146) Is the insurer in a life insurance liable in case the insured commits suicide?
147) Is the contention tenable?
148) Within what period should a claim in life insurance be settled? In property
insurance?
149) Discuss the effect in case of delay in the payment of claim