Commercial: in Leonardo
Commercial: in Leonardo
College of Law
Outline in Special Commercial Laws1
Atty. LEONARDO NICK D. GUMABUN*
B. Nature of Business
1. Bank - Sec. 3.1, GBL
2. Quasi-Bank - Sec. 95, NCBA in relation to Sec. 4.6, GBL
3. One-Unit Rule - Sec. 20, GBL; PDIC vs. Citibank, 669 SCRA 191 (2012)
1 As of May 1, 2020
2 Assistant Vice-President/ Regional Legal Officer, Development Bank of the Philippines
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E. Kinds of Deposit
F. Anonymous Account - Sec 9(a), RA 9160
G. Survivorship Agreement - Vitug vs. CA, GR. No. 82027
1 As of May 1, 2020
2 Assistant Vice-President/ Regional Legal Officer, Development Bank of the Philippines
1
IV. SECRECY OF BANK DEPOSIT - RA 1405 “Secrecy of Bank Deposits Act”
A. Purpose
B. Nature/Coverage — Sec. 2, RA 140S
1. Deposits
2. Investments in Government Bonds
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F. Payment of Insured Deposit — Sec. 10(c), RA 359
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VIII. LOAN FUNCTION
A. Authority to Lend Money - Sec. 1, BSP Circular No. 622, Series of 2008
B. Conditions for the Granting of Loans/ Safe and Sound Banking Practice - Sec. 39,
GBL
C. Ascertainment of Borrower’s Capacity — Sec. 40, GBL; Security Bank vs. Cuenca, 341
SCRA 781 (2000)
D. Secured vs. Unsecured Loans and Other Credit Accommodation
E. Bridge Financing - De Vera vs. Court of Appeals, 367 SCRA 781
F. Fixed vs. £-Ioating Interest Rate and Escalation Clauses - Security Bank vs. RTC of
Makati 263 SCRA 483 (1196); Consolidated Bank vs. Court of Appeals 356 SCRA 671 (2001);
Almeda vs. Court of Appeals 256 SCRA 292 (1996); PNB vs. Court of Appeals 259 SCRA
174 (1996)
G. Risk Based Capital - Sec 34, GBL
H. Single Borrower’s Limit — Secs. 35.1 in relation to Sec. X303 Manual of Regulations
for Banks (“MORB)
1. Exception - 35.2, GBL
L. Loan Threshold
1. Real Estate — Sec. 37, GBL
2. ChaNel — Sec. 38, GBL
B. Fit and Proper Rule - Sec. 16, GBL; Busuego vs. Court of Appeals
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C. Remedies of the BSP for a Bank in Distress
1. Emergency Loan — Sec. 84, NCBA
2. Conservatorship - Sec. 29, NCBA
3. Receivership - Sec. 30, NCBA as amended by RA 11211 in relation to Sec 56, RA
8791
a. Effects — Fidelity Savings and Mortgage Bank vs. Cenzon, GR. No. L-46208; Larrobis
vs. PVB, GR. No. 135706
D. Effect of Actions of the BSP in Conservatorship and Receivership - Sec. 30, NCBA -
BSP Monetary Board vs. Antonio-Valenzuela, GR. No. 184778
TRUTH IN LENDING
ANTI-MONEY LAUNDERING
I. Governing Laws - RA 9160 or the “Anti-Money Laundering Act of 2001”, as amended
by RA 9194 (“AMLA”); RA 10167 amending Sections 10 and 11of RA 9160; RA 10365
G. Concept of Insolveny — Sec. 4 (p), FRIA; Metrobank vs. S.F. Naguiat Enterprises, Inc.,
GR.
No. 178407
i. Actual vs. Technical - PNB vs. Court of Appeals, GR. No. 165571
II. Rehabilitation
A. Definition & Concept - Sec. 4(gg), FRIA; BPI Family Savings Bank, Inc. vs. St.
Michael Medical Center, Inc., GR. No. 205469; Wonder Book Corp. vs. PBCom, GR. No.
187316; Viva Shipping Lines, Inc. vs. Keppel Philippines Marine, Inc., GR. No.
177382
B. Concept of Material Financial Commitment - PBCom vs. Basic Polyprinters and
Packaging Corporation, GR. No. 187581
4. Stay or Suspension Order — Sec. 16(9), FRIA; Sec. 5(r), Rule 1, A.M. 12-12-11-SC
a. Concept of “Claims” — Sec. 4(c), FRIA; Molina vs. Pacific Plans, Inc. GR No.
165476; Lingkod Manggagawa sa Rubberworld vs. Rubberworld (Phils.), Inc., GR. No 153882;
Garcia vs.
PAL, GR No. 164856; Sobrejuanite vs. ASB Development Corp., GR. 165675
b. Exceptions — Sec. 18, FRIA; Sec. 10, Rule 2, A.M. 12-12-11-SC; MWSS vs. Daway,
GR. No. 160732; JAPRL Development Corp. vs. Security Bank, GR No. 190107; Panlilio vs.
RTC, GR No. 173846
E. Displacement of Existing Management — Sec. 36, FRIA; Sec. 31, Rule 2, A.M. 12-12-11-
SC; Umale vs. ASB Realty Corp., GR. No. 181126
F. Claw-Back Principle — Sec. 52, FRIA
H. Rehabilitation Plan
1. Definition & Contents — Secs. 4(ii) & 62, FRIA; BPI vs. Sarabia Manor Hotel
Corporation, GR No. 175844; Philippine Asset Growth Two, Inc. vs. Fastech Synergy Phils.,
GR. No. 206528
2. Approval or Rejection by the Creditor — Sec. 64, FRIA; See, however, Sec. 42, FRIA;
Sec. 62, Rule 2, A.M. 12-12-11-SC
3. Non-Impairment of Contracts — PNB vs. Court of Appeals p GR. No. 165571
4. Submission to the Court — Sec. 65, FRIA; Sec. 63, Rule 2, A.M. 12-12-11-SC
5. Confirmation of Plan Notwithstanding Rejection by the Creditors “Cram Down Clause”
— 2’ d Par, Sec. 64, FRIA; Sec. 62, Rule 2, A.M. 12-12-11-SC; Victorio-Aquino vs. Pacific
Plans, Inc. GR No. 193108;
6. Objections — Sec. 66, FRIA; Sec. 64, Rule 2, A.M. 12-12-11-SC; BPI vs. Sarabia Manor
Hotel Corp., GR No. 175844
7. Confirmation of Rehabilitation Plan — Sec. 68, FRIA; Sec. 66, Rule 2, A.M. 12-12-11-
6
SC
8. Effects of Confirmation — Sec. 69, FRIA; Sec. 67, Rule 2, A.M. 12-12-11-SC;
Veterans Philippine Scout Security Agency vs. First Dominion Prime Holdings, 679 SCRA
168 (2012)
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9. Period of Confirmation — Sec. 72, FRIA
10. Termination — Sec. 74, FRIA
a. Effects — Sec. 75, FRIA
11. Failure of Rehabilitation - Sec. 74, FRIA
B. Liquidation Order and its Effects - Secs. 107, 112, and 113, FRIA