August 2013 Philippine Supreme Court Decisions on Commercial Law

Here are select August 2103 rulings of the Supreme Court of the Philippines on commercial law:

Insurance; prohibition against removal of property. Here, by the clear and express condition in the renewal policy, the removal of the insured property to any building or place required the consent of Malayan. Any transfer effected by the insured, without the insurer’s consent, would free the latter from any liability.

Insurance; rescission. Considering that the original policy was renewed on an “as is basis,” it follows that the renewal policy carried with it the same stipulations and limitations. The terms and conditions in the renewal policy provided, among others, that the location of the risk insured against is at the Sanyo factory in PEZA. The subject insured properties, however, were totally burned at the Pace Factory. Although it was also located in PEZA, Pace Factory was not the location stipulated in the renewal policy. There being an unconsented removal, the transfer was at PAP’s own risk. Consequently, it must suffer the consequences of the fire. Thus, the Court agrees with the report of Cunningham Toplis Philippines, Inc., an international loss adjuster which investigated the fire incident at the Pace Factory, which opined that “[g]iven that the location of risk covered under the policy is not the location affected, the policy will, therefore, not respond to this loss/claim.” It can also be said that with the transfer of the location of the subject properties, without notice and without Malayan’s consent, after the renewal of the policy, PAP clearly committed concealment, misrepresentation and a breach of a material warranty.

Accordingly, an insurer can exercise its right to rescind an insurance contract when the following conditions are present, to wit:

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December 2012 Philippine Supreme Court Decisions on Criminal Law and Procedure

Here are select December 2012 rulings of the Supreme Court of the Philippines on criminal law and procedure:

1.            REVISED PENAL CODE

Rape; Pruna Guidelines. In this case, the prosecution may have been unable to present AAA’s birth certificate or other authentic document such as a baptismal certificate during trial in accordance with the formulated set of guidelines in People v. Pruna in appreciating age either as an element of the crime or as a qualifying circumstance in rape cases. However, that failure to present relevant evidence did not deter the Supreme Court from upholding that qualified rape was indeed committed by the accused Padigos because he himself admitted, in his counter-affidavit which formed part of the evidence for the defense and the contents of which he later affirmed in his testimony in open court, that AAA was below 7 years old around the time of the rape incident. In the Court’s view, this admission from accused, taken with the testimony of the victim, sufficiently proved the victim’s minority. People of the Philippines v. Edgar Padigos, G.R. No. 181202, December 5, 2012.

Rape; resistance. Accused Estoya attempts to raise doubts in victim AAA’s testimony by questioning the latter’s failure to offer tenacious resistance during the supposed sexual assault. The Supreme Court held that the law does not impose upon a rape victim the burden of proving resistance. Physical resistance need not be established in rape when intimidation is exercised upon the victim and she submits herself against her will to the rapist’s lust because of fear for life and personal safety. In the case at bar, AAA was only 14 years of age at the time of the rape, and at such a tender age, she could not be expected to put up resistance as would be expected from a mature woman. Also, Estoya had threatened AAA that he would stab her with a knife if she resisted. People of the Philippines v. Radby Estoya y Mateo, G.R. No. 200531, December 5, 2012.

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June 2012 Philippine Supreme Court Decisions on Commercial Law

Here are select June 2012 rulings of the Supreme Court of the Philippines on commercial law:

Banks; diligence required.  Republic Act No. 8971, or the General Banking Law of 2000, recognizes the vital role of banks in providing an environment conducive to the sustained development of the national economy and the fiduciary nature of banking; thus, the law requires banks to have high standards of integrity and performance. The fiduciary nature of banking requires banks to assume a degree of diligence higher than that of a good father of a family. In the case at bar, petitioner itself was negligent in the conduct of its business when it extended unsecured loans to the debtors. Worse, it was in serious breach of its duty as the trustee of the MTI. It was not able to protect the interests of the parties and was even instrumental in violating the terms of the MTI, to the detriment of the parties thereto. Thus, petitioner has only itself to blame for being left with insufficient recourse against petitioner under the assailed MTI. Metropolitan Bank and Trust Company vs. Centro Development Corp., et al., G.R. No. 180974, June 13, 2012.

Corporation; corporate approval for appointment of trustee.  Reading carefully the Secretary’s Certificate, it is clear that the main purpose of the directors’ Resolution was to appoint petitioner as the new trustee of the previously executed and amended MTI. Going through the original and the revised MTI, we find no substantial amendments to the provisions of the contract. We agree with petitioner that the act of appointing a new trustee of the MTI was a regular business transaction. The appointment necessitated only a decision of at least a majority of the directors present at the meeting in which there was a quorum, pursuant to Section 25 of the Corporation Code.  Metropolitan Bank and Trust Company vs. Centro Development Corp., et al., G.R. No. 180974, June 13, 2012.

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