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A. LETTERS OF CREDIT 1. DEFINITION/CONCEP T

C. DOCTRINE OF STRICT COMPLIANCE

-issuing bank should require all the documents specified in the letter of credit to be presented by beneficiary before paying to the latter. Acceptance of incomplete documents would expose bank to risk applicant is not liable to reimburse the bank

2. GOVERNING LAWS
-Code of Commerce -UCP -jurisprudence

B. WAREHOUSE RECEIPTS LAW 1. NATURE AND FUNCTIONS OF A WAREHOUSE RECEIPT

A. TO WHOM DELIVERED B. KINDS 1. Negotiable 2. Non-negotiable -order instrument -bearer instrument C. DISTINCTION BETWEEN A NEGOTIABLE INSTURMENT AND A NEGOTIABLE WAREHOUSE RECEIPT Negotiable instrument Warehouse receipt Alteration Null and void Valid, enforceable according to the original tenor Bearer instrument Still payable to bearer Becomes an Order specially endorsed instrument, thus, needs to be specially endorsed to be negotiated HIDC Better title person who Same title indorsed D. RIGHTS OF A HOLDER OF A NEGOTIABLE WAREHOUSE RECEIPT

3. NATURE OF LETTER OF CREDIT

-not a guarantee/surety: not dependent on the principal contract between the buyer-seller (in accordance with the Doctrine of Independence) -agency in a sense: the issuing bank acts as the agent of the buyer and the seller he acts as the intermediary

4. PARTIES TO A LETTER OF CREDIT

*RIGHTS AND OBLIGATIONS OF PARTIES -Applicant-buyer -Issuing Bank -Beneficiary-seller

5. BASIC PRINICPLES OF LETTER OF CREDIT

A. DOCTRINE OF INDEPENDENCE -Issuing bank has the obligation to pay the beneficiary upon presentation of documents as specified; -no need to check compliance with contract; the issuing banks obligation is independent from any issues in the principal contract B. FRAUD EXCEPTION PRINCIPLE -in light of the purpose of credit, payment thereof would constitute fraudulent abuse of the credit (so payment can be stopped)

2. DUTIES OF A WAREHOUSEMAN

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3. WAREHOUSEMANS LIEN

C. TRUST RECEIPTS LAW 1. DEFINITION/CONCEPT OF A TRUST RECEIPT TRANSACTION

Section 4. What constitutes a trust receipt transaction. A trust receipt transaction, within the meaning of this Decree, is any transaction by and between a person referred to in this Decree as the entruster, and another person referred to in this Decree as entrustee, whereby the entruster, who owns or holds absolute title or security interests over certain specified goods, documents or instruments, releases the same to the possession of the entrustee upon the latter's execution and delivery to the entruster of a signed document called a "trust receipt" wherein the entrustee binds himself to hold the designated goods, documents or instruments in trust for the entruster and to sell or otherwise dispose of the goods, documents or instruments with the obligation to turn over to the entruster the proceeds thereof to the extent of the amount owing to the entruster or as appears in the trust receipt or the goods, documents or instruments themselves if they are unsold or not otherwise disposed of, in accordance with the terms and conditions specified in the trust receipt, or for other purposes substantially equivalent to any of the following: 1. In the case of goods or documents, (a) to sell the goods or procure their sale; or (b) to manufacture or process the goods with the purpose of ultimate sale: Provided, That, in the case of goods delivered under trust receipt for the purpose of manufacturing or processing before its ultimate sale, the entruster shall retain its title over the goods whether in its original or processed form until the entrustee has complied fully with his obligation under the trust receipt; or (c) to load, unload, ship or tranship or otherwise deal with them in a manner preliminary or necessary to their sale; or 2. In the case of instruments, a) to sell or procure their sale or exchange; or b) to deliver them to a principal; or c) to effect the consummation of some transactions involving delivery to a depository or register; or d) to effect their presentation, collection or renewal

The sale of goods, documents or instruments by a person in the business of selling goods, documents or instruments for profit who, at the outset of the transaction, has, as against the buyer, general property rights in such goods, documents or instruments, or who sells the same to the buyer on credit, retaining title or other interest as security for the payment of the purchase price, does not constitute a trust receipt transaction and is outside the purview and coverage of this Decree. A. LOAN/SECURITY FEATURE -LOAN: Importer borrows money from the bank for the importation of the goods -SECURITY: to secure payment, the bank (ENTRUSTER) holds the title to the GDI until buyer (ENTRUSTEE) would be able to pay for the loan. The bill of lading is in the name of the Bank B. OWNERSHIP OF THE GOODS, DOCUMENTS AND INSTRUMENTS (GDI) UNDER A TRUST RECEIPT

2. RIGHTS OF THE ENTRUSTER

Section 7. Rights of the entruster. The entruster shall be entitled to the proceeds from the sale of the goods, documents or instruments released under a trust receipt to the entrustee to the extent of the amount owing to the entruster or as appears in the trust receipt, or to the return of the goods, documents or instruments in case of non-sale, and to the enforcement of all other rights conferred on him in the trust receipt provided such are not contrary to the provisions of this Decree. The entruster may cancel the trust and take possession of the goods, documents or instruments subject of the trust or of the proceeds realized therefrom at any time upon default or failure of the entrustee to comply with any of the terms and conditions of the trust receipt or any other agreement between the entruster and the entrustee, and the entruster in possession of the goods, documents or instruments may, on or after default, give notice to the entrustee of the intention to sell, and may, not less than five days after serving or sending of such notice, sell the goods, documents or instruments at public or private sale, and the entruster may, at a public sale, become a purchaser. The proceeds of any such sale, whether public or private, shall be

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applied (a) to the payment of the expenses thereof; (b) to the payment of the expenses of re-taking, keeping and storing the goods, documents or instruments; (c) to the satisfaction of the entrustee's indebtedness to the entruster. The entrustee shall receive any surplus but shall be liable to the entruster for any deficiency. Notice of sale shall be deemed sufficiently given if in writing, and either personally served on the entrustee or sent by post-paid ordinary mail to the entrustee's last known business address.

A. REQUISITES OF NEGOTIABILITY B. KINDS OF NEGOTIABLE INSTRUMENTS

2. COMPLETION AND DELIVERY

a. INSERTION OF DATE b. COMPLETION OF BLANKS c. INCOMPLETE AND UNDELIVERED INSTRUMENTS d. COMPLETE BUT UNDELIVERED INSTRUMENTS

So Entitled to -the proceeds from the sale of the GDI to the extend owing to the entruster as appears on trust receipt -the return of the GDI in case of nonsale upon demand of entruster -enforcement of all other rights *VALIDITY OF THE SECURITY INTEREST AS AGAINST THE CREDITORS OF THE ENTRUSTEE/INNOCENT PURCHASERS FOR VALUE

3. RULES OF INTERPRETATION

4. SIGNATURE
a. SIGNING IN TRADE NAME

3. OBLIGATION AND LIABILITY OF THE ENTRU STEE

A. PAYMENT/DELIVERY OF PROCEEDS OF SALE OR DISPOSITION OF GDI B. RETURN OF GDI IN CASE OF SALE C. LIABILITY FOR LOSS OF GDI

b. SIGNATURE OF AGENT c. INDORSEMENT BY MINOR OR CORPORATION d. FORGERY

5. CONSIDERATION 4. REMEDIES AVAILABLE 6. ACCOMODATION PARTY D. NEGOTIABLE INSTRUMENTS LAW 1. FORMS AND INTERPRETATION 7. NEGOTIATION
a. DISTINGUISHED FROM ASSIGNMENT

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c. EFFECT OF NOTICE b. MODES OF NEGOTIATION d. FORM OF NOTICE

8. RIGHTS OF THE HOLDER

a. HOLDER IN DUE COURSE b. DEFENSES AGAINST THE HOLDER

e. WAIVER f. DISPENSATION WITH NOTICE g. EFFECT OF FAILURE TO GIVE NOTICE 12. DISCHARGE OF NEGOTIABLE INSTRUMENT a. DISCHARGEOF NEGOTIABLE INSTRUMENT b. DISCHARGE OF PARTIES SECONDARILY LIABLE c. RIGHT OF PARTY WHO DISCHARGED INSTRUMENT d. RENUNCIATION BY HOLDER 13. MATERIAL ALTERATION a. CONCEPT b. EFFECT OF MATERIAL ALTERATION 14. ACCEPTANCE a. DEFINITION b. MANNER c. TIME FOR ACCEPTANCE d. RULES GOVERNING ACCEPTANCE 15. PRESENTMENT FOR ACCEPTANCE a. TIME/PLACE/MANNER OF PRESENTMENT b. EFFECT OF FAILURE TO MAKE PRESENTMENT c. DISHONOR BY NON-ACCEPTANCE 16. PROMISSORY NOTES 17. CHECKS a. DEFINITION b. KINDS c. PRESENTMENT FOR PAYMENT (1) TIME (2) EFFECT OF DELAY

9. LIABILITIES OF PARTIES
a. MAKER b. DRAWER c. ACCEPTOR d. INDORSER e. WARRANTIES

10. PRESENTMENT FOR PAYMENT

a. NECESSITY OF PRESENTMENT FOR PAYMENT b. PARTIES TO WHOM PRESENTMENT FOR PAYMENT SHOULD BE MADE c. DISPENSATION WITH PRESENTMENT FOR PAYMENT d. DISHONOR BY NON-PAYMENT

11. NOTICE OF DISHONOR

a. PARTIES TO BE NOTIFIED b. PARTIES WHO MAY GIVE NOTICE OF DISHONOR

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E. INSURANCE CODE 1. CONCEPT OF INSURANCE 2. ELEMENTS OF AN INSURANCE CONTRACT 3. CHARACTERISTICS/NATURE OF INSURANCE CONTRACTS3. CHARACTERISTICS/NATURE OF INSURANCE CONTRACTS 4. CLASSES a. MARINE b. FIRE c. CASUALTY d. SURETYSHIP e. LIFE f. COMPULSORY MOTOR VEHICLE LIABILITY INSURANCE 5. INSURABLE INTEREST a. IN LIFE/HEALTH b. IN PROPERTY c. DOUBLE INSURANCE AND OVER INSURANCE d. Multiple OR SEVERAL INTERESTS ON SAME PROPERTY 6. PERFECTION OF THE CONTRACT OF INSURANCE a. OFFER AND ACCEPTANCE/CONSENSUALITY (1) DELAY IN ACCEPTANCE (2) DELIVERY OF POLICY b. PREMIUM PAYMENT c. NON-DEFAULT OPTIONS IN LIFE INSURANCE d. REINSTATEMENT OF A LAPSED POLICY OF LIFE INSURANCE e. REFUND OF PREMIUMS 7. RESCISSION OF INSURANCE CONTRACTS a. CONCEALMENT b. MISREPRESENTATION/OMISSIONS c. BREACH OF WARRANTIES 8. CLAIMS SETTLEMENT AND SUBROGATION a. NOTICE AND PROOF OF LOSS b. GUIDELINES ON CLAIMS SETTLEMENT (1) UNFAIR CLAIMS SETTLEMENT; SANCTIONS (2) PRESCRIPTION OF ACTION (3) SUBROGATION