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2014 BAR EXAMINATIONS

POLITICAL LAW

I.

With the passage of time, the members of the House of Representatives increased with the creation
of new legislative districts and the corresponding adjustments in the number of party-list
representatives. At a time when the House membership was already 290, a great number of the
members decided that it was time to propose amendments to the Constitution. The Senators,
however, were cool to the idea. But the members of the House insisted. They accordingly convened
Congress into a constituent assembly in spite of the opposition of the majority of the members of the
Senate. When the votes were counted, 275 members of the House of Representatives approved the
proposed amendments. Only 10 Senators supported such proposals. The proponents now claim that
the proposals were validly made, since more than the required three-fourths vote of Congress has
been obtained. The 14 Senators who voted against the proposals claim that the proposals needed
not three-fourths vote of the entire Congress but each house. Since the required number of votes in
the Senate was not obtained, then there could be no valid proposals, so argued the Senators. Were
the proposals validly adopted by Congress? (5%)

SUGGESTED ANSWER

The proposals were not validly adopted, because the ten (10) Senators who voted in favor of the
proposed amendments constituted less than three-fourths of all the Members of the Senate. Although
Section 1, Article XVII of the Constitution did not expressly provide that the Senate and the House of
Representatives must vote separately, when the Legislature consists of two (2) houses, the
determination of one house is to be submitted to the separate determination of the other house (Miller
vs Mardo, 2 SCRA 898 (1961))

II.

Several citizens, unhappy with the proliferation of families dominating the political landscape, decided
to take matters into their own hands. They proposed to come up with a peoples initiative defining
political dynasties. They started a signature campaign for the purpose of coming up with a petition for
that purpose. Some others expressed misgivings about a peoples initiative for the purpose of
proposing amendments to the Constitution, however. They cited the Courts decision in Santiago v.
Commission on Elections, 270 SCRA 106 (1997), as authority for their position that there is yet no
enabling law for s uch purpose. On the other hand, there are also those who claim that the individual
votes of the justices in Lambino v. Commission on Elections, 505 SCRA 160 (2006), mean that
Santiagos pronouncement has effectively been abandoned. If you were consulted by those behind
the new attempt at a peoples initiative, how would you advise them? (4%)

SUGGESTED ANSWER

I shall advise those starting a peoples initiative that initiative to pass a law defining political dynasties
may proceed as their proposal is to enact a law only and not to amend the Constitution. The decision
in Santiago vs COMELEC, 270 SCRA 106 (1997), which has not been reversed, upheld the adequacy
of the provisions in R.A. 6735 on initiative to enact a law.

ALTERNATIVE ANSWER

I shall advise those starting a peoples initiative that the ruling in Santiago vs COMELEC that there is
as yet no enabling law for an initiative has not been reversed. According to Section 4 (3), Article VIII
of the Constitution, a doctrine of law laid down in a decision rendered by the Supreme Court en banc
may not be reversed except by it acting en banc. The majority opinion in Lambino vs COMELEC (505
SCRA 160 (2006), refused to re-examine the ruling in Santiago vs COMELEC (270 SCRA 106
(1997)), because it was not necessary for deciding the case. The Justices who voted to reverse the
ruling constituted the minority.

III.

In Serrano v. Gallant Maritime Services, Inc., 582 SCRA 254 (2009), the Supreme Court declared as
violative of the Equal Protection Clause the 5th paragraph of 10 R.A. No. 8042 (Migrant Workers
and Overseas Filipinos Act of 1995) for discriminating against illegally dismissed OFWs who still had
mo re than a year to their contract compared to those who only had less than a year remaining. The
next year, Congress enacted R.A. No 10222, an amendment to the Migrant Workers and Overseas
Filipinos Act, which practically reinstated the provision struck down in Serrano.

Seamacho, an overseas seafarer who still had two years remaining on his contract when he was
illegally terminated, and who would only be entitled to a maximum of six-months pay under the
reinstated provision, engages you as his counsel. How are you to argue that the new law is invalid
insofar as it brings back to the statute books a provision that has already been struck down by the
Court? (5%)

SUGGESTED ANSWER

I will argue that since Section 10 of RA No. 8042 has already been declared unconstitutional by the
Supreme Court, its nullity cannot be cured by reincorporation or reenactment of the same or a similar
law or provision. Once a law has been declared unconstitutional, it remains unconstitutional unless
circumstances have so changed as to warrant a reverse conclusion (Sameer Overseas Placement
Agency vs Cabiles, GR No. 170139, August 5, 2014)

IV.

Beauty was proclaimed as the winning candidate for the position of Representative in the House of
Representatives three (3) days after the elections in May. She then immediately took her oath of
office. However, there was a pending disqualification case against her, which case was eventually
decided by the COMELEC against her 10 days after the election. Since she has already been
proclaimed, she ignored that decision and did not bother appealing it. The COMELEC then declared
in the first week of June that its decision holding that Beauty was not validly elected had become
final. Beauty then went to the Supreme Court questioning the jurisdiction of the COMELEC claiming
that since she had already been proclaimed and had taken her oath of office, such election body had
no more right to come up with a decision that the jurisdiction had already been transferred to the
House of Representatives Electoral Tribunal. How defensible is the argument of Beauty? (4%)

SUGGESTED ANSWER

The House of Representatives Electoral Tribunal has acquired exclusive jurisdiction over the case of
Beauty, since she has already been proclaimed. The proclamation of the winning candidate is the
operative fact that triggers the exclusive jurisdiction of the House of Representative Electoral Tribunal
over election contests relating to the election, returns and qualifications of the winning candidate. The
proclamation divests the COMELEC of jurisdiction over the question of disqualifications pending
before it at the time of the proclamation. Any case pertaining to questions over the qualifications of a
winning candidate should be raised before the House of Representative Electoral Tribunal
(Limkaichong vs COMELEC, 583 SCRA 1 (2011)); Jalosjos, Jr. vs COMELEC, 674 SCRA 530 (2013)

V.

Greenpeas is an ideology-based political party fighting for environmental causes. It decided to


participate under the party-list system. When the election results came in, it only obtained 1.99
percent of the votes cast under the party -list system. Bluebean, a political observer, claimed that
Greenpeas is not entitled to any seat since it failed to obtain at least 2% of the votes. Moreover, since
it does not represent any of the marginalized and underrepresented sectors of society, Greenpeas is
not entitled to participate under the party-list system. How valid are the observations of Bluebean?
(4%)

SUGGESTED ANSWER

The claim of Bluebean that Greenpeas is not entitled to a seat under the party-list system because it
obtained only 1.99 percent of the votes cast under the party-list system is not correct. Since the
provision in Section 5(2), Article VI of the Constitution that the party-list representative shall constitute
twenty percent (20%) of the total number of the Members of the House of Representatives is
mandatory, after the parties receiving at least two percent (2%) of the total votes case for the party-
list system have been allocated one seat, the remaining seats should be allocated among the parties
by the proportional percentage of the votes received by each party as against the total party-list votes
(Barangay Association for National Advancement and Transparency vs COMELEC, 586 SCRA 211
(2009).

The claim of Bluebean that Greenpeas is not entitled to participate in the party-list elections because
it does not represent any marginalized and underrepresented sectors of society is not correct. It is
enough that its principal advocacy pertains to the special interests of its sector (Atong Panglaum vs
COMELEC, 694 SCRA 477 (2013)).

VI.

A few months before the end of the present Congress, Strongwill was invited by the Senate to shed
light in an inquiry relative to the alleged siphoning and diverting of the pork barrel of members of
Congress to non-existent or fictitious projects. Strongwill has been identified in the news as the
principal actor responsible for the scandal, the leader of a non-governmental organization which
ostensibly funnelled the funds to certain local government projects which existed only on paper. At
the start of the hearings before the Senate, Strongwill refused at once to cooperate. The Senate cited
him in contempt and sent him to jail until he would have seen the light. The Congress, thereafter,
adjourned sine die preparatory to the assumption to office of the newly-elected members. In the
meantime, Strongwill languished behind bars and the remaining senators refused to have him
released, claiming that the Senate is a continuing body and , therefore, he can be detained
indefinitely. Are the senators right? (4%)

SUGGESTED ANSWER

Yes, the Senators are right. The Senate is to be considered as a continuing body for purposes of its
exercise of its power punish for contempt. Accordingly, the continuing validity of its orders punishing
for contempt should not be affected by its sine die adjournment (Arnault vs Nazareno, 87 Phil. 29
(1950)
ALTERNATIVE ANSWER

The Senators are right. While the Senate as an institution is continuing, in the conduct of its day-to-
day business, the Senate of each Congress acts separately from the Senate of the Congress before
it. All pending matters terminate upon expiration of each Congress (Neri vs Senate Committee on
Accountability of Public Officers and Investigation, 564 SCRA 152 (2008)

VII.

Margie has been in the judiciary for a long time, starting from the lowest court. Twenty (20) years
from her first year in the judiciary, she was nominated as a Justice in the Court of Appeals. Margie
also happens to be a first-degree cousin of the President. The Judicial and Bar Council included her
in the short-list submitted to the President whose term of office was about to end it was a month
before the next presidential elections. Can the President still make appointments to the judiciary
during the so-called midnight appointment ban period? Assuming that he can still make appointments,
could he appoint Margie, his cousin? (4%)

SUGGESTED ANSWER

The President can make appointments to the Supreme Court two months before a presidential
election until the end of his term but not to the rest of the Judiciary like the Court of Appeals. Under
Section 4(1), Article VIII of the Constitution, vacancies in the Supreme Court shall be filled within
ninety (90) days from the occurrence of the vacancy. Under Section 9, Article VIII of the Constitution,
vacancies in the lower courts shall be filled within ninety (90) days from submission of the list of
nominees. These appointments are screened by the Judicial and Bar Council, and the process
necessarily precludes or prevents the President from making purely political appointments to the
courts, which is what is sought to be prevented by the prohibition (De Castro vs Judicial and Bar
Council, 615 SCRA 666 (2010)).

The President may also appoint his first cousin, Margie, as Justice of the Court of Appeals. The
prohibition in Section 13, Article VII of the Constitution against appointment by the President of
relatives within the fourth degree by consanguinity or affinity does not include appointments to the
Judiciary.

ALTERNATIVE ANSWER (FOR FIRST QUESTION)

The President cannot make appointments to the Judiciary during two months before the presidential
election until the end of his term because of the ban in Section 15, Article VII of the Constitution.
Despite the constitutional mandate to fill vacancies in Judiciary within the prescribed periods, the
prohibitions against the appointments releases the President from the obligation to appoint within
them. The delay is excusable, since it will be impossible to comply with his obligation.

VIII.

The President, concerned about persistent reports of widespread irregularities and shenanigans
related to the alleged ghost projects with which the pork barrel funds of members of Congress had
been associated, decided not to release the funds authorized under a Special Appropriations Act for
the construction of a new bridge. The Chief Executive explained that, to pro perly conserve and
preserve the limited funds of the government, as well as to avoid further mistrust by the people, such
a project which he considered as unnecessary since there was an old bridge near the proposed
bridge which was still functional should be scrapped. Does the President have such authority? (4%)

SUGGESTED ANSWER

The President has the authority to withhold the release of the funds under a Special Appropriation
Act for a project which he considered unnecessary. The faithful execution of the laws requires the
President to desist from implementing a law if by doing so will prejudice public interest. It is folly to
require the President to spend the entire amounts appropriated in the law in such a case. (Philippine
Constitution Association vs. Enriquez, 235 SCRA 506 (1994))

ALTERNATIVE ANSWER

The President does not possess the authority to scrap the Special Appropriations Act for the
construction of the new bridge. His refusal to spend the funds appropriated for the purpose is unlawful.

The President is expected to faithfully implement the purpose for which Congress appropriated funds.
Generally, he cannot replace legislative discretion with his own personal judgment as to the wisdom
of a law. (Araullo vs Aquino, GR No. 209287, July 1, 2014).

IX.

Gerrymandering refers to the practice of: (1%)

(A) creating or dividing congressional districts in a manner intended to favor a particular party
or candidate

(B) truancy as applied to Members of Congress

(C) loafing among members of Congress

(D) coming up with guessing game when it comes to legislation

(E) commandeering large chunks of the budget for favoured congressional districts

SUGGESTED ANSWER

(A) Creating or dividing congressional districts in a manner intended to favor a particular party or
candidate

X.

The void-for-vagueness doctrine is a concept which means that: (1%)

(A) if a law is vague, then it must be void

(B) any law which could not be understood by laymen is a nullity


(C) if a law is incomprehensible to ordinary people such that they do not really know what is
required or prohibited, then the law must be struck down

(D) a government regulation that lacks clear standards is nonsensical and useless as a guide
for human conduct

(E) clarity in legal language is a mandate of due process.

SUGGESTED ANSWER

(C ) if a law is incomprehensible to ordinary people such that they do not really know what is required
or prohibited, then the law must be struck down

XI.

In keeping with the modern age of instant and incessant information and transformation, Congress
passed Cybercrime Prevention Act to regulate access to and use of the amenities of the cyberspace.
While ostensibly the law is intended to protect the interests of society, some of its provisions were
also seen as impermissibly invading and impairing widely cherished liberties of the people particularly
the freedom of expression. Before the law could even be implemented, petitions were filed in the
Supreme Court questioning said provisions by people who felt threatened, for themselves as well as
for the benefit of others who may be similarly affected but not minded enough to challenge the law.
The Solicitor General countered that there is no basis for the exercise of the power of judicial review
since there has yet been no violation of the law, and therefore, there is no actual case or controversy
to speak of, aside from the fact that the petitioners have no locus standi since they do not claim to be
in imminent danger of being prosecuted under the law. Can the Court proceed to decide the case
even if the law has not yet become effective? (4%)

SUGGESTED ANSWER

The Supreme Court can proceed to decide the case even if the law has not yet become effective.
Since the petitions filed sought to nullify the Cybercrime Prevention Act, because it violated several
provisions of the Bill of Rights, the Supreme Court became duty-bound to settle the dispute (Tanada
vs Angara, 272 SCRA 18 (1997)). Since it is alleged that the Cybercrime Prevention Act violates
various provisions of the Bill of Rights, including freedom of speech, freedom of the press, and the
right against unreasonable searches and seizures, the issues raised are the paramount public
interest, of transcendental importance and with far-reaching constitutional implications, that justify
dispensation with locus standi and exercise of the power of judicial review by the Supreme Court
(Chavez vs Gonzales, 545 SCRA 441 (2008). Jurisprudence provides that locus standi is not required
when the action was filed to prevent a chilling effect on the exercise of the right to freedom of
expression and overbreadth.

XII.

The Court had adopted the practice of announcing its decision in important, controversial or
interesting cases the moment the votes had been taken among the justices, even as the final printed
decision and separate opinions are not yet available to the public. In a greatly anticipated decision in
a case of wide-ranging ramifications, the voting was close 8 for the majority, while 7 were for the
other side. After the Court had thus voted, it issued a press release announcing the result, with the
advice that the printed copy of the decision, together with the separate opinions, were to be issued
subsequently. The following day, however, one of the members of the Court died. The Court then
announced that it would deliberate anew on the case since apparently the one who died belonged to
the majority. Citizens for Transparency, a group of civic-spirited professionals and ordinary citizens
dedicated to transparency and accountability in the government, questioned the act of the Court. The
petitioners claimed the decision had already been validly adopted and promulgated. Therefore, it
could no longer be recalled by the Court. At the same time, the group also asked the Court to disclose
to the public the original decision and the separate opinions of the magistrates, together with what
they had deliberated on just before they came up with the press release about the 8-7 decision. (6%)

(A) Was the announced 8-7 decision already validly promulgated and thus not subject to
recall?

(B) If the decision was not yet finalized at the time when the justice died, could it still be
promulgated?

(C) If the decision was still being finalized, should the Court release to the public the majority
decision and the separate opinions as originally announced, together with their deliberations
on the issues?

SUGGESTED ANSWER

(A) The decision cannot be deemed to have been promulgated simply because of the
announcement of the voting in a press release, because the decision has not yet been issued
and filed with the Clerk of Court. Until the decision is filed with the Clerk of Court, the Justices
still have control over the decision and they can still change their votes (Limkaichong vs
COMELEC, 594 SCRA 434, (2009)).
(B) The decision can no longer be promulgated if the Justice who belonged to the majority died,
for lack of a majority vote. The vote he cast is no longer valid, as he was no longer an
incumbent member of the Supreme Court (Lao vs To-Chip, 158 SCRA 243 (1988))

ALTERNATIVE ANSWER for (B

The decision can be promulgated even if the Supreme Court en banc is equally divided, if after
the case was again deliberated upon, no majority decision was reached. If the case is an original
action, it should be dismissed. If it is an appealed case, the decision appealed from should be
affirmed if it is a civil case. If it is a criminal case, the accused should be acquitted (Section 7,
Rule 56 of the Rules of the Court; Section 3, Rule 125, Revised Rules on Criminal Procedure).

(C) The Supreme Court should not release to the public the majority opinion and the separate
opinions, as well as its deliberations. They are part of its confidential internal deliberations.

XIII.

Congress may increase the appellate jurisdiction of the Supreme Court: (1%)

(A) anytime it wants


(B) if requested by the Supreme Court

(C) upon recommendation of the President

(D) only with the advice and concurrence of the Supreme Court

(E) whenever it deems it appropriate, advisable or necessary

(D) only with the advice and concurrence of the Supreme Court

XIV.

The guarantee of freedom of expression signifies: (1%)

(A) absolute freedom to express oneself

(B) freedom from prior restraint

(C) right to freely speak on anything without limitations

(D) the right of the government to regulate speech

(E) the right of broadcast stations to air any program

(B) freedom from prior restraint

XV.

Allmighty Apostles is a relatively new religious group and movement with fast-growing membership.
One time, DeepThroat, an investigative reporter, made a research and study as to what the groups
leader, Maskeraid was actually doing. DeepThroat eventually came up with the conclusion that
Maskeraid was a phony who is just fooling the simple-minded people to part with their money in
exchange for the promise of eternal happiness in some far -away heaven. This was published in a
newspaper which caused much agitation among the followers of Maskeraid. Some threatened
violence against DeepThroat, while some others already started destroying properties while hurting
those selling the newspaper. The local authorities, afraid of the public disorder that such followers
might do, decided to ban the distribution of the newspaper containing the article. DeepThroat went to
court complaining about the prohibition placed on the dissemination of his article. He claims that the
act of the authorities partakes of the nature of hecklers veto, thus a violation of the guaranty of press
freedom. On th e other hand, the authorities counter that the act was necessary to protect the public
order and the greater interest of the community. If you were the judge, how would you resolve the
issue? (4%)

SUGGESTED ANSWER

If I were the judge, I would rule that the distribution of the newspaper cannot be banned. Freedom of
the news should be allowed although it induces a condition of unrest and stirs people to anger.
Freedom of the press include freedom of circulation (Chavez vs Gonzales, 545 SCRA 441 (2008))
When governmental action that restricts freedom of the press is based on content, it is given the
strictest scrutiny and the government must show that there is a clear and present danger as to warrant
curtailment of the right of Deep Throat to distribute the newspaper (Chavez vs Gonzales, 545 SCRA
441(2008))

ALTERNATIVE ANSWER

The action of the government is justified.

The fact that some people had already started destroying properties while hurting those selling the
newspaper can be validly considered by the government as a clear and present danger, which will
justify its banning of the further distribution of the newspaper containing the article. The test for
limitations on freedom of expression continues to be the clear and present danger rule-that words
are used in such circumstances and are of such a nature as to create a clear and present danger that
they will bring about the substantive evils that the lawmaker has a right to prevent (Chavez vs
Gonzales, 545 SCRA 441 (2008))

XVI.

The overbreadth doctrine posits that the government: (1%)

(A) must know the extent of its power

(B) when it exercises too much power it is like someone with bad breath it is not healthy to
society

(C) can enact laws which can reach outside its borders, like long -arm statues

(D) the government is prohibited in banning unprotected speech if a substantial amount of


protected speech is restrained or chilled in the process

(D) the government is prohibited in banning unprotected speech if a substantial amount of protected
speech is restrained or chilled in the process.

XVII.

Towards the end of the year, the Commission on Audit (COA) sought the remainder of its
appropriation from the Department of Budge t and Management (DBM). However, the DBM refused
because the COA had not yet submitted a report on the expenditures relative to the earlier amount
released to it. And, pursuant to the "no report, no release" policy of the DBM, COA is not entitled to
any further releases in the meantime. COA counters that such a policy contravenes the guaranty of
fiscal autonomy granted by the Constitution. Is COA entitled to receive the rest of its appropriations
even without complying with the DBM policy? (4%)

SUGGESTED ANSWER

The Commission on Audit is entitled to receive the rest of its appropriations even without complying
with the policy of the Department of Budget and Management. Section 5, Article IX-A of the
Constitution provides that its approved annual appropriation shall be automatically and regular
released. The Secretary of Budget and Management cannot make the release of the appropriations
subject to the submissions of reports (Civil Service Commission vs Department of Budget and
Management, 464 SCRA 115 (2005))

XVIII.

The National Building Code and its implementing rules provide, inter alia, that operators of shopping
centers and malls should provide parking and loading spaces, in accordance with a prescribed ratio.
The Solicitor General, heeding the call of the public for the provision of free parking spaces in malls,
filed a case to compel said business concerns to discontinue their practice of collecting parking fees.
The mall owners and operators oppose, saying that this is an invalid taking of their property, thus a
violation of due process. The Solicitor General justifies it, however, claiming that it is a valid exercise
of police power. Could the mall owners and operators be validly compelled to provide free parking to
their customers? (4%)

SUGGESTED ANSWER

No, the mall owners and operators cannot be validly compelled to provide free parking to their
customers, because requiring them to provide free parking space to their customers is beyond the
scope of police powers. It unreasonably restricts the right to use property for business purposes and
amounts to confiscation of property (Office of the Solicitor General vs Ayala Land, Inc. 600 SCRA
617 (2009))

XIX.

Surveys Galore is an outfit involved in conducting nationwide surveys. In one such survey, it asked
the people about the degree of trust and confidence they had in several institutions of the government.
When the results came in, the judiciary was shown to be less trusted than most of the government
offices. The results were then published by the mass media. Assension, a trial court judge, felt
particularly offended by the news. He then issued a show-cause order against Surveys Galore
directing the survey entity to explain why it should not be cited in contempt for coming up with such
a survey and publishing the results which were so unflattering and degrading to the dignity of the
judiciary. Surveys Galore immediately assailed the show-cause order of Judge Assension, arguing
that it is violative of the constitutional guaranty of freedom of expression. Is Surveys Galores petition
meritorious? (4%)

SUGGESTED ANSWER

The petition of Surveys Galore is meritorious. Freedom of speech and freedom of the press may be
identified with the liberty to discuss publicly and truthfully any matter of public interest without
censorship and punishment. There should be no previous restraint on the communication of views or
subsequent liability whether in libel suits, prosecution for sedition, or action for damages, or contempt
proceedings unless there is a clear and present danger of substantive evil that Congress has a right
to prevent (Chavez vs Gonzales, 545 SCRA 441 (2008)). Freedom of speech should not be impaired
through the exercise of the power to punish for contempt of court unless the statement in question is
a serious and imminent threat to the administration of justice. Here, the publication of the result of the
survey was not intended to degrade the Judiciary (Cabansag vs Fernandez, 102 Phil. 152 (2012))

XX.
Under the so-called doctrine of qualified political agency, (1%)

(A) civil servants must first qualify before they could be appointed to office

(B) all employees in the government are merely agents of the people

(C) the acts of subordinates presumptively of those of the heads of offices disapproves them

(D) members of the Cabinet must have the absolute trust and confidence of the President

(C) the acts of subordinates presumptively of those of the heads of offices disapproves them

XXI.

Constituent power refers to the authority (1%)

(A) of public officials to command respect

(B) given to Congress to enact police power measures

(C) to propose constitutional amendments or revisions

(D) of the people to take back the power entrusted to those in government

(E) of the President to call out the armed forces to suppress lawless violence

(C) to propose constitutional amendments or revisions

XXII.

The National Power and Grid Corporation (NPGC), a government entity involved in power generation
distribution, had its transmissi on lines traverse some fields belonging to Farmerjoe. NPGC did so
without instituting any expropriation proceedings. Farmerjoe, not knowing any better, did not
immediately press his claim for payment until after ten years later when a son of his took up Law and
told him that he had a right to claim compensation. That was then the only time that Farmerjoe
earnestly demanded payment. When the NPGC ignored him, he instituted a case for payment of just
compensation. In defense, NPGC pointed out that the claim had already prescribed since under its
Charter it is clearly provided that "actions for damages must be filed within five years after the rights
of way, transmission lines, substations, plants or other facilities shall have been established and that
after said period, no suit shall be brought to question the said rights of way, transmission lines,
substations, plants or other facilities." If you were the lawyer of Farmerjoe, how would you protect
and vindicate the rights of your client? (4%)

SUGGESTED ANSWER

Farmerjoes demand for payment is justified and cannot be considered as prescribed. His demand
for payment is an action for the payment of just compensation and not an action for damages as
provided in the Charter of the National Power and Grid Corporation. It partakes of the nature of a
reverse eminent domain proceeding (or inverse condemnation proceeding) wherein claims for just
compensation for property taken can be made and pursued (National Power Corporation vs Vda. De
Capin, 569 SCRA 648 (2008); National Power Corporation vs Heirs of Sangkay, 656 SCRA 60 (2011)

ALTERNATIVE ANSWER

I will claim that since National Power and Grid Corporation took the property traversing the fields of
Farmerjoe without first acquiring title through expropriation or negotiated sale, his action to recover
just compensation is imprescriptible (Republic vs Court of Appeals, 454 SCRA 510 (2005))

XXIII.

The police got a report about a shooting incident during a town fiesta. One person was killed. The
police immediately went to the scene and started asking the people about what they witnessed. In
due time, they were pointed to Edward Gunman, a security guard, as the possible malefactor. Edward
was then having refreshment in one of the eateries when the police approached him. They asked him
if he had a gun to which question he answered yes. Then they asked if he had seen anybody shot in
the vicinity just a few minutes earlier and this time he said he did not know about it. After a few more
questions, one of the policemen asked Edward if he was the shooter. He said no, but then the
policeman who asked him told him that several witnesses pointed to hi m as the shooter. Whereupon
Edward broke down and started explaining that it was a matter of self-defense. Edwardwas eventually
charged with murder. During his trial, the statements he made to the police were introduced as
evidence against him. He obj ected claiming that they were inadmissible since he was not given his
Miranda rights. On the other hand, the prosecution countered that there was no need for such rights
to be given since he was not yet arrested at the time of the questioning. If you were the judge, how
would you rule on the issue? (4%)

SUGGESTED ANSWER

If I were the judge, I would rule that the confession is inadmissible. First, the rights under investigation
in Section 12, Article III of the Constitution are applicable to any person under investigation for the
commission of an offense. The investigation began when a policeman told Edward that several
witnesses pointed to him as the shooter, because it started to focus on him as a suspect (People vs
Bariquit, 341 SCRA 600 (2000). Second, under Section 2 of RA 7438, for a confession to be
admissible, it must be in writing (People vs Labtan, 320 SCRA 140 (1999))

XXIV.

Alienmae is a foreign tourist. She was asked certain questions in regard to a complaint that was filed
against her by someone who claimed to have been defrauded by her. Alienmae answered all the
questions asked, except in regard to some matters in which she invoked her right against self-
incrimination. When she was pressed to elucidate, she said that the questions being asked might
tend to elicit incriminating answers insofar as her home state is concerned. Could Alienmae invoke
the right against self-incrimination if the fear of incrimination is in regard to her foreign law? (4%)

SUGGESTED ANSWER

Alienme can invoke her right against self-incrimination even if it is in regard to her foreign law, if her
home is a party to the International Covenant on Civil and Political Rights. Article 14(3)(g) of the said
Covenant provides:
In the determination of any criminal charge against him, everyone shall be entitled to the following
minimum guarantees, in full equality:

(g) Not to be compelled to testify against himself or to confess guilt.

XXV.

Rosebud is a natural-born Filipino woman who got married to Rockcold, a citizen of State Frozen. By
virtue of the laws of Frozen, any person who marries its citizens would automatically be deemed its
own citizen. After ten years of marriage, Rosebud, who has split her time between the Philippines
and Frozen, decided to run for Congress. Her opponent sought her disqualification, however, claiming
that she is no longer a natural-born citizen. In any event, she could not seek elective position since
she never renounced her foreign citizenship pursuant to the Citizenship Retention and Reacquisition
Act (R.A. No. 9225). Is Rosebud disqualified to run by reason of citizenship? (4%)

SUGGESTED ANSWER

Rosebud remained a natural born Filipino citizen even if under the laws of the Frozen, she became
a citizen of it because of her marriage to Rockcold. Under Section 4, Article IV of the Constitution,
she retained her Philippine citizenship.

Rosebud cannot seek elective office. Under Section 5(2) of RA No. 9225, even those who retained
their Philippine citizenship by birth and acquired foreign citizenship by virtue of marriage to a foreign
spouse are required to renounce their foreign citizenship (Sobejana-Condon vs COMELEC 678
SCRA 267 (2012))

ALTERNATIVE ANSWER

No, Rosebud is not disqualified.

She became a dual citizen, not on the basis of the provisions of RA No. 9225, but by reason of the
automatic operation of the citizenship laws of State Frozen, of which her husband Rockcold, was a
citizen. The requirement regarding the renunciation of her foreign citizenship under that law cannot
therefore be made to apply to her.

It does not appear that she ever renounced her natural-born Filipino citizenship upon her marriage to
Rockcold. Accordingly, she cannot be considered as ever having lost it. She is therefore not
disqualified to run for Congress by reason of citizenship.

XXVI.

The one-year-bar rule in impeachment proceedings is to be reckoned from the time the (1%)

(A) first impeachment complaint is filed

(B) impeachment complaint is referred to the Committee on Justice

(C) House of Representatives vote on the impeachment complaint


(D) House of Representatives endorses the Articles of Impeachment to the Senate

(B) impeachment complaint is referred to the Committee on Justice.

XXVII.

Congress enacted a law exempting certain government institutions providing social services from the
payment of court fees. Atty. Kristopher Timoteo challenged the constitutionality of the said law on the
ground that only the Supreme Court has the power to fix and exempt said entities from the payment
of court fees.

Congress, on the other hand, argues that the law is constitutional as it has the power to enact said
law for it was through legislative fiat that the Judiciary Development Fund (JDF) and the Special
Allowance for Judges and Justices (SAJJ), the funding of which are sourced from the fees collected
by the courts, were created. Thus, Congress further argues that if it can enact a law utilizing court
fees to fund the JDF and SAJJ, a fortiori it can enact a law exempting the payment of court fees.

Discuss the constitutionality of the said law, taking into account the arguments of both parties? (4%)

SUGGESTED ANSWER

The law is unconstitutional. The Constitution has taken away the power of Congress to repeal, alter
or supplement the Rules of Court. The fiscal autonomy guaranteed the Judiciary by Section 3, Article
VIII of the Constitution recognized the authority of the Supreme Court to levy, assess and collect fees.
Congress cannot amend the rules promulgated by the Supreme Court for the payment of legal fees
by granting exemptions (In re Petition for Recognition of Exemption of the GSIS from Payment of
Legal Fees, 612 SCRA 193 (2010); In re Exemption of NAPOCOR from Payment of Filing/Docket
Fees, 615 SCRA 1 (2010); In re Exemption from Payment of Court and Sheriffs Fees of Duly
Registered Cooperatives, 668 SCRA 1 (2012))

XXVIII.

From an existing province, Wideland, Congress created a new province, Hundred Isles, consisting of
several islands, with an aggregate area of 500 square kilometres. The law creating Hundred Isles
was duly approved in a plebiscite called for that purpose. Juan, a taxpayer and a resident of Wideland,
assailed the creation of Hundred Isles claiming that it did not comply with the area requirement as set
out in the Local Government Code, i.e., an area of at least 2,000 square kilometres. The proponents
justified the creation, however, pointing out that the Rules and Regulations Implementing the Local
Government Code states that "the land area requirement shall not apply where the pr oposed
province is composed of one (1) or more islands." Accordingly, since the new province consists of
several islands, the area requirement need not be satisfied. How tenable is the position of the
proponents? (4%)

SUGGESTED ANSWER

The position of the proponents is tenable. The Supreme Court has clarified that, when a province is
composed of one or more islands, its creation need not comply with the 2,000 square kilometer
contiguous territory requirement under the provisions of the Local Government Code. Article 9 (2) of
the Implementing Rules and Regulations of the Local Government Code provided the exemption.
Sections 442 and 450 of the Local Government Code exempted municipalities and component cities
from the area requirement if they consist of one or more islands. While there is no similar provisions
for provinces, there is no reason why the exemption should not apply to them. There is a greater
likelihood that an island or group of island will form part of the area of a province (Navarro vs Ermita.
648 SCRA 400 (2011))

XXIX.

Ambassador Gaylor is State Juvenus diplomatic representative to State Hinterlands. During one of
his vacations, Ambassador Gaylor decided to experience for himself the sights and sounds of State
Paradise, a country known for its beauty and other attractions. While in State Paradise, Ambassador
Gaylor was caught in the company of children under suspicious circumstances. He was arrested for
violation of the strict anti-pedophilia statute of State Paradise. He claims that he is immune from arrest
and incarceration by virtue of his diplomatic immunity. Does the claim of Ambassador Gaylor hold
water? (4%)

SUGGESTED ANSWER

Ambassador Gaylor cannot invoke his diplomatic immunity. In accordance with Paragraph 1, Article
31 of the Vienna Convention of Diplomatic Relations, since State Paradise is not his receiving state,
he does not enjoy diplomatic immunity within its territory. Under Paragraph 1, Article 40 of the Vienna
Convention of Diplomatic Relations, he cannot be accorded diplomatic immunity in State Paradise,
because he is not passing through it take up or return to his post or to return to State Juvenus.

XXX.

Congress passed a law, R.A. No. 15005, creating an administrative Board principally tasked with the
supervision and regulation of legal education. The Board was attached to the Department of
Education. It was empowered, among others, to prescribe minimum standards for law admission and
minimum qualifications of faculty members, the basic curricula for the course of study aligned to the
requirements for admission to the Bar, law practice and social consciousness, as well as to establish
a law practice internship as a requirement for taking the Bar which a law student shall undergo
anytime during the law course, and to adopt a system of continuing legal education. Professor
Boombastick, a long-time law practitioner and lecturer in several prestigious law schools, assails the
constitutionality of the law arguing; that it encroached on the prerogatives of the Supreme Court to
promulgate rules relative to admission to the pra ctice of law, the Integrated Bar, and legal assistance
to the underprivileged. If you were Professor Boombasticks understudy, how may you help him
develop clear, concise and cogent arguments in support of his position based on the present
Constitution and the decisions of the Supreme Court on judicial independence and fiscal autonomy?
(4%)

SUGGESTED ANSWER

The statutory authority granted to the administrative Board to promulgate rule and regulations cannot
encroach upon the exclusive authority of the Supreme Court to regulate the admission to the practice
of law (Section 5(5), Article VIII of the Constitution).

Thus, the Administrative Board cannot prescribe additional standards for admission to the practice of
law, adopt a course of study which is inconsistent with the requirements of the Supreme Court, and
impose additional requirements to take the bar examinations (Philippine Lawyerss Association vs
Agrava, 105 Phil 173 (1959)). Since Congress has no power to repeal, alter or supplement the Rules
of Court, it cannot delegate such power to the Administrative Board.
2014 BAR EXAMINATIONS
LABOR LAW

I.

Linda was employed by Sectarian University (SU) to cook for the members of a religious order who
teach and live inside the campus. While performing her assigned task, Linda accidentally burned
herself. Because of the extent of her injuries, she went on medical leave. Meanwhile, SU engaged
a replacement cook. Linda filed a complaint for illegal dismissal, but her employer SU contended
that Linda was not a regular employee but a domestic househelp. Decide. (4%)

SUGGESTED ANSWER

Linda is a regular employee.

SUs contention that Linda is a domestic helper is without basis because the latter did not minister
to the personal comfort of the members of any household. Although a cook, hence listed, she cannot
be classified as a Kasambahay because she rendered services for resident religious teachers in a
university which was not a household.

II.

Lucy was one of approximately 500 call center agents at Hambergis, Inc. She was hired as a
contractual employee four years ago. Her contracts would be for a duration of five (5) months at a
time, usually after a onemonth interval. Her re-hiring was contingent on her performance for the
immediately preceding contract. Six (6) months after the expiration of her last contract, Lucy went to
Hambergis personnel department to inquire why she was not yet being recalled to work. She was
told that her performance during her last contract was "below average." Lucy seeks your legal advice
about her chances of getting her job back. What will your advice be? (4%)

SUGGESTED ANSWER

I will advise Lucy to file a complaint for constructive dismissal, with prayer for reinstatement, because
her floating status has exceeded six (6) months.

By virtue of the nature of her job, Lucy attained tenure on the first day of her employment. As a
regular employee, therefore, she could only be dismissed for a just or authorized cause. Expiration
of her last contract was neither a just nor authorized cause. Hence, she was illegally dismissed.
Moreover, her term employment contracts were contracts of adhesion; hence, they should be taken
against Hambergis Inc. because of its obvious intent to use periods to bar her regularization.

III.

Lolong Law Firm (LLF), which employs around 50 lawyers and 100 regular staff, suffered losses for
the first time in its history. The management informed its employees that it could no longer afford to
provide them free lunch. Consequently, it announced that a nominal fee would henceforth be
charged. Was LLF justified in withdrawing this benefit which it had unilaterally been providing to its
employees? (1%)
(A) Yes, because it is suffering losses for the first time.

(B) Yes, because this is a management prerogative which is not due to any legal or
contractual obligation.

(C) No, because this amounts to a diminution of benefits which is prohibited by the Labor
Code.

(D) No, because it is a fringe benefit that has already ripened into a demandable right.

SUGGESTED ANSWER

(D) No, because it is a fringe benefit that has already ripened into a demandable right.

Note:

Not (A) because the losses do not appear to be substantial losses.

Not (B) because management prerogative cannot be the source of a unilateral benefit at one point
and the very justification for its taking away at another.

Not (C) because Article 100 of the Labor Code applies only to benefits enjoyed before or at the time
of the effectivity of the Code (Waterfront ruling, 22 Sept. 2010, J Peralta).

IV.

Linis Manpower, Inc. (LMI) had provided janitorial services to the Philippine Overseas Employment
Administration (POEA) since March 2009. Its service contract was renewed every three months.
However, in the bidding held in June 2012, LMI was disqualified and excluded. In 2013, six janitors
of LMI formerly assigned at POEA filed a complaint for underpayment of wages. Both LMI and POEA
were impleaded as respondents. Should POEA, a government agency subject to budgetary
appropriations from Congress, be held liable solidarily with LMI for the payment of salary differentials
due to the complainant? Cite the legal basis of your answer. (4%)

SUGGESTED ANSWER

Yes.

The POEA, although a government agency, is a statutory employer by operation of Article 106 of
the Labor Code, as implemented by D.O. 18-A. As such, it can be held solidarily liable for salary
differentials resulting from its job contractors underpayment of salaries due its workers (Meralco
Industrial Engg ruling, 14 March 2008).

Comment:

Relative to the trilateral relationship between a principal (P), contractor (C) and worker (W), we
hardly read that P may be any person private or public. The Bar question tells us that P may be
the POEA, SSS, GSIS or ADB. Article 106, LC, makes no distinction; hence, any person can be a
statutory employer. Indeed, only principals of service providers in IT-assisted outsourcing, PCAB-
registered contractors, and canteen concessionaires are beyond the reach of D.O. 18-A.

V.

Liwayway Glass had 600 rank-and-file employees. Three rival unions A, B, and C participated in
the certification elections ordered by the Med-Arbiter. 500 employees voted. The unions obtained
the following votes: A-200; B-150; C-50; 90 employees voted "no union"; and 10 were segregated
votes. Out of the segregated votes, four (4) were cast by probationary employees and six (6) were
cast by dismissed employees whose respective cases are still on appeal. (10%)

(A) Should the votes of the probationary and dismissed employees be counted in the total
votes cast for the purpose of determining the winning labor union?

(B) Was there a valid election?

(C) Should Union A be declared the winner?

(D) Suppose the election is declared invalid, which of the contending unions should
represent the rank-and-file employees?

(E) Suppose that in the election, the unions obtained the following votes: A-250; B-150; C-
50; 40 voted "no union"; and 10 were segregated votes. Should Union A be certified as the
bargaining representative?

SUGGESTED ANSWER

(A). Yes. The segregated votes should be counted as valid votes. Probationary employees are not
among the employees who are ineligible to vote. Likewise, the pendency of the appeal of the six
dismissed employees indicates that they have contested their dismissal before a forum of
appropriate jurisdiction; hence, they continue to be employees for purposes of voting in a certification
election (D.O. 40-03).

(B). Yes. The certification election is valid because it is not a barred election and majority of the
eligible voters cast their votes.

(C). No. Union A should not be declared the winner because it failed to garner majority of the valid
votes. The majority of 500 votes, representing valid votes, is 251 votes. Since Union A received
200 votes only, it did not win the election.

(D) None of the participating unions can represent the rank-and-file employees for purposes of
collective bargaining because none of them enjoys majority representative status.

(E) If the 10 votes were segregated on the same grounds, Union A cannot still be certified as the
bargaining representative because its vote of 250 is still short of the majority vote of 251. However,
if the 10 votes were validly segregated, majority vote would be 246 votes. Since Union A received
more than majority vote then it won the election.
VI.

Lina has been working as a steward with a Miami, U.S.A.-based Loyal Cruise Lines for the past 15
years. She was recruited by a local manning agency, Macapagal Shipping, and was made to sign a
10-month employment contract every time she left for Miami. Macapagal Shipping paid for Linas
round-trip travel expenses from Manila to Miami. Because of a food poisoning incident which
happened during her last cruise assignment, Lina was not re-hired. Lina claims she has been illegally
terminated and seeks separation pay. If you were the Labor Arbiter handling the case, how would
you decide? (4%)

SUGGESTED ANSWER

I will dismiss the complaint for illegal dismissal.

Lina is a seafarer. As such, she is a contractual employee who cannot require her employer to
enter into another contract of employment with her under the Principle of Freedom of Contracts. In
effect, Lina cannot be awarded separation pay. As an alternative relief, separation pay is proper
only when there is a finding of illegal dismissal.

VII.

Non-lawyers can appear before the Labor Arbiter if: (1%)

(A) they represent themselves

(B) they are properly authorized to represent their legitimate labor organization or member
thereof

(C) they are duly-accredited members of the legal aid office recognized by the DOJ or IBP

(D) they appear in cases involving an amount of less than Php5,000

SUGGESTED ANSWER

(A). They represent themselves.

Note:

Not (B) because it restricts the term organizations to legitimate labor organizations.

Not (C) because the DOJ is not an accrediting agency.

Not (D) because the not exceeding Ph5,000 is a jurisdictional rule, not a rule on law practice.
VIII.

As a result of a bargaining deadlock between Lazo Corporation and Lazo Employees Union, the
latter staged a strike. During the strike, several employees committed illegal acts. Eventually, its
members informed the company of their intention to return to work. (6%)

(A) Can Lazo Corporation refuse to admit the strikers?

(B) Assuming the company admits the strikers, can it later on dismiss those employees who
committed illegal acts?

(C) If due to prolonged strike, Lazo Corporation hired replacements, can it refuse to admit
the replaced strikers?

SUGGESTED ANSWERS:

(A) No. A strike is a temporary stoppage of work only. Therefore, strikers can go back to their work
in the event of a voluntary abandonment of their strike.

(B) After admission, the company can hold the strikers behind the illegalities accountable for their
acts. If found to have committed acts justifying a dismissal, said employees can be terminated after
due process.

(C) No. The positions left behind by strikers are deemed legally unoccupied. Moreover, the hiring
of replacement workers does not terminate employer-employee relationship because a strike is a
temporary stoppage of work only. Finally, replacement workers are deemed to have accepted their
engagement subject to the outcome of the strike.

IX.

Luisa Court is a popular chain of motels. It employs over 30 chambermaids who, among others, help
clean and maintain the rooms. These chambermaids are part of the union rank-and-file employees
which has an existing collective bargaining agreement (CBA) with the company. While the CBA was
in force, Luisa Court decided to abolish the position of chambermaids and outsource the cleaning of
the rooms to Malinis Janitorial Services, a bona fide independent contractor which has invested in
substantial equipment and sufficient manpower. The chambermaids filed a case of illegal dismissal
against Luisa Court. In response, the company argued that the decision to outsource resulted from
the new managements directive to streamline operations and save on costs. If you were the Labor
Arbiter assigned to the case, how would you decide? (4%)

SUGGESTED ANSWER:

I would declare the chambermaids to have been illegally dismissed.

The chambermaids are regular employees for performing work necessary or desirable to the main
trade of the Luisa Court. As such, they enjoy security of tenure. The job contracting arrangement
between Luisa Court and Malinis Janitorial Services is prohibited by D.O. 18-A because it has the
effect of introducing workers to displace Luisa Courts regular workers.

X.

Luisa was hired as a secretary by the Asian Development Bank (ADB) in Manila. Luisas first boss
was a Japanese national whom she got along with. But after two years, the latter was replaced by
an arrogant Indian national who did not believe her work output was in accordance with international
standards. One day, Luisa submitted a draft report filled with typographical errors to her boss. The
latter scolded her, but Luisa verbally fought back. The Indian boss decided to terminate her services
right then and there. Luisa filed a case for illegal dismissal with the Labor Arbiter claiming
arbitrariness and denial of due process. If you were the Labor Arbiter, how would you decide the
case? (4%)

SUGGESTED ANSWER:

I will dismiss the complaint for illegal dismissal.

Luisa committed serious misconduct. Her Indian boss, regardless of his arrogant nature, had the
clear right to reprimand her for her poor performance. Absent justification for verbally fighting back,
Luisas act amounted to serious misconduct. Therefore, her dismissal was valid. However, she
was not accorded statutory due process. For this reason, I will award her nominal damages of
Ph30,000.

XI.

Lionel, an American citizen whose parents migrated to the U.S. from the Philippines, was hired by
JP Morgan in New York as a call center specialist. Hearing about the phenomenal growth of the call
center industry in his parents native land, Lionel sought and was granted a transfer as a call center
manager for JP Morgans operations in Taguig City. Lionelsemployment contract did not specify a
period for his stay in the Philippines. After three years of working in the Philippines, Lionel was
advised that he was being recalled to New York and being promoted to the position of director of
international call center operations. However, because of certain "family reasons," Lionel advised
the company of his preference to stay in the Philippines. He was dismissed by the company. Lionel
now seeks yo ur legal advice on: (6%)

(A) whether he has a cause of action

(B) whether he can file a case in the Philippines

(C) what are his chances of winning

SUGGESTED ANSWER:

(A) Lionel has a cause of action. He has a right to be secure in his job; his employer has the
correlative obligation to respect that right; his dismissal constitutes a violation of his tenurial right;
and said violation caused him legal injury.
(B) Lionel can file an illegal dismissal case in the Philippines. Being a resident corporation, JP
Morgan is subject to Philippine Labor Laws. And, although hired abroad, Lionels place of work is
Taguig. Hence, he can lodge his complaint with the NLRC-NCR which has territorial jurisdiction
over his workplace (Sec. 1, Rule IV, NLRC Rules of Procedure, as amended).

(C) Lionel has reasonable chances of winning. His recall to the USA was not a lawful lateral transfer
that he could not refuse. On the contrary, it was a scalar transfer amounting to a promotion which
he could validly refuse. Absent willful disobedience, therefore, his termination is groundless.

XII.

Which of the following groups does not enjoy the right to self-organization? (1%)

(A) those who work in a non-profit charitable institution

(B) those who are paid on a piece-rate basis

(C) those who work in a corporation with less than 10 employees

(D) those who work as legal secretaries

SUGGESTED ANSWER:

(D). Those who work as legal secretaries. Legal secretaries are confidential employees.

Note:

Not (A) because, under Article 243 of the Labor Code, employees of charitable, religious,
educational and medical institutions are covered employees.

Not (B) because piece-raters do not suffer any disqualification.

Not (C) because the less than 10 rule in the Labor Code affects right to labor standards benefits,
in particular holiday pay and service incentive leave (Articles 94 and 95), not right to self-
organization.

XIII.

Don Luis, a widower, lived alone in a house with a large garden. One day, he noticed that the plants
in his garden needed trimming. He remembered that Lando, a 17-year old out-of-school youth, had
contacted him in church the other day looking for work. He contacted Lando who immediately
attended to Don Luiss garden a nd finished the job in three days. (4%)

(A) Is there an employer-employee relationship between Don Luis and Lando?

(B) Does Don Luis need to register Lando with the Social Security System (SSS)?
SUGGESTED ANSWER:

(A) There is employer-employee relationship between Don Luis and Lando. Firstly, Lando who was
looking for work finally rendered personal services for Don Luis. Secondly, Lando could not have
been the master of his time, means and methods under the circumstances (Sec. 8, RA 8282).

(B) Don Luis does not need to register Lando with the SSS because he is a purely casual employee,
hence outside SSS coverage (RA 8282). Neither should he report Lando for SSS coverage under
the Kasambahay Act because, although a gardener, he is an occasional if not sporadic employee.
Therefore, he is not a kasambahay who is entitled to SSS coverage (RA 10361).

Comment:

The question is tricky. The examiner wants to lead the examinees into considering Lando as a
kasambahay because he is listed (gardener), and giving him SSS coverage pursuant to RA 10361.
However, Lando is an occasional or sporadic gardener; hence, he is not a kasambahay.

XIV.

Luisito has been working with Lima Land for 20 years. Wanting to work in the public sector, Luisito
applied with and was offered a job at Livecor. Before accepting the offer, he wanted to consult you
whether the payments that he and Lima Land had made to the Social Security System (SSS) can
be transferred or credited to the Government Service Insurance System (GSIS). What would you
advice? (4%)

SUGGESTED ANSWER:

I would tell Luisito that, under the Limited Portability Law, he will carry with him his creditable service
and paid contributions as he moves from one system to the other. Hence, he may accept the job
offer without fearing that he would lose his years of service in the private sector. Actually, they can
be totalized with his years of service in the public sector in the event that he would not be able to
qualify for benefits due solely to insufficiency of creditable service.

XV.

Our Lady of Peace Catholic School Teachers and Employees Labor Union (OLPCS-TELU) is a
legitimate labor organization composed of vice principals, department heads, coordinators,
teachers, and non-teaching personnel of Our Lady of Peace Catholic School (OLPCS).

OLPCS-TELU subsequently filed a petition for certification election among the teaching and non-
teaching personnel of OLPCS before the Bureau of Labor Relations (BLR) of the Department of
Labor and Employment (DOLE). The Med-Arbiter subsequently granted the petition and ordered the
conduct of a joint certification election for the teaching and non-teaching personnel of OLPCS.

May OLPCS-TELU be considered a legitimate labor organization? (5%)

SUGGESTED ANSWER:

Yes, OLPCS-TELU is a legitimate labor organization. Its mixed-membership which includes


supervisors and rank-and-filers does not affect its legitimacy. The only effect of such membership
is that the supervisors in the persons of vice principals and department heads are deemed
automatically removed (RA 9481).

Comment:

Another tricky question. The body of the problem leads one to appropriateness of a CBU. Hence,
he might apply the Substantial Mutuality of Interest Principle based on his observation that the
employees perform separate but interdependent tasks. Actually, the question is legitimacy of status
only (LLO status). So, the fact to tackle is mixed-membership.

XVI.

Samahang East Gate Enterprises (SEGE) is a labor organization composed of the rank-and-file
employees of East Gate Enterprises (EGE), the leading manufacturer of all types of gloves and
aprons.

EGE was later requested by SEGE to bargain collectively for better terms and conditions of
employment of all the rank -and-file employees of EGE. Consequently, EGE filed a petition for
certification election before the Bureau of Labor Relations (BLR).

During the proceedings, EGE insisted that it should participate in the certification process. EGE
reasoned that since it was the one who filed the petition and considering that the employees
concerned were its own rankand-file employees, it should be allowed to take an active part in the
certification process.

Is the contention of EGE proper? Explain. (5%)

SUGGESTED ANSWER:

EGE could file the petition for certification election because it was requested to collectively bargain
and it could not do so because SEGE was not the EBR. After it filed the petition, however, it reverted
to its standby status. Therefore, it could not interfere with the selection process which was the
exclusive prerogative of its workers. It could only participate in the inclusion exclusion proceedings,
and nowhere else.

XVII.

Philhealth is a government-owned and controlled corporation employing thousands of Filipinos.


Because of the desire of the employees of Philhealth to obtain better terms and conditions of
employment from the government, they formed the Philhealth Employees Association (PEA) and
demanded Philhealth to enter into negotiations with PEA regarding terms and conditions of
employment which are not fixed by law. (4%)

(A) Are the employees of Philhealth allowed to self-organize and form PEA and thereafter
demand Philhealth to enter into negotiations with PEA for better terms and conditions of
employment?

(B) In case of unresolved grievances, can PEA resort to strikes, walkouts, and other
temporary work stoppages to pressure the government to accede to their demands?
SUGGESTED ANSWERS:

(A) Under E.O. 180, Philhealth employees can organize. Thru their organization, they can negotiate
with Philhealth over terms and conditions of employment not fixed by its charter, Civil Service Law,
or applicable salary standardization law.

(B) No. Although the right to organize implies the right to strike, law may withhold said right. E.O.
180 is that law which withholds from government employees the right to strike. Hence, they cannot
resort to strikes and similar concerted activities to compel concessions from the government.

XVIII.

The procedural requirements of a valid strike include: (1%)

(A) a claim of either unfair labor practice or deadlock in collective bargaining

(B) notice of strike filed at least 15 days before a ULP-grounded strike or at least 30 days
prior to the deadlock in a bargaining grounded strike

(C) majority of the union membership must have voted to stage the strike with notice thereon
furnished to the National Conciliation and Mediation Board (NCMB) at least 24 hours before
the strike vote is taken

(D) strike vote results must be furnished to the NCMB at least seven (7) days before the
intended strike

SUGGESTED ANSWER:

(A). A claim of either unfair labor practice or deadlock in collective bargaining.

Explanation:

Options B, C and D refer to strike procedures. B refers to the cooling-off period; C to the
strike vote; and D to the strike ban. What is not expressly referred to in the options is notice of
strike. It is this procedural requirement which includes ULP or bargaining deadlock which are the
only strike grounds. Hence, it is correct to say that the procedural requirements of a valid strike
include (see MCQ stem) a claim for ULP or deadlock in collective bargaining (Option A). In other
words, the procedural requirements of a valid strike are notice, cooling-off period, strike vote, and
strike ban. It is in the notice that ULP and deadlock in CB are included.

Comment:

The question is fantastic. Never imagined before. The examiner used the simple word include to
hide the answer.
XIX.

Lincoln was in the business of trading broadcast equipment used by television and radio networks.
He employed Lionel as his agent. Subsequently, Lincoln set up Liberty Communications to formally
engage in the same business. He requested Lionel to be one of the incorporators and assigned to
him 100 Liberty shares. Lionel was also given the title Assistant Vice-President for Sales and Head
of Technical Coordination. After several months, there were allegations that Lionel was engaged in
"under the table dealings" and received "confidential commissions" from Libertys clients and
suppliers. He was, therefore, charged with serious misconduct and willful breach of trust, and was
given 48 hours to present his explanation on the charges. Lionel was unable to comply with the 48
-hour deadline and was subsequently barred from entering company premises. Lionel then filed a
complaint with the Labor Arbiter claiming constructive dismissal. Among others, the company sought
the dismissal of the complaint alleging that the case involved an intra-corporate controversy which
was within the jurisdiction of the Regional Trial Court (RTC).

If you were the Labor Arbiter assigned to the case, how would you rule on the companys motion to
dismiss? (5%)

SUGGESTED ANSWER:

I will deny the motion to dismiss.

Lionel is not a corporate officer but a corporate employee only because: (a) his office is not a
creation of the Corporation Code; (b) it is not shown that his office is a corporate position under
Libertys Articles of Incorporation; and (c) it is not shown that there is a board resolution investing
his position with the status of a corporate office.

Absent corporate controversy, the Office of the Labor Arbiter has jurisdiction to hear and resolve
Lionels complaint for illegal dismissal.

XX.

Lito was anticipating the bonus he would receive for 2013. Aside from the 13th month pay, the
company has been awarding him and his other co-employees a two to three months bonus for the
last 10 years. However, because of poor over-all sales performance for the year, the company
unilaterally decided to pay only a one month bonus in 2013. Is Litos employer legally allowed to
reduce the bonus? (4%)

SUGGESTED ANSWER:

Yes.

Bonuses enjoyed even for 10 years may be reduced for economic reasons. Article 100 of the Labor
Code will not be violated because it applies only to benefits enjoyed before or at the time of the
effectivity of the Labor Code (Waterfront ruling). As to whether the Principle of Grants will be
violated, the reduction will not also amount to a violation because benefits given to workers are not
raw materials but the product of business success. This policy of balancing employer-employee
interests is one of the pillars of labor relations (Prof. C. Azucena).
XXI.

An accidental fire gutted the JKL factory in Caloocan. JKL decided to suspend operations and
requested its employees to stop reporting for work. After six (6) months, JKL resumed operations
but hired a new set of employees. The old set of employees filed a case for illegal dismissal. If you
were the Labor Arbiter, how would you decide the case? (4%)

SUGGESTED ANSWER:

I will decide in favor of the employees.

The fire has not resulted in complete destruction of employer-employee relationship. Said
relationship has temporarily ceased only. When JKL resumed operations, therefore, it became its
obligation to recall its old employees instead of replacing them with new employees.

Withholding of work beyond six (6) months amounts to constructive dismissal. Hence, I will order
JKL to pay the complainants full back wages, separation pay because their positions are occupied
already, nominal damages for non-observance by JKL of prescribed pre-termination procedure,
moral and exemplary damages for its bad faith (Lynvil Fishing Enterprises, Inc., et al. vs. Ariola, et
al., G.R. No. 181974,1 February 2012), and 10% attorneys fees for compelling its employees to
litigate against it (Art. 111, LC).

XXII.

Despite a reinstatement order, an employer may choose not to reinstate an employee if: (1%)

(A) there is a strained employer-employee relationship

(B) the position of the employee no longer exists

(C) the employers business has been closed

(D) the employee does not wish to be reinstated.

SUGGESTED ANSWER:

(A). There is strained employer-employee relationship.

Note:

Not (B) because the stem implies that the employer has a choice between reinstatement and non-
reinstatement. Here, he has no option at all because the position in question no longer exists.

Not (C) because the employer has no option due to the closure of his business.

Not (D) because the employer cannot choose not to reinstate due to his employees decision not to
be reinstated.
Comment:

This MCQ demonstrates the importance of recognizing the implications of the stem. Since the
stem implies that the employer can choose one of two options, none of the items that give him just
one choice can be the correct answer.

XXIII.

Luningning Foods engaged the services of Lamitan Manpower, Inc., a bona fide independent
contractor, to provide "tasters" that will check on food quality. Subsequently, these "tasters" joined
the union of rank -and-file employees of Luningning and demanded that they be made regular
employees of the latter as they are performing functions necessary and desirable to operate the
companys business. Luningning rejected the demand for regularization. On behalf of the "tasters",
the union then filed a notice of strike with the Department of Labor and Employment (DOLE). In
response, Luningning sought a restraining order from the Regional Trial Court (RTC) arguing that
the DOLE does not have jurisdiction over the case since it does not have an employer-employee
relationship with the employees of an independent contractor. If you were the RTC judge, would you
issue a restraining order against the union? (4%)

SUGGESTED ANSWER:

I will not issue a TRO.

The dispute brought to the RTC is a labor dispute despite the fact that the disputants may not stand
in the proximate relation of employer and employee (Art. 212, LC). Moreover, the issue of
regularization is resolvable solely thru the application of labor laws. Under both Reasonable Causal
Connection Rule and Reference to Labor Law Rule, the dispute is for labor tribunals to resolve.

For lack of jurisdiction, therefore, I will dismiss the case.

XXIV.

Lanz was a strict and unpopular Vice-President for Sales of Lobinsons Land. One day, Lanz shouted
invectives against Lee, a poor performing sales associate, calling him, among others, a "brown
monkey." Hurt, Lee decided to file a criminal complaint for grave defamation against Lanz. The
prosecutor found probable cause and filed an information in court. Lobinsons decided to terminate
Lanz for committing a potential crime and other illegal acts prejudicial to business. Can Lanz be
legally terminated by the company on these grounds? (4%)

SUGGESTED ANSWER:

As to the first ground, crime to be a just cause for dismissal must be against the employer, members
of his immediate family or representative (Article 288, LC, as renumbered). Since the potential crime
of Lanz is not against Lobinsons or its duly authorized representatives, it cannot of itself justify his
termination.

As to the second ground, Lanzs dysfunctional conduct has made the work environment at
Lobinsons hostile as to adversely affect other employees, like Lee. Therefore, he can be dismissed
on the ground of serious misconduct and loss of trust and confidence.
Comment:

There are two separate grounds for dismissal. One is a just cause, the other is not. To the question
Can Lanz be legally terminated on these grounds?, one should not give an answer that treats the
two as though they were one and the same. This is because, based on the crafting of previous
questions, it should be obvious that the examiner has a clinical mind.

Alternative Answer:

As to the first ground, crime to be a just cause for dismissal must be against the employer, members
of his immediate family or representative (Article 288, LC, as renumbered). Since the potential crime
of Lanz is not against Lobinsons or its duly authorized representatives, it cannot of itself justify his
termination. However, it can be treated as a cause analogous to serious misconduct or loss of trust
and confidence. Therefore, Lanz can be dismissed on this ground.

As to the second ground, Lanzs dysfunctional behavior has made the work environment at
Lobinsons hostile as to adversely affect other employees, like Lee. Therefore, he can be dismissed
also on the ground of serious misconduct and loss of trust and confidence.

XXV.

Lizzy Lu is a sales associate for Luna Properties. The latter is looking to retrench Lizzy and five other
sales associates due to financial losses. Aside from a basic monthly salary, Lizzy and her colleagues
receive commissions on the sales they make as well as cost of living and representation allowances.
In computing Lizzys separation pay, Luna Properties should consider her: (1%)

(A) monthly salary only

(B) monthly salary plus sales commissions

(C) monthly salary plus sales commissions, plus cost of living allowance

(D) monthly salary plus sales commissions, plus cost of living allowance and representation
allowance

ANSWER:

(A). Monthly salary only.

Note:

Not (B) because the basis of separation pay under Art. 289 (renumbered), LC, is monthly salary
only.

Not (C) because monthly salary means basis salary which excludes commissions and allowances.

Not (D) because monthly salary excludes commissions and allowances.


XXVI.

Liwanag Corporation is engaged in the power generation business. A stalemate was reached during
the collective bargaining negotiations between its management and the union. After following all the
requisites provided by law, the union decided to stage a strike. The management sought the
assistance of the Secretary of Labor and Employment, who assumed jurisdiction over the strike and
issued a return-to-work order. The union defied the latter and continued the strike. Without providing
any notice, Liwanag Corporation declared everyone who participated in the strike as having lost their
employment. (4%)

(A) Was Liwanag Corporations action valid?

(B) If, before the DOLE Secretary assumed jurisdiction, the striking union members
communicated in writing their desire to return to work, which offer Liwanag Corporation
refused to accept, what remedy, if any, does the union have?

SUGGESTED ANSWER:

(A) . Yes, the action of Liwanag Corporation is valid.

The DOLE Secretary can assume jurisdiction in the event of a labor dispute likely to result in a strike
in an industry involving national interest, like energy production (Art. 263(g); D.O. 40-H-13). His
AJO, once duly served on the union, will produce an injunctive effect. Hence, if ignored, the unions
strike would be illegal even if it may have complied with prestrike procedure. As a consequence,
Liwanag Corporation may declare all the strikers as having lost their employment as a consequence
of their intransigence (Sarmiento v. Tuico, 27 June 1988).

(B) The union may file a complaint for illegal lockout, with prayer for immediate reinstatement. The
refusal of Liwanag Corporation to admit the strikers back is an illegal lockout because it is not
preceded by compliance with prescribed pre-lockout procedure. If the lockout is unreasonably
prolonged, the complaint may be amended to charge constructive dismissal.

XXVII.

The jurisdiction of the National Labor Relations Commission does not include: (1%)

(A) exclusive appellate jurisdiction over all cases decided by the Labor Arbiter

(B) exclusive appellate jurisdiction over all cases decided by Regional Directors or hearing
officers involving the recovery of wages and other monetary claims and benefits arising from
employer-employee relations where the aggregate money claim of each does not exceed
five thousand pesos (Php5,000)

(C) original jurisdiction to act as a compulsory arbitration body over labor disputes certified
to it by the Regional Directors

(D) power to issue a labor injunction


ANSWER:

(C). Regional Directors do not have assumption power; hence, they cannot certify cases to the
NLRC.

Comment:

The examiner shows contempt for the human eye.

AN APPEAL TO THE EXAMINER

This bystander initially answered the questions on a blue pad with his pen. It took him 2 hours to
answer the 27 questions. This means that the examination was really long. For another 2 hours, or
more, he reviewed and edited his raw answers for online sharing. Regardless, he is not totally
sure if he has correctly answered all. Therefore, he appeals to the examiner to be liberal. After all,
his questions are really for higher forms of life. He did a great job.

---ooo0ooo---
2014 BAR EXAMINATIONS
CIVIL LAW
I.

Ariz and Paz were officemates at Perlas ng Silangan Bank (PSB). They fell in love with each other
and had a civil and church wedding. Meanwhile, Paz rapidly climbed the corporate ladder of PSB and
eventually became its Vice President, while Ariz remained one of its bank supervisors, although he
was short of 12 units to finish his Masters of Business Administration (MBA) degree.

Ariz became envious of the success of his wife. He started to drink alcohol until he became a drunkard.
He preferred to join his "barkadas"; became a wifebeater; would hurt his children without any reason;
and failed to contribute to the needs of the family. Despite rehabilitation and consultation with a
psychiatrist, his ways did not change.

After 19 years of marriage, Paz, a devout Catholic, decided to have their marriage annulled by the
church. Through the testimony of Paz and a psychiatrist, it was found that Ariz was a spoiled brat in
his youth and was sometimes involved in brawls. In his teens, he was once referred to a psychiatrist
for t reatment due to his violent tendencies. In due time, the National Appellate Matrimonial Tribunal
(NAMT) annulled the union of Ariz and Paz due to the failure of Ariz to perform and fulfill his duties as
a husband and as a father to their children. The NAMT concluded that it is for the best interest of Paz,
Ariz and their children to have the marriage annulled.

In view of the NAMT decision, Paz decided to file a Petition for Declaration of Nullity of Marriage of
their civil wedding before the Regional Trial Court (RTC) of Makati City using the NAMT decision and
the same evidence adduced in the church annulment proceedings as basis.

If you are the judge, will you grant the petition? Explain. (5%)

SUGGESTED ANSWER:
If I were the judge, I will not grant the petition. While the decision of the church tribunal annulling the
marriage of the parties may be persuasive, it is not however, binding upon the civil courts. For
psychological incapacity to be a ground for nullity, it must be shown that it was rooted in the history of
the party alleged to be suffering from it, must be grave and serious, and incurable such that it renders
the person incapacitated to perform the essential marital obligations due to causes psychological in
nature. In the case presented, it appears that Ariz fulfilled his marital obligations at the beginning and
it was only after feeling envious about the success of Paz that he started exhibiting violent tendencies
and refused to comply with marital obligations. Psychological incapacity is not mere refusal but
outright incapacity to perform marital obligations which does not appear to be present in the case of
Ariz. (Marcos v. Marcos G.R. No. 136490- October 19, 2000)

II.

Crispin died testate and was survived by Alex and Josine, his children from his first wife; Rene and
Ruby, his children from his second wife; and Allan, Bea, and Cheska, his children from his third wife.

One important provision in his will reads as follows:

"Ang lupa at bahay sa Lungsod ng Maynila ay ililipat at ilalagay sa pangalan nila Alex at Rene hindi
bilang pamana ko sa kanila kundi upang pamahalaan at pangalagaan lamang nila at nang ang
sinuman sa aking mga anak, sampu ng aking mga apo at kaapuapuhan ko sa habang panahon, ay
may tutuluyan kung magnanais na mag-aral sa Maynila o sa kalapit na mga lungsod."
Is the provision valid? (4%)

SUGGESTED ANSWER:
No, the provision is not valid. At first glance, the provision may appear valid as it provides for the
transfer of title in favor of Alex and Rene over the parcel of land. A legacy or devise is to be construed
as a donation effective mortis causa, and it is intended to transfer ownership to the legatee or devisee.
Since the ownership is legally transferred to the Alex and Rene, they cannot be prohibited by the
testator from alienating or partitioning the same perpetually. The dispositions of the testator declaring
all or part of the estate inalienable for more than twenty years are void. (Article 870)

III.

The Roman Catholic Church accepted a donation of a real property located in Lipa City. A deed of
donation was executed, signed by the donor, Don Mariano, and the donee, the Church, as represented
by Fr. Damian. Before the deed could be notarized, Don Mariano died. Is the donation valid? (4%)

SUGGESTED ANSWER:
The donation is void. The donation of an immovable property must be in a public instrument in order
for it to be valid. In this case, the donor died even before the notarization of the deed of donation.
Hence, it does not satisfy the requirement of being in a public instrument for the donation to be valid.

IV.

Nante, a registered owner of a parcel of land in Quezon City, sold the property to Monica under a deed
of sale which reads as follows:

"That for and in consideration of the sum of P500,000.00, value to be paid and delivered to me, and
receipt of which shall be acknowledged by me to the full satisfaction of Monica, referred to as Vendee,
I hereby sell, transfer, cede, convey, and assign, as by these presents, I do have sold, transferred,
ceded, conveyed and assigned a parcel of land covered by TCT No. 2468 in favor of the Vendee."

After delivery of the initial payment of P100,000.00, Monica immediately took possession of the
property. Five (5) months after, Monica failed to pay the remaining balance of the purchase price.
Nante filed an action for the recovery of possession of the property. Nante alleged that the agreement
was one to sell,which was not consummated as the full contract price was not paid. Is the contention
of Nante tenable?

SUGGESTED ANSWER:
The contention of Nante is not tenable. The deed itself states that for consideration received, he sells,
transfers, and conveys the land to Monica and there was delivery of the property to the latter. The
contract is clearly one of sale as there was no reservation of ownership on the part of the seller Nante.
The non-payment of the price in a contract of sale would only entitle the seller to rescind the contract
but it does not thereby prevent the transfer of ownership particularly so as in this case, where there
was already delivery to the buyer.

V.
What is the effect of preterition ? (1%)

(A) It annuls the devise and legacy

(B) It annuls the institution of heir

(C) It reduces the devise and legacy

(D) It partially annuls the institution of heir

Answer is letter B (preterition annuls the institution of heirs)

VI.

Miko and Dinah started to live together as husband and wife without the benefit of marriage in 1984.
Ten (10) years after, they separated. In 1996, they decided to live together again, and in 1998, they
got married.

On February 17, 2001, Dinah filed a complaint for declaration of nullity of her marriage with Miko on
the ground of psychological incapacity under Article 36 of the Family Code. The court rendered the
following decision:

"1. Declaring the marriage null and void;

2. Dissolving the regime of absolute community of property; and

3. Declaring that a decree of absolute nullity of marriage shall only be issued after liquidation, partition
and distribution of the parties properties under Article 147 of the Family Code."

Dinah filed a motion for partial reconsideration questioning the portion of the decision on the issuance
of a decree of nullity of marriage only after the liquidation, partition and distribution of properties under
Article 147 of the Code.

If you are the judge, how will you decide petitioners motion for partial reconsideration? Why? (4%)

SUGGESTED ANSWER:
I will grant partial reconsideration. If the marriage is declared void under Article 36, the provisions of
the Family Code on liquidation, partition, and distribution of the properties on absolute community or
conjugal partnership will not apply but rather Article 147 or Article 148 depending on the presence or
absence of a legal impediment between them. In Dino v. Dino,1 the SC ruled that Art. 50 of the Family
Code and Section 19 of the Rules on Declaration of Nullity applies only to marriages which are
declared void ab initio or annulled by final judgment under Articles 40 and 45 of the Family. In short,
Art. 50 of the Family Code does not apply to marriages which are declared void ab initio under Art. 36
of the FC which should be declared void without waiting for the liquidation of the properties of the
parties.

1
Alain Dino vs. Ma. Caridad Dino G.R. No. 178044, January 19, 2011
VII.

Due to the continuous heavy rainfall, the major streets in Manila became flooded. This compelled Cris
to check-in at Square One Hotel. As soon as Crisgot off from his Toyota Altis, the Hotels parking
attendant got the key of his car and gave him a valet parking customers claim stub. The attendant
parked his car at the basement of the hotel. Early in the morning, Cris was informed by the hotel
manager that his car was carnapped. (4%)

(A) What contract, if any, was perfected between Cris and the Hotel when Cris surrendered the key of
his car to the Hotels parking attendant?

(B) What is the liability, if any, of the Hotel for the loss of Cris car?

SUGGESTED ANSWER:

a) The contract between Cris and Square One Hotel is one of necessary deposit. Deposit of
effects made by travelers or guests in hotels or inns is considered a necessary deposit. 2 This
includes not only the personal effects brought inside the hotel premises but also vehicles or
animals and articles which have been introduced or placed in the annexes of the hotel.

b) In the case of Durban Apartments vs. Pioneer Insurance,3 the Supreme Court held the hotel
liable for the loss of the vehicle of the guest after its valet parking attendant parked the vehicle
in front of a bank near the hotel premises. The court ruled that the banks parking area became
an annex of the hotel when the management of the bank allowed the hotel to park vehicles
there on the night in question. The contract of deposit was perfected when the guest
surrendered the keys to his vehicle to the parking attendant and the hotel is under obligation
of safely keeping and returning it. Ultimately, Square One Hotel is liable for the loss of the
vehicle.

VIII.

Tess leased her 1,500 sq. m. lot in Antipolo City to Ruth for a period of three (3) years, from
January 2010 to February 2013.

On March 19, 2011, Tess sent a letter to Ruth, part of which reads as follows:

"I am offering you to buy the property you are presently leasing at P5,000.00 per sq. m. or for a
total of P7,500,000.00. You can pay the contract price by installment for two (2) years without
interest.

I will give you a period of one (1) year from receipt of this letter to decide whether you will buy the
property."

2
Article 1998, Civil Code

3 G.R. No. 179419 January 12, 2011


After the expiration of the lease contract, Tess sold the property to her niece for a total
consideration of P4 million.

Ruth filed a complaint for the annulment of the sale, reconveyance and damages against Tess
and her niece. Ruth alleged that the sale of the leased property violated her right to buy under the
principle of right of first refusal.

Is the allegation of Ruth tenable? (4%)

SUGGESTED ANSWER:
No, the allegation of Ruth is not tenable. The letter written by Tess did not grant a right of first
refusal to Ruth. At most, it is to be construed as an option contract whereby Ruth was given the
right to buy or not to buy the leased property. An option is itself not a purchase but it merely secures
the privilege to buy. However, the option is not valid because it was not supported by a cause or
consideration distinct from the price of the property. (Article 1479) Also, Ruth does not appear to
have exercised her option before the offer was withdrawn by the subsequent sale of the property
to the niece of Tess.

IX.

Spouses Macario and Bonifacia Dakila entered into a contract to sell with Honorio Cruz over a
parcel of industrial land in Valenzuela, Bulacan for a price of Three Million Five Hundred Thousand
Pesos (P3,500,000.00). The spouses would give a downpayment of Five Hundred Thousand
Pesos (P500,000.00) upon the signing of the contract, while the balance would be paid for the
next three (3) consecutive months in the amount of One Million Pesos (P1,000,000.00) per month.
The spouses paid the first two (2) installments but not the last installment. After one (1) year, the
spouses offered to pay the unpaid balance which Honorio refused to accept.

The spouses filed a complaint for specific performance against Honorio invoking the application of
the Maceda Law. If you are the judge, how will you decide the case? (4%)

SUGGESTED ANSWER:
I will rule in favor of Honorio. The invocation of the Maceda Law is misplaced. The law applies
only to sale or financing of realty on installment payments including residential units or residential
condominium apartments and does not apply to sales of industrial units or industrial lands like in
the case presented. Another reason why the Maceda law will not apply is that, the sale in the case
at bar is not the sale on installment as contemplated by the law. The sale on installment covered
by the Maceda Law is one where the price is paid or amortized over a certain period in equal
installments. The sale to the Spouses Dakila is not a sale on installment but more of a straight
sale where a down payment is to be made and the balance to be paid in a relatively short period
of three months.

X.

Dorotea leased portions of her 2,000 sq. m. lot to Monet, Kathy, Celia, and Ruth for five (5) years.
Two (2) years before the expiration of the lease contract, Dorotea sold the property to PM Realty
and Development Corporation. The following month, Dorotea and PM Realty stopped accepting
rental payments from all the lessees because they wanted to terminate the lease contracts.

Due to the refusal of Dorotea to accept rental payments, the lessees , Ruth, et al., filed a complaint
for consignation of the rentals before the Regional Trial Court (RTC) of Manila without notifying
Dorotea.
Is the consignation valid? (4%)

SUGGESTED ANSWER:
No, the consignation is not valid. For consignation of the thing or sum due to be proper, there
must be prior notice to the creditor that the debtor is going to consign the payment in court. This
notice is intended to give the creditor the opportunity to accept payment and thus avoid liability for
costs in case it is found that the act of consignation was properly made. Even on the assumption
that Dorotea was no longer the creditor as she had already sold the property to DM Realty, the
facts do not state that the realty corporation was also given notice before filing the case for
consignation.

XI.

An easement that can be acquired by prescription: (1%)

(A) Right of way

(B) Watering of an animal

(C) Lateral and subjacent support

(D) Light and view

Correct answer letter D only continuous and apparent easements may be acquired by
prescription

XII.

J.C. Construction (J.C.) bought steel bars from Matibay Steel Industries (MSI) which is owned by
Buddy Batungbacal. J.C. failed to pay the purchased materials worth P500,000.00 on due date.
J.C. persuaded its client Amoroso with whom it had receivables to pay its obligation to MSI.
Amoroso agreed and paid MSI the amount of P50,000.00. After two (2) other payments, Amoroso
stopped making further payments.

Buddy filed a complaint for collection of the balance of the obligation and damages against J.C.
J.C. denied any liability claiming that its obligation was extinguished by reason of novation which
took place when MSI accepted partial payments from Amoroso on its behalf.

Was the obligation of J.C. Construction to MSI extinguished by novation? Why? (4%)

SUGEGSTED ANSWER:
No, the obligation of JC was not extinguished by novation. Novation may either be objective or
subjective. Subjective novation takes place by the substitution of debtor or subrogation of a third
person to the rights of the creditor. Novation by substituting a new debtor may take place even without
the knowledge or against the will of the original debtor but not without the consent of the creditor.
Moreover, novation must be expressed and it cannot be implied and there must be an agreement that
the old obligation is extinguished. In the case of JC, it does not appear that MSI had agreed to release
JC from the obligation. Hence, the obligation of JC was not extinguished.
XIII.

Esteban and Martha had four (4) children: Rolando, Jun, Mark, and Hector. Rolando had a
daughter, Edith, while Mark had a son, Philip. After the death of Esteban and Martha, their three
(3) parcels of land were adjudicated to Jun. After the death of Jun, the properties passed to his
surviving spouse Anita, and son Cesar. When Anita died, her share went to her son Cesar. Ten
(10) years after, Cesar died intestate without any issue. Peachy, Anitas sister, adjudicated to
herself the properties as the only surviving heir of Anita and Cesar. Edith and Philip would like to
recover the properties claiming that they should have been reserved by Peachy in their behalf and
must now revert back to them.

Is the contention of Edith and Philip valid? (4%)

SUGGESTED ANSWER:
No, the contention is not valid. The property adjudicated to Jun from the estate of his parents which
he in turn left to Anita and Cesar is not subject to reservation in favor of Edith and Philip. In Mendoza
et. al. vs.Policarpio, et. al. 4 the court ruled that lineal character of the reservable property is reckoned
from the ascendant from whom the propositus received the property by gratuitous title. The ownership
should be reckoned only from Jun, as he is the ascendant from where the first transmission occurred
or from whom Cesar inherited the properties. Moreover, Article 891 provides that the person obliged
to reserve the property should be an ascendant. Peachy is not Cesars ascendant but a mere collateral
relative. On the assumption that the property is reservable, Edith and Philip being first cousins of
Cesar who is the propositus are disqualified to be reservatarios as they are not third degree relatives
of Cesar.

XIV.

A pedestrian, who was four (4) months pregnant, was hit by a bus driver while crossing the street.
Although the pedestrian survived, the fetus inside her womb was aborted. Can the pedestrian recover
damages on account of the death of the fetus? (1%)

(A) Yes, because of Article 2206 of the Civil Code which allows the surviving heirs to demand
damages for mental anguish by reason of the death of the deceased.

(B) Yes, for as long as the pedestrian can prove that she was not at fault and the bus driver was
the one negligent.

(C) No, because a fetus is not a natural person.

(D) No, if the fetus did not comply with the requirements under Article 41 of the Civil Code.

Correct Answer is letter D Article 41 of the Civil Code requires that to be considered a person, a
fetus with an intrauterine life of less than seven months must survive for the full twenty-four hours from
complete separation from the mothers womb.

4
G.R. NO. 176422 -March 20, 2013
XV.

Mr. Bong owns several properties in Pasig City. He decided to build a condominium named Flores de
Manila in one of his lots. To fund the project, he obtained a loan from the National Bank (NB) secured
by a real estate mortgage over the adjoining property which he also owned.

During construction, he built three (3) pumps on the mortgaged property to supply water to the
condominium. After one (1) year, the project was completed and the condominium was turned over to
the buyers. However, Mr. Bong failed to pay his loan obligation to NB. Thus, NB foreclosed the
mortgaged property where the pumps were installed. During the sale on public auction of the mortgaged
property, Mr. Simon won in the bidding. When Mr. Simon attempted to take possession of the property,
the condominium owners, who in the meantime constituted themselves into Flores de Manila Inc. (FMI),
claimed that they have earlier filed a case for the declaration of the existence of an easement before
the Regional Trial Court (RTC) of Pasig City and prayed that the easement be annotated in the title of
the property foreclosed by NB. FMI further claimed that when Mr. Bong installed the pumps in his
adjoining property, a voluntary easement was constituted in favor of FMI.

Will the action prosper? (4%)

SUGGESTED ANSWER:
No, the action will not prosper. The essence of a mortgage is that it immediately subjects the property
upon which it is imposed, and whoever the possessor may be, to the fulfillment of the obligation for
whose security it was constituted.5 There was no voluntary easement in this case because at the time
the water pumps were constructed, the subject lot where the water pumps were constructed and the
condominium belong to the same person. No one can have an easement over his own property. (Bogo-
Medellin vs. CA G.R. 124699, July 31, 2003.) Even of the assumption that an easement was created
in favor of FMI that alone will not defeat the right of the mortgagee to enforce the security if the debtor
defaults.

XVI.

A congregation for religious women, by way of commodatum, is using the real property owned and
registered in the name of Spouses Manuel as a retreat house.

Maria, a helper of the congregation discovered a chest in the backyard. When she opened the chest, it
contained several pieces of jewelry and money. (4%)

(A) Can the chest containing the pieces of jewelry and money be considered as hidden treasure?

(B) Who has the right to claim ownership of it?

SUGGESTED ANSWER:

a) No, for property to be considered hidden treasure it must consist of money, jewelry or other
precious objects, the lawful ownership of which does not appear. In the case at bar, the chest
was just lay in the backyard and the real property where it was found belongs to the Spouses
Manuel. They are thus presumed the owner of the chest where the jewelry was found.

b) Since it does not come within the purview of hidden treasure, the spouses Manuel have the
right to claim ownership over the chest as well as its contents.

5
Article 2126
XVII.

On March 30, 2000, Mariano died intestate and was survived by his wife, Leonora, and children, Danilo
and Carlito. One of the properties he left was a piece of land in Alabang where he built his residential
house.

After his burial, Leonora and Marianos children extrajudicially settled his estate. Thereafter, Leonora
and Danilo advised Carlito of their intention to partition the property. Carlito opposed invoking Article
159 of the Family Code. Carlito alleged that since his minor child Lucas still resides in the premises,
the family home continues until that minor beneficiary becomes of age.

Is the contention of Carlito tenable? (4%)

SUGGESTED ANSWER:
No, the contention of Carlito is not tenable. In the case of Patricio v. Dario,6 with similar facts to the
case at bar, the court ruled that to qualify as beneficiary of the family home the person must be among
those mentioned in Article 154, he/she must be actually living in the family home and must be
dependent for legal support upon the head of the family. While Lucas, the son of Carlito satisfies the
first and second requisites, he cannot however, directly claim legal support from his grandmother,
Leonora because the person primarily obliged to give support to Lucas is his father, Carlito. Thus,
partition may be successfully claimed by Leonora and Danilo.

XVIII.

Spouses Magtanggol managed and operated a gasoline station on a 1,000 sq.m. lot which they leased
from Francisco Bigla-awa. The contract was for a period of three (3) years. When the contract expired,
Francisco asked the spouses to peacefully vacate the premises. The spouses ignored the demand and
continued with the operation of the gasoline station.

One month after, Francisco, with the aid of a group of armed men, caused the closure of the gasoline
station by constructing fences around it.

Was the act of Francisco and his men lawful? Why? (4%)

SUGGESTED ANSWER:
No, the act was not lawful. Even if the lessees right to occupy the premises has expired, the lessor
cannot physically oust the lessee from the leased premises if the latter refuses to vacate. The lessor
must go through the proper channels by filing an appropriate case for unlawful detainer or recovery of
possession. Every possessor has a right to be respected in his possession (Article 539) and in no case
my possession be acquired through force or intimidation as long as there is a possessor who objects
thereto. (Article 536) The act of Francisco is an abuse of rights because even if he has the right to
recover possession of his property, he must act with justice and give the lessees their day in court and
observe honesty and good faith.

6
G.R. No. 170829 November 20, 2006
XIX.

Who enjoys the Right of Retention? (1%)

(A) Depositary until full payment of what may be due him in deposit.

(B) Lessee if he advances the expenses for the repair of the leased premises.

(C) Bailee if bailor owes him something.

(D) Builder in bad faith for the recovery of necessary and useful expenses.

Correct answer is letter A depositary (Article 1994)

XX.

Mabuhay Elementary School organized a field trip for its Grade VI students in Fort Santiago, Manila
Zoo, and Star City. To be able to join, the parents of the students had to sign a piece of paper that
reads as follows:

"I allow my child (name of student), Grade Section, to join the schools field trip on February 14,
2014.

I will not file any claim against the school, administrator or teacher in case something happens to my
child during the trip."

Joey, a 7-year-old student of Mabuhay Elementary School was bitten by a snake while the group was
touring Manila Zoo. The parents of Joey sued the school for damages. The school, as a defense,
presented the waiver signed by Joeys parents.

Was there a valid waiver of right to sue the school? Why? (4%)

SUGGESTED ANSWER:
No, there was no valid waiver of the right to sue the school. A waiver to be valid must have three
requisites 1) existence of the right; 2) legal capacity of the person waiving the right and 3) the waiver
must not be contrary to law, morals, good customs, public order or public policy or prejudicial to a third
person with a right recognized by law. In the case presented, the waiver may be considered contrary
to public policy as it exonerates the school from liability for future negligence. The waiver in effect
allows the school to not exercise even ordinary diligence.
XXI.

A delayed accession is: (1%)

(A) formation of an island

(B) avulsion

(C) alluvium

(D) change in the course of the riverbed

Correct answer is letter B (Article 459 Civil Code)

XXII.

On March 27, 1980, Cornelio filed an application for land registration involving a parcel of agricultural
land that he had bought from Isaac identified as Lot No. 2716 with an area of one (1) hectare. During
the trial, Cornelio claimed that he and his predecessors-in-interest had been in open, continuous,
uninterrupted, public and adverse possession and occupation of the land for more than thirty (30)
years. He likewise introduced in evidence a certification dated February 12, 1981 citing a presidential
declaration to the effect that on June 14, 1980, agricultural lands of the public domain, including the
subject matter of the application, were declared alienable and disposable agricultural land. (4%)

(A) If you are the judge, will you grant the application for land registration of Cornelio?

(B) Can Cornelio acquire said agricultural land through acquisitive prescription, whether
ordinary or extraordinary?

SUGGESTED ANSWER:

a) No, I will not grant the application. To be entitled to registration of the parcel of land, the
applicant must show that the land being applied for is alienable land. At the time of the filing of
the application, the land has not yet been declared alienable by the state. (Republic v. CA, G.R.
No. 144057, January 17, 2005)

b) Cornelio can acquire the land by acquisitive prescription only after it was declared part of
alienable land by the state by possession for the required number of years for ordinary
prescription, ten years possession in good faith with just title or extraordinary prescription by
possession for thirty years without need of any other condition. (Article 1134, Civil Code)

XXIII.

After undergoing sex reassignment in a foreign country, Jose, who is now using the name of "Josie,"
married his partner Ador. Is the marriage valid? (1%)

(A) Yes, the marriage is valid for as long as it is valid in the place where it is celebrated
following Article 17 of the Civil Code.
(B) Yes, the marriage is valid if all the essential and formal elements of marriage under the
Family Code are present.

(C) No, the marriage is not valid because one essential element of marriage is absent.

(D) No, the marriage is not valid but is voidable because "Josie" concealed her real identity.

Correct answer is letter C not valid for lack of one essential requirement (Silverio v. Republic
G.R. No. 174689, October 22, 2007)

XXIV.

Ted, married to Annie, went to Canada to work. Five (5) years later, Ted became a naturalized
Canadian citizen. He returned to the Philippines to convince Annie to settle in Canada. Unfortunately,
Ted discovered that Annie and his friend Louie were having an affair. Deeply hurt, Ted returned to
Canada and filed a petition for divorce which was granted. In December 2013, Ted decided to marry
his childhood friend Corazon in the Philippines. In preparation for the wedding, Ted went to the Local
Civil Registry of Quezon City where his marriage contract with Annie was registered. He asked the
Civil Register to annotate the decree of divorce on his marriage contract with Annie. However, he was
advised by the National Statistics Office (NSO) to file a petition for judicial recognition of the decree of
divorce in the Philippines.

Is it necessary for Ted to file a petition for judicial recognition of the decree of divorce he obtained in
Canada before he can contract a second marriage in the Philippines? (4%)

SUGGESTED ANSWER:
Yes, a divorce decree even if validly obtained abroad cannot have effect in the Philippines unless it is
judicially recognized through an appropriate petition filed before Philippine courts. In Corpuz v. Sto.
Tomas,7 the SC ruled that the foreigner must file a petition under Rule 108 and prove therein the fact
of divorce by presenting an official copy attested by the officer having custody of the original. He must
also prove that the court which issued the divorce has jurisdiction to issue it and the law of the foreign
country on divorce.

XXV.

Mario executed his last will and testament where he acknowledges the child being conceived by his
live-in partner Josie as his own child; and that his house and lot in Baguio City be given to his unborn
conceived child. Are the acknowledgment and the donation mortis causa valid? Why? (4%)

SUGGESTED ANSWER:
Yes, the acknowledgment is considered valid because a will (although not required to be filed by the
notary public) may still constitute a document which contains an admission of illegitimate filiation. Article
834 also provides that the recognition of an illegitimate child does not lose its legal effect even though
the will wherein it was made should be revoked. This provision by itself warrants a conclusion that a
will may be considered as proof of filiation. The donation mortis causa may be considered valid
because although unborn, a fetus has a presumptive personality for all purposes favorable to it provided
it be born under the conditions specified in Article 41.

7
Gerbert Corpuz vs. Daisylyn Sto. Tomas G.R. No. 186571; August 11, 2010
XXVI.

Isaac leased the apartment of Dorotea for two (2) years. Six (6) months after, Isaac subleased a
portion of the apartment due to financial difficulty. Is the sublease contract valid? (1%)

(A) Yes, it is valid for as long as all the elements of a valid sublease contract are present.

(B) Yes, it is valid if there is no express prohibition for subleasing in the lease contract.

(C) No, it is void if there is no written consent on the part of the lessor.

(D) No, it is void because of breach of the lease contract.

Correct answer is letter B Article 1650

XXVII.

Fe, Esperanza, and Caridad inherited from their parents a 500 sq. m. lot which they leased to Maria
for three (3) years. One year after, Fe, claiming to have the authority to represent her siblings
Esperanza and Caridad, offered to sell the leased property to Maria which the latter accepted. The
sale was not reduced into writing, but Maria started to make partial payments to Fe, which the latter
received and acknowledged. After giving the full payment, Maria demanded for the execution of a
deed of absolute sale which Esperanza and Caridad refused to do. Worst, Maria learned that the
siblings sold the same property to Manuel. This compelled Maria to file a complaint for the annulment
of the sale with specific performance and damages.

If you are the judge, how will you decide the case? (4%)

SUGGESTED ANSWER:
I will dismiss the case for annulment of the sale and specific performance filed by Maria with respect to
the shares pertaining to Esperanza and Caridad. Since the object of the sale is a co-owned property,
a co-owner may sell his undivided share or interest in the property owned in common but the sale will
be subject to the result of the partition among the co-owners. In a co-ownership there is no mutual
agency except as provided under Article 487. Thus, Fe cannot sell the shares of Esperanza and
Caridad without a special power of attorney from them and the sale with respect to the shares of the
latter without their written authority is void under Article 1874. Hence, the sale of the property to Manuel
is not valid with respect to the shares of Esperanza and Caridad. Maria can only assail the portion
pertaining to Fe as the same has been validly sold to her by Fe.

XXVIII.

Spouses Esteban and Maria decided to raise their two (2) nieces, Faith and Hope, both minors, as
their own children after the parents of the minors died in a vehicular accident.

Ten (10) years after, Esteban died. Maria later on married her boss Daniel, a British national who had
been living in the Philippines for two (2) years.
With the permission of Daniel, Maria filed a petition for the adoption of Faith and Hope. She did not
include Daniel as her co-petitioner because for Maria, it was her former husband Esteban who raised
the kids.

If you are the judge, how will you resolve the petition? (4%)

SUGGESTED ANSWER:
I will dismiss the petition for adoption. The rule is that the husband and wife must jointly adopt and
there are only three recognized exceptions to joint adoption by the husband and wife: 1) if one spouse
seeks to adopt the legitimate child of the other; 2) if one spouse seeks to adopt his or her own
illegitimate child; 3) if the spouses are legally separated. The case of Maria and Daniel does not
appear to fall under any of the recognized exceptions, accordingly the petition filed by the wife alone
should be dismissed.

XXIX

Timothy executed a Memorandum of Agreement (MOA) with Kristopher setting up a business venture
covering three (3) fastfood stores known as "Hungry Toppings" that will be established at Mall Uno,
Mall Dos, and Mall Tres.

The pertinent provisions of the MOA provides:

1. Timothy shall be considered a partner with thirty percent (30%) share in all of the stores to
be set up by Kristopher;

2. The proceeds of the business, after deducting expenses, shall be used to pay the principal
amount of P500,000.00 and the interest therein which is to be computed based on the bank
rate, representing the bank loan secured by Timothy;

3. The net profits, if any, after deducting the expenses and payments of the principal and
interest shall be divided as follows: seventy percent (70%) for Kristopher and thirty percent
(30%) for Timothy;

4. Kristopher shall have a free hand in running the business without any interference from
Timothy, his agents, representatives, or assigns , and should such interference happen,
Kristopher has the right to buy back the share of Timothy less the amounts already paid on
the principal and to dissolve the MOA; and

5. Kristopher shall submit his monthly sales report in connection with the business to Timothy.

What is the contractual relationship between Timothy and Kristopher? (4%)

SUGGESTED ANSWER:
The contractual relationship between Timothy and Kristopher is a contract of partnership as defined
under Article 1767 of the Civil Code, since they have bound themselves to contribute money, property
or industry to a common fund, with the intention of dividing the profits of the partnership between them.
With a seed money of P500, 000.00 obtained by Timothy through a bank loan, they agreed to divide
the profits, 70% for Kristopher and 30% for Timothy.
However, to be more specific, theirs is a limited partnership as defined under Article 1843 of the Civil
Code because Timothy does not take part in the control of the business pursuant to Article 1848, Civil
Code. Nevertheless, Timothy is entitled to monthly sales reports in connection with the business, a
right enshrined in Article 1851 of the Civil Code.

XXX.

Joe Miguel, a well-known treasure hunter in Mindanao, executed a Special Power of Attorney (SPA)
appointing his nephew, John Paul, as his attorney-infact. John Paul was given the power to deal with
treasure-hunting activities on Joe Miguels land and to file charges against those who may enter it
without the latters authority. Joe Miguel agreed to give John Paul forty percent (40%) of the treasure
that may be found on the land.

Thereafter, John Paul filed a case for damages and injunction against Lilo for illegally entering Joe
Miguels land. Subsequently, he hired the legal services of Atty. Audrey agreeing to give the latter
thirty percent (30%) of Joe Miguels share in whatever treasure that may be found in the land.

Dissatified however with the strategies implemented by John Paul, Joe Miguel unilaterally revoked the
SPA granted to John Paul.

Is the revocation proper? (4%)

SUGGESTED ANSWER:
No, the revocation was not proper. As a rule, a contract of agency may be revoked by the principal at
will.8 However, an agency ceases to be revocable at will if it is coupled with an interest or if it is a
means of fulfilling an obligation already contracted. (Article 1922). In the case at bar, the agency may
be deemed an agency coupled with an interest not only because of the fact that John Paul expects to
receive 40% of whatever treasure may be found but also because he also contracted the services of
a lawyer pursuant to his mandate under the contract of agency and he therefore stands to be liable to
the lawyer whose services he has contracted. (Sevilla v. Tourist World Service, G.R. No. L-41182-3
April 16, 1988)

8
Article 1920
2014 BAR EXAMINATIONS
TAXATION LAW

I.

On March 27, 2012, the Bureau of Internal Revenue (BIR) issued a notice of assessment against
Blue Water Industries Inc. (BWI), a domestic corporation, informing the latter of its alleged deficiency
corporate income tax for the year 2009. On April 20, 2012, BWI filed a letter protest before the BIR
contesting said assessment and demanding that the same be cancelled or set aside.

However, on May 19, 2013, that is, after more than a year from the filing of the letter protest, the BIR
informed BWI that the latters letter protest was denied on the ground that the assessment had already
become final, executory and demandable. The BIR reasoned that its failure to decide the case within
180 days from filing of the letter protest should have prompted BWI to seek recourse before the Court
of Tax Appeals (CTA) by filing a petition for review within thirty (30) days after the expiration of the
180-day period as mandated by the provisions of the last paragraph of Section 228 of the National
Internal Revenue Code (NIRC). Accordingly, BWIs failure to file a petition for review before the CTA
rendered the assessment final, executory and demandable. Is the contention of the BIR correct?
Explain. (5%)

SUGGESTED ANSWER

No, the contention of BIR is not correct. The right of BWI to consider the inaction of the Commissioner
on the protest within 180 days as an appealable decision is only optional and will not make the
assessment final, executory and demandable (Section 228, NIRC; Lascona Land Co., Inc. vs CIR
667 SCRA 455 (March 5, 2012)

II.

Mr. De Sarapen is a candidate in the upcoming Senatorial elections. Mr. De Almacen, believing in
the sincerity and ability of Mr. De Sarapen to introduce much needed reforms in the country,
contributed P500,000.00 in cash to the campaign chest of Mr. De Sarapen. In addition, Mr. De
Almacen purchased tarpaulins, t-shirts, umbrellas, caps and other campaign materials that he also
donated to Mr. De Sarapen for use in his campaign. Is the contribution of cash and campaign
materials subject to donors tax? (4%)

SUGGESTED ANSWER

The Tax Code provides that any contribution in cash or in kind to any candidate, political party or
coalition of parties for campaign purposes shall be governed by the Election Code (Section 99 (C ),
NIRC). On the other hand, the Omnibus Election provides, that any provision of the law to the contrary
notwithstanding, any contribution in cash or in kind to any candidate or political party or coalition of
parties for campaign purposes, duly reported to the Commission shall not be subject to any payment
of gift tax (Section 13, RA 7166). Hence, the contributions will be exempt from donors tax if they are
duly reported to the Commission. Otherwise, the contributions will be subject to donors tax.

III.

Dr. Taimtim is an alumnus of the College of Medicine of Universal University (UU), a privately-owned
center for learning which grants yearly dividends to its stockholders.
UU has a famous chapel located within the campus where the old folks used to say that anyone who
wanted to pass the medical board examinations should offer a dozen roses on all the Sundays of
October. This was what Dr. Taimtim did when he was still reviewing for the board examinations. In
his case, the folk saying proved to be true because he is now a successful cardiologist. Wanting to
give back to the chapel and help defray the costs of its maintenance, Dr. Taimtim donated P50,000.00
to the caretakers of the chapel which was evidenced by an acknowledgment receipt.

In computing his net taxable income, can Dr.Taimtim use his donation to the chapel as an allowable
deduction from his gross income under the National Internal Revenue Code (NIRC)? (4%)

SUGGESTED ANSWER

No, the donation is not deductible. The chapel is owned by privately-owned university hence the
donation for the maintenance of the chapel is a donation to the university. The donation to be
deductible must comply with the requirement that the net income of the done must not inure to the
benefit of any private stockholder or individual. In the instant case, the university is granting yearly
dividends to its stockholders which is a clear violation of the law appertaining to the so-called private
inurement doctrine thereby making the donation non-deductible (Section 34 (h)(1), NIRC)

IV.

Gangwam Corporation (GC) filed its quarterly tax returns for the calendar year 2012 as follows:

First quarter - April 25, 2012

Second quarter - July 23, 2012

Third quarter - October 25, 2012

Fourth quarter - January 27, 2013

On December 22, 2013, GC filed with the Bureau of Internal Revenue (BIR) an administrative claim
for refund of its unutilized input Value-Added Tax (VAT) for the calendar year 2012. After several
months of inaction by the BIR on its claim for refund, GC decided to elevate its claim directly to the
Court of Tax Appeals (CTA) on April 22, 2014.

In due time, the CTA denied the tax refund relative to the input VAT of GC for the first quarter of 2012,
reasoning that the claim was filed beyond the two-year period prescribed under Section 112(A) of the
National Internal Revenue Code (NIRC).

(A) Is the CTA correct? (3%)

(B) Assuming that GC filed its claim before the CTA on February 22, 2014, would your answer
be the same? (3%)

SUGGESTED ANSWER

(A) No. CTA is not correct. The two-year period to file a claim for refund refers to the
administrative claim and does not refer to period within which to elevate the claim to the CTA.
The filing of the administrative claim for refund was timely done because it is made within two
years from the end of the quarter when the zero-rated transaction took place (Section 112(A),
NIRC). When GC decided to elevate its claim to the CTA on April 22, 2014, it was after the
lapse of 120 days from the filing of the claim for refund with the BIR, hence, the appeal is
seasonably filed. The rule of VAT refunds is two years to file the claim with the BIR, plus 120
days for the Commissioner to act and inaction after 120 days is a deemed adverse decision
on the claim, appealable to the CTA within 30 days from the lapse of the 120-day period (CIR
vs Aichi Forging Company of Asia, Inc., GR No. 184823, Oct 6, 2010; CIR vs San Roque GR.
No. 187485 (Feb 12, 2013)
(B) Yes. The two-year prescriptive period to file a claim for refund refers to the administrative
claim with the BIR and not to the period to elevate the claim to the CTA. Hence, the CTA
cannot deny the refund for reasons that the first quarter claim was filed beyond the two-year
period prescribed by law. However, when the claim is made before the CTA on February 24,
there is definitely no appealable decision as yet because the 120-day period for the
Commissioner to act on the claim for refund has not yet lapsed. Hence the act of the taxpayer
in elevating the claim to the CTA is premature and the CTA has no jurisdiction to rule thereon
(CIR vs Aichi Forging Company of Asia, Inc. GR No.184823, Oct 6, 2010; CIR vs San Roque,
GR No. 187485 (Feb 12, 2013))

V.

The City of Liwliwa assessed local business taxes against Talin Company. Claiming that there is
double taxation, Talin Company filed a Complaint for Refund or Recovery of Illegally and/or
Erroneously-collected Local Business Tax; Prohibition with Prayer to Issue Temporary Restraining
Order and Writ of Preliminary Injunction with the Regional Trial Court (RTC). The RTC denied the
application for a Writ of Preliminary Injunction. Since its motion for reconsideration was denied, Talin
Company filed a special civil action for certiorari with the Court of Appeals (CA). The government
lawyer representing the City of Liwliwa prayed for the dismissal of the petition on the ground that the
same should have been filed with the Court of Tax Appeals (CTA). Talin Company, through its lawyer,
Atty. Frank, countered that the CTA cannot entertain a petition for certiorari since it is not one of its
powers and authorities under existing laws and rules.

Decide. (5%)

SUGGESTED ANSWER

The government lawyer is correct that it is the CTA that is vested with proper jurisdiction.

The law is clear when it said that The CTA shall have exclusive appellate jurisdiction to review by
appeal decisions, orders or resolutions of the RTC, in local tax cases originally decided or resolved
by them in the exercise of their original or appellate jurisdiction (Section 7(3) RA 9282). In a recent
case decided by the SC, it was held that the CTA has certiorari powers over the issue of grave abuse
of discretion on the part of the RTC in issuing an interlocutory order in cases falling within the
exclusive appellate jurisdiction of the tax court, as this is inherent to its exercise of appellate
jurisdiction (City of Manila vs Ho. Caridad H. Grecia-Cuerdo, GR No. 175723 February 4, 2014)
VI.

Choose the correct answer. Smuggling - (1%)

(A) does not extend to the entry of imported or exported articles by means of any false or
fraudulent invoice, statement or practices; the entry of goods at less than the true weight or
measure; or the filing of any false or fraudulent entry for the payment of drawback or refund
of duties.

(B) is limited to the import of contraband or highly dutiable cargo beyond the reach of customs
authorities.

(C) is committed by any person who shall fraudulently import or bring into the Philippines, or
assist in so doing, any article, contrary to law, or shall receive, conceal, buy, sell or any
manner facilitate the transportation, concealment or sale of such article after importation,
knowing the same to have been imported contrary to law.

(C) is committed by any person who shall fraudulently import or bring into the Philippines, or assist in
so doing, any article, contrary to law, or shall receive, conceal, buy, sell or any manner facilitate the
transportation, concealment or sale of such article after importation, knowing the same to have been
imported contrary to law. (Section 3601, Tariff and Customs Code)

VII.

In accordance with the Local Government Code (LGC), the Sangguniang Panglungsod (SP) of
Baguio City enacted Tax Ordinance No. 19, Series of 2014, imposing a P50.00 tax on all the tourists
and travellers going to Baguio City. In imposing the local tax, the SP reasoned that the tax collected
will be used to maintain the cleanliness of Baguio City and for the beautification of its tourist
attractions. (D) is punishable by administrative penalty only.

Claiming the tax to be unjust, Baguio Travellers Association (BTA), an association of travel agencies
in Baguio City, filed a petition for declaratory relief before the Regional Trial Court (RTC) because
BTA was apprehensive that tourists might cancel their bookings with BTAs member agencies. BTA
also prayed for the issuance of a Temporary Restraining Order (TRO) to enjoin Baguio City from
enforcing the local tax on their customers and on all tourists going to Baguio City.

The RTC issued a TRO enjoining Baguio City from imposing the local tax. Aggrieved, Baguio City
filed a petition for certiorari before the Supreme Court (SC) seeking to set aside the TRO issued by
the RTC on the ground that collection of taxes cannot be enjoined. Will the petition prosper? (5%)

SUGGESTED ANSWER

Yes. The petition for certiorari will prosper. The RTC has no jurisdiction to entertain any action
concerning the validity of a Tax Ordinance and to enjoin the imposition of taxes levied by it. Any
question on the legality of the tax ordinance can only be raised on appeal with the Secretary of Justice
and the appeal shall not have the effect of suspending the effectivity of the ordinance and the accrual
and the payment of the tax levied therein (Section 187, LGC)
VIII.

Masarap Kumain, Inc. (MKI) is a Value-Added Tax (VAT)-registered company which has been
engaged in the catering business for the past 10 years. It has invested a substantial portion of its
capital on flat wares, table linens, plates, chairs, catering equipment, and delivery vans. MKI sold its
first delivery van, already 10 years old and idle, to Magpapala Gravel and Sand Corp. (MGSC), a
corporation engaged in the business of buying and selling gravel and sand. The selling price of the
delivery van was way below its acquisition cost. Is the sale of the delivery van by MKI to MGSC
subject to VAT? (4%)

SUGGESTED ANSWER

Yes, the sale of the delivery van is subject to VAT being a transaction incidental to the catering
business which is a VAT-registered activity of MKI. Transactions that are undertaken incidental to the
pursuit of a commercial or economic activity are considered as entered into in the course of trade or
business (Section 105, NIRC). A sale of a fully depreciated vehicle that has been used in business is
subject to VAT as an incidental transaction, although such sale may be considered isolated
(Mindanao II Geothermal Partnership vs CIR GR no. 193301; GR no. 194637, March 11, 2013)

IX.

Mr. Gipit borrowed from Mr. Maunawain P100,000.00, payable in five (5) equal monthly installments.
Before the first installment became due, Mr. Gipit rendered general cleaning services in the entire
office building of Mr. Maunawain, and as compensation therefor, Mr. Maunawain cancelled the
indebtedness of Mr. Gipit up to the amount of P75,000.00. Mr. Gipit claims that the cancellation of
his indebtedness cannot be considered as gain on his part which must be subject to income tax,
because according to him, he did not actually receive payment from Mr. Maunawain for the general
cleaning services. Is Mr. Gipit correct? Explain. (4%)

SUGGESTED ANSWER

No. The cancellation of the indebtedness of up to P75,000 is intended as a compensation for the
general cleaning services rendered by Mr. Gipit. Compensation for services in whatever form paid is
part of gross income. (Section 32 (A), NIRC)

X.

Which of the following is an exclusion from gross income? (1%)

(A) Salaries and wages

(B) Cash dividends

(C) Liquidating dividends after dissolution of a corporation

(D) De minimis benefits

(E) Embezzled money


(D) De minimis benefits (Section 33 (C) (4); RR No. 3-98

XI.

Triple Star, a domestic corporation, entered into a Management Service Contract with Single Star, a
non-resident foreign corporation with no property in the Philippines. Under the contract, Single Star
shall provide managerial services for Triple Stars Hongkong branch. All said services shall be
performed in Hongkong.

Is the compensation for the services of Single Star taxable as income from sources within the
Philippines? Explain. (4%)

SUGGESTED ANSWER

No. The compensation for services rendered by Single Star is an income derived from sources
without the Philippines. To be considered as income from within, the labor or service must be
performed within the Philippines (Section 42 (A)(3) and Section 42 (C)(3), NIRC). Since all the
services required to be performed by Single Star, a non-resident foreign corporation, is to be
performed in Hongkong, the entire income is from sources without.

XII.

Which of the following should not be claimed as deductions from gross income? (1%)

(A) discounts given to senior citizens on certain goods and services.

(B) advertising expense to maintain some form of goodwill for the taxpayers business.

(C) salaries and bonuses paid to employees.

(D) interest payment on loans for the purchase of machinery and equipment used in business.

(B) advertising expense to maintain some form of goodwill for the taxpayers business.

XIII.

Hopeful Corporation obtained a loan from Generous Bank and executed a mortgage on its real
property to secure the loan. When Hopeful Corporation failed to pay the loan, Generous Bank
extrajudicially foreclosed the mortgage on the property and acquired the same as the highest bidder.
A month after the foreclosure, Hopeful Corporation exercised its right of redemption and was able to
redeem the property. Is Generous Bank liable to pay capital gains tax as a result of the foreclosure
sale? Explain. (4%)

SUGGESTED ANSWER

No. In a foreclosure of a real estate mortgage, the capital gains tax accrues only after the lapse of
the redemption period because it is only then that there exist a transfer of property. Thus, if the right
to redeem the foreclosed property was exercised by the mortgagor before expiration of the
redemption period, as in this case, the foreclosure is not a taxable event (See RR no.4-99; Supreme
Transliner, Inc. vs BPI Family Savings Bank, Inc. GR No. 165617, February 25, 2011)

XIV.

Mr. X, a Filipino residing in Alabama, U.S.A., died on January 2, 2013 after undergoing a major heart
surgery. He left behind to his wife and two (2) kids several properties, to wit: (4%)

(1) Family home in Makati City;

(2) Condominium unit in Las Pias City;

(3) Proceeds of health insurance from Take Care, a health maintenance organization in the
Philippines; and

(4) Land in Alabama, U.S.A.

The following expenses were paid:

(1) Funeral expenses;

(2) Medical expenses; and

(3) Judicial expenses in the testate proceedings.

(A) What are the items that must be considered as part of the gross estate income of Mr. X?

(B) What are the items that may be considered as deductions from the gross estate?

SUGGESTED ANSWER

(A) All the items of properties enumerated in the problem shall form part of the gross estate of
Mr. X. The composition of the gross estate of a decedent who is a Filipino citizen shall include
all of his properties, real or personal, tangible or intangible, wherever situated (Section 85,
NIRC).

Note: It is suggested that if the examinee answered NONE, the same should be given full
credit because there is no gross estate INCOME in the problem. Likewise, it is suggested that
any answer should be given full credit because of the question is worded in a confusing
manner

(B) All the items of expenses in the problem are deductible from the gross estate. However, the
allowable amount of funeral expenses shall be 5% of the gross estate or actual, whichever is
lower, but in no case shall the amount deductible go beyond P 200,000. Likewise, the
deductible medical expenses must be limited to those incurred within one year prior his death
but not to exceed P 500,000. In addition to the items of expenses mentioned in the problem,
there is also allowed as deduction from the gross estate the standard deduction amounting
to P1 million (Section 86, NIRC)
XV.

When is a pre-assessment notice required under the following cases? (1%)

(A) When the finding for any deficiency tax is the result of mathematical error in the
computation of the tax as appearing on the face of the return.

(B) When a discrepancy has been determined between the tax withheld and the amount
actually remitted by the withholding agent.

(C) When the excise tax due on excisable articles has been paid.

(D) When an article locally purchased or imported by an exempt person, such as, but not
limited to vehicles, capital equipment, machineries and spare parts, has been sold, traded or
transferred to non-exempt persons.

(A) When the finding for any deficiency tax is the result of mathematical error in the computation of
the tax as appearing on the face of the return.

XVI.

Mr. Tiaga has been a law-abiding citizen diligently paying his income taxes. On May 5, 2014, he was
surprised to receive an assessment notice from the Bureau of Internal Revenue (BIR) informing him
of a deficiency tax assessment as a result of a mathematical error in the computation of his income
tax, as appearing on the face of his income tax return for the year 2011, which he filed on April 15,
2012. Mr. Tiaga believes that there was no such error in the computation of his income tax for the
year 2011. Based on the assessment received by Mr. Tiaga, may he already file a protest thereon?
(4%)

SUGGESTED ANSWER

Yes. Mr. Tiaga may consider the assessment notice as a final assessment notice and his right to
protest within 30 days from receipt may now be exercised by him. When the finding of a deficiency
tax is the result of mathematical error in the computation of the tax appearing on the face of the return,
a pre-assessment notice shall not be required hence, the assessment notice is a final assessment
notice (Section 228, NIRC; RR No. 18-2013)

XVII.

In a civil case for Annulment of Contract of Sale, plaintiff Ma. Reklamo presented in evidence the
Contract of Sale which she sought to be annulled. No documentary stamp tax on the Contract of Sale
was paid because according to plaintiff Ma. Reklamo, there was no need to pay the same since the
sale was not registered with the Register of Deeds. Plaintiff Ma. Reklamo is now offering the Contract
of Sale as her evidence. Is the Contract of Sale admissible? (4%)
SUGGESTED ANSWER

No. The Contract of Sale cannot be admitted in evidence. The document is clearly taxable because
the law imposes a documentary stamp tax (DST) on Sales and Agreement to Sell and Memoranda
of Sale (Section 175, NIRC). Since the (DST) thereon is not paid the effect is that the instrument,
document or paper which is required by law to be stamped and which has been signed, issued,
accepted and transferred without being duly stamped shall not be recorded, nor shall it or used in
evidence in any court until the requisite stamp or stamps shall have been affixed thereto and
cancelled. (Section 201, NIRC) In the case at bar, no documentary stamp tax was paid on the
Contract of Sale, hence, it cannot be used as her evidence in court.

XVIII.

Madam X owns real property in Caloocan City. On July 1, 2014, she received a notice of assessment
from the City Assessor, informing her of a deficiency tax on her property. She wants to contest the
assessment. (4%)

(A) What are the administrative remedies available to Madam X in order to contest the
assessment and their respective prescriptive periods?

(B) May Madam X refuse to pay the deficiency tax assessment during the pendency of her
appeal?

SUGGESTED ANSWER

(A) The administrative remedies available to Madam X to contest the assessment and their
respective prescriptive periods are as follows:

1. Pay the deficiency real property tax under protest (Section 252, LGC)
2. File the protest with local treasurer The protest in writing must be filed within thirty (30)
days from payment of the tax to the provincial, city treasurer or municipal treasurer, in the
case of a municipality within Metropolitan Manila Area, who shall decide the protest within
sixty (60) days from receipt (Section 252, LGC)
3. Appeal to the LBAA If protest is denied or upon the lapse of the 60-day period for the
treasurer to decide, the taxpayer may appeal to the LBAA within 60 days and the cases
decided within 120 days Section 226 & 229, LGC)
4. Appeal to the CBAA If not satisfied with the decision of the LBAA, appeal to the CBAA
within 30 days from receipt of a copy of the decision (Section 229 (c), LGC).

(B) No. The payment of the deficiency tax is a condition before she can protest the deficiency
assessment. It is the decision on the protest or inaction thereon that gives her the right to
appeal. This means that she cannot refuse to pay the deficiency assessment during the
pendency of the appeal because it is the payment itself which gives rise to the remedy. The
law provides that no protest (which is the beginning of the disputation process) shall be
entertained unless the taxpayer first pays the tax. (Section 252, LGC)
XIX.

The Bureau of Internal Revenue (BIR) issued Revenue Memorandum Circular (RMC) No. 65-2012
imposing Value-Added Tax (VAT) on association dues and membership fees collected by
condominium corporations from its member condominium-unit owners. The RMCs validity is
challenged before the Supreme Court (SC) by the condominium corporations.

The Solicitor General, counsel for BIR, claims that association dues, membership fees, and other
assessment/charges collected by a condominium corporation are subject to VAT since they constitute
income payments or compensation for the beneficial services it provides to its members and tenants.

On the other hand, the lawyer of the condominium corporations argues that such dues and fees are
merely held in trust by the condominium corporations exclusively for their members and used solely
for administrative expenses in implementing the condominium corporations purposes. Accordingly,
the condominium corporations do not actually render services for a fee subject to VAT.

Whose argument is correct? Decide. (5%)

SUGGESTED ANSWER

1. The lawyer of the condominium corporations is correct. The association dues, membership
fees, and other assessments/charge do not constitute income payments because they were
collected for the benefit of the unit owners and the condominium corporation is not created
as a business entity. The collection is the money of the unit owners pooled together and will
be spent exclusively for the purpose of maintaining and preserving the building and its
premises which they themselves own and possess (First e-Bank Tower Condominium Corp.,
vs BIR Special Civil Action No. 12-1236, RTC Br. 146, Makati City)
2. In the case of Office Metro Philippines, Inc. (formerly Regus Centres, Inc.) vs. CIR (CTA Case
No. 8382), the Court only dealt with the EWT issue as the VAT issue was not raised. However,
the CTA held that in the payment of association dues to a condominium corporation, these
dues are merely held in trust and used solely for administrative expenses from which does
not realize any gain or profit. The BIR, on the other hand, views these payments as income
or compensation for beneficial services.

However, a perusal of Section 105 shows that transactions in the course of a trade or
business (sells, barters, exchanges, leases goods or properties, renders services, imports
goods) are those subject to VAT. In the case of a condominium corporation, the function of
the entity is merely for administrative purposes and not a trade or business. Thus, payments
in the form of association dues should not be subjected to VAT.

XX.

During his lifetime, Mr. Sakitin obtained a loan amounting to P10 million from Bangko Uno for the
purchase of a parcel of land located in Makati City, using such property as collateral for the loan. The
loan was evidenced by a duly notarized promissory note. Subsequently, Mr. Sakitin died. At the time
of his death, the unpaid balance of the loan amounted to P2 million. The heirs of Mr. Sakitin deducted
the amount of P2 million from the gross estate, as part of the "Claims against the Estate." Such
deduction was disallowed by the Bureau of Internal Revenue (BIR) Examiner, claiming that the
mortgaged property was not included in the computation of the gross estate. Do you agree with the
BIR? Explain. (4%)
SUGGESTED ANSWER

Yes. Unpaid mortgages upon, or any indebtedness with respect property are deductible from the
gross estate only if the value of the decedents interest in said property, undiminished by such
mortgage or indebtedness, is included in the gross estate (Section 86 (A)(1)(e). In the instant case,
the interest of the decedent in the property purchased from the loan where the said property was
used as the collateral, was not included in the gross estate. Accordingly, the unpaid balance of the
loan at the time of Mr. Sakitins death is not deductible as Claims against the Estate.

XXI.

On August 31, 2014, Haelton Corporation (HC), thru its authorized representative Ms. Pares, sold a
16-storey commercial building known as Haeltown Building to Mr. Belly for P100 million. Mr. Belly, in
turn, sold the same property on the same day to Bell Gates, Inc. (BGI) for P200 million. These two
(2) transactions were evidenced by two (2) separate Deeds of Absolute Sale notarized on the same
day by the same notary public.

Investigations by the Bureau of Internal Revenue (BIR) showed that:

(1) the Deed of Absolute Sale between Mr. Belly and BGI was notarized ahead of the sale between
HC and Mr. Belly; (2) as early as May 17, 2014, HC received P40 million from BGI, and not from Mr.
Belly; (3) the said payment of P40 million was recorded by BGI in its books as of June 30, 2014 as
investment in Haeltown Building; and (4) the substantial portion of P40 million was withdrawn by Ms.
Pares through the declaration of cash dividends to all its stockholders.

Based on the foregoing, the BIR sent Haeltown Corporation a Notice of Assessment for deficiency
income tax arising from an alleged simulated sale of the aforesaid commercial building to escape the
higher corporate income tax rate of thirty percent (30%). What is the liability of Haeltown Corporation,
if any? (4%)

SUGGESTED ANSWER

Haelton Corporation is liable for the deficiency income tax as a result of tax evasion. The purpose of
selling first the property to Mr. Belly is to create a tax shelter. He never controlled the property and
did not enjoy the normal benefits and burdens of ownership. The sale of him was merely a tax ploy,
a sham and without business purpose and economic substance. The intermediary transaction, which
was prompted more on the mitigation of tax liabilities than for legitimate business purpose constitutes
one of tax evasion. However, being a corporation, Haelton can only be liable for civil fraud which is a
civil liability rather than a criminal fraud which can only be committed by natural persons. (CIR vs
Benigno Toda, Jr. 438 SCRA 290 (2004)

XXII.

Choose the correct answer. Double Taxation - (1%)

(A) is one of direct duplicate taxations wherein two (2) taxes must be imposed on the same
subject matter, by the same taxing authority, within the same jurisdiction, during the same
period, with the same kind or character of tax, even if the purposes of imposing the same are
different.
(B) is forbidden by law; and therefore, it is a valid defense against the validity of a tax
measure.

(C) means taxing the same property twice when it should be taxed only once; it is tantamount
to taxing the same person twice by the same jurisdiction for the same thing.

(D) exists when a corporation is assessed with local business tax as a manufacturer, and at
the same time, value-added tax as a person selling goods in the course of trade or business.

(C) means taxing the same property twice when it should be taxed only once; it is tantamount to
taxing the same person twice by the same jurisdiction for the same thing. (Victorias Milling Co vs
Municipality of Victorias, Negros Occidental (1968)

XXIII.

Choose the correct answer. Tax Avoidance (1%)

(A) is a scheme used outside of those lawful means and, when availed of, it usually subjects
the taxpayer to further or additional civil or criminal liabilities.

(B) is a tax saving device within the means sanctioned by law.

(C) is employed by a corporation, the organization of which is prompted more on the mitigation
of tax liabilities than for legitimate business purpose.

(D) is any form of tax deduction scheme, regardless if the same is legal or not.

(B) is a tax saving device within the means sanctioned by law. (Philip Manufacturing Corp vs CIR
(1968)

XXIV.

A, B, and C, all lawyers, formed a partnership called ABC Law Firm so that they can practice their
profession as lawyers. For the year 2012, ABC Law Firm received earnings and paid expenses,
among which are as follows: (6%)

Earnings:

(1) Professional/legal fees from various clients

(2) Cash prize received from a religious society in recognition of the exemplary service of
ABC Law Firm

(3) Gains derived from sale of excess computers and laptops


Payments:

(1) Salaries of office staff

(2) Rentals for office space

(3) Representation expenses incurred in meetings with clients

(A) What are the items in the above mentioned earnings which should be included in the
computation of ABC Law Firms gross income? Explain.

(B) What are the items in the above-mentioned payments which may be considered as
deductions from the gross income of ABC Law Firm? Explain.

(C) If ABC Law Firm earns net income in 2012, what, if any, is the tax consequence on the
part of ABC Law Firm insofar as the payment of income tax is concerned? What, if any, is the
tax consequence on the part of A, B, and C as individual partners, insofar as the payment of
income tax is concerned?

SUGGESTED ANSWER

(A) The three (3) items of earnings should be included in the computation of ABC Law Firms
gross income. The professional/legal fees from various clients is included as part of gross
income being in the nature of compensation for services (Section 32 (A)(1), NIRC). The cash
prize from a religious society in recognition of its exemplary services is also included there
being no law providing for its exclusion. This is not a prize in recognition of any of the
achievements enumerated under the law hence, should form part of gross income (Section
32 (B)(7)(C), NIRC). The gains from sale of excess computers and laptops should also be
included as part of the firms gross income because the term gross income specifically
includes gains derived from dealings in property (Section 32 (A)(3), NIRC)
(B) The law firm being formed as a general professional partnership is entitled to the same
deductions as allowed to corporations (Section 26, NIRC). Hence, the three (3) items of
deductions mentioned in the problem are all deductible, they being in the nature of ordinary
and necessary expenses incurred in the practice of profession (Section 34 (A), NIRC).

ALTERNATIVE ANSWER

The law firm being formed as a general professional partnership is entitled to the same
deductions as allowed to corporations (Section 26, NIRC). Hence, the three (3) items of
deductions mentioned in the problem are all deductible, they being in the nature of ordinary
and necessary expenses incurred in the practice of profession (Section 34 (A), NIRC).
However, the amount deductible for representation expenses incurred by a taxpayer engaged
in sale of services, including a law firm, is subject to a ceiling of 1% of net revenue (RR No.
10-2002).

(C) The net income having been earned by the law firm, which is formed and qualifies as a
general professional partnership, is not subject to income tax because the earner is devoid
of any income tax personality. Each partner shall report as gross income his distributive share,
actually or constructively received, in the net income of the partnership. The partnership is
merely treated for income tax purposes as a pass-through entity so that its net income is not
taxable at the level of the partnership but said net income should be attributed to the partners,
whether or not distributed to them, and they are liable to pay the income tax based on their
respective taxable income as individual taxpayers (Section 26, NIRC)

XXV.

Which of the following transactions is subject to Value-Added Tax (VAT)? (1%)

(A) Sale of shares of stock-listed and traded through the local stock exchange

(B) Importation of personal and household effects belonging to residents of the Philippines
returning from abroad subject to custom duties under the Tariff and Customs Code

(C) Services rendered by individuals pursuant to an employeremployee relationship

(D) Gross receipts from lending activities by credit or multi-purpose cooperatives duly
registered with the Cooperative Development Authority

(B) Importation of personal and household effects belonging to residents of the Philippines returning
from abroad subject to custom duties under the Tariff and Customs Code (exempt from VAT only if
exempt from customs duties, Section 109 (1)(C), NIRC)

XXVI.

Freezy Corporation, a domestic corporation engaged in the manufacture and sale of ice cream, made
payments to an officer of Frosty Corporation, a competitor in the ice cream business, in exchange for
said officers revelation of Frosty Corporations trade secrets.

May Freezy Corporation claim the payment to the officer as deduction from its gross income? Explain.
(4%)

SUGGESTED ANSWER

No. The payments made in exchange for the revelation of a competitors trade secrets is considered
as an expense which is against law, morals, good customs or public policy, which is not deductible
(3M PH, Inc. vs CIR (1988)). Also, the law will not allow the deduction of bribes, kickbacks and other
similar payments. Applying the principle of ejusdem generis, payment made by Freezy Corporation
would fall under other similar payments which are not allowed as deduction from gross income
(Section 34 (A)(1)(C), NIRC)

XXVII.

In January 2013, your friend got his first job as an o ffice clerk. He is single and lives with his family
who depends upon him for financial support. His parents have long retired from their work, and his
two (2) siblings are still minors and studying in grade school. In February 2014, he consulted you as
he wanted to comply with all the rules pertaining to the preparation and filing of his income tax return.
He now asks you the following:

(A) Is he entitled to personal exemptions? If so, how much? (1%)


(B) Is he entitled to additional exemptions? If so, how much? (1%)

(C) What is the effect of the taxes withheld from his salaries on his taxable income? (2%)

SUGGESTED ANSWER

(A) Yes. The law allows a basic personal exemption of P50,000 for each individual taxpayer
(Section 35 (A), NIRC)
(B) No. While his parents and minor siblings are living with and dependent upon him for financial
support, they are not qualified dependents for purposes of additional exemptions. The term
dependent for purposes of the additional personal exemption would include only legitimate,
illegitimate or legally adopted child. (Section 35(B), NIRC)
(C) The taxes withheld from his salaries will not affect his taxable income because they are not
allowed as tax deductions but as tax credits. Tax deductions reduce the taxable income while
tax credits reduce the tax liability (Central Drug Corporation vs CIR)

XXVIII.

Choose the correct answer. Tax laws - (1%)

(A) may be enacted for the promotion of private enterprise or business for as long as it gives
incidental advantage to the public or the State

(B) are inherently legislative; therefore, may not be delegated

(C) are territorial in nature; hence, they do not recognize the generally-accepted tenets of
international law

(D) adhere to uniformity and equality when all taxable articles or kinds of property of the same
class are taxable at the same rate

(D) adhere to uniformity and equality when all taxable articles or kinds of property of the same class
are taxable at the same rate (City of Baguio vs de Leon, 25 SCRA 938)

XXIX.

Doa Evelina, a rich widow engaged in the business of currency exchange, was assessed a
considerable amount of local business taxes by the City Government of Bagnet by virtue of Tax
Ordinance No. 24. Despite her objections thereto, Doa Evelina paid the taxes. Nevertheless,
unsatisfied with said Tax Ordinance, Doa Evelina, through her counsel Atty. ELP, filed a written
claim for recovery of said local business taxes and contested the assessment. Her claim was denied,
and so Atty. ELP elevated her case to the Regional Trial Court (RTC).

The RTC declared Tax Ordinance No. 24 null and void and without legal effect for having been
enacted in violation of the public ation requirement of tax ordinances and revenue measures under
the Local Government Code (LGC) and on the ground of double taxation. On appeal, the Court of
Tax Appeals (CTA) affirmed the decision of the RTC. No motion for reconsideration was filed and the
decision became final and executory. (4%)
(A) If you are Atty. ELP, what advice will you give Doa Evelina so that she can recover the
subject local business taxes?

(B) If Doa Evelina eventually recovers the local business taxes, must the same be
considered as income taxable by the national government?

SUGGESTED ANSWER

(A) The remedy availed of by Dona Evelina to question the validity if the assessment was to
file a written claim for recovery which was denied by the city treasurer. It appears that
after the denial, the judicial remedies were properly pursued. Since the decision by the
CTA had already become final and executory, the counsel should advice Dona Evelina
to press for the execution of the judgment. Should the city treasurer refuse to refund the
local taxes paid, they should push for the issuance of a writ of execution by the CTA to
force the local treasurer to make the refund.
(B) Yes. Subject to the tax benefit rule. The local business tax paid is a business connected
tax hence, deductible from gross income. If at the time of its deduction it resulted to a tax
benefit to Dona Evelina, then the recovery will form part of gross income to the extent of
the tax benefit on the previous deduction (Section 34 (C)(1), NIRC)

---ooo0ooo---
2014 BAR EXAMINATIONS
COMMERCIAL LAW

I.

Carlo and Bianca met in the La Boracay festivities. Immediately, they fell in love with each other and
got married soon after. They have been cohabiting blissfully as husband and wife, but they did not
have any offspring. As the years passed by, Carlo decided to take out an insurance on Biancaslife
for P1,000,000.00 with him (Carlo) as sole beneficiary, given that he did not have a steady source of
income and he always depended on Bianca both emotionally and financially. During the term of the
insurance, Bianca died of what appeared to bea mysterious cause so that Carlo immediately
requested for an autopsy tobe conducted. It was established that Bianca died of a natural cause.
More than that, it was also established that Bianca was a transgender all along a fact unknown to
Carlo. Can Carlo claim the insurance benefit? (5%)

SUGGESTED ANSWERS

Yes, Carlo can claim the insurance benefit. He had insurable interest on Biancas life under Section
10 (b) of the Insurance Code as the problem states that Carlo always depended on Bianca both
emotionally and financially. The insurable interest upon the life of another under the aforesaid
provision need not be based on kinship or legal obligation to give support (see Alvendia, The Law of
Insurance in the Philippines, 1968 ed., p. 42; Martin, Commentaries and Jurisprudence on the
Philippine Commercial Laws, vol. 2, 1986 ed., p. 21). The fact that their marriage may be void is
irrelevant.

II.

Bong bought 300 bags of rice from Ben for P300,000.00. As payment, Bong indorsed to Bena Bank
of the Philippine Islands (BPI) check issued by Baby in the amount of P300,000.00. Upon
presentment for payment, the BPI check was dishonored because Babys account from which it was
drawn has been closed. To replace the dishonored check, Bong indorsed a crossed Development
Bank of the Philippines (DBP) check issued also by Baby for P300,000.00. Again, the check was
dishonored because of insufficient funds. Ben sued Bong and Baby on the dishonored BPI check.
Bong interposed the defense that the BPI check was discharged by novation when Ben accepted the
crossed DBP check as replacement for the BPI check. Bong cited Section 119 of the Negotiable
Instruments Law which provides that a negotiable instrument is discharged "by any other act which
will discharge a simple contractfor the payment of money." Is Bong correct? (4%)

SUGGESTED ANSWERS

Bong is not correct. His claim that the BPI check was discharged by novation when Ben accepted the
crossed DBP check as replacement for the BPI check is unmeritorious.

Bens acceptance of the DBP check, which replaced the dishonored BPI check, did not result in
novation as there was no express agreement to establish that Bong was already discharged from the
liability to pay Ben the amount of P300,000.00 as payment for the 300 bags of rice. Novation is never
presumed. There must be an express intention to novate. In fact, when the DBP check was delivered
to Ben, the same was also indorsed by Bong which shows Bongs recognition of the existing obligation
to Ben to pay P214,000.00 subject of the replaced BPI check.

Moreover, Bens acceptance of the DBP check did not result in any incompatibility, since the two
checks BPI and DBP checks were precisely for the purpose of paying the amount of P214,000.00,
i.e. the credit obtained from the purchase of the 300 bags of rice from Ben. Indeed, there was no
substantial change in the object or principal condition of the obligation of Bong as the indorser of the
check to pay the amount of P214,000.00. It would appear that Ben accepted the DBP check to give
Bong the chance to pay his obligation. (Salazar vs J.Y. Brothers Marketing Corporation, (2010))

III.

Under the Financial Rehabilitation and Insolvency Act (FRIA), the filing of a petition for voluntary
rehabilitation must be approved by: (1%)

(A) a majority vote of the Board of Directors and authorized by the vote of the stockholders
representing at least a majority of the outstanding capital stock

(B) a majority vote of the Board of Directors and authorized by the vote of the stockholders
representing at least two-thirds of the outstanding capital stock

(C) two-thirds vote of the Board of Directors and authorized by the vote of the stockholders
representing at least a majority of the outstanding capital stock

(D) two-thirds vote of the Board of Directors and authorized by the vote of the stockholders
representing at least two-thirds of the outstanding capital stock

RECOMMENDATION:

This MCQ is outside the coverage of the 2014 Mercantile Law Bar Examination as the 2014 Syllabus
for Mercantile Law prepared by the SC did not include the FRIA. It is recommended that all examinees
be given full credit whether they gave any answer or not.

(A) a majority vote of the Board of Directors and authorized by the vote of the stockholders
representing at least a majority of the outstanding capital stock

IV.

DC is a unit owner of Medici Condominium located in Pasig City. On September 7, 2011, Medici
Condominium Corp. (Medici) demanded from DC payment for alleged unpaid association dues and
assessments amounting toP195,000.00. DC disputed the claim, saying that he paid all dues as shown
by the fact that he was previously elected as Director and President of Medici. Medici, on the other
hand, claimed that DCs obligation was a carry-over of his obligations to the condominium developer,
Medici Construction Corporation. Consequently, DCwas prevented from exercising his right to vote
and be voted for during the 2011 election of Medicis Board of Directors. This prompted DC to file a
complaint for damages before the Special Commercial Court of Pasig City. Medici filed a motion to
dismiss on the ground that the court has no jurisdiction over the intra-corporate dispute which the
Housing and Land Use Regulatory Board (HLURB) has exclusive jurisdiction over. Is Medici correct?
(4%)

SUGGESTED ANSWER

Medici is correct. Using the relationship test and the nature of the controversy test, it is indubitable
that the controversy involves intra-corporate issues. The facts of the problem indicate that there was
a dispute as to the liability of DC for condominium dues, as well as the right to DC to to vote and be
voted for during the 2011 election of Medicis Board of Directors. Accordingly, jurisdiction is with the
Special Commercial Court of Pasig City, not with the Housing and Land Use Regulatory Board
(Medical Plaza Makati Condominium Corp. vs Cullen, (2013)

V.

A corporation organized under the Corporation Code commences to have corporate existence and
juridical personality and is deemed incorporated: (1%)

(A) from the date the application for incorporation is filed with the Securities and Exchange
Commission (SEC)

(B) from the date the SEC issues a certificate of incorporation under its official seal

(C) thirty (30) days after the date the application for incorporation is filed with the SEC

(D) thirty (30) days after the datethe SEC issues a certificate of incorporation under its official
seal

(B) from the date the SEC issues a certificate of incorporation under its official seal. (Sec 19,
Corporation Code)

VI.

On May 26, 2014, Jess insured with Jack Insurance (Jack) his 2014 Toyota Corolla sedan under a
comprehensive motor vehicle insurance policy for one year. On July 1, 2014, Jess car was unlawfully
taken. Hence, he immediately reported the theft to the Traffic Management Command (TMC) of the
Philippine National Police (PNP), which made Jess accomplish a complaint sheet as part of its
procedure. In the complaint sheet, Jess alleged that a certain Ric Silat(Silat) took possession of the
subject vehicle to add accessories and improvements thereon. However, Silat failed to return the
subject vehicle within the agreed 3-day period. As a result, Jess notified Jack of his claim for
reimbursement of the value of the lost vehicle under the insurance policy. Jack refused to pay claiming
that there is no theft as Jess gave Silat lawful possession of the car. Is Jack correct? (4%)

SUGGESTED ANSWER

Jack Insurance is not correct. Ric Silat was merely given physical possession of the car. He did not
have juridical possession over the same. It is also apparent that the taking by Silat of the car of Jess
is without the consent or authority of the latter. Thus, the act of Silat in depriving Jess of his car, soon
after the transfer of physical possession of the same to him, constitutes theft under the insurance
policy that is compesable. (Paramount Insurance vs Spouse Remondeulaz (2012)

VII.

Jinggy went to Kluwer University(KU) in Germany for his doctorate degree (Ph.D.). He completed his
degree with the highest honors in the shortest time. When he came back, he decided to set-up his
own graduate school in his hometown in Zamboanga. After seeking free legal advice from his high-
flying lawyer-friends, he learned that the Philippines follows the territoriality principle in trademark
law, i.e., trademark rights are acquired through valid registration in accordance with the law. Forth
with, Jinggy named his school the Kluwer Graduate School of Business of Mindanao and immediately
secured registration with the Bureau of Trademarks. KU did not like the unauthorized use of its name
by its top alumnus no less. KU sought your help. What advice can you give KU? (4%)

SUGGESTED ANSWER

I can advise KU to file a petition to cancel the registration of the name Kluwer Graduate School of
Business of Mindanao (KGSBM) with the Bureau of Trademarks.

The petition could be anchored on the following facts: Kluwer University is the owner of the name
Kluwer. Jinggy registered the trademark in bad faith. He came to know of the trademark because
he went to Kluwer University in Germany for his doctorate degree. KU is the owner of the name
Kluwer and has the sole right to register the same. Foreign marks that are not registered are still
accorded protection against infringement and/or unfair competition under the Paris Convention for
the Protection of Industrial Property. Both the Philippines and Germany are signatories to the Paris
Convention. Under the said Convention, the trademark of a national or signatory to the Paris
Convention is entitled to its protection in other countries that are also signatories to the Convention
without need of registering the trademark.

The petition could also be based on the fact, if it were proven by KU that Kluwer is a well-known
mark and entitled to protection as KU and KGSBM belong to the same class of services, i.e. Class
41 (education and entertainment). KU must also prove that a competent authority of the Philippines
has designated Kluwer to be well known internationally and in the Philippines.

Finally, the petition could also be based on the fact, if it were proven by KU, that Kluwer is a trade
name that KU has adopted and used before its use and registration by Jinggy. (Ecole de Cuisine
Manille (Cordon Bleu of the Philippines), Inc. vs Renaud Cointreau & Cie and Le Cordon Bleu Ints
(2013)

VIII.

As a rule, an insurance contract is consensual and voluntary. The exception is in the case of: (1%)

(A) Inland Marine Insurance

(B) Industrial Life Insurance

(C) Motor Vehicle Liability Insurance

(D) Life Insurance

(C) Motor Vehicle Liability Insurance

Note: The correct term to use in (C) is compulsory motor vehicle liability insurance (Chapter VI,
Insurance Code) rather than motor vehicle liability insurance.

IX.

On February 21, 2013, Barrack entered into a contract of insurance with Matino Insurance Company
(Matino) involving a motor vehicle. The policy obligates Matino to pay Barrack the amount of Six
Hundred Thousand Pesos (P600,000.00) in case of loss or damage to said vehicle during the period
covered, which is from February 26, 2013 to February 26, 2014.

On April 16, 2013, at about 9:00 a.m., Barrack instructed his driver, JJ, to bring the motor vehicle to
a near by auto shop for tune-up. However, JJno longer returned and despite diligent efforts to locate
the said vehicle, the efforts proved futile. Resultantly, Barrack promptly notified Matino of the said
loss and demanded payment of the insurance proceeds of P600,000.00.

In a letter dated July 5, 2013. Matino denied the claim, reasoning as stated in the contract that "the
company shall not be liable for any malicious damage caused by the insured, any member of his
family or by a person in the insureds service. Is Matino correct in denying the claim? (4%)

SUGGESTED ANSWER

Matino Insurance is not correct in denying the claim. The loss of the motor vehicle is not excluded
under the insurance policy as the loss was due to theft, not malicious damage. The malicious
damage clause under the policy is not applicable but rather the theft clause. Thus, the provision
under the policy that the company shall not be liable for any malicious damage caused by the
insured, any member of his family or by a person in the insureds service is not applicable. (Alpha
Insurance and Surety Co vs Castor (2003)

X.

A person is said to have an insurable interest in the subject matter insured where he has a relation
or connection with, or concern in it that he will derive pecuniary benefit or advantage from its
preservation. Which among the following subject matters is not considered insurable? (1%)

(A) A partner in a firm on its future profits

(B) A general creditor on debtors property

(C) A judgment creditor on debtors property

(D) A mortgage creditor on debtors mortgaged property

(B) A general creditor on debtors property

XI.

PA Assurance (PA) was incorporated in 1980 toengage in the sale of pre-need educational plans. It
sold open-ended educational plans which guaranteed the payment of tuition and other fees to
planholders irrespective of the cost at the time of availment. Italso engaged in the sale of fixed value
plans which guaranteed the payment of a pre-determined amount to planholders. In 1982, PAwas
among the countrys top corporations. However, it subsequently suffered financial difficulties.

On September 8, 2005, PA filed a Petition for Corporate Rehabilitation before the Regional Trial Court
(RTC) of Makati City. On October 17, 2005, ten (10) plan holders filed an Opposition and Motion to
Exclude Planholders from Stay Order on the ground that planholders are not creditors as they
(planholders) have a trust relationship with PA. Are the planholders correct? (4%)
SUGGESTED ANSWER

RECOMMENDATION:

XII.

To constitute a quorum for the transaction of corporate business, only a majority of the number of
Board of Directors is required: (1%)

(A) as fixed by the corporate by-laws

(B) as fixed in the articles of incorporation

(C) actually serving in the board

(D) actually serving in the board but constituting a quorum

(B) as fixed in the articles of incorporation

XIII.

Pursuant to its By-Laws, Soei Corporations Board of Directors created an Executive Committee to
manage the affairs of the corporation in between board meetings. The Board of Directors appointed
the following members of the Executive Committee: the President, Sarah L; the Vice President, Jane
L; and, a third member from the board, Juan Riles. On December 1, 2013, the Executive Committee,
with Sarah L and Jane L present, met and decided on the following matters:

1. Purchase of a delivery van for use in the corporations retail business;

2. Declaration and approval of the 13th month bonus;

3. Purchase of an office condominium unit at the Fort; and

4. Declaration of P10.00 per share cash dividend.

Are the actions of the Executive Committee valid? (4%)

SUGGESTED ANSWER

All the actions taken by the Executive Committee in the problem are not valid. The Executive
Committee was not properly created and, therefore, its acts are invalid. Section 35 of the Corporation
Code requires that at least three members of an Executive Committee be directors of the corporation.
In the problem, only Member Sarah L (who is a director as she is the President) and Member Juan
Riles (who is clearly identified in the problem as a director) are directors of Soci Corporation. Member
Jane L is no identified as a director. As the Executive Committee in the problem was not properly
created it could not act at all as the minimum quorum would be three. As stated earlier, the Executive
Committee lacks one qualified member.

If the Executive Committee were properly organized and a quorum were present, all the actions taken
by the Executive Committee in the problem, except the declaration of P 10.00 per share cash
dividend, would have been valid. The distribution of cash dividends to the shareholders may not be
delegated by the Board of Directors to the Executive Committee pursuant to Section 35 of the
Corporation Code.

XIV.

On September 25, 2013, Danny Marcial (Danny) procured an insurance on his life with a face value
ofP5,000,000.00 from RN Insurance Company (RN), with his wife Tina Marcial(Tina) as sole
beneficiary. On the same day, Danny issued an undated check to RN for the full amount of the
premium. On October 1, 2013, RN issued the policy covering Dannys life insurance. On October 5,
2013, Dannymet a tragic accident and died. Tina claimed the insurance benefit, but RN was quick to
deny the claim because at the time of Dannys death, the check was not yet encashed and therefore
the premium remained unpaid.

Is RN correct? Will your answer be the same if the check is dated October 15, 2013? (4%)

SUGGESTED ANSWERS

To the first question

RN Insurance is not correct. The facts of the case show that Danny procured insurance on his life on
September 25, 2013, with his wife Tina as beneficiary, and that on the same day, i.e. September 25,
2013, he issued an undated check to RN for the full amount of the premium. Since the undated check
was issued to RN on September 25, 2013, it will be considered dated as of the same day, i.e.
September 25, 2013 pursuant to Section 17(c) of the Negotiable Instruments Law. The facts also
show that RN Insurance issued the policy on Dannys life on October 1, 2013 and that Danny died in
an accident on October 5, 2013.

RN Insurance denied that claim of Tina because at the time of Dannys death, the check was not yet
encashed and, therefore, the premium remained unpaid. Presumably, RN Insurance is relying on the
second paragraph of Article 1249 of the Civil Code which states that the delivery of promissory notes
payable to order, or bills of exchange or other mercantile documents shall produce the effect of
payment only when they have been cashed, or when through the fault of the creditor they have been
impaired.

Whose fault was it that the check was not encashed? Certainly not Danny or Tina. RN Insurance had
the check as early as September 25, 2013 and could have encashed the check before the death of
Danny on October 5, 2013. The problem did not indicate that there was any problem with the check,
e.g. that it was not adequately funded. RN Insurance was at fault and Tina should not be denied the
proceeds of the policy.

(See the case of Malayan Insurance Co., Inc. vs Arnaldo (1987), where the Court held that the insurer
could no longer claim forfeiture of the insureds right because it held the check used to pay the
premium on a fire insurance policy for an unreasonable time; see also the comments of Justice Jose
C. Vitug (ret.) in his book, Commercial Laws and Jurisprudence, 2006 Vol 1., p. 250, that payment x
x x by means of a check or note, accepted by the insurer, bearing a date prior to the loss, assuming
an availability of funds thereof, would be sufficient even if it remains uncashed at the time of the loss.
The subsequent effects of encashment (or impairment by the fault of the creditor) or of legal
compensation under Articles 1278-1279, in relation to Article 1249 of the Civil Code, would retroact
to the date of the mercantile instrument and its acceptance by the creditor.

To the second question

My answer would not be the same if the check were dated October 15, 2013. This answer assumes
that Danny was the one who dated the check and, therefore what he issued was a postdated check.
The payment of a promissory note or a postdated check at a stated maturity subsequent to the loss,
assuming that there was no estoppel (e.g. written acknowledgment of the receipt of premium), is
insufficient to put the insurance into effect. (Vitug, Commercial Laws and Jurisprudence, 2006, Vol 1
p 250)

If it were RN Insurance who dated the check October 15, 2013, then my answer would be the same
as my answer to the first question.

XV.

A, B, C, D, and Ewere members of the 2003-2004 Board of Directors of FLP Corporation. At the
election for the 2004-2005 Board of Directors, not one of them was elected. They filed in court a
derivative suit on behalf of FLP Corporation against the newly-elected members of the Board of
Directors. They questioned the validity of the election as it was allegedly marred by lack of quorum,
and prayed for the nullification of the said election. The 2004-2005 Board of Directorsmoved to
dismiss the complaint because the derivative suit is not proper. Decide. (4%)

SUGGESTED ANSWER

The position taken by the 2004-2005 Board of Directors is correct. The derivative suit is not proper.
The members of the 03-04 BOD of FLP Corporation are the injured parties, not FLP Corporation, as
their rights to vote and to be voted upon were directly affected by the election of the new set of
directors (Legaspi Towers 300, Inc. et. al. vs Muer, et al (2012)

XVI.

In intellectual property cases, fraudulent intent is not an element of the cause of action except in
cases involving: (1%)

(A) trademark infringement

(B) copyright infringement

(C) patent infringement

(D) unfair competition

(D) unfair competition


XVII.

On December 1, 2010, Kore A Corporationshipped from South Korea to LT Corporation in Manila


some 300,000 sheets of high-grade special steel. The shipment was insured against all risks by NA
Insurance(NA). The carrying vessel arrived at the Portof Manila on January 10, 2011. When the
shipment was discharged, it was noted that 25,000 sheets were damaged and in bad order. The
entire shipment was turned over to the custody of ATI, the arrastre operator, on January 21, 2011 for
storage and safekeeping, pending its withdrawal by the consignees authorized customs broker,
RVM.

On January 26 and 29, 2011, the subject shipment was withdrawn by RVM from the custody of ATI.
On January 29, 2011, prior to the withdrawal of the last batch of the shipment, a joint inspection of
the cargo was conducted per the Request for Bad Order Survey (RBO) dated January 28, 2011. The
examination report showed that 30,000 sheets of steel were damaged and in bad order.

NA Insurance paid LT Corporationthe amount of P30,000,000.00 for the 30,000 sheets that were
damaged, as shown in the Subrogation Receipt dated January 13, 2013. Thereafter, NA Insurance
demanded reparation against ATI for the goods damaged in its custody, in the amount
of P5,000,00.00. ATI refused to pay claiming that the claim was already barred by the statute of
limitations. ATI alleged that the Carriage of Goods by Sea Act (COGSA) applies in this case since
the goods were shipped from a foreign port to the Philippines. NA Insurance claims that the COGSA
does not apply, since ATIis not a shipper or carrier. Who is correct? (5%)

SUGGESTED ANSWER

NA Insurance is correct. The COGSA applies only to carriers or ships. A carrier, under Section 1(a)
of the COGSA, includes the owner or the charterer who enters into a contract of carriage with a
shipper, while a ship is defined under Section 1(d) as any vessel used for the COGSA. The
COGSA does not apply to ATI as it is neither a carrier nor a ship, much less a shipper. It is simply
an arrastre operator. Moreover, the COGSA does not mention that an arrastre operator may invoke
the prescriptive period of one year; hence, it does not cover the arrastre operator. (Insurance Co. of
North America vs Asian Terminals, Inc., (2012)

XVIII.

Skechers Corporation sued Inter-Pacific for trademark infringement, claiming that Inter-Pacificused
Skechers registered "S" logo mark on Inter-Pacifics shoe products without its consent. Skechers has
registered the trademark "SKECHERS" and the trademark "S" (with an oval design) with the
Intellectual Property Office (IPO).

In its complaint, Skechers points out the following similarities: the color scheme of the blue, white and
gray utilized by Skechers. Even the design and "wave-like" pattern of the mid-sole and outer sole of
Inter Pacifics shoes are very similar to Skechers shoes, if not exact patterns thereof. On the side of
Inter-Pacifics shoes, near the upper part, appears the stylized "S" placed in the exact location as that
of the stylized "S" the Skechers shoes. On top of the "tongue" of both shoes, appears the stylized "S"
in practically the same location and size.

In its defense, Inter-Pacific claims that under the Holistic Test, the following dissimilarities are present:
the mark "S" found in Strong shoes is not enclosed in an "oval design"; the word "Strong" is
conspicuously placed at the backside and insoles; the hang tags labels attached to the shoes bear
the word "Strong" for Inter-Pacific and "Skechers U.S.A." for Skechers; and, Strong shoes are
modestly priced compared to the costs of Skechers shoes.

Under the foregoing circumstances, which is the proper test to be applied Holistic or Dominancy
Test? Decide. (4%)

SUGGESTED ANSWER

Considering the facts given and the arguments of the parties, the dominancy test is the proper test to
apply. Thus, the appropriation and use of the letter S by Inter-Pacific on its rubber shoes constitutes
an infringement of the trademark of Skechers.

The essential element of infringement under the Intellectual Property Code is that the infringing mark
is likely to cause confusion. In determining similarity and likelihood of confusion, jurisprudence has
developed tests Dominancy Test and Holistic Test. The Dominancy Test focuses on the similarity
of the prevalent or dominant features of the competing trademarks that might cause confusion,
mistake, and deception in the mind of the purchasing public. Duplication or imitation is not necessary;
neither is it required that the mark sought to be registered suggest an effort to imitate. Given more
consideration are the aural and visual impressions created by the marks on the buyers of goods,
giving little weight to factors like prices, quality, sales outlets, and market segments.

In contrast, the Holistic or Totality Test necessitates a consideration of the entirety of the marks as
applied to the products, including the labels and packaging, in determining confusing similarity. The
discerning eye of the observer must focus not only on the predominant words, but also on the other
features appearing on both labels so that the observer may draw conclusion on whether one is
confusingly similar to the other.

Relative to the question on confusion of marks and trade names, jurisprudence has noted two (w)
types of confusion, viz: (1) confusion of goods (product confusion), where the ordinarily prudent
purchaser would be induced to purchase one product in the belief that he was purchasing the other;
and (2) confusion of business (source or origin confusion), where, although the goods of the parties
are different, the product, the mark of which registration is applied for by one party, is such as might
reasonably be assumed to originate with the registrant of an earlier product, and the public would
then be deceived either into that belief or into the belief that there is some connection between the
two parties, though inexistent.

Applying the Dominancy Test to the problem, we find that the use of the stylized S by Inter-Pacific
in its Strong rubber shoes infringes on the mark already registred by Skechers with the IPO. While it
is undisputed that stylized S of Skechers is within an oval design, the dominant feature of the
trademark is the stylized S, as it is precisely the stylized S which catches the eye of the purchaser.
Thus, even if Inter-Pacific did not use an oval design, the mere fact that it used the same stylized S,
the same being the dominant feature of the trademark of Skechers, already constitutes infringement
under the Dominancy Test. (Skechers, USA Inc. vs Inter Pacific Industrial Trading Corp., et al (2006)

XIX.

Guetze and his wife have three (3) children: Neymar, 25, who is now based in Rio de Janeiro, Brazil;
Muelter, 23, who has migrated to Munich, Germany; and James, 21, who resides in Bogota,
Colombia. Neymar and Muelter have since renounced their Philippine citizenship in favor of their
country of residence. Nearing 70 years old, Guetze decided to incorporate his business in Binondo,
Manila. He asked his wife and three (3) children to act as incorporators with one (1) share of stock
each, while he owned 999,996 shares of the 1,000,000 shares of the capital stock. (6%)

(A) Assuming all other requirements are met, should the Securities and Exchange
Commission (SEC) accept or reject the Articles of Incorporation? Why?

(B) Being the control freak and micro-manager that he is, Guetze asked you his astute legal
adviser if he can serve as Chairman of the Board of Directors, as President, and as General
Manager of the corporation, all at the same time. Please advise Guetze.

(C) Assuming the corporation has beenproperly registered, may the Articles of Incorporation
now beamended to reduce the number of directors to two (2) Guetze and his wife to reflect
the real owners of the shares of stock?

SUGGESTED ANSWERS

(A) The SEC should reject the Articles of Incorporation. Only two of the incorporators are resident
of the Philippines. Section 10 of the Corporation Code requires that a majority of the
incorporators be residents of the Philippines.
(B) Guetze can serve as Chairman of the Board of Directors, and President and General Manager
of the corporation, all at the same time. This is allowed by, and is not covered by the
prohibition in, Section 25 of the Corporation Code.
(C) The AOI may not be amended to reduce that number of directors to two. Under Section 14 of
the Corporation Code, the number of directors shall not be less than five.

XX.

On May 13, 1996, PAM, Inc. obtained a P15,000,000.00 fire insurance policy from Ilocano Insurance
covering its machineries and equipment effective for one (1) yearor until May 14, 1997. The policy
expressly stated that the insured properties were located at "Sanyo Precision Phils. Building, Phase
III, Lots 4 and 6, Block 15, PEZA, Rosario, Cavite." Before its expiration, the policy was renewed on
"as is" basis for another year or until May 13, 1998. The subject properties were later transferred to
Pace Factory also in PEZA. On October 12, 1997, during the effectivity of the renewed policy, a fire
broke out at the Pace Factory which totally burned the insured properties.

The policy forbade the removal of the insured properties unless sanctioned by Ilocano. Condition 9(c)
of the policy provides that "the insurance ceases to attach as regards the property affected unless
the insured, before the occurrence of any loss or damage, obtains the sanction of the company
signified by endorsement upon the policy x x x (c) if the property insured is removed to any building
or place other than in that which is herein stated to be insured." PAM claims that it has substantially
complied with notifying Ilocano through its sister company, the RBC, which, in fact, referred PAM to
Ilocano for the insurance coverage. Is Ilocano liable under the policy? (4%)

SUGGESTED ANSWERS

Ilocano Insurance is not liable under the policy. 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 Ilocano.
Any transfer effected by PAM, Inc. without Ilocanos consent (as is the case here) would free the
latter from any liability. (Malayan Insurance Company vs PAPCO (2013)

XXI.

On July 3, 1993, Delia Sotero (Sotero) took out a life insurance policy from Ilocos Bankers Life
Insurance Corporation (Ilocos Life) designating Creencia Aban(Aban), her niece, as her beneficiary.
Ilocos Life issued Policy No. 747, with a face value of P100,000.00, in Soteros favor on August 30,
1993, after the requisite medical examination and payment of the premium.

On April 10, 1996, Sotero died. Aban filed a claim for the insurance proceeds on July 9, 1996. Ilocos
Life conducted an investigation into the claim and came out withthe following findings:

1. Soterodid not personally apply for insurance coverage, as she was illiterate.

2. Soterowas sickly since 1990.

3. Soterodid not have the financial capability to pay the premium on the policy.

4. Soterodid not sign the application for insurance.

5. Aban was the one who filed the insurance application and designated herself as the
beneficiary.

For the above reasons and claiming fraud, Ilocos Life denied Abans claim on April 16, 1997, but
refunded the premium paid on the policy. (6%)

(A) May Sotero validly designate her niece as beneficiary?

(B) May the incontestability period set in even in cases of fraud as alleged in this case?

(C) Is Aban entitled to claim the proceeds under the policy?

SUGGESTED ANSWERS

(A) Yes, Sotero may validly designate her niece as beneficiary. The same is not prohibited under
the Insurance Code or any other law pertinent to the problem.
(B) Yes, the incontestability period applies even in cases of fraud as claimed in this problem.
Note that the findings are those of the insurer and these were made in an investigation
conducted unilaterally by the insurer more than 3 years after the policy was taken out by
Sotero. These findings may very well be dismissed as self-serving considering the
incontestability clause set out in Sec. 48 of the Insurance Code.

Sec. 48 regulates both the actions of the insurers and prospective takers of life insurance. It
gives insurers enough time to inquire whether the policy was obtained by fraud, concealment,
or misrepresentation; on the other hand, it forewarns scheming individuals that their attempts
at insurance fraud would be timely uncovered thus deterring them from venturing into such
nefarious enterprise. At the same time, legitimate policy holders are absolutely protected from
unwarranted denial of their claims or delay in the collection of insurance proceeds occasioned
by allegations of fraud, concealment, or misrepresentation by insurers, claims which may no
longer be set up after the two-year period expires as ordained under the law.

Thus, the self-regulating feature of Sec. 48 lies in the fact that both the insurer and the insured
are given the assurance that any dishonest scheme to obtain life insurance would be
exposed, and attempts at unduly denying a claim would be struck down. Life insurance
policies that pass the statutory two-year period are essentially treated as legitimate and
beyond question, and the individuals who wield them are made secure by the thought that
they will be paid promptly upon claim. In this manner, Sec. 48 contributes to the stability of
the insurance industry.

Sec. 48 prevents a situation where the insurer knowingly continues to accept annual premium
payments on life insurance, only to later on deny a claim on the policy on specious claims of
fraudulent concealment and misrepresentation, such as what obtains in the instant case.
Thus, instead of conducting at the first instance an investigation into the circumstances
surrounding the issuance of the insurance policy which would have timely exposed the
supposed flaws and irregularities attending it as it now professes, Ilocos Life appears to have
turned a blind eye and opted instead to continue collecting collected the premiums and
devoted the same to its own profit. It cannot now deny the claim when it is called to account.
Sec. 48 must be applied to it with full force and effect.

Insurers may not be allowed to delay the payment of claims by filing frivolous cases in court,
hoping that the inevitable may be put off for years or even decades by the pendency of
these unnecessary court cases. In the meantime, they benefit from collecting the interest
and/or returns on both the premiums previously paid by the insured and the insurance
proceeds which should otherwise go to their beneficiaries. The business of insurance is a
highly regulated commercial activity in the country, and is imbued with public interest. An
insurance contract is a contract of adhesion that must be construed liberally in favor of the
insured and strictly against the insurer in order to safeguard the formers interest (Manila
Bankers Life Insurance Corp vs Aban (2013)

(C) Yes, Aban is entitled to claim the proceeds under the policy as beneficiary for the same
reasons adduced in (B) above.

XXII.

Paul George Pua (Pua) filed a complaint for a sum of money against the spouses Benito and Caroline
James (Spouses James). In the complaint, Pua prayed that the defendants pay Pua the amount
of P8,500,000.00, covered by a check. Pua asserts that defendants owed him a sum of money way
back in 1988 for which the Spouses James gave him several checks. These checks, however, had
all been dishonored and Pua has not been paid the amount of the loan plus the agreed interest. In
1996, the Spouses James approached Pua to get the computation of their liability including the 2%
compounded interest. After bargaining to lower the amount of their liability, the Spouses James gave
Puaa postdated check bearing the discounted amount of P8,500,000.00. Like the 1988 checks, the
drawee bank likewise dishonored this check. To prove his allegations, Pua submitted the original
copies of the 17 checks issued by Caroline in 1988 and the check issued in 1996, Manila trust Check
No. 750. The Spouses James, on the other hand, completely denied the existence of the debt
asserting that they had never approached Pua to borrow money in 1988 or in 1996. They assert,
instead, that Pua is simply acting at the instance of his sister, Lilian, to file a false charge against
them using a check left to fund a gambling business previously operated by Lilian and Caroline.
Decide. (5%)
SUGGESTED ANSWER

I will decide in favor of Pua and against the Spouses James.

A check is evidence of indebtedness and proof of an obligation. It can be used in lieu of and for the
same purpose as a promissory note. In other words, a check functions more than a promissory note
since it not only contains an undertaking to pay an amount of money but is an order addressed to a
bank and partakes of a representation that the drawer has funds on deposit against which the check
is drawn, sufficient to ensure payment upon its presentation to the bank. A check, the entries of which
are in writing, could prove a loan transaction. Thus, under the NIL, every negotiable instrument is
deemed prima facie to have been issued for a valuable consideration, and every person whose
signature appears thereon to have become a party for value. (Pua vs Spouse Benito Tiong (2013)

XXIII.

What vote is needed to consider every decision to be a valid corporate act? (1%)

(A) a majority of the directors present at the meeting

(B) two-thirds of the directors present at the meeting

(C) a majority of the directors present at the meeting at which there is a quorum

(D) two-thirds of the directors present at the meeting at which there is a quorum

(C) a majority of the directors present at the meeting at which there is a quorum (Sec 25, Corporation
Code)

XXIV.

A criminal complaint for violation of B.P. 22 was filed by Foton Motors (Foton), an entity engaged in
the business of car dealership, against Pura Felipe (Pura) with the Office of the City Prosecutor of
Quezon City. The Office found probable cause to indict Pura and filed an information before the
Metropolitan Trial Court (MeTC) of Quezon City, for her issuance of a postdated check in the amount
of P1,020,000.00 which was subsequently dishonored upon presentment due to "Stop Payment."

Pura issued the check because her son, Freddie, attracted by a huge discount of P220,000.00,
purchased a Foton Blizzard 4x2 from Foton. The term of the transaction was Cash-on-Delivery and
no downpayment was required. The car was delivered on May 14, 1997, but Freddie failed to pay
upon delivery. Despite non-payment, Freddie took possession of the vehicle.

Pura was eventually acquitted of the charge of violating B.P. 22 but was found civilly liable for the
amount of the check plus legal interest. Pura appealed the decision as regards the civil liability,
claiming that there was no privity of contract between Foton and Pura. No civil liability could be
adjudged against her because of her acquittal from the criminal charge. It was Freddie who was civilly
liable to Foton, Pura claimed. Pura added that she could not be an accommodation party either
because she only came in after Freddie failed to pay the purchase price, or six (6) months after the
execution of the contract between Foton and Freddie. Her liability was limited to her act of issuing a
worthless check, but by her acquittal in the criminal charge, there was no more basis for her to be
held civilly liable to Foton. Puras act of issuing the subject check did not, by itself, assume the
obligation of Freddie to Foton or automatically make her a party to the contract. Is Pura liable? (5%)

SUGGESTED ANSWER

Pura is liable to Foton Motors because it sold a car to her son and was a holder for value of the check
issued in its favor by Pura. Any person criminally liable for felony is also civilly liable. Thus , her
acquittal in the criminal charge does not carry with it extinction of her civil liability unless the extinction
proceeds from a declaration in a final judgment that the fact from which the civil might arise did not
exist. (People vs Maniego (1987)

More specifically, Pura is liable as an accommodation party. Under Sec. 29 of the NIL, an
accommodation party is one who has signed the instrument as maker, drawer, acceptor, or indorser,
without receiving value therefor, and for the purpose of lending his name to some other person. Such
a person is liable on the instrument to a holder for value, notwithstanding such holder, at the time of
taking the instrument, knew him to be only an accommodation party.

Puras liability existed although Pura issued the check after the delivery of the car. Under Sec. 25 of
the NIL, and antecedent or pre-existing debt constitutes value and is deemed such whether the
instrument is payable on demand or at a future time.

XXV.

In an action for collection of a sum of money, the Regional Trial Court (RTC) of Makati City issued a
decision finding D-Securities, Inc. liable to Rehouse Corporation for P10,000,000.00. Subsequently,
the writ of execution was issued but returned unsatisfied because D-Securities had no more assets
to satisfy the judgment. Rehouse moved for an Alias Writ of Execution against Fairfield Bank (FB),
the parent company of D-Securities. FB opposed the motion on the grounds that it is a separate entity
and that it was never made a party to the case. The RTC granted the motion and issued the Alias
Writ of Execution. In its Resolution, the RTC relied on the following facts: 499,995 out of the 500,000
outstanding shares of stocks of D-Securities are owned by FB; FB had actual knowledge of the
subject matter of litigation as the lawyers who represented D-Securities are also the lawyers of FB.
As an alter ego, there is no need for a finding of fraud or illegality before the doctrine of piercing the
veil of corporate fiction can be applied. The RTC ratiocinated that being one and the same entity in
the eyes of the law, the service of summons upon D-Securities has bestowed jurisdiction over both
the parent and wholly-owned subsidiary. Is the RTC correct? (4%)

SUGGESTED ANSWER

The RTC is not correct. As FB is a separate entity and was never made a party to the case, the
judgment sought to be enforced against D-Securities cannot be made against its parent company,
FB.

Piercing the corporate veil based on the alter ego theory requires the concurrence of three elements:
(1) control of the corporation by the stockholder or parent corporation, (2) fraud or fundamental
unfairness imposed on the plaintiff, and (3) harm or damage caused to the plaintiff by the fraudulent
or unfair act of the corporation. The absence of all these elements in the problem prevents the piercing
of the corporate veil.

The absence of any one of these elements prevents piercing the corporate veil. In applying the alter
ego doctrine, the courts are concerned with reality and not form, with how the corporation operated
and the individual defendants relationship to that operation. Hence, all three elements should concur
for the doctrine to be applicable.

Mere ownership by a single stockholder or by another corporation of all or nearly all of the capital
stock of a corporation is not of itself sufficient ground for disregarding the separate corporate
personality. Neither is the existence of interlocking directors, corporate officers and shareholders
enough justification to pierce the veil of corporate fiction in the absence of fraud or other public policy
considerations/

To justify treating the sole stockholder or holding company as responsible, it is not enough that the
subsidiary is so organized and controlled as to make it merely an instrumentality, conduit or adjunct
of its stockholders. It must further appear that to recognize their separate entities would aid in the
consummation of a wrong.

Control, by itself, does not mean that the controlled corporation is a mere instrumentality or a business
conduit of the mother company. Even control over the financial operational concerns of a subsidiary
company does not by itself call for disregarding its corporate fiction. There must be a perpetuation of
fraud behind the control or at least a fraudulent or illegal purpose behind the control in order to justify
piercing the veil. Such fraudulent intent is lacking in this case (Pacific Rehouse Corporation vs CA
(2014)

XXVI.

DMP Corporation (DMP) obtained a loan of P20 million from National Bank (NB) secured by a real
estate mortgage over a 63,380-square-meter land situated in Cabanatuan City. Due to the Asian
Economic Crisis, DMP experienced liquidity problems disenabling it from paying its loan on time. For
that reason, NB sought the extra judicial foreclosure of the said mortgage by filing a petition for sale
on June 30, 2003. On September 4, 2003, the mortgaged property was sold at public auction, which
was eventually awarded to NBas the highest bidder. That same day, the Sheriff executed a Certificate
of Sale in favor of NB.

On October 21, 2003, DMP filed a Petition for Rehabilitation before the Regional Trial Court (RTC).
Pursuant to this, a Stay Order was issued by the RTC on October 27, 2003.

On the other hand, NB caused the recording of the Sheriffs Certificate of Sale on December 3, 2003
with the Register of Deeds of Cabanatuan City. NB executed an Affidavit of Consolidation of
Ownership and had the same annotated on the title of DMP. Consequently, the Register of Deeds
cancelled DMPs title and issued a new title in the name of NB on December 10, 2003.

NB also filed on March 17, 2004 an Ex-Parte Petition for Issuance of Writ of Possession before the
RTC of Cabanatuan City. After hearing, the RTC issued on September 6, 2004 an Order directing
the Issuance of the Writ of Possession, which was issued on October 4, 2004.

DMP claims that all subsequent actions pertaining to the Cabanatuan property should have been
held in abeyance after the Stay Order was issued by the rehabilitation court. Is DMP correct? (4%)
SUGGESTED ANSWER

DMP is not correct. Since the foreclosure of DMPs mortgage and the issuance of the certificate of
sale in NBs favor were done prior to the appointment of a Rehabilitation Receiver and the Stay Order,
all the actions taken with respect to the foreclosed mortgage property which were subsequent to the
issuance of the Stay Order were not affected by the Stay Order. Thus, after the redemption period
expired without DMP redeeming the foreclosed property, NB becomes the absolute owner of the
property and it was within its right to ask for the consolidation of title and the issuance of new title in
its name as a consequence of ownership; thus, it is entitled to the possession and enjoyment of the
property (Equitable PCI Bank vs DNG Realty and Development Corp. (2010)

XXVII.

ELP Insurance, Inc. issued Marine Policy No. 888 in favor of FCL Corp. to insure the shipment of 132
bundles of electric copper cathodes against all risks. Subsequently, the cargoes were shipped on
board the vessel "M/V Menchu" from Leyte to Pier 10, North Harbor, Manila.

Upon arrival, FCL Corp. engaged the services of CGM, Inc. for the release and withdrawal of the
cargoes from the pier and the subsequent delivery to its warehouses/plants in Valenzuela City. The
goods were loaded on board twelve (12) trucks owned by CGM, Inc., driven by its employed drivers
and accompanied by its employed truck helpers. Of the twelve (12) trucks en routeto Valenzuela City,
only eleven (11) reached the destination. One (1) truck, loaded with eleven (11) bundles of copper
cathodes, failed to deliver its cargo.

Because of this incident, FCL Corp. filed with ELP Insurance, Inc. a claim for insurance indemnity in
the amount of P1,500,000.00. After the requisite investigation and adjustment, ELP Insurance, Inc.
paid FCL Corp. the amount of P1,350,000.00 as insurance indemnity.

ELP Insurance, Inc., thereafter, filed a complaint for damages against CGM, Inc. before the Regional
Trial Court (RTC), seeking reimbursement of the amount it had paid to FCL Corp. for the loss of the
subject cargo. CGM, Inc. denied the claim on the basis that it is not privy to the contract entered into
by and between FCL Corp. and ELP Insurance, Inc., and hence, it is not liable therefor. If you are the
judge, how will you decide the case? (4%)

SUGGESTED ANSWER

I will decide the case in favor of ELP Insurance. Even if CGM, Inc. is not privy to the contract between
FCL Corp. and ELP Insurance, it is still liable for the loss of the subject cargo. Art. 2207 of the Civil
Code states if the plaintiffs property has been insured and he has received indemnity from the
insurance company for injury or loss arising out of the wrong or breach of contract complained of, the
insurance company shall be subrogated to the rights of the insured against the wrong-doer or the
person who has violated the contract, which in this case is CGM. Since ELP Insurance is subrogated
to the rights of FCL Corporation to the extent of the amount it paid to the latter under the marine
insurance contract, it has the right to seek reimbursement from CGM, Inc, for breach of contract
and/or tort (Loadmasters Customs Services, Inc. vs Glodel Brokerage Corporation and R & B
Insurance Corp (2011)
XXVIII.

Which of the following instruments is negotiable if all the other requirements of negotiability are met?
(1%)

(A) A promissory note with promise to pay out of the U.S. Dollar account of the maker in XYZ
Bank

(B) A promissory note which designates the U.S. Dollar currency in which payment is to be
made

(C) A promissory note which contains in addition a promise to paint the portrait of the bearer

(D) A promissory note made payable to the order of Jose Cruz or Josefa Cruz

(B) A promissory note which designates the U.S. Dollar currency in which payment is to be made or
(D) A promissory note made payable to the order of Jose Cruz or Josefa Cruz

XXIX.

KKis from Bangkok, Thailand. She studies medicine in the Pontifical University of Santo Tomas
(UST). She learned that the same foreign books prescribed in UST are 40-50% cheaper in Bangkok.
So she ordered 50 copies of each book for herself and her classmates and sold the books at 20%
less than the price in the Philippines. XX, the exclusive licensed publisher of the books in the
Philippines, sued KK for copyright infringement. Decide. (4%)

SUGGESTED ANSWER

KK is liable for infringement of copyright. XX, as exclusive licensed publisher, is entitled, within the
scope of the license, to all the rights and remedies that the licensor has with respect to the copyright
(Sec. 180, of IPC)

The importation by KK of 50 copies of each foreign book prescribed in UST and selling them locally
at 20% less than their respective prices in the Philippines is subject to the doctrine of fair use set out
in Sec. 185.1 of the IPC. The factors to be considered in determining whether the us made of a work
is fair use shall include:

(a) The purpose and character of the use, including whether such use is of a commercial nature
or is for non-profit educational; purposes;
(b) The nature of the copyrighted work;
(c) The amount and substantiality of the portion used in relation to the copyrighted work as a
whole; and
(d) The effect of the use upon the potential market for or value of the copyrighted work.

Applying the above-listed factors to the problem, KKs importation of the books and their sale locally
clearly show the unfairness of her use of the books, particularly the adverse effect of her price
discounting on the business of XX.

---oo0ooo---
2014 BAR EXAMINATIONS
CRIMINAL LAW
I.

Ms. A had been married to Mr. B for 10 years. Since their marriage, Mr. B had been jobless
and a drunkard, preferring to stay with his barkadas until the wee hours of the morning. Ms. A was
the breadwinner and attended to the needs of their three (3) growing children. Many times, when Mr.
B was drunk, he would beat Ms. A and their three (3) children, and shout invectives against them. In
fact, in one of the beating incidents, Ms. A suffered a deep stab wound on her tummy that required a
prolonged stay in the hospital. Due to the beatings and verbal abuses committed against her, she
consulted a psychologist several times, as she was slowly beginning to lose her mind. One night, when
Mr. B arrived dead drunk, he suddenly stabbed Ms. A several times while shouting invectives against
her. Defending herself from the attack, Ms. Agrappled for the possession of a knife and she
succeeded. She then stabbed Mr. Bseveral times which caused his instantaneous death. Medico-
Legal Report showed that the husband suffered three (3) stab wounds. Can Ms. A validly put up a
defense? Explain. (5%)

Yes, Ms. A can validly put up the defense of battered woman syndrome.
Under RA 9262, the battered woman syndrome can be invoked as a defense by a woman who killed
her husband or a man with whom she had a dating relationship after having been a victim of a series
of physical or psychological violence inflicted against her or her child by the man.
Here, Ms. A was a victim of a series of physical and psychological violence by her husband Mr. B.
Hence, Ms. A can validly put up the defense of battered woman syndrome.

II.
Macho married Ganda, a transgender. Macho was not then aware that Ganda was a
transgender. On their first night, after their marriage, Macho discovered that Gandawas a transgender.
Macho confronted Ganda and a heated argument ensued. In the course of the heated argument, a
fight took place wherein Ganda got hold of a knife to stab Macho. Macho ran away from the stabbing
thrusts and got his gun which he pointed at Ganda just to frighten and stop Ganda from continuing
with the attack.Macho had no intention at all to kill Ganda. Unfamiliar with guns, Macho accidentally
pulled the trigger and hit Ganda that caused the latters death. What was the crime committed? (4%)

Macho had committed the crime of Homicide, mitigated by no intent to commit so grave a wrong.
Under the Revised Penal Code (RPC), Homicide is committed when, without the qualifying
circumstances for Murder, a person inflicts a mortal wound upon another and the latter dies, the intent
to kill being presumed. This is because under the RPC, he is liable for the resulting felony although it
be different from that which he intended. However, the accused is entitled to the mitigating
circumstance of no intent to commit so grave a wrong.
Here, Macho caused the death of Ganda although he did not intend to kill the latter. Hence, Macho is
criminally liable for Homicide mitigated by no intent to commit so grave a wrong.

III.
City Engr. A, is the city engineer and the Chairman of the Bids and Awards Committee (BAC)
of the City of Kawawa. In 2009, the City of Kawawa, through an ordinance, allotted the amount of P100
million for the construction of a road leading to thepoblacion. City Engr. A instead, diverted the
construction of the road leading to his farm. Investigation further showed that he accepted money in
the amount of P10 million each from three (3) contending bidders, who eventually lost in the bidding.
Audit report likewise showed that service vehicles valued at P2 million could not be accounted for
although reports showed that these were lent to City Engr. As authorized drivers but the same were
never returned. Further, there were funds underCity Engr. As custody amounting to P10 million which
were found to be missing and could not be accounted for. In another project, he was instrumental in
awarding a contract for the construction of a city school building costing P10 million to a close relative,
although the lowest bid was P8 million. Investigation also revealed that City Engr. A has a net worth
of more than P50 million, which was way beyond his legitimate income. (8%)

(A) If you are the Ombudsman, what charge or charges will you file against City Engr. A?

I will charge City Engr. A with Plunder.


Under the Anti-Plunder Law, any person who acquires ill-gotten wealth through a combination or
series of overt acts of receiving directly or indirectly kickbacks or any other form of pecuniary benefit
from any person or entity in connection with any government contract or project or by reason of the
position of the public officer, in the aggregate amount of P50 million pesos shall be guilty of the crime
of Plunder.
Here, City Engr. A is a public officer who has acquired an aggregate amount of P50 million pesos
which is deemed to be ill-gotten wealth. Hence, City Engr. A should be charged with the crime of
Plunder before the Office of the Ombudsman.

(B) Suppose the discovered net worth of City Engr. A is less than P50 million, will your answer still be
the same?

No, the answer will not be the same. City Engr. A will be charged with Malversation and violation of
RA 3019 (Graft and Corruption).
Under the Revised Penal Code, Malversation is committed when a public officer, by reason of the
duties of his office, appropriates, misappropriates, or takes public funds of not more than P12,000. In
addition to such crime, the public officer shall be criminally liable under RA 3019 for unexplained wealth
manifestly out of proportion to his salary and other lawful income.
Here, City Engr. A is a public officer who appropriated or took public funds of more than P12,000, as
well as acquired unexplained wealth manifestly out of proportion to his salary and other lawful income.
Hence, City Engr. A should be charged with malversation and violation of RA 3019.

IV.

Madam X, a bank teller, received from depositor Madam Y a check payable to cash in the amount
of P1 million, to be deposited to the account of Madam Y. Because the check was not a crossed check,
Madam X credited the amount to the account of her good friend, Madam W, by accomplishing a deposit
slip. Seven (7) days after, Madam X contacted her good friend, Madam W and told her that the amount
of P1 million was wrongfully credited to Madam W, thus, Madam X urged Madam W to withdraw the
amount of P1 million from her account and to turn over the same to Madam X. As a dutiful friend,
Madam W readily acceded. She was gifted by Madam X with an expensive Hermes bag after the
withdrawal of the amount. What crime/s, if any, didMadam X and Madam W commit? Explain. (5%)

Madam X did commit the crime of Estafa, while Madam W did not commit any crime.
Under the Revised Penal Code, any person who defrauds another by misappropriating or
converting money received in trust is guilty of the crime of Estafa. On the other hand, Fencing is
committed by any person who, with intent to gain, buys, sells, receives of possesses any item which
he knows or should have known to have been derived from robbery or theft.
Here, Madam X defrauded Madam Y when Madam X misappropriated or converted the money she
received in trust from Madam Y. Hence, Madam X did commit the crime of Estafa. On the other hand,
Madam W did not commit the crime of Fencing since neither did she have the intent to gain nor was
the bag derived from robbery or theft.

V.

Congress passed a law reviving the Anti-Subversion Law, making it a criminal offense again for
a person to join the Communist Party of the Philippines. Reporma, a former high-ranking member of
the Communist Party, was charged under the new law for his membership in the Communist Party
when he was a student in the 80s. He now challenges the charge against him. What objections may
he raise? (3%)
Reporma may raise the objection of violation of the doctrine of irretrospectivity of penal laws.

Well-settled is the doctrine of irretrospectivity in Criminal Law which states that no felonious act
shall be punished by any penalty prescribed by law when it was committed prior to its enactment.
Article 21 of the Revised Penal Code provides that no felony shall be punishable by any penalty not
prescribed by law prior to its commission.

Here, the felonious act imputed was committed prior to the revival of the Anti-Subversion Law. Hence,
Reporma can object to the charge on the ground of irretrospectivity of penal laws.
VI.

A was caught peeping through a small hole in the bathroom door while a young 16-year-old lady
was taking a bath. A is liable for: (1%)
(A) Violation of R.A. 9262 or Violence Against Women and their Children
(B) Violation of R.A. 7610 Child Abuse Law
(C) Light coercion
(D) Acts of lasciviousness
(A) Violation of R.A. 9262 or Violence Against Women and their Children

VII.
Filthy, a very rich businessman, convinced Loko, a clerk of court, to issue an order of release for
Takas, Filthys cousin, who was in jail for a drug charge. After receiving P500,000.00, Loko forged the
signature of the judge on the order of release and accompanied Filthy to the detention center. At the
jail, Loko gave the guard P10,000.00 to open the gate and let Takas out.
What crime or crimes did Filthy, Loko, and the guard commit? (4%)

Filthy, Loko, and the guard did commit the crimes of Corruption of Public Official, Direct Bribery
and Falsification, and Delivering Prisoner from Jail, respectively.
Under the Revised Penal Code, Corruption of Public Officials (Art. 212) is committed by any person
who offers or gives gift to a public officer in consideration of the performance by the latter of an act
constituting the crime of Direct or Indirect Bribery. Direct Bribery (Art. 210) is committed by a public
officer by agreeing to perform an act constituting a crime in consideration of an offer, promise, or gift.
On the other hand, Falsification (Art. 171) is committed by a public officer who, taking advantage of
his position, falsifies a document by imitating a signature of another. Finally, Delivering Prisoners from
Jail (Art. 156) is committed by any person who shall facilitate or help the escape of a prisoner from jail
by means of bribery.

Here, Filthy gave money to Loko, a public officer, who in return agreed to perform an act constituting
a crime. Loko did perform the agreed act, and as means thereto falsified a document by imitating a
signature. The guard took a bribery in exchange of helping or facilitating the escape of a prisoner from
jail.

Hence, Filthy committed the crime of Corruption of Public Official; Loko committed Direct Bribery and
Falsification, while the guard committed the crime of Delivering a Prisoner from Jail.
VIII.

Pretty was a campus beauty queen who, because of her looks and charms, attracted many
suitors. Having decided that she would become a nun, Pretty turned down all her suitors. Guapo, one
of her most persistent suitors, could not handle rejection and one night, decided to accost Pretty as
she walked home. Together with Pogi, Guapoforced Pretty into his car and drove her to an abandoned
warehouse where he andPogi forced Pretty to dance for them. Later, the two took turns in raping her.
After satisfying their lusts, Guapo and Pogi dropped her off at her house. (4%)

(A) What crime or crimes did Guapo and Pogi commit?

Guapo and Pogi committed Forcible Abduction with Rape, and Unjust Vexation.
Under the Revised Penal Code, the complex crime of Forcible Abduction with Rape is committed
when a man, with lewd design, deprives a woman of her liberty and eventually has carnal knowledge
with her through force or intimidation. On the other hand, Unjust Vexation is any act committed without
violence but which unjustifiably annoys or vexes another person.
Here, Guapo and Pogi, with lewd designs, deprived Pretty of her liberty, forced her to dance, and
eventually had carnal knowledge with her without her consent. Hence, Guapo and Pogi committed the
complex crime of Forcible Abduction with Rape, as well as Unjust Vexation.

(B) Pretty, after the ordeal, decided to take her own life by hanging herself one hour after the
rape. Would Guapo and Pogi be liable for Prettys death? Explain.

Yes, Guapo and Pogi would be liable for Prettys death.


Settled is the doctrine in Criminal Law that he whose felonious act is the proximate cause of the death
of another person is criminally liable, such as when a man who causes upon anothers mind a great
anguish and embarrassment is responsible for the direct, natural and logical consequence of such
anguish and embarrassment. El que es causa dela causa es causa del mal causado.
Here, the suicide committed by Pretty would be the direct, natural, and logical consequence of the
anguish and embarrassment proximately caused by the felonious acts of Guapo and Pogi. Hence,
Guapo and Pogi would be liable for Prettys death.

IX.
A, B, and C agreed to rob the house of Mr. D at 10 oclock in the evening, with C as the driver
of the tricycle which they would use in going to and leaving the house of Mr. D, and A and B as the
ones who would enter the house to get the valuables of Mr. D. As planned, C parked the tricycle in a
dark place, while A and B entered the house thru an open door. Once inside, A entered the masters
bedroom and started getting all the valuables he could see, while B entered another room. While inside
the room, Bsaw a male person and immediately B brought out his gun but he accidentally pulled its
trigger. The bullet went through the window, hitting a neighbor that killed him. Neighbors were then
awakened by the gunfire and policemen were alerted. Not long after, policemen arrived. A and B
panicked and got hold of a young boy and shouted to the policemen who were already outside of the
house that they would harm the boy if the policemen did not disperse. A and B demanded that they
should be allowed to use a vehicle to bring them to a certain place and that would be the time that
they would release the young boy. The policemen acceded. In the meantime, C was arrested by the
policemen while he was about to flee, while A and B, after releasing the young boy, were arrested.
What crime/s did A, B, and C commit, and what modifying circumstances attended the commission
of the crime/s? (6%)

A, B, and C committed the special complex crime of Robbery with Homicide, as well as Grave Theat.
Under the Revised Penal Code (Art. 294), the special complex crime of Robbery with Homicide is
committed when a person or persons, with intent to gain, shall take any personal property belonging
to another, and on the occasion thereof shall kill another. On the other hand, Grave Threat (Art. 282)
is committed by any person who shall threaten another with the infliction of any wrong amounting to a
crime. Jurisprudence states that whenever Homicide is committed as a consequence of a robbery, all
those who participated in the commission of robbery are also guilty as principals in the crime of robbery
with homicide even if they only participated in the robbery as a lookout, unless it appears that they
sought to prevent the killing.
Here, A, B, and C had conspired to commit robbery, which A and b actually executed, and as a
consequence killed a neighbor and threatened to inflict harm upon a child, while C served as a lookout
but did not seek to prevent the killing. Hence, A, B, and C are liable for the special complex crime of
Robbery with Homicide, and Grave Threat. Nighttime attended the commission of the crime as
aggravating circumstance.

X.
Loko advertised on the internet that he was looking for commercial models for a TV
advertisement. Ganda, a 16-year-old beauty, applied for the project. Loko offered her a contract, which
Ganda signed. She was asked to report to an address which turned out to be a high-end brothel.
Ganda became one of its most featured attraction. What is Lokos liability, if any? What effect would
Gandas minority have on Lokos liability?(4%)

Loko is liable for Qualified Trafficking of Person.


Under RA 9208, Trafficking of Persons is committed by recruitment of persons through fraud or
deception for the purpose of prostitution or sexual exploitation. The crime is qualified when the person
recruited for sexual exploitation is a child.
Here, Loko recruited Ganda, a child, through deception for the purpose of sexual exploitation. Hence,
Loko is criminally liable for Qualified Trafficking of Persons.
XI.

A, in a public place, fired his gun at B with the intention of killing B, but the gun did not fire because
the bullet is a dud. The crime is: (1%)
(A) attempted homicide
(B) grave threat
(C) impossible crime
(D) alarm and scandal
(A) attempted homicide

XII.

Sexy boarded a taxi on her way home from a party. Because she was already tipsy, she fell
asleep. Pogi, the taxi driver, decided to take advantage of the situation and drove Sexy to a deserted
place where he raped her for a period of two (2) weeks. What crime did Pogi commit? (4%)

Pogi committed the special complex crime of Kidnapping and Illegal Serious Detention with Rape.
Under the Revised Penal Code (Art. 297), the special complex crime of Kidnapping and Illegal Serious
Detention with Rape is committed when a person carries away by force another person, deprives her
of her liberty for more than three days, and in the process have carnal knowledge with her against her
will. Settled is the rule that a special complex crime is committed when the law provides a single
penalty for two or more component offenses, and there is only one special complex crime no matter
how many rapes had been committed.
Hence, Pogi is criminally liable for Kidnapping and Serious Illegal Detention with Rape.

XIII.

Puti detested Pula, his roommate, because Pula was courting Ganda, whom Putifancied. One
day, Puti decided to teach Pula a lesson and went to a veterinarian (Vet) to ask for poison on the
pretext that he was going to kill a sick pet, when actually Putiwas intending to poison Pula. The Vet
instantly gave Puti a non-toxic solution which, when mixed with Pulas food, did not kill Pula. (4%)

(A) What crime, if any, did Puti commit?


Puti committed an Impossible Crime.
Under Article 4 of the Revised Penal Code, a person is liable for an Impossible Crime by 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.
Here, Puti would have committed the crime of Murder, an offense against persons, when with intent
to kill and evident premeditation he executed the act of poisoning Pula had it not for the employment
of ineffectual means. Hence, Puti is liable for Impossible Crime.

(B) Would your answer be the same if, as a result of the mixture, Pula got an upset stomach and had
to be hospitalized for 10 days?
No, the answer would be different. Puti would be liable for the crime of Less Serious Physical Injuries.
Under the Revised Penal Code (Art. 265), any person who inflicts upon another physical injuries that
require medical attendance for ten days shall be guilty of Less Serious Physical Injuries.
Hence, if due to the non-toxic solution Puti gave to Pula the latter got upset stomach that required
medical attendance for ten days, Puti would be liable for Less Serious Physical Injuries.

XIV.

Malo, a clerk of court of a trial court, promised the accused in a drug case pending before the
court, that he would convince the judge to acquit him for a consideration of P5 million. The accused
agreed and delivered the money, through his lawyer, to the clerk of court.
The judge, not knowing of the deal, proceeded to rule on the evidence and convicted the accused.
(4%)

(A) Malo was charged with violation of Section 3(b), Republic Act (R.A.) No. 3019, which prohibits a
public officer from directly or indirectly requesting or receiving any gift, present, share percentage or
benefit wherein the public officer, in his official capacity, has to intervene under the law. He was later
charged also with indirect bribery under the Revised Penal Code. Malo claims he can no longer be
charged under the Revised Penal Code for the same act under R.A. 3019. Is he correct?

No, Malo is not correct.

Settled is the doctrine in Criminal Law that when a single act produces two or more offenses, one
under the Revised Penal Code and the other under a special law, the offender shall be criminally liable
for two separate crimes, unless one absorbs the other.
Here, Malo committed an act under RA 3019 by receiving gift or benefit from another person in
consideration of the performance of an act constituting a crime, the same felonious act being punished
under the Revised Penal Code as Direct Bribery (Art. 210). Hence, notwithstanding the charge under
RA 3019, Malo can still be charged under the Revised Penal Code for Direct Bribery.
(B) Malo was charged with estafa under Article 315 because he misrepresented that he had influence,
when he actually had none. Is the charge correct?

Yes, the charge of Estafa under Art. 315 of the Revised Penal Code (RPC) is correct.
Estafa under Art. 315 of the RPC is committed by any person who defrauds another by falsely
pretending that he possesses power or influence.
Hence, the charge of Estafa under Art. 315 of the RPC is correct since Malo defrauded the accused
by falsely pretending that he possessed the power to influence the decision of the judge.

XV.

Which of the following is not a privilege mitigating circumstance? (1%)


(A) 17-year-old offender
(B) 14-year-old offender
(C) incomplete self-defense
(D) incomplete defense of a relative
(D) incomplete defense of a relative

XVI.

Mr. Benjie is the owner of a hardware store specializing in the sale of plumbing materials. On
February 1, 2014, Mr. Ed, a friend and regular customer of Mr. Benjie, visited the hardware store and
purchased several plumbing materials in the total amount of P5 million. Mr. Benjie readily accepted
Mr. Eds payment of three (3) postdated checks in the amount of P1 million Pesos each in view of the
assurance ofMr. Ed that the checks will be honored upon presentment for payment. Mr. Benjie, as a
consequence, immediately delivered the materials to the house of Mr. Ed.
The following day, Mr. Ed went back to Mr. Benjie to tender another two (2) postdated checks in the
amount of P1 million each to complete the payment, with the same assurance that the checks will be
honored upon presentment for payment. When the checks were presented for payment, all were
dishonored for insufficiency of funds and corresponding notices of dishonor were sent and received
by Mr. Ed. One month after receipt of the notices of dishonor, Mr. Ed failed to make good the checks.
Thereafter,Mr. Benjie filed before the public prosecutors office a complaint against Mr. Ed, although
no demand letter was earlier sent to Mr. Ed.
During the preliminary investigation, Mr. Benjie accepted several amounts from Mr. Ed as partial
payments. The wife of Mr. Benjie protested and insisted that the complaint should continue despite
the partial payments. On the other hand, Mr. Edcounters that no demand letter was earlier sent to him,
that the obligation is merely civil in character and that novation took place when Mr. Benjie accepted
the partial payments. Discuss the criminal liability, if any, of Mr. Ed. (6%)

Mr. Ed is criminally liable for Estafa under BP No. 22.


Well-settled is the rule that Estafa under BP No. 22 is committed when the accused issues a check
without sufficient funds and he fails to deposit the amount in the check within five days after receipt of
the notice of dishonor of the check by the bank. Moreover, novation is not among the modes of
extinguishing criminal liability for violation of BP No. 22.
Hence, the mere issuance by Mr. Ed of checks without sufficient funds his failure to deposit with the
bank the amount in the checks within five days after receipt of the notice of dishonor makes him
criminally liable for Estafa under BP 22. Neither is novation nor absence of demand letter a defense
against criminal liability under BP 22 insofar as the notice of dishonor serves as demand for payment.

XVII.

Pierce is a French diplomat stationed in the Philippines. While on EDSA and driving with an
expired license, he hit a pedestrian who was crossing illegally. The pedestrian died. Pierce was
charged with reckless imprudence resulting in homicide. In his defense, he claimed diplomatic
immunity. Is Pierce correct? (3%)

No, Pierce is not correct.


It is a fundamental doctrine in Criminal Law, and applying the Vienna Convention on Diplomatic
Relations, that diplomatic immunity applies only to acts performed by officials or their agents in
connection with their official diplomatic functions.
Here, Pierces culpable act that constituted the crime of Reckless Imprudence Resulting in Homicide
had no connection to his official diplomatic functions. Hence, Pierces defense of diplomatic immunity
is not correct.

XVIII.

Manolo, an avid art collector, was invited to Tonios house. There, Manolo noticed a nice
painting that exactly looked like the painting which he reported was stolen from him some years back.
Manolo confronted Tonio about the painting, but Tonio denied any knowledge, claiming that he bought
the painting legitimately from a friend. Manololater proved to Tonio that the painting was indeed the
stolen painting. (4%)

(A) What crime/s, if any, may Tonio be charged with?

Tonio may be charged with Fencing.


Under RA 8049, Fencing is committed by any person who buys or acquires any article or anything of
value which he knows or should be known to him to have been derived from the proceeds of theft. The
mere possession of anything of value stolen is a prima facie evidence of fencing.
Here, Tonio bought a painting which he should have known to have been derived from the proceeds
of theft. Hence, Tonio may be charged with Fencing since his mere possession of the painting is a
prima facie evidence of the crime.

(B) Manolo decided to take matters into his own hands and, one night, broke into Tonios house by
destroying the wall and taking the painting. What, if any, would be the liability of Manolo?

Manolo would be liable for Robbery.


Under the Revised Penal Code (Art. 293), Robbery is committed when a person, with intent to gain,
takes any personal property belonging to another by means of force upon things.
Here, Tonio already owned the painting through sale, and Manolo with intent to gain would take the
painting through force upon the wall. Hence, Manolo would be liable for Robbery.

XIX.

Clepto went alone to a high-end busy shop and decided to take one of the smaller purses without
paying for it. Overcame by conscience, she decided to leave her own purse in place of the one she
took. Her act was discovered and Clepto was charged with theft. She claimed that there was
no theft, as the store suffered no injury or prejudice because she had left a purse in place of the one
she took. Comment on her defense. (3%)

Cleptos defense has no merit.

Under the Revised Penal Code (Art. 308), Theft is committed when a person with intent to gain takes
a personal property belonging to another without violence or intimidation and without the consent of
the owner. Jurisprudence holds that mere taking of the personal property consummates the crime of
Theft, so that when taking is complete the defense of desistance does not set in anymore.

Hence, regardless of the fact that Clepto replaced the purse she took with her own, Theft was already
consummated, and desistance no longer sets in as a defense.

XX.
Which of the following is not a qualifying aggravating circumstance? (1%)
(A) treachery
(B) evident premeditation
(C) dwelling
(D) cruelty
(C) dwelling

XXI.
During trial for theft in 2014, the prosecution managed to show that accused AA has also been
convicted by final judgment for robbery in 2003, but she eluded capture. A subsequent verification
showed that AA had several convictions, to wit:

(1.) In 1998, she was convicted of estafa;


(2.) In 2002, she was convicted of theft;
(3.) In 2004, she was convicted of frustrated homicide;
The judge trying the theft case in 2014 is about to convict AA. What circumstances affecting the
liability or penalty may the judge appreciate against AA? (4%)

The judge may appreciate the aggravating circumstance of a recidivist.


Under the Revised Penal Code (Art. 14), a recidivist is one who, at the time of trial for a crime, he has
been previously convicted by final judgment of another crime embraced in the same title of the Revised
Penal Code where the current crime on trial is found.
Here, during the trial for Theft, AA had been previously convicted by final judgment for the crime of
Robbery, both crimes being embraced in the same title of the Revised Penal Code. Hence, the judge
can only appreciate the aggravating circumstance of a recidivist.

XXII.

Mr. Red was drinking with his buddies, Mr. White and Mr. Blue when he saw Mr. Greenwith his former
girlfriend, Ms. Yellow. Already drunk, Mr. Red declared in a loud voice that if he could not have Ms.
Yellow, no one can. He then proceeded to the mens room but told Mr. White and Mr. Blue to take
care of Mr. Green. Mr. Blue and Mr.White asked Mr. Red what he meant but Mr. Red simply said, You
already know what I want, and then left. Mr. Blue and Mr. White proceeded to kill Mr. Green and hurt
Ms. Yellow. (4%)

(A) What, if any, are the respective liabilities of Mr. Red, Mr. White and Mr. Blue for the death of Mr.
Green?

Mr. White and Mr. Blueare criminally liable for Murder for killing Mr. Green.
Under the Revised Penal Code, any person who kills another shall be criminally liable for Murder.
Jurisprudence holds that for an accused to be liable as principal by inducement, the inducement must
be expressed in clear unequivocal language, strong enough as an irresistible force.
Hence, only Mr. White and Mr. Blue can be held criminally liable for Murder for killing Mr. Green, while
Mr. Red cannot be held liable even as a principal by inducement since his statement cannot be
considered as inducement insofar as it is not strong enough as an irresistible force.

(B) What, if any, are the respective liabilities of Mr. Red, Mr. Whit and Mr. Blue for the injuries of Ms.
Yellow?
Similarly, Mr. White and Mr. Blue are criminally liable for Serious, Less Serious, or Slight Physical
Injuries for the injuries they inflicted upon Ms. Yellow. On the other hand, Mr. Red has no criminal
liability.
Under the Revised Penal Code, any person who shall wound, beat, or assault another that requires
medical attention, or becomes ill or incapacitated is liable for Serious Physical Injuries if the
medication, illness or incapacity is for more than 30 days, Less Serious Physical Injuries if the
medication, illness or incapacity is for ten days or more, or for Slight Physical Injuries if the medication,
illness or incapacity lasts for one to nine days. On the other hand, a person who has no participation
in the planning of or in the actual beating or assault shall not have any criminal liability.
Hence, only Mr. White and Mr. Blue shall be criminally liable for Serious, Less Serious, or slight
Physical Injuries, depending on the gravity or duration of illness, incapacity or medication caused upon
Ms. Yellow, while Mr. Red cannot be held criminally liable.

XXIII.
Carla, four (4) years old, was kidnapped by Enrique, the tricycle driver engaged by her parents to drive
her to and from school every day. Enrique wrote a ransom note demanding that Carlas parents pay
him P500,000.00 ransom in exchange for her liberty. However, before the ransom note could be
received by Carlas parents, Enriques hideout was discovered by the police. Carla was rescued while
Enrique was arrested. The prosecutor considered that the ransom note was never received by Carlas
parents and filed a case of Impossible crime to commit kidnapping against Enrique. Is the prosecutor
correct? If he is not correct, can he instead file a case of grave coercion? (4%)

No, the prosecution is not correct for neither impossible nor grave coercion.

Jurisprudence applying the second paragraph of Article 4 of the Revised Penal Code has held that,
Impossible Crime would only be considered as a last resort if no crime against person or property or
any other felony applies to the act committed. When person deprives a child of his liberty, the crime
committed is Kidnapping and Serious Illegal Detention qualified by minority.
Hence, Impossible Crime nor Grave Coercion shall not be considered insofar as the correct crime
committed was Kidnapping and Serious Illegal Detention qualified by minority.
XXIV.
A, a young boy aged sixteen (16) at the time of the commission of the crime, was convicted when he
was already seventeen (17) years of age for violation of Section 11 of R.A. 9165 or Illegal Possession
of Dangerous Drugs for which the imposable penalty is life imprisonment and a fine. Section 98 of the
same law provides that if the penalty imposed is life imprisonment to death on minor offenders, the
penalty shall be reclusion perpetua to death. Under R.A. 9344, a minor offender is entitled to a privilege
mitigating circumstance. (8%)

(A) May the privilege mitigating circumstance of minority be appreciated considering that the penalty
imposed by law is life imprisonment and fine?
Yes, the privilege of mitigating circumstance of minority may be appreciated.

By express provision of Sec. 98 of RA 9165, notwithstanding any law, the provisions of the Revised
Penal Code shall not apply to the provisions of RA 9165, except in the case of minor offenders. Where
the offender is a minor, the penalty for acts punishable by life imprisonment to death shall be reclusion
perpetua. Under RA 9344, the privileged mitigating circumstance of minority shall be considered for
the purpose of recommending the amount of bail.
Hence, the privileged mitigating circumstance of minority may be appreciated for the purpose of
recommending the amount of bail.

(B) Is the Indeterminate Sentence Law applicable considering that life imprisonment has no fixed
duration and the Dangerous Drugs Law is malum prohibitum?
Yes, the Indeterminate Sentence Law is applicable.
Settled is the rule that by virtue of Sec. 98 of RA 9165, where the offender is a minor, the penalty for
acts punishable by life imprisonment to death shall be reclusion perpetua to death, an indivisible
penalty. The Indeterminate Sentence Law applies only to divisible penalties of more than one (1) year
of imprisonment. Considering the privileged mitigating circumstance of minority, the penalty shall be
one degree lower than reclusion perpetua, which shall be reclusion temporal, a divisible penalty.
Thus, the Indeterminate Sentence Law is applicable because the penalty which has been indivisible
became a divisible penalty of more than one year after appreciating the privilege mitigating
circumstance of minority.

(C) If the penalty imposed is more than six (6) years and a notice of appeal was filed by A and given
due course by the court, may A still file an application for probation?

No, A may not file an application for Probation.


By express provision of the Probation Law (PD 968), where the imposed penalty is imprisonment of
more than six years, the convict shall not be entitled to probation. Similarly, the Probation Law provides
that appeal and probation are mutually exclusive, so that once an appeal has filed, the privilege of
probation is no longer available unless the convict withdraws the appeal.
Hence, A may not file an application for Probation insofar as the imposed penalty is imprisonment of
more than six years.

(D) If probation is not allowed by the court, how will A serve his sentence?
Pursuant to RA 9344, the sentence for A shall be automatically suspended and the court shall
determine the disposition measures under the Implementing Rules of 9344.

XXV.

Mr. Gray opened a savings account with Bank A with an initial deposit of P50,000.00. A few days
later, he deposited a check for P200,000.00 drawn from Bank B and endorsed by Mr. White. Ten days
later, Mr. Gray withdrew the P200,000.00 from his account. Mr. White later complained to Bank B
when the amount of P200,000.00 was later debited to his account, as he did not issue the check and
his signature thereon was forged. Mr. Gray subsequently deposited another check signed by Mr. White
for P200,000.00, which amount he later withdrew. Upon receiving the amount, Mr. Graywas arrested
by agents of the National Bureau of Investigation (NBI).
Mr. Gray was convicted of estafa and attempted estafa, both through the use of commercial
documents. (4%)

(A) Mr. Gray claims as defense that, except for Mr. Whites claim of forgery, there was no evidence
showing that he was the author of the forgery and Mr. White did not suffer any injuries as to the second
check (attempted estafa). Rule on the defense of Mr. Gray.
The defense is without merit.
Settled is the rule in Estafa cases that the disturbance of property right is equivalent to damage and
is in itself sufficient to constitute injury within the meaning of Art. 315 of the Revised Penal Code.
Here, Mr. White suffered injury when his signature was forged and his money parted from him on
account of the forgery that is attributable to the bearer of the check, Mr. Gray. Hence, Mr. Grays
defense must fail.

(B) Mr. Gray claims that he was entrapped illegally because there was no showing that the second
check was a forgery and, therefore, his withdrawal based on the second check was a legal act. Is Mr.
Gray correct?

XXVI.

A was bitten by a dog owned by a neighbor. The following day, angered by the incident, A took the
dog without the knowledge of the owner, had it butchered and cooked the meat. He then invited his
friends to partake of the dish with his friends who knew fully well that the dog was taken without the
knowledge of the owner. What are the friends of A liable for? (1%)
(A) Theft
(B) Malicious mischief
(C) Accessories

(D) Obstruction of Justice


(C) Accessories
2014 BAR EXAMINATIONS
REMEDIAL LAW

I.

Ludong, Balatong, and Labong were charged with murder. After trial, the court announced that the
case was considered submitted for decision. Subsequently, the Clerk of Court issued the notices of
promulgation of judgment which were duly received. On promulgation day, Ludong and his lawyer
appeared. The lawyers of Balatong and Labong appeared but without their clients and failed to
satisfactorily explain their absence when queried by the court. Thus, the judge ordered the Clerk of
Court to proceed with the reading of the judgment convicting all the accused. With respect to Balatong
and Labong, the judge ordered that the judgment be entered in the criminal docket and copies be
furnished their lawyers. The lawyers of Ludong, Balatong, and Labong filed within the reglementary
period a Joint Motion for Reconsideration. The court favorably granted the motion of Ludong
downgrading his conviction from murder to homicide but denied the motion as regards Balatong and
Labong. (4%)

(A) Was the court correct in taking cognizance of the Joint Motion for Reconsideration?

(B) Can Balatong and Labong appeal their conviction in case Ludong accepts his conviction for
homicide?

ANSWERS:

(A)

No, the court was not correct in taking cognizance of the Joint Motion for Reconsideration
insofar as Balatong and Labong were concerned.

Under Section 6 Rule 120, if the judgment was for conviction and the failure of the accused to
appear was without justifiable cause, he shall lose the remedies available under the Rules of Court
and the court shall order his arrest. The accused may regain the remedies only if he surrenders and
files a motion for leave to avail of the remedies under the Rules of Court.

Here the failure of Balatong and Labong to appear was without justifiable cause as even their
lawyers were not aware of the reason for their absence. Hence they lost their remedies under the
Rules. Since Balatong and Labong did not surrender and file a motion for leave to avail of remedies,
it was incorrect for the trial court to take cognizance of the joint motion for reconsideration insofar as
Balatong and Labong were concerned. The trial court should instead have ordered their arrest.
(People v. De Grano, 5 June 2009, Peralta, J.).

On the other hand, it was correct for the trial court to take cognizance of the joint motion for
reconsideration insofar as Ludong was concerned since he and his lawyer were present during the
promulgation.

(B)

No, Balatong and Labong cannot appeal their conviction in case Ludong accepts his
conviction for homicide.
Since Balatong and Labong failed to appear during the promulgation of the conviction without
justifiable cause, they lost the remedies under the Rules of Court including the remedy of an appeal.

II.

McJolly is a trouble-maker of sorts, always getting into brushes with the law. In one incident, he drove
his Humvee recklessly, hitting a pedicab which sent its driver and passengers in different directions.
The pedicab driver died, while two (2) of the passengers suffered slight physical injuries. Two (2)
Informations were then filed against McJolly. One, for Reckless Imprudence Resulting in Homicide
and Damage to Property, and two, for Reckless Imprudence Resulting in Slight Physical Injuries. The
latter case was scheduled for arraignment earlier, on which occasion McJolly immediately pleaded
guilty. He was meted out the penalty of public censure. A month later, the case for reckless imprudence
resulting in homicide was also set for arraignment. Instead of pleading, McJolly interposed the defense
of double jeopardy. Resolve. (4%)

ANSWER:

The defense of double jeopardy is meritorious and the second information for reckless imprudence
resulting in homicide should be quashed on the ground of double jeopardy.

The Supreme Court has held that reckless imprudence is a single crime and that its consequences on
persons and property are material only to determine the penalty.

Here there was only one act and crime of reckless imprudence. The death, the physical injuries, and
the damage to the tricycle are only consequences of the same reckless act of McJolly. Hence there
was double jeopardy when a second information arising from the same reckless act was brought
against the accused. (Ivler v. Modesto-San Pedro, 17 November 2010).

III.

While passing by a dark uninhabited part of their barangay, PO2 Asintado observed shadows and
heard screams from a distance. PO2 Asintado hid himself behind the bushes and saw a man beating
a woman whom he recognized as his neighbor, Kulasa. When Kulasa was already in agony, the man
stabbed her and she fell on the ground. The man hurriedly left thereafter.

PO2 Asintado immediately went to Kulasas rescue. Kulasa, who was then in a state of hysteria, kept
mentioning to PO2 Asintado Si Rene, gusto akong patayin! Sinaksak niya ako! When PO2 Asintado
was about to carry her, Kulasa refused and said Kaya ko. Mababaw lang to. Habulin mo si Rene.

The following day, Rene learned of Kulasas death and, bothered by his conscience, surrendered to
the authorities with his counsel. As his surrender was broadcasted all over media, Rene opted to
release his statement to the press which goes:
I believe that I am entitled to the presumption of innocence until my guilt is proven beyond reasonable
doubt. Although I admit that I performed acts that may take ones life away, I hope and pray that justice
will be served the right way. God bless us all.

(Sgd.)

Rene

The trial court convicted Rene of homicide on the basis of PO2 Asintados testimony, Kulasas
statements, and Renes statement to the press. On appeal, Rene raises the following errors:

1. The trial court erred in giving weight to PO2 Asintados testimony, as the latter did not have any
personal knowledge of the facts in issue, and violated Renes right to due process when it considered
Kulasas statements despite lack of opportunity for her cross-examination.

2. The trial court erred in holding that Renes statement to the press was a confession which, standing
alone, would be sufficient to warrant conviction.

Resolve. (4%)

ANSWER:

Renes appeal is denied for lack of merit.

1. The contention that the trial court erred in giving weight to PO2 Asintados testimony since he did
not have personal knowledge of the facts in issue is without merit. The contention in effect challenges
Kulasas statement for being hearsay.

Under the Rules of Evidence, a statement made immediately subsequent to a startling occurrence is
excepted from the hearsay rule as part of the res gestae.

Here Kulasas statement was made immediately subsequent to a starling occurrence, that is, her
stabbing by Rene, and was made in a state of hysteria, showing that she was under the influence of
the startling occurrence. Hence testimony regarding the statement is excepted from the hearsay rule.

Since Kulasas statement is an exception to the hearsay rule, Rene cannot complain that his right to
due process was violated when the trial court considered Kulasas statement despite lack of
opportunity to cross-examine her.

There should be no serious question about the admissibility against an accused of hearsay where this
hearsay falls under an exception to the hearsay rule, especially here where the declarant is dead and
thus unavailable to testify. (ANTONIO R. BAUTISTA, BASIC EVIDENCE 214-215 [2004 ed.]). In U.S.
v. Gil, 13 Phil. 530 (1909), the Supreme Court upheld dying declarations as an exception to the
confrontation clause since such declarations have always been regarded as an exception to the
general rule regarding hearsay evidence.

2. The argument that the trial court erred in holding that Renes statement to the press was a
confession which, standing alone, would be sufficient to warrant conviction is meritorious.
Firstly, Renes statement is not a confession but an admission. A confession is one wherein a person
acknowledges his guilt of a crime, which Rene did not do. Secondly, even assuming it is a confession,
standing alone it would not be sufficient to warrant conviction since it is an extrajudicial confession
which is not sufficient ground for conviction unless corroborated by evidence of corpus delicti. (S3
R133).

Nonetheless this was a harmless error since the admission of Rene was corroborated by the testimony
of PO2 Asintado on Kulasas statement.

IV.

An order of the court requiring a retroactive re-dating of an order, judgment or document filing be
entered or recorded in a judgment is: (1%)

(A) pro hac vice

(B) non pro tunc

(C) confession relicta verificatione

(D) nolle prosequi

ANSWER:

(B) (Note: Should be nunc pro tunc.).

V.

Landlord, a resident of Quezon City, entered into a lease contract with Tenant, a resident of Marikina
City, over a residential house in Las Pias City. The lease contract provided, among others, for a
monthly rental of P25,000.00, plus ten percent (10%) interest rate in case of non-payment on its due
date. Subsequently, Landlord migrated to the United States of America (USA) but granted in favor of
his sister Maria, a special power of attorney to manage the property and file and defend suits over
the property rented out to Tenant. Tenant failed to pay the rentals due for five (5) months. Maria
asks your legal advice on how she can expeditiously collect from Tenant the unpaid rentals plus
interests due. (6%)

(A) What judicial remedy would you recommend to Maria?

(B) Where is the proper venue of the judicial remedy which you recommended?
(C) If Maria insists on filing an ejectment suit against Tenant, when do you reckon the one (1)-year
period within which to file the action?

ANSWERS:

(A) The judicial remedy that I would recommend to Maria is to file a collection suit for the
P125,000 rentals in arrears and the P12,500 interest due. The remedy would be expeditious since it
would be governed by the Rules on Summary Procedure as the amount of the demand, excluding
interest, does not exceed P200,000.

(B) The proper venue of the collection suit would be in Marikina City, where Tenant resides.

Under the Rules of Civil Procedure, venue in personal actions is with the residence of either the
plaintiff or the defendant, at the plaintiffs election.

Since the Plaintiff does not reside in the Philippines, venue may be laid only in Marikina City where
the defendant Tenant resides.

(C) If Maria insists on filing an ejectment suit against Tenant, the one-year period within which
to file the action shall be reckoned from the expiration of 5-days from notice of the last demand to
pay and vacate. (Cruz v. Atencio, 28 February 1959; Sy Oh v. Garcia, 30 June 1969).

VI.

As a rule, courts may not grant an application for provisional remedy without complying with the
requirements of notice and hearing. These requirements, however, may be dispensed with in an
application for: (1%)

(A) writ of preliminary injunction

(B) writ for preliminary attachment

(C) an order granting support pendente lite

(D) a writ of replevin

ANSWER:
(B) writ for preliminary attachment

VII.

Co Batong, a Taipan, filed a civil action for damages with the Regional Trial Court (RTC) of Paraaque
City against Jose Penduko, a news reporter of the Philippine Times, a newspaper of general circulation
printed and published in Paraaque City. The complaint alleged, among others, that Jose Penduko
wrote malicious and defamatory imputations against Co Batong; that Co Batongs business address
is in Makati City; and that the libelous article was first printed and published in Paraaque City. The
complaint prayed that Jose Penduko be held liable to pay P200,000.00, as moral damages;
P150,000.00, as exemplary damages; and P50,000.00, as attorneys fees.

Jose Penduko filed a Motion to Dismiss on the following grounds:

1. The RTC is without jurisdiction because under the Totality Rule, the claim for damages in the
amount of P350,000.00 fall within the exclusive original jurisdiction of the Metropolitan Trial Court
(MeTC) of Paraaque City.

2. The venue is improperly laid because what the complaint alleged is Co Batongs business
address and not his residence address.

Are the grounds invoked in the Motion to Dismiss proper? (4%)

ANSWER:

No, the grounds invoked in the motion to dismiss improper.

1. The invocation of the Totality Rule is misplaced. Under Art. 360 of the Revised Penal Code,
jurisdiction over a civil action for damages in case of libel is with the Court of First Instance, now the
Regional Trial Court. (Nocum v. Tan, 23 September 2005). The said provision does not mention any
jurisdictional amount over such action; hence the Totality Rule is inapplicable.

2. The ground that the complaint mentioned the complainants office address rather than his
residence is of no moment since the complaint also stated that the libelous article was printed and first
published in Paranaque City. Under Article 360 of the Revised Penal Code, venue in a civil action for
libel also lies in the place where the libelous article was printed and first published.
VIII.

Johnny, a naturalized citizen of the United States of America (USA) but formerly a Filipino citizen,
executed a notarial will in accordance with the laws of the State of California, USA. Johnny, at the time
of his death, was survived by his niece Anastacia, an American citizen residing at the condominium
unit of Johnny located at Fort Bonifacio, Taguig City; a younger brother, Bartolome, who manages
Johnnys fish pond in Lingayen, Pangasinan; and a younger sister, Christina, who manages Johnnys
rental

condominium units in Makati City. Johnnys entire estate which he inherited from his parents is valued
at P200 million. Johnny appointed Anastacia as executrix of his will. (4%)

(A) Can Johnnys notarial will be probated before the proper court in the Philippines?

(B) Is Anastacia qualified to be the executrix of Johnnys notarial will?

ANSWERS:

(A) Yes, the formal validity of a will is governed also by the national law of the decedent. (Article 817,
Civil Code).

A will proved and allowed in a foreign country, according to the laws of such country, may be allowed,
filed, and recorded by the proper Regional Trial Court in the Philippines. (S1 R77).

(B)Yes, assuming that Anastacia is of legal age, she is qualified to be an executor although an alien
because she is a resident of the Philippines. (S1 R78).

IX.

Bayani, an overseas worker based in Dubai, issued in favor of Agente, a special power of attorney to
sell his house and lot. Agente was able to sell the property but failed to remit the proceeds to Bayani,
as agreed upon. On his return to the Philippines, Bayani, by way of a demand letter duly received by
Agente, sought to recover the amount due him. Agente failed to return the amount as he had used it
for the construction of his own house.

Thus, Bayani filed an action against Agente for sum of money with damages. Bayani subsequently
filed an ex-parte motion for the issuance of a writ of preliminary attachment duly supported by an
affidavit. The court granted the ex-parte motion and issued a writ of preliminary attachment upon
Bayanis posting of the required bond. Bayani prayed that the courts sheriff be deputized to serve and
implement the writ of attachment. On November 19, 2013, the Sheriff served upon Agente the writ of
attachment and levied on the latters house and lot. On November 20, 2013, the Sheriff served on
Agente summons and a copy of the complaint. On November 22, 2013, Agente filed an Answer with
Motion to Discharge the Writ of Attachment alleging that at the time the writ of preliminary attachment
was issued, he has not been served with summons and, therefore, it was improperly issued. (4%)

(A) Is Agente correct?

(B) Was the writ of preliminary attachment properly executed?


ANSWERS:

(A) No, Agente is not correct.

Under the Rules of Civil Procedure, a writ of attachment may issue even before service of summons
upon the defendant. (S2 R57).

(B) No, the writ of preliminary attachment not properly executed.

Under S5 R57, no levy on preliminary attachment shall be enforced unless there is prior or
simultaneous service of the summons and the accompanying papers. (S5 R The Supreme Court
has held that subsequent service of summons will not cure the irregularity that attended the
enforcement of the writ (Onate v. Abrogar, 23 February 1995).

Here the sheriff levied upon the house and lot prior to the service of the summons and the complaint
upon Agente. Hence the writ of preliminary attachment was not properly executed. The subsequent
service of summons and the complaint did not cure the irregularity in the enforcement of the writ.

X.

Prince Chong entered into a lease contract with King Kong over a commercial building where the
former conducted his hardware business. The lease contract stipulated, among others, a monthly
rental of P50,000.00 for a four (4)-year period commencing on January 1, 2010. On January 1, 2013,
Prince Chong died. Kin Il Chong was appointed administrator of the estate of Prince Chong, but the
former failed to pay the rentals for the months of January to June 2013 despite King Kongs written
demands.

Thus, on July 1, 2013, King Kong filed with the Regional Trial Court (RTC) an action for rescission of
contract with damages and payment of accrued rentals as of June 30, 2013. (4%)

(A) Can Kin Il Chong move to dismiss the complaint on the ground that the RTC is without jurisdiction
since the amount claimed is only P300,000.00?

(B) If the rentals accrued during the lifetime of Prince Chong, and King Kong also filed the complaint
for sum of money during that time, will the action be dismissible upon Prince Chongs death during the
pendency of the case?

ANSWERS:

(A) No, Kin II Chong cannot move to dismiss the complaint on the ground that the RTC is
without jurisdiction since the amount claimed is only P300,000.
Under B.P. Blg. 129, the RTC has original and exclusive jurisdiction over actions incapable of
pecuniary estimation.

Here the action is for rescission which is incapable of pecuniary estimation. The P300,000 accrued
rentals is only incidental to the main purpose of the action which is to rescind the lease contract.

(B) No, the action will not be dismissible upon Prince Chongs death during the pendency of
the case.

Under S20 R3, when the action is on a contractual money claim and the defendant dies before entry
of final judgment, the action shall not be dismissed but shall instead be allowed to continue until
entry of final judgment.

Here the action is on a contractual money claim, that is, a claim for rentals based on a lease
contract. Hence it shall be allowed to continue until final judgment. (S20 R3, S5 R86).

XI.

A search warrant was issued for the purpose of looking for unlicensed firearms in the house of Ass-
asin, a notorious gun for hire. When the police served the warrant, they also sought the assistance of
barangay tanods who were assigned to look at other portions of the premises around the house. In a
nipa hut thirty (30) meters away from the house of Ass-asin, a barangay tanod came upon a kilo of
marijuana that was wrapped in newsprint. He took it and this was later used by the authorities to
charge Ass-asin with illegal possession of marijuana. Ass-asin objected to the introduction of such
evidence claiming that it was illegally seized. Is the objection of Assasin valid? (4%)

ANSWER:

Yes, the objection of Ass-asin is valid.

Under the Constitution, the right of the people against unlawful search is inviolable except in
cases where a valid search warrant was issued or in exceptional cases where the law provides for a
warrantless search. (Sec. 2, Art. III, Constitution). Under the fruit of the poisonous tree doctrine,
items seized by virtue of an unlawful search are inadmissible in evidence. (Sec. 3[2], Art. III,
Constitution).

Here the the seizure of the marijuana was illegal since it was not pursuant to a search
warrant. The search warrant was for the search and seizure of unlicensed firearms not
marijuana. Nor would the exception regarding items seized under plain view apply. The marijuana
was wrapped in newsprint and clearly not in plain sight. Hence the marijuana may not be introduced
in evidence over Ass-asins objection.
XII.

Mary Jane met Shiela May at the recruitment agency where they both applied for overseas
employment. They exchanged pleasantries, including details of their personal circumstances.
Fortunately, Mary Jane was deployed to work as front desk receptionist at a hotel in Abu Dhabi where
she met Sultan Ahmed who proposed marriage, to which she readily accepted. Unfortunately for
Shiela May, she was not deployed to work abroad, and this made her envious of Mary Jane.

Mary Jane returned to the Philippines to prepare for her wedding. She secured from the National
Statistics Office (NSO) a Certificate of No Marriage. It turned out from the NSO records that Mary Jane
had previously contracted marriage with John Starr, a British citizen, which she never did. The
purported marriage between Mary Jane and John Starr contained all the required pertinent details on
Mary Jane. Mary Jane later on learned that Shiela May is the best friend of John Starr.

As a lawyer, Mary Jane seeks your advice on her predicament. What legal remedy will you avail to
enable Mary Jane to contract marriage with Sultan Ahmed? (4%)

ANSWER:

The legal remedy I would avail to enable Mary Jane to contract marriage with Sultan Ahmed
is to file a petition under Rule 108 to cancel entries in the marriage contract between John Starr and
Mary Jane, particularly the portion and entries thereon relating to the wife.

Rule 108 may be availed of to cancel erroneous or invalid entries in the Civil Registry. Here
the entry of Mary Jane as the wife of John Starr is clearly erroneous and invalid as she never
contracted marriage with anybody, much less John Starr. There is no need to file a petition for
declaration of nullity of marriage since there was no marriage to speak of in the first place, the
marriage contract being a sham contract. (Republic v. Olaybar, 10 February 2014, Peralta, J.).

XIII.

A foreign dog trained to sniff dangerous drugs from packages, was hired by FDP Corporation, a door
to door forwarder company, to sniff packages in their depot at the international airport. In one of the
routinary inspections of packages waiting to be sent to the United States of America (USA), the dog
sat beside one of the packages, a signal that the package contained dangerous drugs. Thereafter,
the guards opened the package and found two (2) kilograms of cocaine. The owner of the package
was arrested and charges were filed against him. During the trial, the prosecution, through the
trainer who was present during the incident and an expert in this kind of field, testified that the dog
was highly trained to sniff packages to determine if the contents were dangerous drugs and the
sniffing technique of these highly trained dogs was accepted worldwide and had been successful in
dangerous drugs operations. The prosecution moved to admit this evidence to justify the opening of
the package. The accused objected on the grounds that: (i) the guards had no personal knowledge
of the contents of the package before it was opened; (ii) the testimony of the trainer of the dog is
hearsay; and (iii) the accused could not cross-examine the dog. Decide. (4%)
ANSWER:

The accuseds objections are overruled.

The objection that the guards had no personal knowledge of the contents of the package before
it was opened is misplaced. The one testifying is the trainer not the guards and he had personal
knowledge of the circumstances since he was present during the incident. Besides there is no rule of
evidence that one cannot testify about the contents of a package if he did not have prior personal
knowledge of its contents before opening it.

The objection that the testimony of the trainer of the dog is hearsay is not valid. Hearsay is an
out-of-court declaration made by a person which is offered for the truth of the matter asserted.

Here what is involved is a dog who is not a person who can make an out-of-court declaration.
(Lempert & Saltzburg, A MODERN APPROACH TO EVIDENCE 370-371 [1982]). A dog is not treated
as a declarant or witness who can be cross-examined. (People v. Centolella, 305 N.Y.S.2d
279). Hence testimony that the dog sat beside the package is not testimony about an out-of-court
declaration and thus not hearsay.

The objection that the accused could not cross-examine the dog is without merit. Under the
Constitution, the accuseds right of confrontation refers to witnesses. As previously discussed, a dog
is not a witness who can be cross-examined.

Note: It is urged that utmost liberality be exercised in grading this number. The answer is not
found in Philippine law and jurisprudence and even in commentaries by writers on evidence.

XIV.

When a Municipal Trial Court (MTC), pursuant to its delegated jurisdiction, renders an adverse
judgment in an application for land registration, the aggrieved partys remedy is: (1%)

(A) ordinary appeal to the Regional Trial Court

(B) petition for review on certiorari to the Supreme Court

(C) ordinary appeal to the Court of Appeals

(D) petition for review to the Court of Appeals

ANSWER:

(C) (See Sec. 34, B.P. Blg. 129)


XV.

The Ombudsman, after conducting the requisite preliminary investigation, found probable cause to
charge Gov. Matigas in conspiracy with Carpintero, a private individual, for violating Section 3(e) of
Republic Act (RA) No. 3019 (Anti-Graft and Corrupt Practices Act, as amended).

Before the information could be filed with the Sandiganbayan, Gov. Matigas was killed in an ambush.
This, notwithstanding, an information was filed against Gov. Matigas and Carpintero.

At the Sandiganbayan, Carpintero through counsel, filed a Motion to Quash the Information, on the
ground of lack of jurisdiction of the Sandiganbayan, arguing that with the death of Gov. Matigas, there
is no public officer charged in the information.

Is the motion to quash legally tenable? (4%)

ANSWER:

No, the motion to quash is not legally tenable.

In a case involving similar facts, the Supreme Court held that the death of the public officer did not
mean that the allegation of conspiracy between the public officer and the private person can no longer
be proved or that their alleged conspiracy is already expunged. The only thing extinguished by the
death of the public officer was his criminal liability. His death did not extinguish the crime nor did it
remove the basis of the charge of conspiracy between him and the private person. Hence the
Sandiganbayan had jurisdiction over the offense charged. (People v. Go, 25 March 2014, Peralta, J.)

XVI.

Plaintiff filed a complaint denominated as accion publiciana, against defendant. In his answer,
defendant alleged that he had no interest over the land in question, except as lessee of Z. Plaintiff
subsequently filed an affidavit of Z, the lessor of defendant, stating that Z had sold to plaintiff all his
rights and interests in the property as shown by a deed of transfer attached to the affidavit. Thus,
plaintiff may ask the court to render: (1%)

(A) summary judgment

(B) judgment on the pleadings

(C) partial judgment

(D) judgment by default

ANSWER:

(A) (S1 & 3, R35)


XVII.

A was charged before the Sandiganbayan with a crime of plunder, a non-bailable offense, where the
court had already issued a warrant for his arrest. Without A being arrested, his lawyer filed a Motion
to Quash Arrest Warrant and to Fix Bail, arguing that the allegations in the information did not charge
the crime of plunder but a crime of malversation, a bailable offense. The court denied the motion on
the ground that it had not yet acquired jurisdiction over the person of the accused and that the accused
should be under the custody of the court since the crime charged was nonbailable.

The accuseds lawyer counter-argued that the court can rule on the motion even if the accused was
at-large because it had jurisdiction over the subject matter of the case. According to said lawyer, there
was no need for the accused to be under the custody of the court because what was filed was a Motion
to Quash Arrest and to Fix Bail, not a Petition for Bail.

(A) If you are the Sandiganbayan, how will you rule on the motion? (3%)

(B) If the Sandiganbayan denies the motion, what judicial remedy should the accused undertake?
(2%)

ANSWERS:

(A) If I were the Sandiganbayan, I would deny the Motion to Quash Arrest Warrant and to Fix
Bail.

The motion to quash warrant of arrest may be considered since only jurisdiction over the
person not custody of the law is required. Jurisdiction over the person of A was obtained by his
voluntary appearance made through the filing of the motion seeking affirmative relief. (See Miranda
v. Tuliao, 31 March 2006).

Nonetheless I would still deny the motion to quash arrest warrant. The ground that the offense
charged is malversation not plunder is not a valid ground to quash the arrest warrant. A should simply
file an application for bail and contend that he is entitled thereto as a matter of right.

The motion to fix amount of bail, which is in effect an application for bail cannot be granted
unless the accused is in custody of the law. (Miranda v. Tuliao, 31 March 2006). Here A was not in
custody of the law but still at large. Hence the motion to fix the amount of bail should be denied.

(B) If the Sandiganbayan denies the motion, the judicial remedy that the accused should
undertake is to file a petition for certiorari under Rule 65 with the Supreme Court. Certiorari is available
to challenge interlocutory orders rendered with grave abuse of discretion since appeal is unavailable.

Here the order denying the Motion to Quash Arrest Warrant and to Fix Bail is interlocutory
since it does not completely dispose of the case. Hence certiorari is available. A should aver that the
Sandiganbayan acted with grave abuse of discretion amounting to lack of or excess of jurisdiction in
denying his motion.
XVIII.

A was charged with murder in the lower court. His Petition for Bail was denied after a summary hearing
on the ground that the prosecution had established a strong evidence of guilt. No Motion for
Reconsideration was filed from the denial of the Petition for Bail. During the reception of the evidence
of the accused, the accused reiterated his petition for bail on the ground that the witnesses so far
presented by the accused had shown that no qualifying aggravating circumstance attended the killing.
The court denied the petition on the grounds that it had already ruled that: (i) the evidence of guilt is
strong; (ii) the resolution for the Petition for Bail is solely based on the evidence presented by the
prosecution; and (iii) no Motion for Reconsideration was filed from the denial of the Petition for Bail.
(6%)

(A) If you are the Judge, how will you resolve the incident?

(B) Suppose the accused is convicted of the crime of homicide and the accused filed a Notice of
Appeal, is he entitled to bail?

ANSWERS:

(A) If I were the judge, I will grant the Petition for Bail if the evidence does not show any
qualifying aggravating circumstance. In such a case the offense would be only homicide which is
bailable.

(i) The ground that the court had already ruled that the evidence of guilt is strong is improper. An
order denying an application for bail is interlocutory and remains at the control of the court until final
judgment. Hence the court is not bound by its earlier ruling and may reconsider the same if the
evidence or law warrants the same.

(ii) The ground that the resolution for the Petition for Bail is solely based on the evidence presented
by the prosecution is improper. While S8 R114 provides that the prosecution has the burden of proof
to show that the evidence of guilt is strong, it should not be taken to mean that the resolution of the
bail application is based solely on the prosecution evidence. At the hearing for the bail application,
both the prosecution and the accused must be given reasonable opportunity to prove or to disprove,
respectively, that the evidence of guilt is strong. (Santos v. Ofilada, 245 SCRA 56).

(iii) The ground that no motion for reconsideration was filed from the order denying the petition for
bail is improper. As previously discussed, an order denying bail is merely interlocutory. Hence the
failure to move for reconsideration thereof during the trial will not render the order final and
conclusive.

(B) No, after conviction by the RTC of an offense not punishable by death, reclusion
perpetua, or life imprisonment, admission to bail is discretionary. (S5 R114).
XIX.

A vicarious admission is considered an exception to the hearsay rule. It, however, does not cover:
(1%)

(A) admission by a conspirator

(B) admission by a privy

(C) judicial admission

(D) adoptive admission

(C) Note: a vicarious admission is an extrajudicial admission. Hence C is not covered by the rule
regarding vicarious admissions.

XX.

Tom Wallis filed with the Regional Trial Court (RTC) a Petition for Declaration of Nullity of his marriage
with Debi Wallis on the ground of psychological incapacity of the latter. Before filing the petition, Tom
Wallis had told Debi Wallis that he wanted the annulment of their marriage because he was already
fed up with her irrational and eccentric behaviour. However, in the petition for declaration of nullity of
marriage, the correct residential address of Debi Wallis was deliberately not alleged and instead, the
residential address of their married son was stated. Summons was served by substituted service at
the address stated in the petition. For failure to file an answer, Debi Wallis was declared in default and
Tom Wallis presented evidence ex-parte. The RTC rendered judgment declaring the marriage null and
void on the ground of psychological incapacity of Debi Wallis. Three (3) years after the RTC judgment
was rendered, Debi Wallis got hold of a copy thereof and wanted to have the RTC judgment reversed
and set aside.

If you are the lawyer of Debi Wallis, what judicial remedy or remedies will you take? Discuss and
specify the ground or grounds for said remedy or remedies. (5%)

ANSWER:

If I were the lawyer of Debi Wallis, the judicial remedy I would take is to file with the Court of Appeals
an action for annulment of the RTC judgment under Rule 47. An action for annulment of judgment
may be resorted to since the remedies of appeal and petition for relief are no longer available through
no fault of Debi Wallis. (S1 R47).

The ground for annulment of judgment would be lack of jurisdiction. Lack of jurisdiction also
covers lack of jurisdiction over the person of the defendant since the judgment would be void. (1
FLORENZ D. REGALADO, REMEDIAL LAW COMPENDIUM 558 [7th rev. ed., 3rd printing]).

Here the court did not acquire jurisdiction over the person of Debi since there was no valid
substituted service of summons. Substituted service of summons should have been made at Debis
residence. (S7 R14). Hence the judgment of the RTC was void. Since the judgment is void, the
petition for annulment thereof is imprescriptible. (S3 R47).
Furthermore, default judgments are not allowed in declaration of nullity of marriage. (S3[e]
R9). Hence the trial courts rendition of a default judgment was made with grave abuse of discretion
amounting to lack of jurisdiction.

XXI.

Goodfeather Corporation, through its President, Al Pakino, filed with the Regional Trial Court (RTC) a
complaint for specific performance against Robert White. Instead of filing an answer to the complaint,
Robert White filed a motion to dismiss the complaint on the ground of lack of the appropriate board
resolution from the Board of Directors of Goodfeather Corporation to show the authority of Al Pakino
to represent the corporation

and file the complaint in its behalf. The RTC granted the motion to dismiss and, accordingly, it ordered
the dismissal of the complaint. Al Pakino filed a motion for reconsideration which the RTC denied. As
nothing more could be done by Al Pakino before the RTC, he filed an appeal before the Court of
Appeals (CA). Robert White moved for dismissal of the appeal on the ground that the same involved
purely a question of law and should have been filed with the Supreme Court (SC). However, Al Pakino
claimed that the appeal involved mixed questions of fact and law because there must be a factual
determination if, indeed, Al Pakino was duly authorized by Goodfeather Corporation to file the
complaint. Whose position is correct? Explain. (4%)

ANSWER:

Robert Whites position is correct. In a case involving similar facts, the Supreme Court held
that the issue of whether or not the trial court erred in dismissing the complaint on the ground that the
person who filed the complaint in behalf of the plaintiff corporation was not authorized to do so is a
legal issue, reviewable only by the Supreme Court in a petition for review on certiorari under Rule
45. (Tamondong v. Court of Appeals, 26 November 2004).

(Note: An alternative answer would be that the appeal raises a factual question of whether or
not Al Pakino was indeed authorized to file the complaint in behalf of Goodfeather Corporation. A
reading of Tamondong would show that the appellant only raised a legal question of whether it was
proper to dismiss the complaint for failure to state a cause of action but did not raise a factual issue
as to whether the filer was in fact authorized by the corporation.).

XXII.

Which of the following decisions may be appealed directly to the Supreme Court (SC)? (Assume that
the issues to be raised on appeal involve purely questions of law) (1%)

(A) Decision of the Regional Trial Court (RTC) rendered in the exercise of its appellate jurisdiction.

(B) Decision of the RTC rendered in the exercise of its original jurisdiction.

(C) Decision of the Civil Service Commission.

(D) Decision of the Office of the President.


ANSWER:

(B) Note: In an appeal from RTC judgment in the exercise of its appellate jurisdiction, the appeal
should be to the CA even if the questions are only legal. Hence A should be excluded. (S2[c] R42).

XXIII.

Mr. Humpty filed with the Regional Trial Court (RTC) a complaint against Ms. Dumpty for damages.
The RTC, after due proceedings, rendered a decision granting the complaint and ordering Ms. Dumpty
to pay damages to Mr. Humpty. Ms. Dumpty timely filed an appeal before the Court of Appeals (CA),
questioning the RTC decision. Meanwhile, the RTC granted Mr. Humptys motion for execution
pending appeal. Upon receipt of the RTCs order granting execution pending appeal, Ms. Dumpty filed
with the

CA another case, this time a special civil action for certiorari assailing said RTC order. Is there a
violation of the rule against forum shopping considering that two (2) actions emanating from the same
case with the RTC were filed by Ms. Dumpty with the CA? Explain. (4%)

ANSWER:

No, there is no violation of the rule against forum shopping.

Forum shopping applies where two or more initiatory pleadings were filed by the same party. This is
discernible from the use of the phrase commenced any action or filed any claim in S5 R7.

Here the first case involves the filing by Ms. Dumpty of a notice of appeal which is not an initiatory
pleading. Hence there is no forum shopping.

XXIV.

Solomon and Faith got married in 2005. In 2010, Solomon contracted a second marriage with Hope.
When Faith found out about the second marriage of Solomon and Hope, she filed a criminal case for
bigamy before the Regional Trial Court (RTC) of Manila sometime in 2011.

Meanwhile, Solomon filed a petition for declaration of nullity of his first marriage with Faith in 2012,
while the case for bigamy before the RTC of Manila is ongoing. Subsequently, Solomon filed a motion
to suspend the proceedings in the bigamy case on the ground of prejudicial question. He asserts that
the proceedings in the criminal case should be suspended because if his first marriage with Faith will
be declared null and void, it will have the effect of exculpating him from the crime of bigamy. Decide.
(4%)
ANSWER:

Motion to suspend proceedings denied.

Under the Rules of Criminal Procedure, a prejudicial question arises if there has been a previously
filed civil action. Here the civil action was filed after the criminal action. Hence no prejudicial question
will arise.

Moreover the Supreme Court has held that a pending case for declaration of nullity of marriage does
not raise a prejudicial question to a charge of bigamy since a person who contracts a second marriage
without first awaiting a judicial declaration of nullity of his first marriage has already committed
bigamy. (People v. Odtuhan, 17 July 2013, Peralta, J.).

XXV.

Mr. Boaz filed an action for ejectment against Mr. Jachin before the Metropolitan Trial Court (MeTC).
Mr. Jachin actively participated in every stage of the proceedings knowing fully well that the MeTC had
no jurisdiction over the action. In his mind, Mr. Jachin was thinking that if the MeTC rendered judgment
against him, he could always raise the issue on the jurisdiction of the MeTC. After trial, the MeTC
rendered judgment against Mr. Jachin. What is the remedy of Mr. Jachin? (1%)

(A) File an appeal

(B) File an action for nullification of judgment

(C) File a motion for reconsideration

(D) File a petition for certiorari under Rule 65

ANSWER:

(A) See S8 R40. R47 is not available since appeal is still available. Not C since a prohibited pleading.

XXVI.

Parole evidence is an: (1%)

(A) agreement not included in the document

(B) oral agreement not included in the document

(C) agreement included in the document

(D) oral agreement included in the document

ANSWER:
(A) Note: It is suggested that either A or B be considered as correct. Strictly speaking parol evidence
does not have to be an agreement; it is simply any evidence, whether written or oral, which is not
contained in a written agreement subject of a case and which seeks to modify, alter, or explain the
terms of the written agreement.

XXVII.

Mr. Avenger filed with the Regional Trial Court (RTC) a complaint against Ms. Bright for annulment of
deed of sale and other documents. Ms. Bright filed a motion to dismiss the complaint on the ground of
lack of cause of action. Mr. Avenger filed an opposition to the motion to dismiss. State and discuss the
appropriate remedy/remedies under each of the following situations: (6%)

(A) If the RTC grants Ms. Brights motion to dismiss and dismisses the complaint on the ground of lack
of cause of action, what will be the remedy/remedies of Mr. Avenger?

(B) If the RTC denies Ms. Brights motion to dismiss, what will be her remedy/remedies?

(C) If the RTC denies Ms. Brights motion to dismiss and, further proceedings, including trial on the
merits, are conducted until the RTC renders a decision in favor of Mr. Avenger, what will be the
remedy/remedies of Ms. Bright?

ANSWERS:

(A) If the RTC grants Ms. Brightss motion to dismiss, the remedies of Mr. Avenger are:

(a) File a motion for reconsideration under Rule 37.

(b) Re-file the complaint. The dismissal does not bar the re-filing of the case (S5 R16).

(c) Appeal from the order of dismissal. The dismissal order is a final order as it completely
disposes of the case; hence it is appealable.

(d) File an amended complaint as a matter of right curing the defect of lack of cause of action
before the dismissal order becomes final. This is because a motion to dismiss is not a
responsive pleading; hence Mr. Avenger can amend the complaint as a matter of right. (S2
R10).

(B) If the RTC denies Ms. Brights motion to dismiss, her remedies are:

(a) File a motion for reconsideration.

(b) Proceed to trial and if she loses, appeal and assign the failure to dismiss as a reversible
error.

(c) File a special civil action for certiorari and/or mandamus if the denial of the order to dismiss
is made with grave abuse of discretion amounting to lack of or excess of jurisdiction.
(C) If the RTC renders a decision in favor of Mr. Avenger, Ms. Brights remedies are:

(a) File a motion for reconsideration or new trial under Rule 37.

(b) File an appeal to the Court of Appeals under Rule 41.

(c) File an appeal to the Supreme Court under Rule 45 if the appeal will raise only questions
of law.

(d) File a petition for relief from judgment under Rule 38.

(e) File an action for annulment of judgment under Rule 47 on the ground of extrinsic fraud or
lack of jurisdiction.

XXVIII.

A was adopted by B and C when A was only a toddler. Later on in life, A filed with the Regional Trial
Court (RTC) a petition for change of name under Rule 103 of the Rules of Court, as he wanted to
reassume the surname of his natural parents because the surname of his adoptive parents sounded
offensive and was seriously affecting his business and social life.

The adoptive parents gave their consent to the petition for change of name. May A file a petition for
change of name? If the RTC grants the petition for change of name, what, if any, will be the effect on
the respective relations of A with his adoptive parents and with his natural parents? Discuss. (4%)

ANSWER:

Yes, A may file a petition for change of name. Changing name on the ground that it is offensive and
seriously affects the petitioners business and social life is a valid ground especially where the adoptive
parents had given their consent.

The grant of the petition will not change As relations with his adoptive and natural parents. The
Supreme Court has held that change of name under Rule 103 affects only the name and not the status
of the petitioner. (Republic v. CA, 21 May 1992).

XXIX.

Estrella was the registered owner of a huge parcel of land located in a remote part of their barrio in
Benguet. However, when she visited the property after she took a long vacation abroad, she was
surprised to see that her childhood friend, John, had established a vacation house on her property.

Both Estrella and John were residents of the same barangay. To recover possession, Estrella filed a
complaint for ejectment with the Municipal Trial Court (MTC), alleging that she is the true owner of the
land as evidenced by her certificate of title and tax declaration which showed the assessed value of
the property as P21,000.00. On the other hand, John refuted Estrellas claim of ownership and
submitted in evidence a Deed of Absolute Sale between him and Estrella. After the filing of Johns
answer, the MTC observed that the real issue was one of ownership and not of possession. Hence,
the MTC dismissed the complaint for lack of jurisdiction.
On appeal by Estrella to the Regional Trial Court (RTC), a full-blown trial was conducted as if the case
was originally filed with it. The RTC reasoned that based on the assessed value of the property, it was
the court of proper jurisdiction. Eventually, the RTC rendered a judgment declaring John as the owner
of the land and, hence, entitled to the possession thereof. (4%)

(A) Was the MTC correct in dismissing the complaint for lack of jurisdiction? Why or why not?

(B) Was the RTC correct in ruling that based on the assessed value of the property, the case was
within its original jurisdiction and, hence, it may conduct a full-blown trial of the appealed case as if it
was originally filed with it? Why or why not?

ANSWERS:

(A) No, the MTC was not correct in dismissing the case for lack of jurisdiction. The Supreme Court
has held that an allegation of ownership as a defense in the answer will not oust the MTC of jurisdiction
in an ejectment case. (Subano v. Vallecer, 24 March 1959). What determines subject-matter
jurisdiction is the allegations in the complaint and not those in the answer. Furthermore, the MTC is
empowered under S16 R70 to resolve the issue of ownership, albeit for the purpose only of resolving
the issue of possession.

(B) No the RTC was not correct in ruling that the case was within its original jurisdiction and that hence
it may conduct a full-blown trial of the appealed case as if it were originally filed with it.

Under S8 R40, if an appeal is taken from an MTC order dismissing a case for lack of jurisdiction without
a trial on the merits, the RTC on appeal may affirm the dismissal order and if it has jurisdiction
thereover, try the case on the merits as if the case was originally filed with it.

Here the RTC did not have jurisdiction over the case since it is an ejectment suit cognizable exclusively
by the MTC. The assessed value of the land is irrelevant for the purpose of determining jurisdiction in
ejectment suits and would not oust the MTC of jurisdiction in the same manner as allegations of
ownership would not oust the MTC of jurisdiction.

The RTC should have reversed the dismissal order and remanded the case to the MTC for further
proceedings. (S8 R40).

Note: Utmost liberality should be given to the examinee on this question as it does not appear to be
within the coverage of the remedial law examination per the bar examination syllabus given by the
Supreme Court.

---ooo0ooo---
2014 BAR EXAMINATION
LEGAL ETHICS

1. Judge A is a close friend of Governor G. On several occasions, Judge A would borrow vehicles
from the office of the Governor to travel to his judicial stations. Judge As actuation: (1%)

(c) is downright unethical

2. R is retained counsel of ABC Bank-Ermita Branch. One day, his Balikbayan Compadre B,
consulted him about his unclaimed deposits with the said branch of ABC Bank, which the bank
had refused to give to him claiming that the account had become dormant. R agreed to file a
case against the bank with the Regional Trial Court (RTC) of Manila. B lost the case, but upon
the advice of R, he no longer appealed the decision. B later discovered that R was the retained
counsel of ABC Bank-Ermita Branch. Does B have any remedy? Discuss the legal and ethical
implications of the problem. (4%)

SUGGESTED ANSWER:

B can file an administrative case against R for representing conflicting of interest of ABC Bank and B in
violation of Rule 15.03 of the Code of Professional Responsibility. There is also conflict of interest when a
lawyer represents inconsistent interests of two or more opposing parties. In the instant question, the test is"
whether or not in behalf of one client, it is the lawyer's duty to fight for an issue or claim, but it is his duty to
oppose it for the other client. In brief, if he argues for one client, this argument will be opposed by him when
he argues for the other client." The prohibition is founded on the principles of public policy and good taste. It
behooves lawyers not only to keep inviolate the client's confidence, but also to avoid the appearance of
treachery and double-dealing for only then can litigants be encouraged to entrust their secrets to their lawyers,
which is of paramount importance in the administration of justice. (Orola vs. Atty. Ramos, Sept. 11, 2013).

3. The Code of Professional Responsibility is the code of conduct for: (1%)

(C) members of the Bench and Bar. Although the Code of Professional Responsibility refers
to lawyers, members of the bench are lawyers who are required to comment on the complaints filed
against them and show cause why they should not be suspended, disbarred or otherwise disciplinary
sanctioned as a member of the bar as provided for in A. M. 02-9-02 SC (Re : Automatic conversion of
some administrative cases against Justices (except Supreme Court Justices who can only be the
subject if impeachment), Judges and Court Officials who are lawyers as disciplinary proceedings
against them both in such officials and as members of the Philippine Bar).

4. A is accused of robbery in a complaint filed by B. A sought free legal assistance from the Public
Attorneys Office (PAO) and Atty. C was assigned to handle his case. After reviewing the facts
as stated in the complaint and as narrated by A, Atty. C is convinced that A is guilty. (4%)

SUGGESTED ANSWER:

(A) Atty. C of the PAO cannot refuse to handle the defense of A who is an indigent client
based on its circular. He is a counsel de oficio who is duty bound to exert his best effort and
professional ability to defend his client (People vs. Esteba, 27 SCRA 106). Moreover, he cannot not
decline the appointment as counsel de oficio (Rule 14.02, Code of Professional Responsibility).
(B). No he cannot. A counsel can withdraw his services only for good cause and upon notice
appropriate to the circumstances under Canon 22 of the Code of Professional Responsibility. This is
not one of the grounds to justify withdrawal under Rule 22.01 of the CPR unless the client insists that
the lawyer pursue conduct violative of the canons and rules. In Rule 14.01, CPR, a lawyer shall not
decline to represent a client because of his own opinion regarding the guilt of said person.

5. The rendition of free legal service is a lawyers: (1%)

(A) moral duty.


Moral duty is above social obligation and legal mandate. The lawyer voluntarily imposes upon
himself higher duties and more noble obligations enshrined in the Lawyer's Oath which goes beyond
commitment to social obligation and legal mandates.

6. Atty. D was required by Judge H of the Regional Trial Court (RTC) of Manila to show cause
why he should not be punished for contempt of court for shouting invectives at the opposing
counsel and harassing his witness. Assuming that there was sufficient cause or ground, may
Judge H suspend Atty. D from the practice of law? If Judge H finds that the actuations of Atty.
D are grossly unethical and unbecoming of a member of the bar, may Judge H disbar Atty. D
instead? Explain your answer. (5%)

SUGGESTED ANSWER:

Judge H can suspend Atty. D for gross misconduct under Sections 27 and 28, Rule 138 of the
Rules of Court. Judge H, however, cannot disbar Atty. D because it is only the Supreme Court who
can impose such penalty in accordance with its authority under Section 27, Rule 138 of the Rules of
Court and the authority of the Supreme Court to discipline lawyers under the 1987 Constitution.

7. The court ordered Atty. Z to testify as a witness for his client in the very case he is handling,
but he refused on the ground that it would violate the rule on privileged communication. Atty.
Z is guilty of: (1%)

Distinction should be made. If Atty. Z refuses to testify on formal matters, like mailing,
authentication or custody of documents, he can be cited for direct contempt (under Section 1, Rule 71
of the Rules of Court) for refusal to be a witness. However, if the matter to be testified is substantial,
he cannot be guilty of contempt or any violation of his duty to the court, based on Rule 12.08, Code
of Professional Responsibility.

8. C and D are law partners using the firm name C and D Attorneys at Law. In an
administrative case filed against C, the Supreme Court (SC) found that C was not entitled to
admission to the practice of law in the Philippines and ordered his name stricken-off from the
Roll of Attorneys. As a result C and D changed their firm name to Law Office of D Attorney
at Law, C Counselor, with C handling purely counselling and office work while D is the
law practitioner. Are C and D liable for contempt of the court? Explain your answer. (5%)

SUGGESTED ANSWER:

C and D are liable for contempt of court. C and D formed a professional partnership wherein
they contributed money, property and industry. C assumes to be an attorney without any authority. D
not only assist in the illegal practice of law but conspired with C. Canon 9 of the CPR clearly states
that a lawyer shall not, directly or indirectly, assist in the unauthorized practice of law. As counselling
is considered practice of law, D delegated the performance of a legal task to C, an unqualified person.
9. Judge A accepted a gift consisting of assorted canned goods other grocery items from his
compadre whose friend has a pending case with him. He accepted the gift just so as not to
embarrass his compadre. When his compadre left his chambers, he asked his secretary to
donate the gift he received to the victims of Typhoon Yolanda. Did the judge cross the ethical
line? Explain your answer. (5%)

SUGGESTED ANSWER:

Judge A crossed the ethical line. He violated the canon of Propriety. As a subject of public
scrutiny, judges must accept personal restrictions that might be viewed as burdensome by ordinary
citizens and should do so freely and voluntarily. (Section1, Canon 4, New Code of Judicial Conduct
for the Philippine Judiciary).

10. Atty M is a partner in the law firm OMP & Associates. C, a former classmate of Atty. M engaged
the legal services of Atty. M to handle his appeal to the Court of Appeals (CA) from an adverse
decision of the Regional Trial Court (RTC) in his annulment case. After the notice to file brief
was issued by the CA, Atty. M met an accident which incapacitated him from further engaging
law practice. May Atty. P, his partner in the law firm, file the required appeal brief for C? Explain
your answer. (5%)

SUGGESTED ANSWER:

Yes, Atty. P can file the required appeal brief. Atty. P is an associate OMP & Associates.
The law firm which has a legal personality as a professional partnership is the counsel, not Atty. P
or Atty. M.

11. A judge who insults counsel and shouts invectives at a litigant is guilty of: (1%)

The judge is guilty of serious misconduct. Under Canon 4, New Code of Judicial Conduct for
the Philippine Judiciary, a judge shall avoid impropriety and the appearance of impropriety in all his
activities. In the problem, the judge (in his capacity as such) insults a counsel and shouts invectives
at a litigant (not as individuals).

12. A inherited parcel of land situated in Batasan Hills which is occupied by informal settlers. He
wanted to eject the occupants, but he has no financial means to pursue the ejectment case.
He contracted the services of Atty. B, who agreed to defray all the expenses of the suit on the
condition that he will be paid one-half () of the property to be recovered as his compensation.
What is this kind of attorneys fees? Can Atty. B enforce this contract against A?

What are the respective remedies relative to the collection of attorneys fees, if any, of A and
Atty. B against each other? (5%)

SUGGESTED ANSWER:

This is a champertous contract and not a contingent contract. In the problem, Atty. B defrays
all the expenses for litigation and gets 50% of the property to be recovered as his compensation, which
the characterstics of a champertous; hence, void for being contrary to public policy. The legal
profession exists to serve the ends of justice and is not to be conducted as a business enterprise.
Since the contract is void, Atty. B cannot enforce it against A but A has a cause of action against Atty.
B for unethical conduct.

13. M engaged the services of Atty. D to prosecute his annulment of marriage case in the Regional
Trial Court (RTC). After a long-drawn trial, Atty. D was able to secure a favourable judgment
from the court. Unfortunately, M has failed to pay in full the stipulated attorneys fees of Atty.
D. How can Atty. D collect his fees from M? Discuss fully. (4%)

SUGGESTED ANSWER:

D can exercise the remedy of retaining lien over the documents and other pieces of evidence
which have lawfully come to his possession, under Sec. 37, Rule 138 of the Revised Rules of Court.
The payment of attorney's fee is based on the services rendered and not dependent on the success
or failure of the case.

14. A person named and appointed by the court to defend an absentee defendant in the suit in
which the appointment is made is an: (1%)

(a) attorney-in-fact
(b) attorney ad hoc
(c) attorney de oficio

15. Will a lawyer violate the Code of Professional Responsibility if he forms a partnership with
professionals of other disciplines like doctors, engineers, architects or accountants? Explain
your answer. (4%)

SUGGESTED ANSWER:

Yes, the Code of Professional Responsibility prohibits unauthorized practice of law so that
lawyers cannot directly or indirectly assist said practice, or delegate its practice to one who is not
qualified to do so. In partnership, the act of a partner is the act of the partnership; hence, a non-lawyer
cannot perform an act that has a legal effect and in the name of the partnership.

16. A person who has been refused admission to the bar by order of the Supreme Court but
nonetheless attempts to practice law is guilty of: (1%)
(a) direct contempt
(b) indirect contempt
(c) criminal attempt

17. Judge Clint Braso is hearing a case between Mr. Timothy and Khristopher Company, a
company where his wife used to work as one of its Junior Executives for several years.
Doubting the impartiality of the Judge, Mr. Timothy filed a motion to inhibit Judge Clint Braso.
Judge Clint Braso refused on the ground that his wife has long resigned from the company.
Decide. (4%)
SUGGESTED ANSWER:

The matter of inhibition is addressed to the judicious discretion of the judge; hence, only he
can examine is his conscience if he can answer to the call of cold neutrality.

18. The Integrated Bar of the Philippines (IBP) may intervene in a case involving a matter of public
law or professional concern as: (1%)

(a) friend of the court


(b) amicus par excellence
(c) amicus curiae

19. After the pre-trial of a civil case for replevin, Judge D advised Bs counsel to settle the case
because according to Judge D, his initial assessment of the case shows that Bs evidence is
weak. (4%)

(a) Did Judge D commit an act of impropriety? Explain


(b) What remedy or remedies may be taken by Bs lawyer against Judge D? Discuss Fully.

SUGGESTED ANSWER:

(A) Yes, Judge D violated Canon 3, Impartiality, New Code of Judicial Conduct for the
Philippine Judiciary. He should not make any comment that might reasonably be expected the effect
the outcome of the proceedings or impair the manifest fairness of the process.
(B) B's lawyer can file a motion for the disqualification of the judge under Canon 3 for bias or
prejudice based on the appearance of the comment to a reasonable observer. A pre-trial is not yet
the complete and exhaustive presentation of evidence of the parties.

20. B hired Atty. Z to file a replevin case against C for an agreed acceptance fee of P30,000.00
which was evidence by a written contract. After the complaint was filed by Atty. Z, B terminated
this services and hire a new lawyer for the same amount of attorneys fees. How much
attorneys fees is Atty. Z entitled to? (4%)

SUGGESTED ANSWER:

Under Section 26, Rule 138, Atty. Z is entitled to the full amount, if his dismissal is without
justifiable cause.

21. Justice B of the Court of Appeals (CA) was a former Regional Trial Court (RTC) Judge. A case
which he heard as a trial judge was raffled off to him. The appellant sought his disqualification
from the case but he refused on the ground that he was not the judge who decided the case
as he was already promoted to the appellate court before he could decide the case. Was the
refusal of Justice B to recuse from the case proper? Explain your answer. (5%)

SUGGESTED ANSWER:
Justice B's refusal to recuse is not proper. After hearing the evidence during the trial when he
was still a judge, he has personal knowledge of the disputed evidentiary facts concerning the
proceedings. The standard under the New Code of Judicial Conduct on the inability of Justice B to
decide the matter impartially is not in him but the appearance of the disqualification of Justice D to a
reasonable observer that he is unable to decide the matter impartially. The conduct of a judge/justice
should not only be above reproach but it should be also perceived to be so in the view of a reasonable
observer (Canon 2, Integrity, New Code of Judicial Conduct).

22. (A) May a lawyer collect fees for services rendered to his client despite the absence of an
agreement to pay attorneys fees?
(B) In the absence of a contract for the payment of attorneys fees, what factor/s may be
considered in fixing the amount of attorneys fees?

SUGGESTED ANSWER:

(A) Yes, it is based on quantum meruit but it can be tempered by the court if it is
unconscionable.
(B) Under Canon 20.01 of the CPR, the following factors are considered:

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;
f) The customary charges for similar services and the schedule of fees of the IBP
chapter to which he belongs;
g) The amount involved in the controversy and the benefits resulting to the client
form the service;
h)The contingency or certainty of compensation;
i) The character of the employment, whether occasional or established; and
j) The professional standing of the lawyer.

23. (A) May a client hire additional counsel as collaborating counsel over and above the objection
of the original counsel?
(B) If the client insists, may the original counsel withdraw from the case, and how?

SUGGESTED ANSWER:

(A) a client may hire additional counsel as collaborating counsel because it is his (client)
prerogative.

(B) The original counsel may withdraw based on Rule 22.01 (c), CPR because his inability to
work with the collaborating counsel will not promote the best interest of the client.

24. (A) May an attorney talk to his witnesses before and during the trial? Explain.
(B) In case of postponement of the trial, whose decision should prevail the client or his
attorney? Explain the governing rule. (4%)
SUGGESTED ANSWER:
(A) an attorney can talk with his witnesses before the trial but it is unethical to do so if the client
is already on the witness stand during the trial.
(B). On matters of legal procedure, it is the decision of the lawyer that prevails.

25. Judge A has an illicit relationship with B, his Branch Clerk of Court. C, the wife of Judge A,
discovered the illicit affair and consulted a lawyer to vindicate her violated marital rights. If you
were that lawyer, what would you advice C, and if she agrees and asks you to proceed to take
action, what is the legal procedure that you should follow? Discuss fully. (4%)

SUGGESTED ANSWER:
File a case of immorality against Judge A and the clerk of court for violation or Rule 1.01, CPR;
impropriety under Canon 4 of the New Code of Judicial Conduct against Judge A; and invoke the
automatic conversion of the administrative case against Judge A and the clerk of court as members
of the bar under A.M. No. 02-9-02-SC, with the Office of the Court Administrator. Complaint for
disbarment against Judge A and the clerk of court may also be filed. (This is without prejudice to the
filing of criminal and civil cases).

26. (A) If an attorney has been granted by his client full authority to enter into an amicable
settlement with the other party, may the client later on refuse to honor the amicable settlement
forged by this attorney? Explain.
(B) In such instance as in (A) above, can the lawyer withdraw from the case and collect in full
his contracted attorneys fees? Why or why not?

SUGGESTED ANSWER:
(A) The client cannot refuse to honor the amicable settlement. Since the lawyer is clothed with the
proper authority, the amicable settlement is in the form of compromise agreement which is immediately
executory under the New Civil Code. The client is now estopped from denying the authority of his
lawyer.
(B) Under Section 26, Rule 138 of the Rules of Court, the lawyer can withdraw from the case
and collect in full his contracted attorney's fee since his duty to his client has already concluded with
the execution of the amicable settlement.

27. Atty. C was hired by D to file an action against E for recovery of possession of real property.
In their contract of service, they stipulated that D cannot compromise the case without the
consent of Atty. C. After trial and unknown to Atty. C, D entered into a compromise with E.
Atty. C withdrew from the case and collected from D. (1%)

(A) Atty. C can collect his attorney's fees under the contract based on Section 26, Rule 138 of
the Rules of Court. The act done by D is without justifiable cause.

28. Atty. Forma is a member of the Philippine Bar. He went to New York City, took the New York
State Bar, and passed the same. He then practice in New York City. One of his American
clients filed a case for disbarment against him for pocketing the money which was entrusted
to him as payment for the filing fee and other incidental expenses for his damage suit. Atty.
Forma was later disbarred for dishonesty. Disheartened, Atty. Forma came back to the
Philippines and practiced as a lawyer. Will his disbarment in New York be used against him
for purposes of disbarment proceeding here in the Philippines?

SUGGESTED ANSWER:

Yes, his disbarment in New York can be used against him but he should be accorded due
process.

29. If a lawyer volunteers his free legal service to a poor client. (1%)

(B) Under Canon 14.04 of the CPR, he is bound to serve his client with same degree of
competence, fidelity and diligence as his paying client. The legal profession is not a business
enterprise but a profession to serve the ends of justice.

30. (A) Can a lawyer who lacks the number of units required by the Mandatory Continuing Legal
Education (MCLE) Board continue to practice his profession?
(B) May a lawyer be held liable for damages by his clients for the lawyers failure to file the
necessary pleadings to prosecute the clients case and as a result of which the client suffered
damages?
(C) Can a lawyer still practice his profession despite having arrears in his Integrated Bar of the
Philippines (IBP) dues?

SUGGESTED ANSWER:

(A) A lawyer who lacks the number of units required by MCLE cannot continue to practice the
legal profession since he is declared as a delinquent member of the bar per Resolution of the Supreme
Court dated January 14, 2014, revoking OCA Circular No. 66-2008.
(B) Yes, lawyer may be held for damages by his client for failure to represent his client with
zeal (Canon 19, CPR) and for not serving his client with competence and diligence (Canon 18, CPR).
(C) Arrears in the IBP may be a ground to suspend the lawyer upon recommendation by the IBP to
the Suprme Court.