BAR EXAMINATION 2013

POLITICAL AND INTERNATIONAL LAW

ESSAY QUESTIONS

I.

In the last quarter of 2012, about 5,000 container vans of imported goods intended
for the Christmas Season were seized by agents of the Bureau of Customs. The
imported goods were released only on January 10,2013. A group of importers got
together and filed an action for damages before the Regional Trial Court of Manila
against the Department of Finance and the Bureau of Customs.

The Bureau of Customs raised the defense of immunity from suit and, alternatively,
that liability should lie with XYZ Corp. which the Bureau had contracted for the lease
of ten (10) high powered van cranes but delivered only five (5) of these cranes, thus
causing the delay in its cargo-handling operations. It appears that the Bureau,
despite demand, did not pay XYZ Corp. the Php 1.0 Million deposit and advance
rental required under their contract.

(A) Will the action by the group of importers prosper? (5%)

(B) Can XYZ Corp. sue the Bureau of Customs to collect rentals for the delivered
cranes? (5'%)

II.

While Congress was in session, the President appointed eight acting Secretaries. A
group of Senators from the minority bloc questioned the validity of the appointments
in a petition before the Supreme Court on the ground that while Congress is in
session, no appointment that requires confirmation by the Commission on
Appointments, can be made without the latter's consent, and that an undersecretary
should instead be designated as Acting Secretary.

Should the petition be granted? (5%)

III.

A robbery with homicide had taken place and Lito, Badong and Rolliewere invited for
questioning based on the information furnished by a neighbor that he saw them
come out of the victim's house at about the time of the robbery/killing. The police
confronted the three with this and other information they had gathered, and
pointedly accused them of committing the crime.

Lito initially resisted, but eventually broke down and admitted his participation in the
crime. Elated by this break and desirous of securing a written confession soonest, the
police called City Attorney Juan Buan to serve as the trio's counsel and to advise
them about their rights during the investigation.

Badong and Rollie, weakened in spirit by Lito's early admission, likewise admitted
their participation. The trio thus signed a joint extra-judicial confession which served
as the main evidence against them at their trial. They were convicted based on their
confession.
Should the judgment of conviction be affirmed or reversed on appeal? (5%)

IV.

Congress enacted a law providing for trial by jury for those charged with crimes or
offenses punishable by reclusion perpetua or life imprisonment. The law provides for
the qualifications of members of the jury, the guidelines for the bar and bench for
their selection, the manner a trial by jury shall operate, and the procedures to be
followed.

Is the law constitutional? (6%)

V.

As a leading member of the Lapiang Mandirigma in the House of Representatives,

you were tasked by the party to initiate the moves to impeach the President because
he entered into an executive agreement with the US Ambassador for the use of the
former Subic Naval Base by the US Navy, for free, i.e., without need to pay rent nor
any kind of fees as a show of goodwill to the U.S. because of the continuing
harmonious RP-US relations.

Cite at least two (2) grounds for impeachment and explain why you chose them. (6%)

VI.

Congress passed Republic Act No. 7711 to comply with the United Nations
Convention on the Law of the Sea.

In a petition filed with the Supreme Court, Anak Ti Ilocos, an association of Ilocano
professionals, argued that Republic Act No. 7711discarded the definition of the
Philippine territory under the Treaty of Paris and in related treaties; excluded the
Kalayaan Islands and the Scarborough Shoals from the Philippine Archipelagic
baselines; and converted internal waters into archipelagic waters.

Is the petition meritorious? (6%)

VII.

As he was entering a bar, Arnold -who was holding an unlit cigarette in his right hand
-was handed a match box by someone standing near the doorway. Arnold
unthinkingly opened the matchbox to light his cigarette and as he did so, a sprinkle
of dried leaves fell out, which the guard noticed. The guard immediately frisked
Arnold, grabbed the matchbox, and sniffed its contents. After confirming that the
matchbox contained marijuana, he immediately arrested Arnold and called in the
police.

At the police station, the guard narrated to the police that he personally caught
Arnold in possession of dried marijuana leaves. Arnold did not contest the guard's
statement; he steadfastly remained silent and refused to give any written statement.
Later in court, the guard testified and narrated the statements he gave the police
over Arnold's counsel's objections. While Arnold presented his own witnesses to prove
that his possession and apprehension had been set-up, he himself did not testify.
The court convicted Arnold, relying largely on his admission of the charge by silence
at the police investigation and during trial.

From the constitutional law perspective, was the court correct in its ruling? (6%)

VIII.

Bobby, an incoming third year college student, was denied admission by his
university, a premiere educational institution in Manila, after he failed in three (3)
major subjects in his sophomore year. The denial of admission was based on the
university's rules and admission policies.

Unable to cope with the depression that his non-admission triggered, Bobby
committed suicide. His family sued the school for damages, citing the school's grossly
unreasonable rules that resulted in the denial of admission. They argued that these
rules violated Bobby's human rights and the priority consideration that the
Constitution gives to the education of the youth.

You are counsel for the university. Explain your arguments in support of the
university's case. (6%)

IX.

Conrad is widely known in the neighborhood as a drug addict. He is also suspected of

being a member of the notorious "Akyat-Condo Gang" that has previously broken into
and looted condominium units in the area.

Retired Army Colonel Sangre who is known as an anti-terrorism fighter who

disdained human and constitutional rights and has been nicknamed "terror of
Mindanao" is now the Head of Security of Capricorn Land Corporation, the owner and
developer of Sagittarius Estates where a series of robberies has recently taken place.

On March l, 2013, Conrad informed his mother, Vannie, that uniformed security
guards had invited him for a talk in their office but he refused to come. Later that
day, however, Conrad appeared to have relented; he was seen walking into the
security office flanked by two security guards. Nobody saw him leave the office
afterwards.

Conrad did not go home that night and was never seen again. The following week
and after a week-long search, Vannie feared the worst because of Col. Sangre's
reputation. She thus reported Conrad's disappearance to the police. When nothing
concrete resulted from the police investigation, Vannie at the advice of counsel -
f1led a petition for a writ of amparo to compel Col. Sangre and the Sagittarius
Security Office to produce Conrad and to hold them liable and responsible for
Conrad's disappearance.

(A) Did Vannie's counsel give the correct legal advice? (6%)

(B) If the petition would prosper, can Col. Sangre be held liable and/or responsible for
Conrad's disappearance? (6%)

X.
The Ambassador of the Republic of Kafiristan referred to you for handling, the case of
the Embassy's Maintenance Agreement with CBM, a private domestic company
engaged in maintenance work. The Agreement binds CBM, for a defined fee, to
maintain the Embassy's elevators, air-conditioning units and electrical facilities.
Section 10 of the Agreement provides that the Agreement shall be governed by
Philippine laws and that any legal action shall be brought before the proper court of
Makati. Kafiristan terminated the Agreement because CBM allegedly did not comply
with their agreed maintenance standards.

CBM contested the tennination and filed a complaint againstKafiristan before the
Regional Trial Court of Makati. The Ambassador wants you to file a motion to dismiss
on the ground of state immunity from suit and to oppose the position that under
Section 10 of the Agreement, Kafiristan expressly waives its immunity from suit.

Under these facts, can the Embassy successfully invoke immunity from suit? (6%)

XI.

In her interview before the Judicial and Bar Council (JBC),Commissioner Annie
Amorsolo of the National Labor Relations Commission claims that she should be given
credit for judicial service because as NLRC Commissioner, she has the rank of a
Justice of the Court of Appeals; she adjudicates cases that are appealable to the
Court of Appeals; she is assigned car plate No. 10; and she is, by law, entitled to the
rank, benefits and privileges of a Court of Appeals Justice.

If you are a member of the JBC, would you give credit to this explanation? (6%)

XII.

In the May 2013 elections, the Allied Workers' Group of the Philippines (AWGP),
representing land-based and sea-based workers in the Philippines and overseas, won
in the party list congressional elections. Atty. Abling, a labor lawyer, is its nominee.

As part of the party's advocacy and services, Congressman Abling engages in labor
counseling, particularly for local workers with claims against their employers and for
those who need representation in collective bargaining negotiations with employers.
When labor cases arise, AWGP enters its appearance in representation of the workers
and the Congressman makes it a point to be there to accompany the workers,
although a retained counsel also formally enters his appearance and is invariably
there. Congressman Abling largely takes a passive role in the proceedings although
he occasionally speaks to supplement the retained counsel's statements. It is
otherwise in CBA negotiations where he actively participates.

Management lawyers, feeling that a congressman should not actively participate in

cases before labor tribunals and before employers because of the influence a
congressman can wield, filed a disbarment case against the Congressman before the
Supreme Court for his violation of the Code of Professional Responsibility and for
breach of trust, in relation particularly with the prohibitions on legislators under the
Constitution.

Is the cited ground for disbarment meritorious? (6%)

MULTIPLE CHOICE QUESTIONS

I. The equal protection clause is violated by __________. (1%)

(A) a law prohibiting motorcycles from plying on limited access highways.

(B) a law granting Value Added Tax exemption to electric cooperatives that sells
electricity to the "homeless poor."

(C) a law providing that a policeman shall be preventively suspended until the
termination of a criminal case against him.

(D) a law providing higher salaries to teachers in public schools who are "foreign
hires."

(E) a law that grants rights to local Filipino workers but denies the same rights to
overseas Filipino workers.

II. Offended by the President's remarks that the Bureau of Customs is a pit of misfits
and the corrupt, the Bureau of Customs Employees Association composed of 3,000
workers seeks your legal advice on how best to protest what it views to be the
President's baseless remarks.

A prudent legal advice is that __________. (1%)

(A) employees can go on mass leave of absence for one week

(B) employees can march and rally at Mendiola every Monday

(C) employees can barricade the gates of the Port of Manila at South Harbor and call
for the resignation of the incumbent Commissioner of Customs

(D) employees can wear black arm bands and pins with the word "UNFAIR" inscribed

(E) None of the above can legally be done.

III. Congress enacted Republic Act No. 1234 requiring all candidates for public offices
to post an election bond equivalent to the one (1) year salary for the position for
which they are candidates. The bond shall be forfeited if the candidates fail to obtain
at least 10% of the votes cast.

Is Republic Act No. 1234 valid? (1%)

(A) It is valid as the bond is a means of ensuring fair, honest, peaceful and orderly
elections.

(B) It is valid as the bond requirement ensures that only candidates with sufficient
means and who cannot be corrupted, can runfor public office.

(C) It is invalid as the requirement effectively imposes a property qualification to run

for public office.

(D) It is invalid as the amount of the surety bond is excessive and unconscionable.
(E) It is valid because it is a reasonable requirement; the Constitution itself expressly
supports the accountability of public officers.

IV. What is the legal effect of decisions of the International Court of Justice in cases
submitted to it for resolution? (1%)

(A) The decision is binding on other countries in similar situations.

(B) The decision is not binding on any country, even the countries that are parties to
the case.

(C) The decision is binding only on the parties but only with respect to that particular
case.

(D) The decision is not binding on the parties and is only advisory.

(E) The binding effect on the parties depends on their submission agreement.

V. Under the UN Convention on the Law of the Sea, the exclusive economic zone
refers to an area. (1%)

(A) that is at least 100 miles from the baselines from which the outer limit of the
territorial sea is measured

(B) that is at least 200 miles but not to exceed 300 miles from the baselines from
which the outer limit of the territorial sea is measured

(C) beyond and adjacent to a country's territorial sea which cannot go beyond 200
nautical miles from the baselines from which the outer limit of the territorial sea is
measured

(D) that can go beyond 3 nautical miles but cannot extend 300 nautical miles from
the baselines from which the outer limit of the territorial sea is measured

(E) None of the above.

VI. A child born under either the 1973 or the 1987 Constitution, whose father or
mother is a Filipino citizen at the time of his birth, is __________. (1%)

(A) not a Filipino citizen as his father and mother must both be Filipino citizens at the
time of his birth

(B) not a Filipino citizen if his mother is a Filipino citizen but his father is not, at the
time of his birth

(C) a Filipino citizen no matter where he or she may be born

(D) a Filipino citizen provided the child is born in the Philippines

(E) a Filipino citizen if he or she so elects upon reaching the age of 21

VII. Who has control of the expenditure of public funds? (1%)

(A) The Office of the President through the Department of Budget and Management.

(B) The House of Representatives from where all appropriation bills emanate.

(C) The Senate through its Committee on Finance.

(D) The Congress of the Republic of the Philippines.

(E) Both the members of Congress and the President acting jointly, if so provided by
the General Appropriations Act.

VIII. May the power of cities to raise revenues be limited by an executive order of the
President? (1%)

(A) Yes, because local government units are under the administrative control of the
President through the Department of Interior and Local Government.

(B) No, because local government units now enjoy full local fiscal autonomy.

(C) No, because only limitations established by Congress can define and limit the
powers of local governments.

(D) Yes, because the President has the power and authority to impose reasonable
restrictions on the power of cities to raise revenues.

(E) Yes, if so provided in a city's charter.

IX. The provision under the Constitution -that any member who took no part,
dissented, or inhibited from a decision or resolution must state the reason for his
dissent or non-participation - applies __________. (1%)

(A) only to the Supreme Court

(B) to both the Supreme Court and the Court of Appeals

(C) to the Supreme Court, Court of Appeals and the Sandiganbayan

(D) to the Supreme Court, the Court of Appeals, the Sandiganbayan and the Court of
Tax Appeals

(E) to all collegial judicial and quasi-judicial adjudicatory bodies

X. Choose the least accurate statement about the independence guaranteed by the
1987 Constitution to the following constitutional bodies: (1%)

(A) The Constitution guarantees the COMELEC decisional and institutional

independence similar to that granted to theJudiciary.
(B) All bodies labeled as "independent" by the Constitution enjoyfiscal autonomy as
an attribute of their independence.

(C) Not all bodies labeled as "independent" by the Constitution were intended to be
independent from the Executive branch of government.

(D) The Constitution guarantees various degrees of independence from the other
branches of government when it labels bodies as "independent".

(E) The COMELEC, the COA, and the CSC enjoy the same degree of independence.

XI. At the Senate impeachment trial of Justice Pablo P. San Quintin, Hon. Emilio A. Tan,
Congressman and Impeachment Panel Manager, wrote the Supreme Court requesting
that the prosecutors be allowed to examine thecourt records of Stewards Association
of the Philippines, Inc. (SAP!) v. Filipinas Air, et al., G.R. No. 987654, a case that is still
pending. The High Court __________. (1%)

(A) may grant the request by reason of inter-departmental courtesy

(B) may grant the request as the records of the Filipinas Air case are public records

(C) should deny the request since records of cases that are pending for decision are
privileged except only for pleadings, orders and resolutions that are available to the
public

(D) should deny the request because it violates the Court's independence and the
doctrine of separation of powers

(E) should grant the request because of the sui generis nature of the power of
impeachment, provided that the Bill of Rights is not violated

XII. Mr. Sinco sued the government for damages. After trial, the court ruled in his
favor and awarded damages amounting to P50 million against the government. To
satisfy the judgment against the government, which valid option is available to Mr.
Sinco? ( 1%)

(A) Garnish the government funds deposited at the Land Bank.

(B) File a claim with the Commission on Audit (COA) pursuant to Commonwealth Act
327, as amended by Presidential Decree1445.

(C) Make representations with the Congress to appropriate the amount to satisfy the
judgment.

(D) File a petition for mandamus in court to compel Congress to appropriate P50
million to satisfy the judgment.

(E) Proceed to execute the judgment as provided by the Rules of Court because the
State allowed itself to be sued.
XIII. Which of the following provisions of the Constitution does not confer rights that
can be enforced in the courts but only provides guidelines for legislative or executive
action? (l%)

(A) The maintenance of peace and order, the protection of life, liberty, and property,
and promotion of the general welfare are essential for the enjoyment by all the
people of the blessings of democracy.

(B) The State shall give priority to education, science and technology, arts, culture,
and sports to foster patriotism and nationalism, accelerate social progress, and
promote total human liberation and development.

(C) The natural and primary right and duty of parents in the rearing of the youth for
civic efficiency and the development of moral character shall receive the support of
the Government.

(D) The right of the people to information on matters. of public concern shall be
recognized. Access to official records, and to documents and papers pertaining to
official acts, transactions, or decisions, as well as to government research data used
as basis for policy development, shall be afforded the citizen, subject to such
limitations as may be provided by law.

(E) All the above only provide guidelines and are not self-executing.

XIV. The President entered into an executive agreement with Vietnam for the supply
to the Philippines of animal feeds not to exceed 40,000 tons in any one year. The
Association of Animal Feed Sellers of the Philippines questioned the executive
agreement for being contrary to R.A. 462 which prohibits the importation of animal
feeds from Asian countries. Is the challenge correct? (1%)

(A) Yes, the executive agreement is contrary to an existing domestic law.

(B) No, the President is solely in charge of foreign relations and all his actions in this
role form part of the law of the land.

(C) No, international agreements are sui generis and stand independently of our
domestic laws.

(D) Yes, the executive agreement is actually a treaty which does not take effect
without ratification by the Senate.

(E) Yes, the challenge is correct because there is no law empowering the President to
undertake the importation.

XV. The separation of Church and State is most clearly violated when __________. (1%)

(A) the State funds a road project whose effect is to make a church more accessible
to its adherents

(B) the State declares the birthplace of a founder of a religious sect as a national
historical site
(C) the State expropriates church property in order to construct an expressway that,
among others, provides easy access to the Church's main cathedral

(D) the State gives vehicles to bishops to assist them in church-related charitable
projects

(E) the State allows prayers in schools for minor children without securing the prior
consent of their parents

XVI. Patricio was elected member of the House of Representative in the May 2010
Elections. His opponent Jose questioned Patricio's victory before the House of
Representatives Electoral Tribunal and later with the Supreme Court.

In a decision promulgated in November 2011, the Court ruled in Jose's favor; thus,
Patricio was ousted from his seat in Congress. Within a year from that decision, the
President can appoint Patricio __________. (1%)

(A) only as a member of the board of directors of any government owned and
controlled corporation

(B) only as a deputy Ombudsman

(C) only as a Commissioner of the Civil Service Commission

(D) only as Chairman of the Commission on Elections

(E) to any position as no prohibition applies to Patricio

XVII. Senator GSC proposed a bill increasing excise taxes on tobacco and alcohol
products. The generated incremental revenues shall be used for the universal health
care program for all Filipinos and for tobacco farmers' livelihood. After the Senate
passed the bill on third reading, it was transmitted to the House of Representatives
which approved the bill in toto. The President eventually signed it into law. Atty. JFC
filed a petition before the Supreme Court, questioning the constitutionality of the new
law.

Is the law constitutional? (1%)

(A) The law is constitutional because it is for a public purpose and has duly satisfied
the three-readings-on-separate-days rule in both Houses.

(B) The law is unconstitutional because it violates the equal protection clause of the
Constitution; it is limited only to alcohol and liquor products.

(C) It is constitutional because of the Enrolled Bill Theory.

(D) It is constitutional because it is valid in form and substance and complied with the
required lawmaking procedures.(E) None of the above is correct.

XVIII. Which of the following statements is correct? (1%)

(A) The President, with the concurrence of the Monetary Board, can guarantee a
foreign loan on behalf of the Republic of the Philippines.

(B) Congress may, by law, provide limitations on the President's power to contract or
guarantee foreign loans on behalf of the Republic of the Philippines.

(C) In order to be valid and effective, treaties and executive agreements must be
concurred in by at least two-thirds of all the Members of the Senate.

(D) The President shall, at the end of every quarter of the calendar year, submit to
Congress a complete report of the loans contracted or guaranteed by the
Government or government-owned and controlled corporations.

(E) All the above choices are defective in some respects.

XIX. Candida has been administratively charged of immorality for openly living with
Manuel, a married man. Candida argues that her conjugal arrangement with Manuel
fully conforms with their religious beliefs and with the teachings of their church.

In resolving whether Candida should be administratively penalized, which is the best

test to apply? (1%)

(A) Clear and Present Danger Test

(B) Compelling State Interest Test

(C) Balancing of interests Test

(D) Conscientious Objector Test

(E) Dangerous Tendency Test

XX. Rafael questioned the qualifications of Carlos as congressman of the Third District
of Manila on the ground that Carlos is a citizen of the USA. The decision disqualifying
Carlos for being a US citizen came only in March 2010, i.e., after the adjournment of
the session of Congress on the 3'd year of the position's three-year term.

What was Carlos' status during his incumbency as congressman? (1%)

(A) He was a de jure officer, having been duly elected and proclaimed.

(B) He was not a public officer because he effectively was not entitled to be a
congressman.

(C) He was a de jure officer since he completed the service of his term before he was
disqualified.

(D) He was a de facto officer since he had served and was only disqualified later.

(E) He neither possesses de jure nor de facto status as such determination is

pointless.
 -0-0-0-0-

BAR EXAMINATION 2013

LABOR LAW

ESSAY QUESTIONS

I.

Jose and Erica, former sweethearts, both worked as sales representatives for Magna,
a multinational firm engaged in the manufacture and sale of pharmaceutical
products. Although the couple had already broken off their relationship, Jose
continued to have special feelings for Erica.

One afternoon, Jose chanced upon Erica riding in the car of Paolo, a co-employee and
Erica's ardent suitor; the two were on their way back to the office from a sales call on
Silver Drug, a major drug retailer. In a fit of extreme jealousy, Jose rammed Paolo's
car, causing severe injuries to Paolo and Erica. Jose's flare up also caused heavy
damage to the two company-owned cars they were driving.

(A) As lawyer for Magna, advise the company on whether just and valid grounds exist
to dismiss Jose. (4%)

(B) Assuming this time that Magna dismissed Jose from employment for cause and
you are the lawyer of Jose, how would you argue the position that Jose's dismissal
was illegal? (4%)

II.

Gamma Company pays its regular employees P350.00 a day, and houses them in a
dormitory inside its factory compound in Manila. Gamma Company also provides
them with three full meals a day.

In the course of a routine inspection, a Department of Labor and Employment (DOLE)

Inspector noted that the workers' pay is below the prescribed minimum wage of
P426.00 plus P30.00 allowance, and thus required Gamma Company to pay wage
differentials.

Gamma Company denies any liability, explaining that after the market value of the
company-provided board and lodging are added to the employees' P350 cash daily
wage, the employees' effective daily rate would be way above the minimum pay
required by law. The company counsel further points out that the employees are
aware that their food and lodging form part of their salary, and have long accepted
the arrangement.

Is the company's position legally correct?(8%)

 III.

Inter-Garments Co. manufactures garments for export and requires its employees to
render overtime work ranging from two to three hours a day to meet its clients'
deadlines. Since 2009, it has been paying its employees on overtime an additional
35% of their hourly rate for work rendered in excess of their regular eight working
hours.

Due to the slowdown of its export business in 2012, Inter-Garments had to reduce its
overtime work; at the same time, it adjusted the overtime rates so that those who
worked overtime were only paid an additional 25%instead of the previous 35%. To
replace the workers' overtime rate loss, the company granted a one-time 5% across-
the-board wage increase.

Vigilant Union, the rank-and-file bargaining agent, charged the company with Unfair
Labor Practice on the ground that (1) no consultations had been made on who would
render overtime work; and (2) the unilateral overtime pay rate reduction is a violation
of Article 100 (entitled Prohibition Against Elimination or Diminution of Benefits) of
the Labor Code.

Is the union position meritorious? (8%)

IV.

Bobby, who was assigned as company branch accountant in Tarlac where his family
also lives, was dismissed by Theta Company after anomalies in the company's
accounts were discovered in the branch Bobby filed a complaint and was ordered
reinstated with full backwages after the Labor Arbiter found that he had been denied
due process because no investigation actually took place.

Theta Company appealed to the National Labor Relations Commission (NLRC) and at
the same time wrote Bobby, advising him to report to the main company office in
Makati where he would be reinstated pending appeal Bobby refused to comply with
his new assignment because Makati is very far from Tarlac and he cannot bring his
family to live with him due to the higher cost of living in Makati.

(A) Is Bobby's reinstatement pending appeal legally correct? (4%)

(B) Advise Bobby on the best course of action to take under the circumstances. (4%)

V.

Cris filed a complaint for illegal dismissal against Baker Company. The Labor Arbiter
dismissed the complaint but awarded Cris financial assistance. Only the company
appealed from the Labor Arbiter's ruling. It confined its appeal solely to the question
of whether financial assistance could be awarded. The NLRC, instead of ruling solely
on the appealed issue, fully reversed the Labor Arbiter's decision; it found Baker
Company liable for illegal dismissal and ordered the payment of separation pay and
full backwages.

Through a petition for certiorari under Rule 65 of the Rules of Court, Baker Company
challenged the validity of the NLRC ruling. It argued that the NLRC acted with grave
abuse of discretion when it ruled on the illegal dismissal issue, when the only issue
brought on appeal was the legal propriety of the financial assistance award.

Cris countered that under Article 218(c) of the Labor Code, the NLRC has the
authority to "correct, amend, or waive any error, defect or irregularity whether in
substance or in form" in the exercise of its appellate jurisdiction.

Decide the case. (8%)

VI.

Because of the stress in caring for her four (4) growing children, Tammy suffered a
miscarriage late in her pregnancy and had to undergo an operation. In the course of
the operation, her obstetrician further discovered a suspicious-looking mass that
required the subsequent removal of her uterus (hysterectomy). After surgery, her
physician advised Tammy to be on full bed rest for six (6) weeks. Meanwhile, the
biopsy of the sample tissue taken from the mass in Tammy's uterus showed a
beginning malignancy that required an immediate series of chemotherapy once a
week for four (4) weeks.

(A) What benefits can Tammy claim under existing social legislation? (4%)

(B) What can Roger-Tammy's 2nd husband and the father of her two (2) younger
children -claim as benefits under the circumstances? (4%)

VII.

Philippine Electric Company is engaged in electric power generation and distribution.

It is a unionized company with Kilusang Makatao as the union representing its rank-
and-file employees. During the negotiations for their expired collective bargaining
agreement (CBA), the parties duly served their proposals and counter-proposals on
one another. The parties, however, failed to discuss the merits of their proposals and
counter-proposals in any formal negotiation meeting because their talks already
bogged down on the negotiation ground rules, i.e., on the question of how they would
conduct their negotiations, particularly on whether to consider retirement as a
negotiable issue.

Because of the continued impasse, the union went on strike. The Secretary of Labor
and Employment immediately assumed jurisdiction over the dispute to avert
widespread electric power interruption in the country. After extensive discussions and
the filing of position papers (before the National Conciliation and Mediation Board and
before the Secretary himself) on the validity of the union's strike and on the wage
and other economic issues (including the retirement issue), the DOLE Secretary ruled
on the validity of the strike and on the disputed CBA issues, and ordered the parties
to execute a CBA based on his rulings.

Did the Secretary of Labor exceed his jurisdiction when he proceeded to rule on the
parties' CBA positions even though the parties did not fully negotiate on their own?
(8%)

VIII.
After thirty (30) years of service, Beta Company compulsorily retired Albert at age 65
pursuant to the company's Retirement Plan. Albert was duly paid his full retirement
benefits of one (1) month pay for every year of service under the Plan. Thereafter,
out of compassion, the company allowed Albert to continue working and paid him his
old monthly salary rate, but without the allowances that he used to enjoy.

After five (5) years under this arrangement, the company finally severed all
employment relations with Albert; he was declared fully retired in a fitting ceremony
but the company did not give him any further retirement benefits. Albert thought this
treatment unfair as he had rendered full service at his usual hours in the past five (5)
years. Thus, he filed a complaint for the allowances that were not paid to him, and for
retirement benefits for his additional five (5) working years, based either on the
company's Retirement Plan or the Retirement Pay Law, whichever is applicable.

(A) After Albert's retirement at age 65, should he be considered a regular employee
entitled to all his previous salaries and benefits when the company allowed him to
continue working? (4%)

(B) Is he entitled to additional retirement benefits for the additional service he

rendered after age 65? (4%)

IX.

Pablo works as a driver at the National Tire Company (NTC). He is a member of the
Malayang Samahan ng Manggagawa sa NTC, the exclusive rank-and-file collective
bargaining representative in the company. The union has a CBA with NTC which
contains a union security and a check-off clause. The union security clause contains a
maintenance of membership provision that requires all members of the bargaining
unit to maintain their membership in good standing with the union during the term of
the CBA under pain of dismissal. The check-off clause on the other hand authorizes
the company to deduct from union members' salaries defined amounts of union dues
and other fees. Pablo refused to issue an authorization to the company for the check-
off of his dues, maintaining that he will personally remit his dues to the union.

(A) Would the NTC management commit unfair labor practice if it desists from
checking off Pablo's union dues for lack of individual authorization from Pablo? (4%)

(B) Can the union charge Pablo with disloyalty for refusing to allow the check off of
his union dues and, on this basis, ask the company to dismiss him from employment?
(4%)

X.

For ten (10) separate but consecutive yearly contracts, Cesar has been deployed as
an able-bodied seaman by Meritt Shipping, through its local agent, Ace Maritime
Services (agency), in accordance with the 2000Philippine Overseas Employment
Administration Standard Employment Contract (2000 POEA-SEC). Cesar's
employment was also covered by a CBA between the union, AMOSl.JP, and Meritt
Shipping. Both the 2000 POEA-SEC and the CBA commonly provide the same mode
and procedures for claiming disability benefits. Cesar's last contract (for nine months)
expired on July 15, 2013.
Cesar disembarked from the vessel M/V Seven Seas on July 16, 2013as a seaman on
"finished contract". He immediately reported to the agency and complained that he
had been experiencing spells of dizziness, nausea, general weakness, and difficulty in
breathing. The agency referred him to Dr. Sales, a cardio-pulmonary specialist, who
examined and treated him; advised him to take a complete rest for a while; gave him
medications; and declared him fit to resume work as a seaman.

After a month, Cesar went back to the agency to ask for re-deployment. The agency
rejected his application. Cesar responded by demanding total disability benefits
based on the ailments that he developed and suffered while on board Meritt Shipping
vessels. The claim was based on the certification of his physician (internist Dr. Reyes)
that he could no longer undertake sea duties because of the hypertension and
diabetes that afflicted him while serving on Meritt Shipping vessels in the last 10
years. Rejected once again, Cesar filed a complaint for illegal dismissal and the
payment of total permanent disability benefits against the agency and its principal.

Assume that you are the Labor Arbiter deciding the case. Identify the facts and issues
you would consider material in resolving the illegal dismissal and disability complaint.
Explain your choices and their materiality, and resolve the case. (8%)

MULTIPLE CHOICE QUESTIONS

I. The parties to a labor dispute can validly submit to voluntary arbitration _________.
(1%)

(A) any disputed issue they may agree to voluntarily arbitrate

(B) only matters that do not fall within the exclusive jurisdiction of the Labor Arbiter

(C) any disputed issue but only after conciliation at the National Conciliation and
Mediation Board fails

(D) any disputed issue provided that the Labor Arbiter has not assumed jurisdiction
over the case on compulsory arbitration

(E) only matters relating to the interpretation or implementation of a collective

bargaining agreement

II. When there is no recognized collective bargaining agent, can a legitimate labor
organization validly declare a strike against the employer? (1%)

(A) Yes, because the right to strike is guaranteed by the Constitution and cannot be
denied to any group of employees.

(B) No, because only an exclusive bargaining agent may declare a strike against the
employer.

(C) Yes, because the right to strike is a basic human right that the country's
international agreements and the International Labor Organization recognize.

(D) Yes, but only in case of unfair labor practice.

(E) No, in the absence of a recognized bargaining agent, the workers' recourse is to
file a case before the Department of Labor and Employment.

III.

Mr. Del Carmen, unsure if his foray into business (messengerial service catering
purely to law firms) would succeed but intending to go long-term if he hurdles the
first year, opted to open his operations with one-year contracts with two law firms
although he also accepts messengerial service requests from other firms as their
orders come. He started with one permanent secretary and six (6) messengers on a
one-year, fixed-term, contract.

Is the arrangement legal from the perspective of labor standards? (1%)

(A) No, because the arrangement will circumvent worker's right to security of tenure.

(B) No. If allowed, the arrangement will serve as starting point in weakening the
security of tenure guarantee.

(C) Yes, if the messengers are hired through a contractor.

(D) Yes, because the business is temporary and the contracted undertaking is specific
and time-bound.

(E) No, because the fixed term provided is invalid.

IV. Chito was illegally dismissed by DEF Corp. effective at the close of business hours
of December 29, 2009.

IV(1). He can file a complaint for illegal dismissal without any legal bar within
_________. (1%)

(A) three (3) years

(B) four (4) years

(C) five (5) years

(D) six (6) years

(E) ten (10) years

IV(2). If he has money claims against DEF Corp., he can make the claim without any
legal bar within _________. (1%)

(A) three (3) years

(B) four (4) years

(C) five (5) years

(D) six (6) years

(E) ten (10) years

V. After vainly struggling to stay financially afloat for a year, LMN Corp. finally gave
up and closed down its operations after its major creditors filed a petition for LMN's
insolvency and liquidation.

In this situation, LMN's employees are entitled to _________ as separation pay. (1%)

(A) one-half month pay for every year of service

(B) one month pay for every year of service

(C) one-half month pay

(D) one month pay

(E) no separation pay at all

VI. At age 65 and after 20 years of sewing work at home on a piece rate basis for PQR
Garments, a manufacturer-exporter to Hongkong, Aling Nena decided it was time to
retire and to just take it easy.

Is she entitled to retirement pay from PQR? (1%)

(A) Yes, but only to one month pay.

(B) No, because she was not a regular employee.

(C) Yes, at the same rate as regular employees.

(D) No, because retirement pay is deemed included in her contracted per piece pay.

(E) No, because homeworkers are not entitled to retirement pay.

VII. The minimum wage prescribed by law for persons with disability is __________.
(1%)

(A) 50% of the applicable minimum wage

(B) 75% of the applicable minimum wage

(C) 100% of the applicable minimum wage

(D) the wage that the parties agree upon, depending on the capability of the
disabled.

(E) the wage that the parties agree upon, depending on the capability of the disabled,
but not less than 50% of the applicable minimum wage
VIII. What is the financial incentive, if any, granted by law to SPQ Garments whose
cutters and sewers in its garments-for-export operations are80% staffed by deaf and
deaf-mute workers? (1%)

(A) Additional deduction from its gross income equivalent to 25% of amount paid as
salaries to persons with disability.

(B) Additional deduction from its gross income equivalent to 50% of the direct costs
of the construction of facilities for the use of persons with disability.

(C) Additional deduction from its net taxable income equivalent to 5% of its total
payroll

(D) Exemption from real property tax for one (1) year of the property where facilities
for persons with disability have been constructed.

(E) The annual deduction under (A), plus a one-time deduction under (B).

IX. Mr. Ortanez has been in the building construction business for several years. He
asks you, as his new labor counsel, for the rules he must observe in considering
regular employment in the construction industry.

You clarify that an employee, project or non-project, will acquire regular status if
__________. (1%)

(A) he has been continuously employed for more than one year

(B) his contract of employment has been repeatedly renewed, from project to project,
for several years

(C) he performs work necessary and desirable to the business, without a fixed period
and without reference to any specific project or undertaking

(D) he has lived up to the company's regularization standards

(E) All of the above.

X. Samahang Tunay, a union of rank-and-file employees lost in a certification election

at Solam Company and has become a minority union. The majority union now has a
signed CBA with the company and the agreement contains a maintenance of
membership clause.

What can Samahang Tunay still do within the company as a union considering that it
still has members who continue to profess continued loyalty to it? (1%)

(A) It can still represent these members in grievance committee meetings.

(B) It can collect agency fees from its members within the bargaining unit.

(C) It can still demand meetings with the company on company time.
(D) As a legitimate labor organization, it can continue to represent its members on
non-CBA-related matters.

(E) None of the above.

(F) All of the above.

XI. The members of the administrative staff of Zeta, a construction company, enjoy
ten (10) days of vacation leave with pay and ten (10) days of sick leave with pay,
annually. The workers' union, Bukluran, demands that Zeta grant its workers service
incentive leave of five (5) days in compliance with the Labor Code.

Is the union demand meritorious? (1%)

(A) Yes, because non-compliance with the law will result in the diminution of
employee benefits.

(B) Yes, because service incentive leave is a benefit expresslyprovided under and
required by the Labor Code.

(C) No, because Zeta already complies with the law.

(D) No, because service incentive leave is a Labor Code benefit that does not apply in
the construction industry.

(E) Yes, because Labor Code benefits are separate from those voluntarily granted by
the company.

XII. Upon the expiration of the first three (3) years of their CBA, the union and the
company commenced negotiations. The union demanded that the company continue
to honor their 30-day union leave benefit under the CBA. The company refused on
the ground that the CBA had already expired, and the union had already consumed
their union leave under the CBA.

Who is correct? (1%)

(A) The company is correct because the CBA has expired; hence it is no longer bound
to provide union leave.

(B) The company is correct because the union has already consumed the allotted
union leave under the expired CBA.

(C) The union is correct because it is still the bargaining representative for the next
two (2) years.

(D) The union is correct because union leaves are part of the economic terms that
continue to govern until new terms are agreed upon.

(E) They are both wrong.

XIII. Hector, a topnotch Human Resource Specialist who had worked in multinational
firms both in the Philippines and overseas, was recruited by ABC Corp., because of his
impressive credentials. In the course of Hector's employment, the company
management frequently did not follow his recommendations and he felt offended by
this constant rebuff.

Thus, he toyed with the idea of resigning and of asking for the same separation pay
that ABC earlier granted to two (2) department heads when they left the company.

To obtain a legal opinion regarding his options, Hector sent an email to ABC's retained
counsel, requesting for advice on whether the grant by the company of separation
pay to his resigned colleagues has already ripened into a company practice, and
whether he can similarly avail of this benefit if he resigns from his job.

As the company's retained legal counsel, how will you respond to Hector? (1%)

(A) I would advise him to write management directly and inquire about the benefits
he can expect if he resigns.

(B) I would advise him that the previous grant of separation pay to his colleagues
cannot be considered a company practice because several other employees had
resigned and were not given separation pay.

(C) I would advise him to ask for separation pay, not on account of company practice,
but on the basis of discrimination as he is similarly situated as the two resigned
department heads who were paid their separation pay.

(D) I would not give him any legal advice because he is not my client.

(E) I would maintain that his question involves a policy matter beyond the
competence of a legal counsel to give.

XIV. Aleta Quiros was a faculty member at BM Institute, a private educational

institution. She was hired on a year-to-year basis under the probationary employment
period provision of the Manual of Regulations for Private Schools. The terms and
conditions of her engagement were defined under her renewable yearly contract.

For reasons of its own, BM Institute no longer wanted to continue with Aleta's
teaching services. Thus, after the contract for her second year expired, BM Institute
advised Aleta that her contract would no longer be renewed. This advice prompted
Aleta to file a complaint for illegal dismissal against BM Institute.

Will the complaint prosper? (1%)

(A) Yes, because no just or authorized cause existed for the termination of her
probationary employment.

(B) Yes, because under the Labor Code, Aleta became a regular employee after 6
months and she may now only be dismissed for cause.

(C) No, because there was no dismissal to speak of. Her employment was
automatically terminated upon the expiration of her year-to-year fixed term
employment.
(D) No, because BM Institute may dismiss its faculty members at will in the exercise
of its academic freedom.

(E) No, because Aleta was still on probationary employment.

XV. Robert, an employee of ABC Company, is married to Wanda. One day, Wanda
visited the company office with her three (3) emaciated minor children, and narrated
to the Manager that Robert had been squandering his earnings on his mistress,
leaving only a paltry sum for the support of their children. Wanda tearfully pleaded
with the Manager to let her have one half of Robert's pay every payday to ensure that
her children would at least have food on the table. To support her plea, Wanda
presented a Kasulatan signed by Robert giving her one half of his salary, on the
condition that she would not complain if he stayed with his mistress on weekends.

If you were the Manager, would you release one half of Robert's salary to Wanda?
(1%)

(A) No, because an employer is prohibited from interfering with the freedom of its
employees to dispose of heir wages.

(B) Yes, because of Robert's signed authorization to give Wanda one half of his salary.

(C) No, because there is no written authorization for ABC Company to release
Robert's salary to Wanda.

(D) Yes, because it is Robert's duty to financially support his minor children.

(E) No, because Robert's Kasulatan is based on an illegal consideration and is of

doubtful legal validity.

XVI. Ricardo operated a successful Makati seafood restaurant patronized by a large

clientele base for its superb cuisine and impeccable service. Ricardo charged its
clients a 10% service charge and distributed 85% of the collection equally among its
rank-and-file employees, 10% among managerial employees, and 5% as reserve for
losses and break ages. Because of the huge volume of sales, the employees received
sizeable shares in the collected service charges.

As part of his business development efforts, Ricardo opened a branch in Cebu where
he maintained the same practice in the collection and distribution of service charges.
The Cebu branch, however, did not attract the forecasted clientele; hence, the Cebu
employees received lesser service charge benefits than those enjoyed by the Makati-
based employees. As a result, the Cebu branch employees demanded equalization of
benefits and filed a case with the NLRC for discrimination when Ricardo refused their
demand.

XVI(l) Will the case prosper? (1%)

(A) Yes, because the employees are not receiving equal treatment in the distribution
of service charge benefits.
(B) Yes, because the law provides that the 85% employees' share in the service
charge collection should be equally divided among all the employees, in this case,
among the Cebu and Makati employees alike.

(C) No, because the employees in Makati are not similarly situated as the Cebu
employees with respect to cost of living and conditions of work.

(D) No, because the service charge benefit attaches to the outlet where service
charges are earned and should be distributed exclusively among the employees
providing service in the outlet.

(E) No, because the market and the clientele the two branches are serving, are
different.

XVI(2). In order to improve the Cebu service and sales, Ricardo decided to assign
some of its Makati-based employees to Cebu to train Cebu employees and expose
them to the Makati standard of service. A chef and three waiters were assigned to
Cebu for the task. While in Cebu, the assigned personnel shared in the Cebu service
charge collection and thus received service charge benefits lesser than what they
were receiving in Makati.

If you were the lawyer for the assigned personnel, what would you advice them to
do? (1%)

(A) I would advise them to file a complaint for unlawful diminution of service charge
benefits and for payment of differentials.

(B) I would advise them to file a complaint for illegal transfer because work in Cebu is
highly prejudicial to them in terms of convenience and service charge benefits.

(C) I would advise them to file a complaint for discrimination in the grant of service
charge benefits.

(D) I would advise them to accept their Cebu training assignment as an exercise of
the company's management prerogative.

(E) I would advise them to demand the continuation of their Makati-based benefits
and to file a complaint under (B)above if the demand is not heeded.

XVII. Constant Builders, an independent contractor, was charged with illegal dismissal
and non-payment of wages and benefits of ten dismissed employees. The
complainants impleaded as co-respondent Able Company, Constant Builder's
principal in the construction of Able's office building. The complaint demanded that
Constant and Able be held solidarily liable for the payment of their backwages,
separation pay, and all their unpaid wages and benefits.

If the Labor Arbiter rules in favor of the complainants, choose the statement that best
describes the extent of the liabilities of Constant and Able. (1%)

(A) Constant and Able should be held solidarily liable for the unpaid wages and
benefits, as well as backwages and separation pay, based on Article 109 of the Labor
Code which provides that "every employer or indirect employer shall be held
responsible with his contractor or subcontractor for any violation of any provision of
this Code."

(B) Constant and Able should be held solidarily liable for the unpaid wages and
benefits, and should order Constant, as the workers' direct employer, to be solely
liable for the backwages and separation pay.

(C) Constant and Able should be held solidarily liable for the unpaid wages and
benefits and the backwages since these pertain to labor standard benefits for which
the employer and contractor are liable under the law, while Constant alone as the
actual employer - should be ordered to pay the separation pay.

(D) Constant and Able should be held solidarily liable for the unpaid wages and
benefits, and Constant should be held liable for their backwages and separation pay
unless Able is shown to have participated with malice or bad faith in the workers'
dismissal, in which case both should be held solidarily liable.

(E) The above statements are all inaccurate.

XVIII. The Pinagbuklod union filed a Petition for Certification Election, alleging that it
was a legitimate labor organization of the rank-and-file employees of Delta Company.
On Delta's motion, the Med Arbiter dismissed the Petition, based on the finding that
Pinagbuklod was not a legitimate labor union and had no legal personality to file a
Petition for Certification Election because its membership was a mixture of rank-and-
file and supervisory employees.

Is the dismissal of the Petition for Certification Election by the Med-Arbiter proper?
(1%)

(A) Yes, because Article 245 of the Labor Code prohibits supervisory employees from
joining the union of he rank and file employees and provides that a union
representing both rank and file and supervisory employees as members is not a
legitimate labor organization.

(B) No, because the grounds for the dismissal of a petition for certification election do
not include mixed membership in one umon.

(C) No, because a final order of cancellation of union registration is required before a
petition for certification election may be dismissed on the ground of lack of legal
personality of the umon.

(D) No, because Delta Company did not have the legal personality to participate in
the certification election proceedings and to file a motion to dismiss based on the
legitimacy status of the petitioning union.

-0-0-0-
 BAR EXAMINATION 2013
TAXATION LAW

ESSAY QUESTIONS

I.

In its final adjustment return for the 2010 taxable year, ABC Corp. had excess tax
credits arising from its over-withholding of income payments. It opted to carry over
the excess tax credits to the following year. Subsequently, ABC Corp. changed its
mind and applied for a refund of the excess tax credits.

Will the claim for refund prosper? (6%)

II.

A group of philanthropists organized a non-stock, non-profit hospital for charitable

purposes to provide medical services to the poor. The hospital also accepted paying
patients although none of its income accrued to any private individual; all income
were plowed back for the hospital's use and not more than 30% of its funds were
used for administrative purposes.

Is the hospital subject to tax on its income? If it is, at what rate? (6%)

III.

ABC Corporation is registered as a holding company and has an office in the City of
Makati. It has no actual business operations. It invested in another company and its
earnings are limited to dividends from this investment, interests on its bank deposits,
and foreign exchange gains from its foreign currency account. The City of Makati
assessed ABC Corporation as a contractor or one that sells services for a fee. Is the
City of Makati correct? (6%)

IV.

Atty. Gambino is a partner in a general professional partnership. The partnership

computes its gross revenues, claims deductions allowed under the Tax Code, and
distributes the net income to the partners, including Atty. Gambino, in accordance
with its articles of partnership.

In filing his own income tax return, Atty. Gambino claimed deductions that the
partnership did not claim, such as purchase of law books, entertainment expenses,
car insurance and car depreciation. The BIR disallowed the deductions.

Was the BIR correct? (6%)

V.

Mr. Agustin, 75 years old and suffering from an incurable disease, decided to sell for
valuable and sufficient consideration a house and lot to his son. He died one year
later.

In the settlement of Mr. Agustin's estate, the BIR argued that the house and lot were
transferred in contemplation of death and should therefore form part of the gross
estate for estate tax purposes.

Is the BIR correct? (7%)

VI.

On October 15, 2005, ABC Corp. imported 1,000 kilos of steel ingots and paid
customs duties and VAT to the Bureau of Customs on the importation. On February
17, 2009, the Bureau of Customs, citing provisions of the Tariff and Customs Code on
post-audit, investigated and assessed ABC Corp. for deficiency customs duties and
VAT.

Is the Bureau of Customs correct? (7%)

VII.

XYZ Law Offices, a law partnership in the Philippines and a VAT-registered taxpayer,
received a query by e-mail from Gainsburg Corporation, a corporation organized
under the laws of Delaware, but the e-mail came from California where Gainsburg has
an office. Gainsburg has no office in the Philippines and does no business in the
Philippines.

XYZ Law Offices rendered its opinion on the query and billed Gainsburg US$1,000 for
the opinion. Gainsburg remitted its payment through Citibank which converted the
remitted US$1 ,000 to pesos and deposited the converted amount in the XYZ Law
Offices account.
What are the tax implications of the payment to XYZ Law Offices in terms of VAT and
income taxes? (7%)

VIII.

Mr. Amado leased a piece of land owned by the Municipality of Pinagsabitan and built
a warehouse on the property for his business operations. The Municipal Assessor
assessed Mr. Amado for real property taxes on the land and the warehouse. Mr.
Amado objected to the assessment, contending that he should not be asked to pay
realty taxes on the land since it is municipal property.

Was the assessment proper? (5%)

IX.

In the settlement of the estate of Mr. Barbera who died intestate, his wife renounced
her inheritance and her share of the conjugal property in favor of their children. The
BIR determined that there was a taxable gift and thus assessed Mrs. Barbera as a
donor.

Was the BIR correct? (7%)

X.

In 2010, pursuant to a Letter of Authority (LA) issued by the Regional Director, Mr.
Abcede was assessed deficiency income taxes by the BIR for the year 2009. He paid
the deficiency. In 2011, Mr. Abcede received another LA for the same year 2009, this
time from the National Investigation Division, on the ground that Mr. Abcede's 2009
return was fraudulent.

Mr. Abcede contested the LA on the ground that he can only be investigated once in a
taxable year. Decide. (7%)

XI.

In 2000, Mr. Belen bought a residential house and lot for P1,000,000. He used the
property as his and his family's principal residence. It is now year 2013 and he is
thinking of selling the property to buy a new one. He seeks your advice on how much
income tax he would pay if he sells the property. The total zonal value of the property
is P5,000,000 and the fair market value per the tax declaration is P2,500,000. He
intends to sell it forP6,000,000.

What material considerations will you take into account in computing the income tax?
Please explain the legal relevance of each of these considerations. (7%)

XII.

You are the retained tax counsel of ABC Corp. Your client informed you that they have
been directly approached with a proposal by a BIR insider (i.e., a middle rank BIR
official) on the tax matter they have referred to you for handling. The BIR insider's
proposal is to settle the matter by significantly reducing the assessment, but he will
get 50% of the savings arising from the reduced assessment.
What tax, criminal and ethical considerations will you take into account in giving your
advice? Explain the relevance of each of these considerations. (9%)

MULTIPLE CHOICE QUESTIONS

I. ABC Corp. was dissolved and liquidating dividends were declared and paid to the
stockholders.

What tax consequence follows? (1%)

(A) ABC Corp. should deduct a final tax of 10% from the dividends.

(B) The stockholders should declare their gain from their investment and pay income
tax at the ordinary rates.

(C) The dividends are exempt from tax.

(D) ABC Corp. should withhold a 10% creditable tax.

II. MGC Corp. secured an income tax holiday for 5 years as a pioneer industry. On the
fourth year of the tax holiday, MGC Corp. declared and paid cash dividends to its
stockholders, all of whom are individuals.

Are the dividends taxable? (1%)

(A) The dividends are taxable; the tax exemption of MGC Corp. does not extend to its
stockholders.

(B) The dividends are tax exempt because of MGC Corp.'s income tax holiday.

(C) The dividends are taxable if they exceed 50% of MGC Corp.'s retained earnings.

(D) The dividends are exempt if paid before the end of MGC Corp.'s fiscal year.

III. Mr. Alas sells shoes in Makati through a retail store. He pays the VAT on his gross
sales to the BIR and the municipal license tax based on the same gross sales to the
City of Makati. He comes to you for advice because he thinks he is being subjected to
double taxation.

What advice will you give him? (1%)

(A) Yes, there is double taxation and it is oppressive.

(B) The City of Makati does not have this power.

(C) Yes, there is double taxation and this is illegal m the Philippines.

(D) Double taxation is allowed where one tax is imposed by the national government
and the other by the local government.
IV. Congress passed a sin tax law that increased the tax rates on cigarettes by
1,000%. The law was thought to be sufficient to drive many cigarette companies out
of business, and was questioned in court by a cigarette company that would go out of
business because it would not be able to pay the increased tax.

The cigarette company is __________ (1%)

(A) wrong because taxes are the lifeblood of the government

(B) wrong because the law recognizes that the power to tax is the power to destroy

(C) correct because no government can deprive a person of his livelihood

(D) correct because Congress, in this case, exceeded its power to tax

V. Mr. Alvarez is in the retail business. He received a deficiency tax assessment from
the BIR containing only the computation of the deficiency tax and the penalties,
without any explanation of the factual and legal bases for the assessment.

Is the assessment valid? (1%)

(A) The assessment is valid; all that Mr. Alvarez has to know is the amount of the tax.

(B) The assessment is invalid; the law requires a statement of the facts and the law
upon which the assessment is based.

(C) The assessment is valid but Mr. Alvarez can still contest it.

(D) The assessment is invalid because Mr. Alvarez has no way to determine if the
computation is erroneous.

VI. In 2010, Mr. Platon sent his sister Helen $1 ,000 via a telegraphic transfer through
the Bank of PI. The bank's remittance clerk made a mistake and credited Helen with
$1,000,000 which she promptly withdrew. The bank demanded the return of the
mistakenly credited excess, but Helen refused. The BIR entered the picture and
investigated Helen.

Would the BIR be correct if it determines that Helen earned taxable income under
these facts? (1%)

(A) No, she had no income because she had no right to the mistakenly credited funds.

(B) Yes, income is income regardless of the source.

(C) No, it was not her fault that the funds in excess of $1,000 were credited to her.

(D) No, the funds in excess of$1,000 were in effect donated to her.

VII. The municipality of San Isidro passed an ordinance imposing a tax on installation
managers. At that time, there was only one installation manager in the municipality;
thus, only he would be liable for the tax.
Is the law constitutional? (1%)

(A) It is unconstitutional because it clearly discriminates against this person.

(B) It is unconstitutional for lack of legal basis.

(C) It is constitutional as it applies to all persons in that class.

(D) It is constitutional because the power to tax is the power to destroy.

VIII. XYZ Corporation manufactures glass panels and is almost at the point of
insolvency. It has no more cash and all it has are unsold glass panels. It received an
assessment from the BIR for deficiency income taxes. It wants to pay but due to lack
of cash, it seeks permission to pay in kind with glass panels.

Should the BIR grant the requested permission? (1%)

(A) It should grant permission to make payment convenient to taxpayers.

(B) It should not grant permission because a tax is generally a pecuniary burden.

(C) It should grant permission; otherwise, XYZ Corporation would not be able to pay.

(D) It should not grant permission because the government does not have the
storage facilities for glass panels.

IX. Prior to the VAT law, sales of cars were subject to a sales tax but the tax applied
only to the original or the first sale; the second and subsequent sales were not
subject to tax.

Deltoid Motors, Inc. (Deltoid) hit on the idea of setting up a wholly-owned subsidiary,
Gonmad Motors, Inc. (Gonmad), and of selling its assembled cars to Gonmad at a low
price so it would pay a lower tax on the first sale. Gonmad would then sell the cars to
the public at a higher price without paying any sales tax on this subsequent sale.

Characterize the arrangement. (1%)

A. The plan is a legitimate exercise of tax planning and merely takes advantage of a
loophole in the law.

B. The plan is legal because the government collects taxes anyway.

C. The plan is improper; the veil of corporate fiction can be pierced so that the
second sale will be considered the taxable sale.

D. The government must respect Gonmad's separate juridical personality and

Deltoid's taxable sale to it.

X. PRT Corp. purchased a residential house and lot with a swimming pool in an
upscale subdivision and required the company president to stay there without paying
rent; it reasoned out that the company president must maintain a certain image and
be able to entertain guests at the house to promote the company's business. The
company president declared that because they are childless, he and his wife could
very well live in a smaller house.

Was there a taxable fringe benefit? (1%)

(A) There was no taxable fringe benefit since it was for the convenience of the
employer and was necessary for its business.

(B) There was a taxable fringe benefit since the stay at the house was for free.

(C) There was a taxable fringe benefit because the house was very luxurious.

(D) There was no taxable fringe benefit because the company president was only
required to stay there and did not demand free housing.

XI. Taxpayer A was required by the BIR to sign and submit a waiver of the statute of
limitations on the assessment period, to give the BIR more time to complete its
investigation. The BIR accepted the waiver but failed to indicate the date of its
acceptance.

What is the legal status of the waiver? (1%)

(A) The waiver is valid because the date of acceptance is immaterial and
unimportant.

(B) The waiver is invalid; the taxpayer cannot be required to waive the statute of
limitations.

(C) The waiver is invalid; the date of acceptance is crucial in counting the start of the
period of suspension of the prescriptive period.

(D) The waiver is valid, having been accepted by the BIR.

XII. Taxpayer Andy received on January 3, 2010 a preliminary assessment notice

(PAN) from the BIR, stating that he had fifteen (15) days from its receipt to comment
or to file a protest. Eight (8) days later (or on January11, 2010), before he could
comment or file a protest, Andy received the final assessment notice (FAN).

Decide on the validity of the FAN. (1%)

(A) The FAN is invalid; Andy was not given the chance to respond to the PAN, in
violation of his due process rights.

(B) The FAN is invalid for being premature.

(C) The FAN is valid since it was issued before the right to assess prescribed.

(D) The FAN is valid. There is no legal requirement that the FAN should await the
protest to the PAN because protest to the PAN is not mandatory.
XIII. MSI Corp. imports orange and lemon concentrates as raw materials for the fruit
drinks it sells locally. The Bureau of Customs (BOC) imposed a 1% duty rate on the
concentrates. Subsequently, the BOC changed its position and held that the
concentrates should be taxed at 7% duty rate. MSI disagreed with the ruling and
questioned it in the CTA which upheld MSI's position. The Commissioner of Customs
appealed to the CTA en bane without filing a motion for reconsideration.

Resolve the appeal. (1%)

(A) The appeal should be dismissed because a motion for reconsideration is

mandatory.

(B) The appeal should be dismissed for having been filed out of time.

(C) The appeal should be given due course since a motion for reconsideration is a
useless exercise.

(D) The appeal should be upheld to be fair to the government which needs taxes.

XIV. The spouses Jun and Elvira Sandoval purchased a piece of land for P5,000,000
and included their two (2) minor children as co-purchasers in the Deed of Absolute
Sale. The Commissioner of Internal Revenue (CIR) ruled that there was an implied
donation and assessed donors' taxes against the spouses.

Rule on the CIR's action. (1%)

(A) The CIR is wrong; a donation must be express.

(B) The CIR is wrong; financial capacity is not a requirement for a valid sale.

(C) The CIR is correct; the amount involved is huge and ultimately ends up with the
children.

(D) The CIR is correct; there was animus donandi since the children had no financial
capacity to be co-purchasers.

XV. Pheleco is a power generation and distribution company operating mainly from
the City of Taguig. It owns electric poles which it also rents out to other companies
that use poles such as telephone and cable companies. Taguig passed an ordinance
imposing a fee equivalent to 1% of the annual rental for these poles. Pheleco
questioned 'the legality of the ordinance on the ground that it imposes an income tax
which local government units (LGUs) are prohibited from imposing.

Rule on the validity of the ordinance. (1%)

(A) The ordinance is void; the fee is based on rental income and is therefore a tax on
income.

(B) The ordinance is valid as a legitimate exercise of police power to regulate electric
poles.

(C) The ordinance is void; 1% of annual rental is excessive and oppressive.

(D) The ordinance is valid; an LGU may impose a tax on income.

XVI. Aleta sued Boboy for breach of promise to marry. Boboy lost the case and duly
paid the court's award that included, among others, Pl00,000 as moral damages for
the mental anguish Aleta suffered.

Did Aleta earn a taxable income? (1%)

(A) She had a taxable income of P100,000 since income is income from whatever
source.

(B) She had no taxable income because it was a donation.

(C) She had taxable income since she made a profit.

(D) She had no taxable income since moral damages are compensatory.

XVII. Mr. Mayuga donated his residential house and lot to his son and duly paid the
donor's tax. In the Deed of Donation, Mr. Mayuga expressly reserved for himself the
usufruct over the property for as long as he lived.

Describe the donated property from the taxation perspective. (1%)

(A) The property will form part of Mr. Mayuga's gross estate when he dies.

(B) The property will not fom1 part of Mr. Mayuga's gross estate when he dies
because he paid the donor's tax.

(C) The property will form part of Mr. Mayuga's gross estate because he died soon
after the donation.

(D) The property will not form part of Mr. Mayuga's gross estate because it is no
longer his.

XVIII. Mr. Z made an importation which he declared at the Bureau of Customs (BOC)
as "Used Truck Replacement Parts". Upon investigation, the container vans contained
15 units of Porsche and Ferrari cars.

Characterize Mr. Z's action. (1%)

(A) Mr. Z committed smuggling.

(B) Mr. Z did not commit smuggling because he submitted his shipment to BOC
examination.

(C) Mr. Z only made a misdeclaration, but did not commit smuggling.

(D) Mr. Z did not commit smuggling because the shipment has not left the customs
area.
XIX. Mr. A was preparing his income tax return and had some doubt on whether a
commission he earned should be declared for the current year or for the succeeding
year. He sought the opinion of his lawyer who advised him to report the commission
in the succeeding year. He heeded his lawyer's advice and reported the commission
in the succeeding year. The lawyer's advice turned out to be wrong; in Mr. A's petition
against the BIR assessment, the court ruled against Mr. A.

Is Mr. A guilty of fraud? (1%)

(A) Mr. A is not guilty of fraud as he simply followed the advice of his lawyer.

(B) Mr. A is guilty of fraud; he deliberately did not report the commission in the
current year when he should have done so.

(C) Mr. A's lawyer should pay the tax for giving the wrong advice.

(D) Mr. A is guilty for failing to consult his accountant.

XX. The BIR, through the Commissioner, instituted a system requiring taxpayers to
submit to the BIR a summary list of their sales and purchases during the year,
indicating the name of the seller or the buyer and the amount. Based on these lists,
the BIR discovered that in 2004 ABC Corp. purchased from XYZ Corp. goods
worthP5,000,000. XYZ Corp. did not declare these for income tax purposes as its
reported gross sales for 2004was only Pl,000,000.

Which of the following defenses may XYZ Corp. interpose in an assessment against it
by the BIR? (1%)

(A) The BIR has no authority to obtain third party information to assess taxpayers.

(B) The third party information is inadmissible as hearsay evidence.

(C) The system of requiring taxpayers to submit third party information is illegal for
violating the right to privacy.

(D) None of the above.

NOTHING FOLLOWS

0-0-0-
 BAR EXAMINATION 2013
CIVIL LAW

ESSAY QUESTIONS

I.

You are a Family Court judge and before you is a Petition for the Declaration of Nullity
of Marriage (under Article 36 of the Family Code)filed by Maria against Neil. Maria
claims that Neil is psychologically incapacitated to comply with the essential
obligations of marriage because Neil is a drunkard, a womanizer, a gambler, and a
mama's boy- traits that she never knew or saw when Neil was courting her. Although
summoned, Neil did not answer Maria's petition and never appeared in court.

To support her petition, Maria presented three witnesses- herself, Dr. Elsie Chan, and
Ambrosia. Dr. Chan testified on the psychological report on Neil that she prepared.
Since Neil never acknowledged n9r responded to her invitation for interviews, her
report is solely based on her interviews with Maria and the spouses' minor children.
Dr. Chan concluded that Neil is suffering from Narcissistic Personality Disorder, an
ailment that she found to be already present since Neil's early adulthood and one
that is grave and incurable. Maria testified on the specific instances when she found
Neil drunk, with another woman, or squandering the family's resources in a casino.
Ambrosia, the spouses' current household help, corroborated Maria's testimony.

On the basis of the evidence presented, will you grant the petition? (8%)

II.

A collision occurred at an intersection involving a bicycle and a taxicab. Both the

bicycle rider (a businessman then doing his morning exercise) and the taxi driver
claimed that the other was at fault. Based on the police report, the bicycle crossed
the intersection first but the taxicab, crossing at a fast clip from the bicycle's left,
could not brake in time and hit the bicycle's rear wheel, toppling it and throwing the
bicycle rider into the sidewalk 5 meters away.

The bicycle rider suffered a fractured right knee, sustained when he fell on his right
side on the concrete side walk. He was hospitalized and was subsequently operated
on, rendering him immobile for 3 weeks and requiring physical rehabilitation for
another 3 months. In his complaint for damages, the rider prayed for the award
ofP1,000,000 actual damages,P200,000 moral damages, P200,000 exemplary
damages, P1 00,000 nominal damages and P50,000 attorney's fees.

Assuming the police report to be correct and as the lawyer for the bicycle rider, what
evidence (documentary and testimonial) and legal arguments will you present in
court to justify the damages that your client claims? (8%)

III.

Sergio is the registered owner of a 500-square meter land. His friend, Marcelo, who
has long been interested in the property, succeeded in persuading Sergio to sell it to
him. On June 2, 2012, they agreed on the purchase price of P600,000 and that Sergio
would give Marcelo up to June30, 2012 within which to raise the amount. Marcelo, in
a light tone usual between them, said that they should seal their agreement through
a case of Jack Daniels Black and P5,000 "pulutan" money which he immediately
handed to Sergio and which the latter accepted. The friends then sat down and drank
the first bottle from the case of bourbon.

On June 15, 2013, Sergio learned of another buyer, Roberto, who was
offering P800,000 in ready cash for the land. When Roberto confirmed that he could
pay in cash as soon as Sergio could get the documentation ready, Sergio decided to
withdraw his offer to Marcelo, hoping to just explain matters to his friend. Marcelo,
however, objected when the withdrawal was communicated to him, taking the
position that they have a firm and binding agreement that Sergio cannot simply walk
away from because he has an option to buy that is duly supported by a duly accepted
valuable consideration.

(A) Does Marcelo have a cause of action against Sergio? (5%)

(B) Can Sergio claim that whatever they might have agreed upon cannot be enforced
because any agreement relating to the sale of real property must be supported by
evidence in writing and they never reduced their agreement to writing? (3%)
 IV.

Anselmo is the registered owner of a land and a house that his friend Boboy occupied
for a nominal rental and on the condition that Boboy would vacate the property on
demand. With Anselmo's knowledge, Boboy introduced renovations consisting of an
additional bedroom, a covered veranda, and a concrete block fence, at his own
expense.

Subsequently, Anselmo needed the property as his residence and thus asked Boboy
to vacate and turn it over to him. Boboy, despite an extension, failed to vacate the
property, forcing Anselmo to send him a written demand to vacate.

In his own written reply, Boboy signified that he was ready to leave but Anselmo must
first reimburse him the value of the improvements he introduced on the property as
he is a builder in good faith. Anselmo refused, insisting that Boboy cannot ask for
reimbursement as he is a mere lessee. Boboy responded by removing the
improvements and leaving the building in its original state.

(A) Resolve Boboy's claim that as a builder in good faith, he should be reimbursed the
value of the improvements he introduced. (4%)

(B) Can Boboy be held liable for damages for removing the improvements over
Anselmo's objection? (4%)

V.

Josefa executed a deed of donation covering a one-hectare rice land in favor of her
daughter, Jennifer. The deed specifically provides that:

"For and in consideration of he love and service Jennifer has shown and given to me,
I hereby freely, voluntarily and irrevocably donate to her my one-hectare rice land
covered by TCT No. 11550, located in San Fernando, Pampanga. This donation shall
take effect upon my death."

The deed also contained Jennifer's signed acceptance, and an attached notarized
declaration by Josefa and Jennifer that the land will remain in Josefa's possession and
cannot be alienated, encumbered, sold or disposed of while Josefa is still alive.

Advise Jennifer on whether the deed is a donation inter vivos or mortis causa and
explain the reasons supporting your advice. (8%)

VI.

Lito obtained a loan of P1,000,000 from Ferdie, payable within one year. To secure
payment, Lito executed a chattel mortgage on a Toyota Avanza and a real estate
mortgage on a 200-square meter piece of property.

(A) Would it be legally significant - from the point of view of validity and enforceability
- if the loan and the mortgages were in public or private instruments? (6%)

(B) Lito's failure to pay led to the extra-judicial foreclosure of the mortgaged real
property. Within a year from foreclosure, Lito tendered a manager's check to Ferdie to
redeem the property. Ferdie refused to accept payment on the ground that he wanted
payment in cash: the check does not qualify as legal tender and does not include the
interest payment. Is Ferdie's refusal justified? (4%)

VII.

In 2005, Andres built a residential house on a lot whose only access to the national
highway was a pathway crossing Brando's property. Andres and others have been
using this pathway (pathway A) since 1980.

In 2006, Brand0 fenced off his property, thereby blocking Andres' access to the
national highway. Andres demanded that part of the fence be removed to maintain
his old access route to the highway (pathway A), but Brando refused, claiming that
there was another available pathway (pathway B) for ingress and egress to the
highway. Andres countered that pathway B has defects, is circuitous, and is extremely
inconvenient to use.

To settle their dispute, Andres and Brando hired Damian, a geodetic and civil
engineer, to survey and examine the two pathways and the surrounding areas, and to
determine the shortest and the least prejudicial way through the servient estates.
After the survey, the engineer concluded that pathway B is the longer route and will
need improvements and repairs, but will not significantly affect the use of Brando's
property. On the other hand, pathway A that had long been in place, is the shorter
route but would significantly affect the use of Brando's property.

In light of the engineer's findings and the circumstances of the case, resolve the
parties' right of way dispute. (6%)

VIII.

Ciriaco Realty Corporation (CRC) sold to the spouses Del a Cruz a500-square meter
land (Lot A) in Paranaque. The land now has a fair market value of Pl,200,000. CRC
likewise sold to the spouses Rodriguez, a 700-square meter land (Lot B) which is
adjacent to Lot A. Lot B has a present fair market value of P1,500,000.

The spouses Dela Cruz constructed a house on Lot B, relying on there presentation of
the CRC sales agent that it is the property they purchased. Only upon the completion
of their house did the spouses Dela Cruz discover that they had built on Lot B owned
by the spouses Rodriguez, not on Lot A that they purchased. They spent P 1 000,000
for the house.

As their lawyer, advise the spouses Dela Cruz on their rights and obligations under
the given circumstances, and the recourses and options open to them to protect their
interests. (8%)

IX.

Rica petitioned for the annulment of her ten-year old marriage to Richard. Richard
hired Atty. Cruz to represent him in the proceedings. In payment for Atty. Cruz's
acceptance and legal fees, Richard conveyed to Atty. Cruz a parcel of land in Taguig
that he recently purchased with his lotto winnings. The transfer documents were duly
signed and Atty. Cruz immediately took possession by fencing off the property's
entire perimeter.
Desperately needing money to pay for his mounting legal fees and his other needs
and despite the transfer to Atty. Cruz, Richard offered the same parcel of land for sale
to the spouses Garcia. After inspection of the land, the spouses considered it a good
investment and purchased it from Richard. Immediately after the sale, the spouses
Garcia commenced the construction of a three-story building over the land, but they
were prevented from doing this by Atty. Cruz who claimed he has a better right in
light of the prior conveyance in his favor.

Is Atty. Cruz's claim correct? (8%)

X.

Manuel was born on 12 March 1940 in a 1 000-square meter property where he grew
up helping his father, Michael, cultivate the land. Michael has lived on the property
since the land was opened for settlement at about the time of the Commonwealth
government in 193 5, but for some reason never secured any title to the property
other than a tax declaration in his name. He has held the property through the years
in the concept of an owner and his stay was uncontested by others. He has also
conscientiously and continuously paid the realty taxes on the land.

Michael died in 2000 and Manuel - as Michaels only son and heir -now wants to
secure and register title to the land in his own name. He consults you for legal advice
as he wants to perfect his title to the land and secure its registration in his name.

(A) What are the laws that you need to consider in advising Manuel on how he can
perfect his title and register the land in his name? Explain the relevance of these laws
to your projected course of action. (4%)

(B) What do you have to prove to secure Manuel's objectives and what
documentation are necessary? (4%)

MULTIPLE CHOICE QUESTIONS

I. Armand died intestate. His full-blood brothers, Bobby and Conrad, and half-blood
brothers, Danny, Edward and Floro, all predeceased him. The following are the
surviving relatives:

1. Benny and Bonnie, legitimate children of Bobby;

2. Cesar, legitimate child of Conrad;

3. Dante, illegitimate child of Danny;

4. Ernie, adopted child of Edward; and

5. Felix, grandson of Floro.

The net value of Armand's estate is Pl,200,000.

I. (1) How much do Benny and Bonnie stand to inherit by right of representation?
(1%)
(A) P200,000

(B) P300,000

(C) P400,000

(D) P150,000

(E) None of the above.

I. (2) How much is Dante's share in the net estate? (1%)

(A) P150,000.

(B) P200,000.

(C) P300,000.

(D) P400,000.

(E) None of the above.

I. (3) How much is Ernie's share in the net estate . (1%)

(A) P 0.

(B) P400,000.

(C) P150,000.

(D) P200,000.

(E) None of the above.

I. (4) How much is Felix's share in the net estate? (1%)

(A) P400,000.

(B) P150,000.

(C) P300,000.

(D) P0.

(E) None of the above.

II. A, B, C and D are the solidary debtors of X for P40,000. X released D from the
payment of his share of PI 0,000. When the obligation became due and demandable,
C turned out to be insolvent.
Should the share of insolvent debtor C be divided only between the two other
remaining debtors, A and B? (1%)

(A) Yes. Remission of D's share carries with it total extinguishment of his obligation to
the benefit of the solidary debtors.

(B) Yes. The Civil Code recognizes remission as a mode of extinguishing an obligation.
This clearly applies to D.

(C) No. The rule is that gratuitous acts should be restrictively construed, allowing only
the least transmission of rights.

(D) No, as the release of the share of one debtor would then increase the burden of
the other debtors without their consent.

III. Amador obtained a loan of P300,000 from Basilio payable on March25, 2012. As
security for the payment of his loan, Amador constituted a mortgage on his
residential house and lot in Basilio's favor. Cacho, a good friend of Amador,
guaranteed and obligated himself to pay Basilio, in case Amador fails to pay his loan
at maturity.

III. (1) If Amador fails to pay Basilio his loan on March 25, 2012, can Basilio compel
Cacho to pay? (1%)

(A) No, Basilio cannot compel Cacho to pay because as guarantor, Cacho can invoke
the principle of excussion, i.e., all the assets of Basilio must first be exhausted.

(B) No, Basilio cannot compel Cacho to pay because Basilio has not exhausted the
available remedies against Amador.

(C) Yes, Basilio can compel Cacho to pay because the nature of Cacho's undertaking
indicates that he has bound himself solidarily with Amador.

(D) Yes, Basilio can compel Cacho who bound himself to unconditionally pay in case
Amador fails to pay; thus the benefit of excussion will not apply.

III. (2) If Amador sells his residential house and lot to Diego, can Basilio foreclose the
real estate mortgage? (1%)

(A) Yes, Basilio can foreclose the real estate mortgage because real estate mortgage
creates a real right that attaches to the property.

(B) Yes, Basilio can foreclose the real estate mortgage. It is binding upon Diego as the
mortgage is embodied in a public instrument.

(C) No, Basilio cannot foreclose the real estate mortgage. The sale confers ownership
on the buyer, Diego, who must therefore consent.

(D) No, Basilio cannot foreclose the real estate mortgage. To deprive the new owner
of ownership and possession is unjustand inequitable.
IV. Cruz lent Jose his car until Jose finished his Bar exams. Soon after Cruz delivered
the car, Jose brought it to Mitsubishi Cubao for maintenance check up and incurred
costs of P8,000. Seeing the car's peeling and faded paint, Jose also had the car
repainted for P10,000. Answer the two questions below based on these common
facts.

IV. (1) After the bar exams, Cruz asked for the return of his car. Jose said he would
return it as soon as Cruz has reimbursed him for the car maintenance and repainting
costs of P 18,000.

Is Jose's refusal justified? (1%)

(A) No, Jose's refusal is not justified. In this kind of contract, Jose is obliged to pay for
all the expenses incurred for the preservation of the thing loaned.

(B) Yes, Jose's refusal is justified. He is obliged to pay forall the ordinary and
extraordinary expenses, but subject to reimbursement from Cruz.

(C) Yes, Jose's refusal is justified. The principle of unjust enrichment warrants the
reimbursement of Jose's expenses.

(D) No, Jose's refusal is not justified. The expenses he incurred are useful for the
preservation of the thing loaned. It is Jose's obligation to shoulder these useful
expenses.

IV. (2) During the bar exam month, Jose lent the car to his girlfriend, Jolie, who parked
the car at the Mall of Asia's open parking lot, with the ignition key inside the car. Car
thieves broke into and took the car.

Is Jose liable to Cruz for the loss of the car due to Jolie's negligence? (1%)

(A) No, Jose is not liable to Cruz as the loss was not due to his fault or negligence.

(B) No, Jose is not liable to Cruz. In the absence of any prohibition, Jose could lend the
car to Jolie. Since the loss was due to force majeure, neither Jose nor Jolie is liable.

(C) Yes, Jose is liable to Cruz. Since Jose lent the car to Jolie without Cruz's consent,
Jose must bear the consequent loss of the car.

(D) Yes, Jose is liable to Cruz. The contract between them is personal in nature. Jose
can neither lend nor lease the car to a third person.

V. In 2005, L, M, N, 0 and P formed a partnership. L, M and N were capitalist partners

who contributed P500,000 each, while 0, a limited partner, contributed P1 ,000,000. P
joined as an industrial partner, contributing only his services. The Articles of
Partnership, registered with the Securities and Exchange Commission, designated L
and 0 as managing partners; L was liable only to the extent of his capital
contribution; and P was not liable for losses.

In 2006, the partnership earned a net profit of P800,000. In the same year, P
engaged in a different business with the consent of all the partners. However, in
2007, the partnership incurred a net loss of P500,000. In 2008,the partners dissolved
the partnership. The proceeds of the sale of partnership assets were insufficient to
settle its obligation. After liquidation, the partnership had an unpaid liability
ofP300,000.

V. (l) Assuming that the just and equitable share of the industrial partner, P, in the
profit in 2006 amounted to P1 00,000, how much is the share of 0, a limited partner,
in the P800,000 net profit? (1%)

(A) P160,000.

(B) P175,000.

(C) P280,000.

(D) P200,000.

(E) None of the above.

V. (2) In 2007, how much is the share of 0, a limited partner, in the net loss
of P500,000? (1%)

(A) P 0.

(B) P1 00,000.

(C) P125,000.

(D) P200,000.

(E) None of the above.

V. (3) Can the partnership creditors hold L, 0 and Pliable after all the assets of the
partnership are exhausted? (1%)

(A) Yes. The stipulation exempting P from losses is valid only among the partners. L is
liable because the agreement limiting his liability to his capital contribution is not
valid insofar as the creditors are concerned. Having taken part in the management of
the partnership, 0 is liable as capitalist partner.

(B) No. P is not liable because there is a valid stipulation exempting him from losses.
Since the other partners allowed him to engage in an outside business activity, the
stipulation absolving P from liability is valid. For 0, it is basic that a limited partner is
liable only up to the extent of his capital contribution.

(C) Yes. The stipulations exempting P and L from losses are not binding upon the
creditors. 0 is likewise liable because the partnership was not formed in accordance
with the requirements of a limited partnership.

(D) No. The Civil Code allows the partners to stipulate that a partner shall not be
liable for losses. The registration of the Articles of Partnership embodying such
stipulations serves as constructive notice to the partnership creditors.(E) None of the
above is completely accurate.
VI. Gary is a tobacco trader and also a lending investor. He sold tobacco leaves to
Homer for delivery within a month, although the period for delivery was not
guaranteed. Despite Gary's efforts to deliver on time, transportation problems and
government red tape hindered his efforts and he could only deliver after 30 days.
Homer refused to accept the late delivery and to pay on the ground that the agreed
term had not been complied with.

As lending investor, Gary granted a Pl,000,000 loan to Isaac to be paid within two
years from execution of the contract. As security for the loan, Isaac promised to
deliver to Gary his Toyota Innova within seven (7) days, but Isaac failed to do so. Gary
was thus compelled to demand payment for the loan before the end of the agreed
two-year term.

VI. (l) Was Homer justified in refusing to accept the tobacco leaves? (1%)

(A) Yes. Homer was justified in refusing to accept the tobacco leaves. The delivery
was to be made within a month. Gary's promise of delivery on a "best effort" basis
made the delivery uncertain. The term, therefore, was ambiguous.

(B) No. Homer was not justified in refusing to accept the tobacco leaves. He
consented to the terms and conditions of the sale and must abide by it. Obligations
arising from contract have the force of law between the contracting parties.

(C) Yes. Homer was justified in his refusal to accept the delivery. The contract
contemplates an obligation with a term. Since the delivery was made after 30 days,
contrary to the terms agreed upon, Gary could not insist that Homer accept the
tobacco leaves.

(D) No. Homer was not justified in refusing to accept the tobacco leaves. There was
no term in the contract but a mixed condition. The fulfillment of the condition did not
depend purely on Gary's will but on other factors, e.g., the shipping company and the
government. Homer should comply with his obligation.

VI. (2) Can Gary compel Isaac to pay his loan even before the end of the two-year
period? (1%)

(A) Yes, Gary can compel Isaac to immediately pay the loan. Non-compliance with the
promised guaranty or security renders the obligation immediately demandable. Isaac
lost his right to make use of the period.

(B) Yes, Gary can compel Isaac to immediately pay the loan. The delivery of the
Toyota Innova is a condition for the loan. Isaac's failure to deliver the car violated the
condition upon which the loan was granted. It is but fair for Gary to demand
immediate payment.

(C) No, Gary cannot compel Isaac to immediately pay the loan. The delivery of the
car as security for the loan is an accessory contract; the principal contract is still the
P 1,000,000 loan. Thus, Isaac can still make use of the period.

(D) No, Gary cannot compel Isaac to immediately pay the loan. Equity dictates that
Gary should have granted a reasonable extension of time for Isaac to deliver his
Toyota Innova. It would be unfair and burdensome for Isaac to pay the P1,000,000
simply because the promised security was not delivered.
 VII.

Lito was a commercial pilot who flew for Pacific-Micronesian Air. In 1998, he was the
co-pilot of the airline's Flight MA916 that mysteriously disappeared two hours after
take-off from Agana, Guam, presumably over the Pacific Ocean. No trace of the plane
and its 105 passengers and crew was ever found despite diligent search; Lito himself
was never heard of again. Lito left behind his wife, Lita, and their two children.

In 2008, Lita met and and married Jaime. They now have a child of their own.

While on a tour with her former high school classmates in a remote province of China
in 2010, Lita was surprised to see Lito or somebody who looked exactly like him, but
she was sure it was Lito because of the extreme surprise that registered in his face
when he also saw her. Shocked, she immediately fled to her hotel and post haste
returned to the country the next day. Lita now comes to you for legal advice. She
asks you the following questions:

VII. (l) If Lito is alive, what is the status of his marriage to Lita? (1%)

(A) The marriage subsists because the marital bond has not been terminated by
death.

(B) The marriage was terminated when Lita married Jaime.

(C) The marriage subsists because Lita's marriage to Jaime is void.

(D) The marriage is terminated because Lito is presumed dead after his plane has
been missing for more than 4 years.

(E) The marriage can be formally declared terminated if Lito would not resurface.

VII. (2) If Lito is alive, what is the status of Lita's marriage to Jaime? (1%)

(A) The marriage is valid because Lita's marriage to Lito was terminated upon Lito's
disappearance for more than seven years.

(B) The marriage is valid. After an absence of more than 10 years, Lito is already
presumed dead for all purposes.

(C) The marriage is void. Lito's mere absence, however lengthy, is insufficient to
authorize Lita to contract a subsequent marriage.

(D) The marriage is void. If Lito is indeed alive, his marriage to Lita was never
dissolved and they can resume their marital relations at any time.

VIII.

Which of the following actions or defenses are meritorious: (1%)

(A) An action for recovery of downpayment paid under a rescinded oral sale of real
property.
(B) A defense in an action for ejectment that the lessor verbally promised to extend
or renew the lease.

(C) An action for payment of sum of money filed against one who orally promised to
answer another's debt in case the latter defaults.

(D) A defense in an action for damages that the debtor has sufficient, but
unliquidated assets to satisfy the credit acquired when it becomes due.

(E) None of the above.

IX.

Betty entrusted to her agent, Aida, several pieces of jewelry to be sold on

commission with the express obligation to turn over to Betty the proceeds of the sale,
or to return the jewelries if not sold in a month's time. Instead of selling the jewelries,
Aida pawned them with the Tambunting Pawnshop, and used the money for herself.
Aida failed to redeem the pawned jewelries and after a month, Betty discovered what
Aida had done. Betty brought criminal charges which resulted in Aida's conviction for
estafa.

Betty thereafter filed an action against Tambunting Pawnshop for the recovery of the
jewelries. Tambunting raised the defense of ownership, additionally arguing that it is
duly licensed to engage in the pawnshop and lending business, and that it accepted
the mortgage of the jewelry in good faith and in the regular course of its business.

If you were the judge, how will you decide the case? (1%)

(A) I will rule in favor of Betty. My ruling is based on the Civil Code provision that one
who has lost any movable or has been unlawfully deprived thereof may recover it
from the person in possession of the same. Tam bunting's claim of good faith is
inconsequential.

(B) I will rule in favor of Betty. Tambunting's claim of good faith pales into
insignificance in light of the unlawful deprivation of the jewelries. However, equity
dictates that Tambunting must be reimbursed for the pawn value of the jewelries.

(C) I will rule in favor of Tambunting. Its good faith takes precedence over the right of
Betty to recover the jewelries.

(D) I will rule in favor of Tambunting. Good faith is always presumed. Tambunting's
lawful acquisition in the ordinary course of business coupled with good faith gives it
legal right over the jewelries.

X.

Arlene owns a row of apartment houses in Kamuning, Quezon City. She agreed to
lease Apartment No. 1 to Janet for a period of 18 months at the rate of P10,000 per
month. The lease was not covered by any contract. Janet promptly gave Arlene two
(2) months deposit and 18 checks covering the rental payment for 18 months. This
show of good faith prompted Arlene to promise Janet that should Arlene decide to sell
the property, she would give Janet the right of first refusal.
X. (1) Not long after Janet moved in, she received news that her application for a
Master of Laws scholarship at King's College in London had been approved. Since her
acceptance of the scholarship entailed a transfer of residence, Janet asked Arlene to
return the advance rental payments she made. Arlene refused, prompting Janet to file
an action to recover the payments. Arlene filed a motion to dismiss, claiming that the
lease on which the action is based, is unenforceable.

If you were the judge, would you grant Arlene's motion? (1%)

(A) Yes, I will grant the motion because the lease contract between Arlene and Janet
was not in writing, hence, Janet may not enforce any right arising from the same
contract.

(B) No, I will not grant the motion because to allow Arlene to retain the advance
payments would amount to unjust enrichment.

(C) Yes, I will grant the motion because the action for recovery is premature; Janet
should first secure a judicial rescission of the contract of lease.

(D) No. I will not grant the motion because the cause of action does not seek to
enforce any right under the contract of lease.

X. (2)Assume that Janet decided not to accept the scholarship and continued leasing
Apartment No. 1. Midway through the lease period, Arlene decided to sell Apartment
No. 1 to Jun in breach of her promise to Janet to grant her the right of first refusal.
Thus, Janet filed an action seeking the recognition of her right of first refusal, the
payment of damages for the violation of this right, and the rescission of the sale
between Arlene and Jun.

Is Janet's action meritorious? (1%)

(A) Yes, under the Civil Code, a promise to buy and sell a determinate thing is
reciprocally demandable.

(B) No, the promise to buy and sell a determinate thing was not supported by a
consideration.

(C) Yes, Janet's right of first refusal was clearly violated when the property was not
offered for sale to her before it was sold to Jun.

(D) No, a right of first refusal involves an interest over real property that must be
embodied in a written contract to be enforceable.

(E) None of the above.

-0-0-0-
 BAR EXAMINATION 2013
MERCANTILE LAW

ESSAY QUESTIONS

I.

Antonio issued the following instrument:

August 10,2013
Makati City
P100,000.00

Sixty days after date, I promise to pay Bobby or his designated .representative the
sum of ONE HUNDRED THOUSAND PESOS(P 100,000.00) from my BPI Acct. No. 1234
if, by this due date, the sun still sets in the west to usher in the evening and rises in
the east the following morning to welcome the day.

(Sgd.) Antonio Reyes

Explain each requirement of negotiability present or absent in the instrument. (8%)

II.

Benny applied for life insurance for Php 1.5 Million. The insurance company approved
his application and issued an insurance policy effective Nov. 6, 2008. Benny named
his children as his beneficiaries. On April 6, 2010, Benny died of hepatoma, a liver
ailment.

The insurance company denied the children's claim for the proceeds of the insurance
policy on the ground that Benny failed to disclose in his application two previous
consultations with his doctors for diabetes and hypertension, and that he had been
diagnosed to be suffering from hepatoma. The insurance company also rescinded the
policy and refunded the premiums paid.

Was the insurance company correct? (8%)

III.

From his first term in 2007, Congressman Abner has been endorsing his pork barrel
allocations to Twin Rivers in exchange for a commission of 40% of the face value of
the allocation. Twin Rivers is a non-governmental organization whose supporting
papers, after audit, were found by the Commission on Audit to be fictitious. Other
than to prepare and submit falsified papers to support the encashment of the pork
barrel checks, Twin Rivers does not appear to have done anything on the endorsed
projects and Congressman Abner likewise does not appear to have bothered to
monitor the progress of the projects he endorsed. The congressman converted most
of the commissions he generated into US dollars, and deposited these in a foreign
currency account with Banco de Plata (BDP).

Based on amply-supported tips given by a congressman from another political party,

the Anti-Money Laundering Council sent BDP an order: (1) to confirm Cong. Abner's
deposits with the bank and to provide details of these deposits; and (2) to hold all
withdrawals and other transactions involving the congressman's bank accounts.

As counsel for BDP, would you advise the bank to comply with the order? (8%)

IV.

Rudy is a fine arts student in a university. He stays in a boarding house with Bernie as
his roommate. During his free time, Rudy would paint and leave his finished works
lying around the boarding house. One day, Rudy saw one of his works -an abstract
painting entitled Manila Traffic Jam - on display at the university cafeteria. The
cafeteria operator said he purchased the painting from Bernie who represented
himself as its painter and owner.

Rudy and the cafeteria operator immediately confronted Bernie. While admitting that
he did not do the painting, Bernie claimed ownership of its copyright since he had
already registered it in his name with the National Library as provided in the
Intellectual Property Code.

Who owns the copyright to the painting? Explain. (8%)

V.

You are a member of the legal staff of a law firm doing corporate and securities work
for Coco Products Inc., a company with unique products derived from coconuts and
whose shares are traded in the Philippine Stock Exchange. A partner in the law firm,
Atty. Buenexito, to whom you report, is the Corporate Secretary of Coco Products. You
have long been investing in Coco Products stocks even before you became a lawyer.

While working with Atty. Buenexito on another file, he accidentally gave you the Coco
Products file containing the company's planned corporate financial rehabilitation.
While you knew you had the wrong file, your curiosity prevailed and you browsed
through the file before returning it. Thus, you learned that a petition for financial
rehabilitation is imminent, as the company could no longer meet its obligations as
they fell due.

Soon after, your mother is rushed to the hospital for an emergency operation, and
you have to raise money for her hospital bills. An immediate option for you is to sell
your Coco Products shares. The sale would be very timely because the price of the
company's stocks are still high.

Would you sell the shares to raise the needed funds for your mother's hospitalization?
Take into account legal (5%) and ethical (3%) considerations. (8% total points)

VI.

Delano Cruz is in default in the payment of his existing loan from BDP Bank. To
extend and restructure this loan, Delano agreed to execute a trust receipt in the
bank's favor covering the iron pellets Delano imported from China one year earlier.
Delano subsequently succeeded in selling the iron pellets to a smelting plant, but the
proceeds went to the payment of the separation benefits of his employees who were
laid off as he reduced his operations.

When the extended loan period expired without any significant payment from Delano
(not even to the extent of the proceeds of the sale of the iron pellets),BDP Bank
consulted you on how to proceed against Delano. The bank is contemplating the filing
of estafa pursuant to the provisions of Pres. Decree No. 115 (Trust Receipts Law) to
force Delano to tum in at least the proceeds of the sale of the iron pellets.

Would you, as bank counsel and as an officer of the court, advise the bank to proceed
with its contemplated action? (8%)

VII.
Stable Insurance Co. (SIC) and St. Peter Manufacturing Co. (SPMC) have had a long-
standing insurance relationship with each other; SPMC secures the comprehensive
fire insurance on its plant and facilities from SIC. The standing business practice
between them has been to allow SPMC a credit period of 90 days from the renewal of
the policy within which to pay the premium.

Soon after the new policy was issued and before premium payments could be made,
a fire gutted the covered plant and facilities to the ground. The day after the fire,
SPMC issued a manager's check to SIC for the fire insurance premium, for which it
was issued a receipt; a week later SPMC issued its notice of loss.

SIC responded by issuing its own manager's check for the amount of the premiums
SPMC had paid, and denied SPMC's claim on the ground that under the "cash and
carry" principle governing fire insurance, no coverage existed at the time the fire
occurred because the insurance premium had not been paid.

Is SPMC entitled to recover for the loss from SIC? (8%)

VIII.

In the November 2010 stockholders meeting of Greenville Corporation, eight (8)

directors were elected to the board. The directors assumed their posts in January 20
ll. Since no stockholders' meeting was held in November 2011, the eight directors
served in a holdover capacity and thus continued discharging their powers.

In June 2012, two (2) of Greenville Corporation's directors- Director A and Director B
-resigned from the board. Relying on Section 29 of the Corporation Code, the
remaining six (6) directors elected two (2) new directors to fill in the vacancy caused
by the resignation of Directors A and B.

Stockholder X questioned the election of the new directors, initially, through a letter-
complaint addressed to the board, and later (when his letter-complaint went
unheeded), through a derivative suit filed with the court. He claimed that the vacancy
in the board should be filled up by the vote of the stockholders of Greenville
Corporation. Greenville Corporation's directors defended the legality of their action,
claiming as well that Stockholder X's derivative suit was improper.

Rule on the issues raised. (8%)

IX.

Fil-Asia Air Flight 9 I 6 was on a scheduled passenger flight from Manila when it
crashed as it landed at the Cagayan de Oro airport; the pilot miscalculated the
plane's approach and undershot the runway. Of the I 50 people on board, ten (10)
passengers died at the crash scene.

Of the ten who died, one was a passenger who managed to leave the plane but was
run over by an ambulance coming to the rescue. Another was an airline employee
who hitched a free ride to Cagayan de Oro and who was not in the passenger
manifest.

It appears from the Civil Aeronautics Authority investigation that the co-pilot who had
control of the plane's landing had less than the required flying and landing time
experience, and should not have been in control of the plane at the time. He was
allowed to fly as a co-pilot because of the scarcity of pilots - Philippine pilots have
been recruited by foreign airlines under vastly improved flying terms and wages so
that newer and less trained pilots are being locally deployed. The main pilot, on the
other hand, had a very high level of blood alcohol at the time of the crash.

You are part of the team that the victims hired to handle the case for them as a
group. In your case conference, the following questions came up:

(A) Explain the causes of action legally possible under the given facts against the
airline and the pilots; whom will you specifically implead in these causes of action?
(5%)

(B) How will you handle the cases of the passenger run over by the ambulance and
the airline employee allowed to hitch a free ride to Cagayan de Oro? (3%)

X.

Bell Philippines, Inc. (BelPhil) is a public utility company, duly incorporated and
registered with the Securities and Exchange Commission. Its authorized capital stock
consists of voting common shares and non-voting preferred shares, with equal par
values of P100.00/share. Currently, the issued and outstanding capital stock of BelPhil
consists only of common shares shared between Bayani Cruz, a Filipino with 60% of
the issued common shares, and Bernard Fleet, a Canadian, with 40%.

To secure additional working fund, BelPhil issued preferred shares to Bernard Fleet
equivalent to the currently outstanding common shares. A suit was filed questioning
the corporate action on the ground that the foreign equity holdings in the company
would now exceed the 40% foreign equity limit allowed under the Constitution for
public utilities.

Rule on the legality of Bernard Fleet's current holdings. (8%)

MULTIPLE CHOICE QUESTIONS

I. Claude, the registered stockholder of 1 000 shares in ABC Corp., pledged the shares
to Conrad by endorsement in blank of the covering stock certificates and, execution
of a Deed of Assignment of Shares of Stock, intended as collateral for a loan of P1.0
Million that was also supported by a separate promissory note.

I. (1) Under these facts, is there a valid pledge of the shares of stock to Conrad? (1%)

(A) No, because shares of stock are intangible personal properties whose possession
cannot be delivered and, hence, cannot be the subject of a pledge.

(B) No, because the pledge of shares of stock requires double registration with the
Register of Deeds of the principal place of business of the corporation and of the
residence of the pledgor.

(C) Yes, because endorsement and delivery of the certificates of stock is equivalent to
the transfer of possession of the covered shares to the pledgee.
(D) Yes, because the execution of the Deed of Assignment of Shares of Stock is
equivalent to a lawful pledge of the shares of stock.

I. (2) After Claude defaulted on the loan, Conrad sought to have the shares registered
in his name in the books of the corporation. If you are the Corporate Secretary of ABC
Corporation, would you register the shares in the name of Conrad without any written
instruction from Claude? (1%)

(A) Yes, since the endorsement and delivery of the certificates of stock executed by
Claude constitute the legal authority to cancel the shares in his name and to place
them in Conrad's name.

(B) Yes, since the execution of the Deed of Assignment by Claude would constitute
the legal authority to cancel the shares in his name and place them in Conrad's
name.

(C) No, because corporate officers can only take direct instructions from the
registered owners on the proper disposition of shares registered in their names.

(D) No, because the corporation has a primary lien on the shares covering the unpaid
subscription.

II. A foreign delegation of businessmen and investment bankers called on your law
firm to discuss the possibilities of investing in various projects in the Philippines, and
wanted your thoughts on certain issues regarding foreign investments in the
Philippines.

II. (1)The delegation has been told about the Foreign Investments Act of 1991, as
amended (FIA '91), and they asked what exactly is the law's essential thrust
regarding foreign investments in Philippine business and industries.

You replied that FIA '91 essentially reflects __________. (1 %)

(A) the "Filipino First Policy"

(B) the "Foreign Investments Positive Lists" concept

(C) the "Foreign Investments Negative Lists" concept

(D) the "Control Test" concept(E) All of the above.

II. (2)The delegation asked: aside from Filipino ctt1zens, what entities would fall
under the definition of "Philippine National" under FIA '91?

You replied that the definition of "Philippine national" under FIA '91 covers __________.
(1%)

(A) domestic partnerships wholly composed of Filipino citizens

(B) domestic corporations 60% of whose capital stock, outstanding and entitled to
vote, are owned and held by Filipino citizens
(C) foreign corporations considered as doing business in the Philippines under the
Corporation Code, 100% of whose capital stock, outstanding and entitled to vote, are
wholly-owned by Filipino citizens

(D) All of the above, because the law considers the juridical personality, whether
domestic or foreign, as a mere medium; the test of nationality is on the individuals
who control the medium

(E) None of the above, because the term Philippine national can only cover
individuals and not juridical entities.

II. (3) The delegation heard that foreigners can invest up to 100% of the equity in
"export oriented enterprises" and you were asked exactly what the term covers.

You replied that an "export oriented enterprise" under FIA '91 is an enterprise that
__________. (1%)

(A) only engages in the export of goods and services, and does not sell goods or
services to the domestic market

(B) exports consistently at least 40% of its goods or services, and sells at least 60%
of the rest to the domestic market

(C) exports consistently at least 60% of the goods or services produced, and sells at
least 40% of the rest to the domestic market

(D) exports consistently at least 60% of its goods or services produced, and can sell
goods or services to the domestic market

(E) None of the above.

II. (4) As a last question and by way of a concrete example, a delegation member
finally inquired - which of the following corporations or businesses in the Philippines
may it invest in and up to what extent? (1%)

(A) A lifestyle magazine publication corporation, up to 40% equity

(B) An advertising corporation, up to 100% equity

(C) A commercial bank, up to 60o/o equity

(D) A jeepney manufacturing corporation, up to 100% equity

(E) A real estate development corporation, up to 60% equity

III. Dennis subscribed to 10,000 shares of XYZ Corporation with a par value of P100
per share. However, he paid only 25% of the subscription or P250,000.00. No call has
been made on the unpaid subscription.

How many shares is Dennis entitled to vote at the annual meeting of the stockholders
of XYZ? (1%)
(A) 10,000 shares

(B) 2,500 shares

(C) 100 shares

(D) 0 shares

(E) None of the above.

IV. ABC Corp. issued redeemable shares. Under the terms of the issuance, the shares
shall be redeemed at the end of 10 years from date of issuance, at par value plus a
premium of 10%.

Choose the correct statement relating to these redeemable shares. (1%)

(A) ABC Corp. would need unrestricted retained earnings to be able tore deem the
shares.

(B) Corporations are not allowed to issue redeemable shares; thus, the issuance by
ABC Corp. is ultra vires.

(C) Holders of redeemable shares enjoy a preference over creditors.

(D) ABC Corp. may redeem the shares at the end of 10 years without need for
unrestricted retained earnings provided that, after the redemption, there are
sufficient assets to cover its debts.

(E) All of the above are incorrect.

V. Arnold, representing himself as an agent of Brian for the sale of Brian's car,
approached Dennis who appeared interested in buying the car. At Arnold's prodding,
Dennis issued a crossed check payable to Brian for P25,000.00 on the understanding
that the check would only be shown to Brian as evidence of Dennis' good faith and
interest in buying the car. Instead, Arnold used the check to pay for the medical
expenses of his wife in Brian's clinic after Brian, a doctor, treated her.

Is Brian a holder in due course (HI DC)? (1%)

(A) Yes, Brian is a HIDC because he was the payee of the check and he received it for
services rendered.

(B) Yes, Brian is a HIDC because he did not need to go behind the check that was
payable to him.

(C) No, Brian is not a HIDC because Dennis issued the check only asevidence of good
faith and interest in buying the car.

(D) No, Brian is not a HIDC because Brian should have been placed on notice: the
check was crossed in his favor and Arnold was not the drawer.
(E) No, Brian is not a HIDC because the requisite consideration to Dennis was not
present.

VI. Gawsengsit Corp. is a corporation incorporated in Singapore. It invested in

Bumblebee Corp., a Philippine corporation, by acquiring 30% of its shares. As a result,
Gawsengsit Corp. nominated 30o/o of the directors of Bumblebee Corp., all of whom
are Singaporeans and officers of Gawsengsit Corp.

Choose the correct statement relating to Gawsengsit Corp. (1%)

(A) Gawsengsit Corp. is doing business in the Philippines and requires alicense from
the Securities and Exchange Commission (SEC).

(B) Gawsengsit Corp. is not doing business in the Philippines by its mere investment
in a Philippine corporation and does not need a license from the SEC.

(C) Gawsengsit Corp. has to appoint a resident agent in the Philippines.

(D) Gawsengsit Corp. cannot elect directors in Bumblebee Corp.

(E) All the above choices are incorrect.

VII. The BIR assessed ABC Corp. for deficiency income tax for taxable year2010 in the
amount of P26,731,208.00, inclusive of surcharge and penalties.

The BIR can __________. (1%)

(A) run after the directors and officers of ABC Corp. to collect the deficiency tax and
their liability will be solidary

(B) run after the stockholders of ABC Corp. and their liability will be joint

(C) run after the stockholders of ABC Corp. and their liability will be solidary

(D) run after the unpaid subscriptions still due to ABC Corp., if any

(E) None of the above choices is correct.

VIII. Anton imported perfumes from Taiwan and these were released to him by the
bank under a trust receipt. While the perfumes were in Anton's warehouse, thieves
broke in and stole all of them.

Who will shoulder the loss of the stolen perfumes? (1%)

(A) The loss of the perfumes will be borne by the bank in whose behalf the perfumes
were held in trust.

(B) Anton will bear the loss.

(C) The exporter can hold both the bank and Anton liable for the loss.
(D) The exporter from whom Anton bought the perfumes will bear the loss.

(E) No one bears the loss for an unforeseen event.

IX. A bank may acquire real property __________. (1%)

(A) by purchase at a public sale of properties levied to satisfy tax delinquencies

(B) by purchase from a real estate corporation in the ordinary course of the bank's
business

(C) through dacion en pago in satisfaction of a debt in favor of the bank

(D) in exchange for the purchase of shares of stocks of the bank

(E) All of the above.

(F) None of the above.

X. Under the Anti-Money Laundering Act, a depositor's bank account may be frozen
__________. (1%)

(A) by the bank when the account is the subject of a suspicious or covered
transaction report

(B) by the Anti-Money Laundering Council (AMLC) when the account belongs to a
person already convicted of money laundering

(C) by the Regional Trial Court, upon ex parte motion by the AMLC, in a criminal
prosecution for money laundering pending before it

(D) by the Court of Appeals motu proprio in an appeal from a judgment of conviction
of a criminal charge for money laundering

(E) In none of the above.

XI. Unknown to the other four proponents, Enrico (who had been given the task of
attending to the Articles of Incorporation of the proposed corporation, Auto Mo,Ayos
Ko) misappropriated the filing fees and never filed the Articles of Incorporation with
the Securities and Exchange Commission (SEC). Instead, he prepared and presented
to the proposed incorporators a falsified SEC certificate approving the Articles.
Relying on the falsified SEC certificate, the latter began assuming and discharging
corporate powers.

Auto Mo, Ayos Ko is a __________. (1%)

(A) de jure corporation

(B) de facto corporation

(C) corporation by estoppel

(D) general partnership

(E) None of the above.

XII. Preferred shares cannot vote on the proposal __________. (1%)

(A) to include other corporate officers in the corporation's by-laws

(B) to issue corporate bonds

(C) to shorten the corporate term

(D) All of the above.

(E) None of the above.

XIII. In 2010, the Philippine National Police declared Kaddafy Benjelani "Public Enemy
No. 1" because of his terrorist activities in the country that have resulted in the death
of thousands of Filipinos. A ransom of P15 million was placed on Kaddafy Benjelani's
head.

Worried about the future of their family, Kaddafy Benjelani's estranged wife, Aurelia,
secured in December 2010 a life insurance policy on his life and designated herself as
the beneficiary.

Is the policy valid and binding? (1%)

(A) Yes, the policy is valid and binding because Aurelia has an insurable interest on
the life of Kaddafy Benjelani.

(B) No, the policy is not valid and binding because Kaddafy Benjelani has been
officially declared a public enemy.

(C) Yes, the policy is valid and binding because it has been in force for more than two
years.

(D) No, the policy is not valid and binding since the spouses' estrangement removed
Aurelia's insurable interest in Benjelani's life.

(E) None of the above.

XIV. Muebles Classico, Inc. (MC), a Manila-based furniture shop, purchased hardwood
lumber from Surigao Timber, Inc. (STI), a Mindanao-based logging company. MC was
to pay STI the amount of P5.0 million for 50 tons of lumber. To pay STI, MC opened a
letter of credit with Banco de Plata (BDP). BOP duly informed STI of the opening of a
letter of credit in its favor.

In the meantime, MC- which had been undergoing financial reverses- filed a petition
for corporate rehabilitation. The rehabilitation court issued a Stay Order to stay the
enforcement of all claims against MC.
After shipping the lumber, STJ went to BDP, presented the shipping documents, and
demanded payment of the letter of credit opened in its favor. MC, on the other hand,
informed the bank of the Stay Order and instructed it to deny payment to STI
because of the Stay Order. BDP comes to you for advice. Your best advice is to
__________. (1%)

(A) grant STI's claim. Under the "Independence Principle," the bank deals only with
the documents and not the underlying circumstances; hence, the presentation of the
letter of credit is sufficient.

(B) deny STI's claim. The Stay Order covers all claims against the debtor and binds all
its creditors. The letter of credit is a claim against the debtor that is covered by the
Stay Order.

(C) grant STI's claim. The letter of credit is not a claim against the debtor under
rehabilitation, but against the bank which has assumed a solidary obligation.

(D) deny STI's claim. If the bank disregards the Stay Order, it may be subject to
contempt by the rehabilitation court. STI should file its claim with the rehabilitation
court.

(E) file an action for inter pleader to resolve the parties' competing claims.

XV. Akiro of Tokyo, Japan sent various goods to his friend Juan in Cebu City,
Philippines, through one of the vessels of Worth well Shippers, Inc., an American
corporation. En route to Cebu City, the vessel had two stops, first in Hong Kong, and
second, in Manila.

XV. (1) While travelling from Tokyo to Hong Kong, the goods were damaged. What law
will govern? (1%)

(A) Japanese law

(B) Hong Kong law

(C) Chinese law

(D) Philippine law

(E) American law

XV. (2) Assuming Philippine law to be applicable and Juan fails to file a claim with the
carrier, may he still commence an action to recover damages with the court? (1%)

(A) No, the failure to file a claim with the carrier is a condition precedent for recovery.

(B) Yes, provided he files the complaint within 10 years from delivery.

(C) Yes, provided he files the complaint within 10 years from discovery of the
damage.

(D) Yes, provided he files the complaint within 1 year from delivery.
(E) Yes, provided he files the complaint within 1 year from discovery of the damage.

-0-0-0-

BAR EXAMINATION 2013

CRIMINAL LAW

ESSAY QUESTIONS
 I.

Bruno was charged with homicide for killing the 75-year old owner of his rooming
house. The prosecution proved that Bruno stabbed the owner causing his death; and
that the killing happened at 10 in the evening in the house where the victim and
Bruno lived. Bruno, on the other hand, successfully proved that he voluntarily
surrendered to the authorities; that he pleaded guilty to the crime charged; that it
was the victim who first attacked and did so without any provocation on his (Bruno's)
part, but he prevailed because he managed to draw his knife with which he stabbed
the victim. The penalty for homicide is reclusion temporal.

Assuming a judgment of conviction and after considering the attendant

circumstances, what penalty should the judge impose? (7%)

II.

While walking alone on her way home from a party, Mildred was seized at gun point
by Felipe and taken on board a tricycle to a house some distance away. Felipe was
with Julio, Roldan, and Lucio, who drove the tricycle.

At the house, Felipe, Julio, and Roldan succeeded in having sexual intercourse with
Mildred against her will and under the threat of Felipe's gun. Lucio was not around
when the sexual assaults took place as he left after bringing his colleagues and
Mildred to their destination, but he returned everyday to bring food and the news in
town about Mildred's disappearance. For five days, Felipe, Julio and Roldan kept
Mildred in the house and took turns in sexually assaulting her. On the 6th day,
Mildred managed to escape; she proceeded immediately to the nearest police station
and narrated her ordeal.

What crime/s did Felipe, Julio, Roldan, and Lucio commit and what was their degree of
participation? (7%)

III.

Modesto and Abelardo are brothers. Sometime in August, 1998 while Abelardo was in
his office, Modesto, together with two other men in police uniform, came with two
heavy bags. Modesto asked Abelardo to keep the two bags in his vault until he comes
back to get them. When Abelardo later examined the two bags, he saw bundles of
money that, in his rough count, could not be less than P5 Million. He kept the money
inside the vault and soon he heard the news that a gang that included Modesto had
been engaged in bank robberies. Abelardo, unsure of what to do under the
circumstances, kept quiet about the two bags in his vault. Soon after, the police
captured, and secured a confession from, Modesto who admitted that their loot had
been deposited with Abelardo.

What is Abelardo's liability? (7%)

IV.

In her weekly gossip column in a tabloid, Gigi wrote an unflattering article about
Pablo, a famous singer, and his bitter separation from his wife. The article portrayed
Pablo as an abusive husband and caused him to lose lucrative endorsement
contracts. Pablo charged Gigi with libel. In her defense, Gigi countered that she did
not commit libel because Pablo has attained the status of a public figure so that even
his personal life has become a legitimate subject of public interest and comment.

Is Gigi correct? (7%)

V.

Michael was 17 years old when he was charged for violation of Sec. 5 of R.A. 9165
(illegal sale of prohibited drug). By the time he was convicted and sentenced, he was
already 21 years old. The court sentenced him to suffer an indeterminate penalty of
imprisonment of six (6) years and one (1) day of prision mayor, as minimum, to
seventeen (17) years and four(4) months of reclusion temporal, as maximum, and a
fine of P500,000.Michael applied for probation but his application was denied
because the probation law does not apply to drug offenders under R.A. 9165. Michael
then sought the suspension of his sentence under R.A. 9344 or the Juvenile Justice
and Youth Welfare Code.

Can Michael avail of the suspension of his sentence provided under this law? (7%)

VI.

Roberto bought a Toyota Fortuner from I igo for P500,000. While driving his newly-
bought car, Roberto met a minor accident that made the examination of his vehicle's
Registration Certificate necessary. When the policeman checked the plate, chassis
and motor numbers of the vehicle against those reflected in the Registration
Certificate, he found the chassis and motor numbers to be different from what the
Registration Certificate stated. The Deed of Sale covering the sale of the Fortuner,
signed by I igo, also bore the same chassis and motor numbers as Roberto's
Registration Certificate. The chassis and motor numbers on the Fortuner were found,
upon verification with the Land Transportation Office, to correspond to a vehicle
previously reported as carnapped.

Roberto claimed that he was in good faith; I igo sold him a carnapped vehicle and
he did not know that he was buying a carnapped vehicle.

If you were the prosecutor, would you or would you not charge Roberto with a crime?
(7%)

VII.

Miss Reyes, a lady professor, caught Mariano, one of her students, cheating during an
examination. Aside from calling Mariano's attention, she confiscated his examination
booklet and sent him out of the room, causing Mariano extreme embarrassment.

In class the following day, Mariano approached Miss Reyes and without any warning,
slapped her on the face. Mariano would have inflicted grave injuries on Miss Reyes
had not Dencio, another student, intervened. Mariano then turned his ire on Dencio
and punched him repeatedly, causing him injuries.

What crime or crimes, if any, did Mariano commit? (7%)

VIII.
William is the son-in-law of Mercedes who owns several pieces of real property. In
1994, William's wife, Anita, died. In 1996, William caused the preparation of a Special
Power of Attorney (SPA) giving him the authority to sell two (2) parcels of land
registered in the name of Mercedes. The signature of Mercedes in the SPA was forged
and, through this forged SPA and without the consent and knowledge of Mercedes,
William succeeded in selling the two (2) parcels for Php 2,000,000. He pocketed the
proceeds of the sale.

Mercedes eventually discovered William's misdeeds and filed a criminal complaint.

William was subsequently charged with estafa through falsification of public
document.

Was the criminal charge proper? (7%)

IX.

Roman and Wendy are neighbors. On Valentine's Day, without prior notice, Roman
visited Wendy at her condo to invite her to dinner, but Wendy turned him down and
abruptly left, leaving her condo door unlocked. Roman attempted to follow, but
appeared to have second thoughts; he simply went back to Wendy's condo, let
himself in, and waited for her return. On Wendy's arrival later that evening, Roman
grabbed her from behind and, with a knife in hand, forced her to undress. Wendy had
no choice but to comply. Roman then tied Wendy's hands to her bed and sexually
assaulted her five (5) times that night.

Roman was charged with, and was convicted of, five (5) counts of rape, but the judge
did not impose the penalty of reclusion perpetua for each count. Instead, the judge
sentenced Roman to 40 years of imprisonment on the basis of the three-fold rule.

Was the judge correct? (7%)

X.

Frank borrowed P1,000,000 from his brother Eric. To pay the loan, Frank issued a
post-dated check to be presented for payment a month after the transaction. Two
days before maturity, Frank called Eric telling him he had insufficient funds and
requested that the deposit of the check be deferred. Nevertheless, Eric deposited the
check and it was dishonored. When Frank failed to pay despite demand, Eric filed a
complaint against him for violation of Batas Pambansa Big. 22 (The Bouncing Checks
Law).

Was the charge brought against Frank correct? (7%)

XI.

Assume that you are a member of the legal staff of Senator Salcedo who wants to file
a bill about imprisonment at the National Penitentiary in Muntinlupa. He wants to
make the State prison a revenue earner for the country through a law providing for
premium accommodations for prisoners (other than those under maximum security
status) whose wives are allowed conjugal weekend visits, and for those who want
long-term premium accommodations.
For conjugal weekenders, he plans to rent out rooms with hotel-like amenities at rates
equivalent to those charged by 4-star hotels; for long-term occupants, he is prepared
to offer room and board with special meals in air conditioned single-occupancy
rooms, at rates equivalent to those charged by 3-star hotels.

What advice will you give the Senator from the point of view of criminal law, taking
into account the purpose of imprisonment (7%) and considerations of ethics and
morality (3%)? (10% total points)

MULTIPLE CHOICE QUESTIONS

I. The acquittal of an accused shall bar the civil action arising from the crime where
the judgment of acquittal holds that __________. (0.5%)

(A) the acquittal is based on reasonable doubt

(B) the liability of the accused is not criminal but civil in nature

(C) the civil liability does not arise from or is not based on the criminal act for which
the accused has been acquitted

(D) the accused did not commit the act imputed to him

II. Subsidiary liability may be imposed on the following, except __________. (0.5%)

(A) innkeepers, in relation to the crime committed in their establishment

(B) employers engaged in industry, for the crime committed by their employees

(C) parents of minors who act with discernment in committing crimes

(D) hospital administrators or owners, for crimes committed by their hospital nurses

III. Passion or obfuscation may be appreciated __________. (0.5%)

(A) if it arises from jealousy in an amorous relationship between a married man and a
single woman

(B) if it arises from jealousy of a man who has been living-in with the woman for the
past 20 years

(C) if it arises from jealousy with immoral, lustful and vindictive sentiments of the
offender against the victim

(D) in none of the above situations

IV. Who among the following accused is entitled to a privileged mitigating

circumstance that would lower the imposable penalty by one degree? (0.5%)

(A) A minor above 15 years old and below 18 years old who acted with discernment.
(B) One who, in fulfillment of his duty to carry out the warrant of arrest of a fugitive,
shot the fugitive to death without ascertaining his identity.

(C) One who defended himself against an unlawful aggression but used unreasonable
means and gave provocation.

(D) All of the above.

V. Conspiracy to commit a felony is punishable only in cases where the law

specifically provides a penalty. Which of the following combinations contain specific
felonies under the Revised Penal Code? (0.5%)

(A) Conspiracy to commit treason, conspiracy to commit rebellion, conspiracy to

commit coup d'etat, conspiracy to commit misprision of treason.

(B) Conspiracy to commit rebellion, conspiracy to commit coup d'etat, conspiracy to

commit treason, conspiracy to commit sedition.

(C) Conspiracy to commit rebellion or insurrection, conspiracy to commit sedition,

conspiracy to commit illegal assemblies, conspiracy to commit treason.

(D) Conspiracy to commit treason, conspiracy to commit sedition, conspiracy to

commit terrorism.

(E) None of the above.

VI. Choose the correct circumstance when a woman may be held liable for rape:
(0.5%)

(A) With the use of force or intimidation.

(B) When the rape is committed by two or more persons.

(C) When the offender uses an instrument and inserts it m the mouth of the victim.

(D) When she befriends and puts a sleeping pill in the victim's drink to enable her
husband to have intercourse with the victim.

VII. The death of the accused extinguishes his criminal liability but civil liability is not
extinguished. (0.5%)

(A) when the death of the accused occurred before conviction

(B) when the death of the accused occurred after conviction and after he has
perfected his appeal from conviction

(C) when the death of the accused occurred during the pendency of his appeal

(D) when the death of the accused occurred after final judgment

(E) None of the above.

VIII. Compelling the pilot of an aircraft of Philippine Registry to change its destination
is __________. (0.5%)

(A) grave coercion

(B) a violation of the Anti-Hijacking Law or R.A. No. 6235

(C) grave threats

(D) a violation of the Human Security Act of 2007 or the Anti-Terrorism Law

(E) All of the above.

IX. Choose from the list below the correct principle in considering "motive". (0.5%)

(A) If the evidence is merely circumstantial, proof of motive is essential.

(B) Generally, proof of motive is not necessary to pin a crime on the accused if the
commission of the crime has been proven and the evidence of identification is
convincing.

(C) Motive is important to ascertain the truth between two antagonistic theories.

(D) Motive is relevant if the identity of the accused is uncertain.

(E) All of the above are correct.

X. Luis was sentenced to prision mayor and to pay a fine of P50,000, with subsidiary
imprisonment in case of in solvency. Is the sentence correct? (0.5%)

(A) Yes, because Luis has no property to pay for the fine, so he must suffer the
equivalent imprisonment provided by law in lieu of fine.

(B) No, because subsidiary imprisonment is applicable only when the penalty
imposed is prision correccional or below.

(C) Yes, because the sentence says so.

(D) No, because the subsidiary imprisonment is applicable only when the penalty
imposed is limited to a fine.

(E) None of the above.

XI. Anthony drew a promissory note and asked his tem1inally-ill and dying business
partner Ben to sign it. The promissory note bound Ben to pay Anthony One Million
Pesos (P1,000,000) plus 12% interest, on or before June 30, 2011.

If Ben died before the promissory note's due date and Anthony still collected
P1,000,000 with interest from Ben's estate, what crime/s did Anthony commit? (1%)

(A) Falsification of a public document.

(B) Falsification of a private document and estafa.

(C) Estafa.

(D) Estafa thru falsification of a private document.

(E) None of the above.

XII. Out of spite and simply intending to put Gina to shame for breaking off with him,
Ritchie emptied a gallon of motor oil on the school's stairway where Gina usually
passed. Gina, unaware of what Ritchie did, used the slippery stairway and slipped,
hitting her head on the stairs. Gina died from brain hemorrhage.

What crime did Ritchie commit? (1%)

(A) Murder.

(B) Reckless imprudence resulting in homicide.

(C) Homicide.

(D) Impossible crime of homicide.

(E) None.

XIII. Santos was sentenced to suffer imprisonment in three separate judgments: 6

months and 1 day to 4 years for attempted homicide; 6 yearsand1day to 8 years for
frustrated homicide; and 6 years and1day to20years for homicide. After his 20th year
in the National Penitentiary, Santos filed a petition for habeas corpus claiming that he
had fully served his sentence of 20 years and should therefore be immediately
released from imprisonment.

Was Santos correct? (1%)

(A) Yes, because he served his sentences simultaneously so that his 20 years of
incarceration was sufficient.

(B) No, because multiple sentences are served successively not simultaneously.

(C) No, only penalties other than imprisonment can be served simultaneously.

(D) Yes, because after he has served the minimum of his penalties, he can now be
released.

XIV. Amelia, a famous actress, bought the penthouse unit of a posh condominium
building in Taguig City. Every night, Amelia would swim naked in the private, but open
air, pool of her penthouse unit. It must have been obvious to Amelia that she could
be seen from nearby buildings. In fact, some residents occupying the higher floors of
the nearby residential buildings did indeed entertain themselves and their friends by
watching her swim in the nude from their windows.
What crime did Amelia commit? (1%)

(A) Alarms and scandals because her act of sw1mmmg naked disturbs the public
tranquility.

(B) Grave scandal because she committed highly scandalous acts that are offensive
to decency or good customs.

(C) Immoral doctrines, obscene publications and exhibitions, and indecent shows
under Article 201 of the Revised Penal Code, because her act of swimming naked is
akin to an indecent live show.

(D) Amelia did not commit any crime because the swimming pool is located in her
private home.

XV. After drinking a bottle of Jack Daniels, Jonjon drove his BMW sports car at high
speed, rammed into a group of crossing pedestrians, and hit a traffic light post. The
incident caused the death of one (1) pedestrian, serious injuries to three (3) others,
and the destruction of the traffic light post.

If you were the prosecutor, what would you charge Jonjon? (1%)

(A) Homicide with serious physical injuries through simple negligence.

(B) Damage to property, serious physical injuries and homicide through reckless
negligence.

(C) Simple negligence resulting in damage to property, serious physical injuries and
homicide.

(D) Reckless imprudence resulting in homicide, serious physical injuries and damage
to property.

XVI. On June 1, 2011, Efren bought a used top-of-the-line Mercedes Benz for P7.5
Million from Switik Trading. On the same day, he paid P2,500,000 in cash and issued
Switik Trading a check for P5,000,000 dated July 31, 2011. He then brought the car to
a friend's house and hid it in an underground garage. The check Efren issued was
dishonored for insufficiency of funds when presented for payment on due date. Efren
was asked to honor and pay the check or to return the car, but he refused.

What crime/s did Efren commit? (1%)

(A) Carnapping.

(B) Estafa and carnapping.

(C) A violation of BP Blg. 22.

(D) Estafa and a violation of BP Blg. 22.

(E) None of the above.

XVII. In his Answer to a complaint, Atty. Jose (counsel for the defendant) stated that
Atty. Agrada (counsel for the plaintiff) is "bobo, inutile, good for nothing, stupid, and a
menace to clients."

Can Atty. Jose be held criminally liable for libel? (1%)

(A) No, because an Answer to a complaint is a court pleading where communications

made are privileged; the writer cannot be held liable for libel.

(B) Yes, because the statement casts aspersion on the character, integrity and
reputation of Atty. Agrada as a lawyer and exposed him to public ridicule.

(C) Yes, although a court pleading is a privileged communication, malicious

statements that are irrelevant and impertinent to the issue in the pleading may be
libelous.

(D) Yes, there was a malicious intent to ridicule Atty. Agrada as a lawyer.

(E) No, because the statement is in a pleading, but Atty. Jose can be charged
administratively for misconduct before the Supreme Court.

XVIII. Using his charms because of his movie star looks, Phil, in a movie date with Lyn,
a 19-year old colegiala, kissed her on the cheek and stroked her pubic hair. Lyn
shouted for help and Phil was arrested. Phil is liable for __________. (1%)

(A) rape by sexual assault for using his fingers

(B) violation of the Anti-Child Abuse Law for lascivious conduct

(C) unjust vexation

(D) acts of lasciviousness

(E) None of the above.

XIX. If Rod killed Irene, his illegitimate daughter, after taking her diamond earrings
and forcing her to have sex with him, what crime/s should Rod be charged with? (1%)

(A) Robbery and rape with parricide.

(B) Robbery, rape and parricide.

(C) Rape with homicide and theft.

(D) Rape with homicide.

(E) None of the above.

XX. From an extension line, Ricardo overheard a telephone conversation between

Julito and Atty. Hipolito. The latter (Atty. Hipolito) was asking money from Julito in
exchange for dropping the extortion charge filed against Julito. Ricardo was charged
of violating the Anti-Wire Tapping Act or R.A. 4200.

Under these facts, was there a violation as charged? (1%)

(A) Yes, because the conversation was private in nature.

(B) Yes, because the conversation was overheard without the consent of the parties,
Julito and Atty. Hipolito.

(C) No, because what is punishable is intentional listening to a conversation through

a wire.

(D) No, because a telephone extension line is not the device or arrangement
contemplated by the law and the use of an extension line cannot be considered as
wire tapping.

(E) None of the above.

XXI. Judge Talim, upon complaint and application of the realty corporation
Batmanson, Inc., issued a writ of preliminary injunction against Darjeeling Ventures,
Inc., a competitor of Batmanson, Inc., without notice and hearing.

If you were counsel for Darjeeling Ventures, Inc., what criminal charge should you file
against Judge Talim? (1%)

(A) Rendering a manifestly unjust judgment.

(B) Knowingly rendering an unjust interlocutory order.

(C) Causing undue injury through manifest partiality under R.A. No. 3019.

(D) Bribery.

(E) None of the above.

XXII. George, the 20-year old son of a rich politician, was arrested at the NAIA arrival
lounge and found positive for opium, a dangerous drug. When arrested, 15 grams of
cocaine were found in his backpack.

What offense would you charge George under R.A. No. 9160 (Comprehensive
Dangerous Drugs Act)? (1%)

(A) Use of dangerous drug.

(B) Use and possession of dangerous drugs.

(C) Possession of dangerous drugs.

(D) Importation of dangerous drugs.

(E) None of the above.

XXIII. During a military uprising aimed at ousting the duly constituted authorities and
taking over the government, General Tejero and his men forcibly took over the entire
Rich Hotel which they used as their base. They used the rooms and other facilities of
the hotel, ate all the available food they found, and detained some hotel guests.

What crime did General Tejero and his men commit? (1%)

(A) Rebellion complexed with serious illegal detention and estafa.

(B) Rebellion.

(C) Coup d'etat.

(D) Terrorism.

(E) None of the above.

XXIV. Andres was convicted of frustrated homicide and was sentenced to 6 years and
1 day as minimum, to 8 years of prision mayor as maximum. Andres appealed his
conviction to the Court of Appeals, which convicted him of attempted homicide, and
sentenced him to 6 months of arresto mayor as minimum, to4years of prision
correccional as maximum.

Instead of appealing his conviction, Andres filed an application for probation with the
Regional Trial Court. Is Andres qualified to avail of the benefits of the probation law?
(1%)

(A) No, because when he filed a notice of appeal with the Court of Appeals, he waived
his right under the probation law.

(B) Yes, because after his appeal, he qualified for probation as the sentence imposed
on him was less than6years.

(C) Yes, because the probation law is meant to favor the accused.

(D) No, because his previous sentence of more than 6 years disqualified him so that
he can no longer avail of probation as an alternative remedy.

(E) None of the above.

XXV. Juancho owns a small piggery in Malolos, Bulacan. One Saturday afternoon, he
discovered that all his pigs had died. Suspecting that one of his neighbours had
poisoned the pigs, Juancho went home, took his rifle, went around the
neighbourhood, and fired his rifle in the air while shouting, "makakatikim sa akin ang
naglason ng mga baboy ko." Barangay officials requested police assistance and
Juancho was apprehended. Juancho was charged with and convicted of the crime of
alarms and scandals. Juancho did not appeal his conviction.

Is Juancho qualified for probation? (1%)

(A) Yes, because the penalty for alarms and scandals is less than six (6) years.

(B) Yes, because Juancho did not appeal his conviction.

(C) No, because the crime of alarms and scandals carries with it a fine of P200.

(D) No, because the crime of alarms and scandals affects public order.

(E) None of the above.

-0-0-0-0-
 BAR EXAMINATION 2013
REMEDIAL LAW

ESSAY QUESTIONS

I.

Alfie Bravo filed with the Regional Trial Court of Caloocan, a complaint for a sum of
money against Charlie Delta. The claim is for Php1.5Million. The complaint alleges
that Charlie borrowed the amount from Alfie and duly executed a promissory note as
evidence of the loan. Charlies office secretary, Esther, received the summons at
Charlies office.

Charlie failed to file an answer within the required period, and Alfie moved to declare
Charlie in default and to be allowed to present evidence ex parte. Ten days later,
Charlie filed his verified answer, raising the defense of full payment with interest.

I(A) Was there proper and valid service of summons on Charlie? (3%)

I(B) If declared in default, what can Charlie do to obtain relief? (4%)

II.

Yvonne, a young and lonely OFW, had an intimate relationship abroad with a friend,
Percy. Although Yvonne comes home to Manila every six months, her foreign posting
still left her husband Dario lonely so that he also engaged in his own extramarital
activities. In one particularly exhilarating session with his girlfriend, Dario died. Within
180 days from Darios death, Yvonne gives birth in Manila to a baby boy. Irate
relatives of Dario contemplate criminally charging Yvonne for adultery and they hire
your law firm to handle the case.

II(A) Is the contemplated criminal action a viable option to bring? (3%)

II(B) Is a civil action to impugn the paternity of the baby boy feasible, and if so, in
what proceeding may such issue be determined? (5%)

III.

While in his Nissan Patrol and hurrying home to Quezon City from his work in Makati,
Gary figured in a vehicular mishap along that portion of EDSA within the City of
Mandaluyong. He was bumped from behind by a Ford Expedition SUV driven by
Horace who was observed using his cellular phone at the time of the collision. Both
vehicles - more than 5 years old no longer carried insurance other than the
compulsory third party liability insurance. Gary suffered physical injuries while his
Nissan Patrol sustained damage in excess of Php500,000.
III(A) As counsel for Gary, describe the process you need to undertake starting from
the point of the incident if Gary would proceed criminally against Horace, and identify
the court with jurisdiction over the case. (3%)

III(B) If Gary chooses to file an independent civil action for damages, explain briefly
this type of action: its legal basis; the different approaches in pursuing this type of
action; the evidence you would need; and types of defenses you could expect. (5%)

IV.

At the Public Attorney's Office station in Taguig where you are assigned, your work
requires you to act as public defender at the local Regional Trial Court and to handle
cases involving indigents.

IV(A) In one criminal action for qualified theft where you are the defense attorney,
you learned that the woman accused has been in detention for six months, yet she
has not been to a courtroom nor seen a judge.

What remedy would you undertake to address the situation and what forum would
you use to invoke this relief? (3%)

IV(B) In another case, also for qualified theft, the detained young domestic helper has
been brought to court five times in the last six months, but the prosecution has yet to
commence the presentation of its evidence. You find that the reason for this is the
continued absence of the employer-complainant who is working overseas.

What remedy is appropriate and before which forum would you invoke this relief?
(3%)

IV(C) Still in another case, this time for illegal possession of dangerous drugs, the
prosecution has rested but you saw from the records that the illegal substance
allegedly involved has not been identified by any of the prosecution witnesses nor
has it been the subject of any stipulation.

Should you now proceed posthaste to the presentation of defense evidence or

consider some other remedy? Explain the remedial steps you propose to undertake.
(3%)

IV(D) In one other case, an indigent mother seeks assistance for her 14-year old son
who has been arrested and detained for malicious mischief.

Would an application for bail be the appropriate remedy or is there another remedy
available? Justify your chosen remedy and outline the appropriate steps to take. (3%)

V.

The spouses Juan reside in Quezon City. With their lottery winnings, they purchased a
parcel of land in Tagaytay City for P100,000.00. In a recent trip to their Tagaytay
property, they were surprised to see hastily assembled shelters of light materials
occupied by several families of informal settlers who were not there when they last
visited the property three (3) months ago.
To rid the spouses Tagaytay property of these informal settlers, briefly discuss the
legal remedy you, as their counsel, would use; the steps you would take; the court
where you would file your remedy if the need arises; and the reason/s for your
actions. (7%)

VI.

While leisurely walking along the street near her house in Marikina, Patty
unknowingly stepped on a garden tool left behind by CCC, a construction company
based in Makati. She lost her balance as a consequence and fell into an open
manhole. Fortunately, Patty suffered no major injuries except for contusions, bruises
and scratches that did not require any hospitalization. However, she lost self-esteem,
suffered embarrassment and ridicule, and had bouts of anxiety and bad dreams
about the accident. She wants vindication for her uncalled for experience and hires
you to act as counsel for her and to do whatever is necessary to recover at least
Php100,000 for what she suffered.

What action or actions may Patty pursue, against whom, where (court and venue),
and under what legal basis? (7%)

VII.

You are the defense counsel of Angela Bituin who has been charged under RA 3019
( Anti-Graft and Corrupt Practices Act ) before the Sandiganbayan. While Angela has
posted bail, she has yet to be arraigned. Angela revealed to you that she has not
been investigated for any offense and that it was only when police officers showed up
at her residence with a warrant of arrest that she learned of the pending case against
her. She wonders why she has been charged before the Sandiganbayan when she is
not in government service.

VII(A) What "before-trial" remedy would you invoke in Angelas behalf to address the
fact that she had not been investigated at all, and how would you avail of this
remedy? (4%)

VII(B) What "during-trial" remedy can you use to allow an early evaluation of the
prosecution evidence without the need of presenting defense evidence; when and
how can you avail of this remedy? (4%)

VIII.

On his way to the PNP Academy in Silang, Cavite on board a public transport bus as a
passenger, Police Inspector Masigasig of the Valenzuela Police witnessed an on-going
armed robbery while the bus was traversing Makati. His alertness and training
enabled him to foil the robbery and to subdue the malefactor. He disarmed the felon
and while frisking him, discovered another handgun tucked in his waist. He seized
both handguns and the malefactor was later charged with the separate crimes of
robbery and illegal possession of firearm.

VIII(A) Where should Police Inspector Masigasig bring the felon for criminal
processing? To Silang, Cavite where he is bound; to Makati where the bus actually
was when the felonies took place; or back to Valenzuela where he is stationed? Which
court has jurisdiction over the criminal cases? (3%)
VIII(B) May the charges of robbery and illegal possession of firearm be filed directly
by the investigating prosecutor with the appropriate court without a preliminary
investigation? (4%)

IX.

For over a year, Nenita had been estranged from her husband Walter because of the
latters suspicion that she was having an affair with Vladimir, a barangay kagawad
who lived in nearby Mandaluyong. Nenita lived in the meantime with her sister in
Makati. One day, the house of Nenitas sister inexplicably burned almost to the
ground. Nenita and her sister were caught inside the house but Nenita survived as
she fled in time, while her sister tried to save belongings and was caught inside when
the house collapsed.

As she was running away from the burning house, Nenita was surprised to see her
husband also running away from the scene. Dr. Carlos, Walters psychiatrist who lived
near the burned house and whom Walter medically consulted after the fire, also saw
Walter in the vicinity some minutes before the fire. Coincidentally, Fr. Platino, the
parish priest who regularly hears Walters confession and who heard it after the fire,
also encountered him not too far away from the burned house.

Walter was charged with arson and at his trial, the prosecution moved to introduce
the testimonies of Nenita, the doctor and the priest-confessor, who all saw Walter at
the vicinity of the fire at about the time of the fire.

IX(A) May the testimony of Nenita be allowed over the objection of Walter? (3%)

IX(B) May the testimony of Dr. Carlos, Walters psychiatrist, be allowed over Walters
objection? (3%)

IX(C) May the testimony of Fr. Platino, the priest-confessor, be allowed over Walters
objection? (3%)

X.

As a new lawyer, Attorney Novato limited his practice to small claims cases, legal
counseling and the notarization of documents. He put up a solo practice law office
and was assisted by his wife who served as his secretary/helper. He used a makeshift
hut in a vacant lot near the local courts and a local transport regulatory agency. With
this practice and location, he did not have big-time clients but enjoyed heavy
patronage assisting walk-in clients.

X(A) What role can Attorney Novato play in small claims cases when lawyers are not
allowed to appear as counsel in these cases? (3%)

X(B) What legal remedy, if any, may Attorney Novato pursue for a client who loses in
a small claims case and before which tribunal or court may this be pursued? (4%)

MULTIPLE CHOICE QUESTIONS

I. In a complaint filed by the plaintiff, what is the effect of the defendants failure to
file an answer within the reglementary period? (1%)
(A) The court is allowed to render judgment motu proprio in favor of the plaintiff.

(B) The court motu proprio may declare the defendant in default, but only after due
notice to the defendant.

(C) The court may declare the defendant in default but only upon motion of the
plaintiff and with notice to the defendant.

(D) The court may declare the defendant in default but only upon motion of the
plaintiff, with notice to the defendant, and upon presentation of proof of the
defendants failure to answer.

(E) The above choices are all inaccurate.

II. Which of the following is admissible? (1%)

(A) The affidavit of an affiant stating that he witnessed the execution of a deed of
sale but the affiant was not presented as a witness in the trial.

(B) The extra judicial admission made by a conspirator against his co-conspirator
after the conspiracy has ended.

(C) The testimony of a partys witness regarding email messagesthe witness received
from the opposing party.

(D) The testimony of a police officer that he had been told by his informants that
there were sachets of shabu in the pocket of the defendant.

(E) None of the above.

III. Leave of court is required to amend a complaint or information before arraignment

if the amendment __________. (1%)

(A) upgrades the nature of the offense from a lower to a higher offense and excludes
any of the accused

(B) upgrades the nature of the offense from a lower to a higher offense and adds
another accused

(C) downgrades the nature of the offense from a higher to a lower offense or excludes
any accused

(D) downgrades the nature of the offense from a higher to a lower offense and adds
another accused

(E) All the above choices are inaccurate.

IV. A Small Claims Court __________. (1%)

(A) has jurisdiction over ejectment actions

(B) has limited jurisdiction over ejectment actions

(C) does not have any jurisdiction over ejectment actions

(D) does not have original, but has concurrent, jurisdiction over ejectment actions

(E) has only residual jurisdiction over ejectment actions

V. Character evidence is admissible __________. (1%)

(A) in criminal cases the accused may prove his good moral character if pertinent to
the moral trait involved in the offense charged

(B) in criminal cases the prosecution may prove the bad moral character of the
accused to prove his criminal predisposition

(C) in criminal cases under certain situations, but not to prove the bad moral
character of the offended party

(D) when it is evidence of the good character of a witness even prior to his
impeachment as witness

(E) In none of the given situations above.

VI. When the court renders judgment in a judicial foreclosure proceeding, when is the
mortgaged property sold at public auction to satisfy the judgment? (1%)

(A) After the decision has become final and executory.

(B) At any time after the failure of the defendant to pay the judgment amount.

(C) After the failure of the defendant to pay the judgment amount within the period
fixed in the decision, which shall not be less than ninety (90) nor more than one
hundred twenty (120) days from entry of judgment.

(D) The mortgaged property is never sold at public auction.

(E) The mortgaged property may be sold but not in any of the situations outlined
above.

VII. The signature of counsel in the pleading constitutes a certification that __________.
(1%)

(A) both client and counsel have read the pleading, that to the best of their
knowledge, information and belief there are good grounds to support it, and that it is
not interposed for delay

(B) the client has read the pleading, that to the best of the clients knowledge,
information and belief, there are good grounds to support it, and that it is not
interposed for delay
(C) the counsel has read the pleading, that to the best of the clients knowledge,
information and belief, there are good grounds to support it, and that it is not
interposed for delay

(D) the counsel has read the pleading, that based on his personal information, there
are good grounds to support it, and that it is not interposed for delay

(E) The above choices are not totally accurate.

VIII. Which among the following is a requisite before an accused may be discharged
to become a state witness? (1%)

(A) The testimony of the accused sought to be discharged can be substantially

corroborated on all points.

(B) The accused does not appear to be guilty.

(C) There is absolute necessity for the testimony of the accused whose discharge is
requested.

(D) The accused has not at any time been convicted of any offense.

(E) None of the above.

IX. Which of the following distinguishes a motion to quash from a demurrer to

evidence? (1%)

(A) A motion to quash a complaint or information is fi led before the prosecution rests
its case.

(B) A motion to quash may be fi led with or without leave of court, at the discretion of
the accused.

(C) When a motion to quash is granted, a dismissal of the case will not necessarily
follow.

(D) The grounds for a motion to quash are also grounds for a demurrer to evidence.

(E) The above choices are all wrong.

X. Which among the following is not subject to mediation for judicial dispute
resolution? (1%)

(A) The civil aspect of B.P. Blg. 22 cases.

(B) The civil aspect of theft penalized under Article 308 of the Revised Penal Code.

(C) The civil aspect of robbery.

(D) Cases cognizable by the Lupong Tagapamayapa under the Katarungang

Pambarangay Law.
(E) None of the above.

XI. What is the effect of the pendency of a special civil action under Rule65 of the
Rules of Court on the principal case before the lower court? (1%)

(A) It always interrupts the course of the principal case.

(B) It interrupts the course of the principal case only if the higher court issues a
temporary restraining order or a writ of preliminary injunction against the lower court.

(C) The lower court judge is given the discretion to continue with the principal case.

(D) The lower court judge will continue with the principal case if he believes that the
special civil action was meant to delay proceedings.

(E) Due respect to the higher court demands that the lower court judge temporarily
suspend the principal case.

XII. Findings of fact are generally not disturbed by the appellate court except in cases
__________. (1%)

(A) where the issue is the credibility of the witness

(B) where the judge who heard the case is not the same judge who penned the
decision

(C) where the judge heard several witnesses who gave conflicting testimonies

(D) where there are substantially overlooked facts and circumstances that, if properly
considered, might affect the result of the case

(E) None of the above.

XIII. Contempt charges made before persons, entities, bodies and agencies exercising
quasi-judicial functions against the parties charged, shall be filed with the Regional
Trial Court of the place where the __________. (1%)

(A) person, entity or agency exercising quasi-judicial function is located

(B) person who committed the contemptuous act resides

(C) act of contempt was committed

(D) party initiating the contempt proceeding resides

(E) charging entity or agency elects to initiate the action

XIV. When may a party fi le a second motion for reconsideration of a final judgment or
final order? (1%)
(A) At anytime within 15 days from notice of denial of the first motion for
reconsideration.

(B) Only in the presence of extraordinarily persuasive reasons and only after
obtaining express leave from the ruling court.

(C) A party is not allowed to fi le a second motion for reconsideration of a final

judgment or final order.

(D) A party is allowed as a matter of right to fi le a second motion for reconsideration

of a judgment or final order.

(E) None of the above.

XV. In an original action for certiorari, prohibition, mandamus, or quo warranto , when
does the Court of Appeals acquire jurisdiction over the person of the respondent?
(1%)

(A) Upon the service on the respondent of the petition for certiorari, prohibition,
mandamus or quo warranto, and his voluntary submission to the jurisdiction of the
Court of Appeals.

(B) Upon service on the respondent of the summons from the Court of Appeals.

(C) Upon the service on the respondent of the order or resolution of the Court of
Appeals indicating its initial action on the petition.

(D) By respondents voluntary submission to the jurisdiction of the Court of Appeals.

(E) Under any of the above modes.

XVI. Extra-territorial service of summons is proper in the following instances, except

__________. (1%)

(A) when the non-resident defendant is to be excluded from any interest on a

property located in the Philippines

(B) when the action against the non-resident defendant affects the personal status of
the plaintiff and the defendant is temporarily outside the Philippines

(C) when the action is against a non-resident defendant who is formerly a Philippine
resident and the action affects the personal status of the plaintiff

(D) when the action against the non-resident defendant relates to property within the
Philippines in which the defendant has a claim or lien

(E) All of the above.

XVII. When is attachment improper in criminal cases? (1%)

(A) When the accused is about to abscond from the Philippines.

(B) When the criminal action is based on a claim for money or property embezzled or
fraudulently misapplied or converted to the use of the accused who is a broker, in the
course of his employment as such.

(C) When the accused is about to conceal, remove, or dispose of his property.

(D) When the accused resides outside the jurisdiction of the trial court.

XVIII. Maria was accused of libel. While Maria was on the witness stand, the
prosecution asked her to write her name and to sign on a piece of paper, apparently
to prove that she authored the libelous material. Maria objected as writing and
signing her name would violate her right against self-incrimination. Was Marias
objection proper? (1%)

(A) No, she can be cross examined just like any other witness and her sample
signature may be taken to verify her alleged authorship of the libelous statements.

(B) No, her right against self-incrimination is waived as soon as she became a
witness.

(C) No, this privilege may be invoked only by an ordinary witness and not by the
accused when she opts to take the witness stand.

(D) The objection was improper under all of A, B, and C.

(E) The objection was proper as the right to self-incrimination is a fundamental right
that affects liberty and is not waived simply because the accused is on the witness
stand.

XIX. Danny filed a complaint for damages against Peter. In the course of the trial,
Peter introduced evidence on a matter not raised in the pleadings. Danny promptly
objected on the ground that the evidence relates to a matter not in issue. How should
the court rule on the objection? (1%)

(A) The court must sustain the objection.

(B) The court must overrule the objection.

(C) The court, in its discretion, may allow amendment of the pleading if doing so
would serve the ends of substantial justice.

(D) The court, in its discretion, may order that the allegation in the pleadings which
do not conform to the evidence presented be stricken out.

(E) The matter is subject to the complete discretion of the court.

XX. The Labor Arbiter, ruling on a purely legal question, ordered a workers
reinstatement and this ruling was affirmed on appeal by the NLRC whose decision,
under the Labor Code, is final. The companys recourse under the circumstances is to
__________. (1%)
(A) file a motion for reconsideration and if denied, file a petition for review with the
Court of Appeals on the pure legal question the case presents.

(B) file a motion for reconsideration and if denied, appeal to the Secretary of Labor
since a labor policy issue is involved.

(C) file a motion for reconsideration and if denied, file a petition for certiorari with the
Court of Appeals on the ground of grave abuse of discretion by the NLRC.

(D) file a motion for reconsideration and if denied, file a petition for review on
certiorari with the Supreme Court since a pure question of law is involved.

(E) directly file a petition for certiorari with the Court of Appeals since a motion for
reconsideration would serve no purpose when a pure question of law is involved.

-000

BAR EXAMINATION 2013

LEGAL ETHICS

ESSAY QUESTIONS

I.

Atty. Bravo represents Carlos Negar (an insurance agent for Dormir Insurance Co.) in
a suit filed by insurance claimant Andy Limot who also sued Dormir Insurance. The
insurance policy requires the insured/claimant to give a written notice to the
insurance company or its agent within 60 days from the occurrence of the loss.

Limot testified during the trial that he had mailed the notice of the loss to the
insurance agent, but admitted that he lost the registry receipt so that he did not have
any documentary evidence of the fact of mailing and of the timeliness of the mailed
notice. Dormir Insurance denied liability, contending that timely notice had not been
given either to the company or its agent. Atty. Bravos client, agent Negar, testified
and confirmed that he never received any notice.

A few days after Negar testified, he admitted to Atty. Bravo that he had lied when he
denied receipt of Limots notice; he did receive the notice by mail but immediately
shredded it to defeat Limots claim.

If you were Atty. Bravo, what would you do in light of your clients (Carlos Negars)
disclosure that he perjured himself when he testified? (8%)

II.
Atty. Serafin Roto is the Corporate Secretary of a construction corporation that has
secured a multi-million infrastructure project from the government. In the course of
his duties as corporate secretary, he learned from the company president that the
corporation had resorted to bribery to secure the project and had falsified records to
cut implementing costs after the award of the project.

The government filed a civil action to annul the infrastructure contract and has
subpoenaed Atty. Roto to testify against the company president and the corporation
regarding the bribery. Atty. Roto moved to quash the subpoena, asserting that lawyer-
client privilege prevents him from testifying against the president and the
corporation.

Resolve the motion to quash. (8%)

III.

Miguel Jactar, a fourth year law student, drove his vehicle recklessly and hit the rear
bumper of Simplicio Medrosos vehicle. Instead of stopping, Jactar accelerated and
sped away. Medroso pursued Jactar and caught up with him at an intersection.

In their confrontation, Jactar dared Medroso to sue, bragged about his connections
with the courts, and even uttered veiled threats against Medroso. During the police
investigation that followed, Medroso learned that Jactar was reviewing for the Bar
examinations.

Under these facts, list and justify the potential objections that can be made against
Jactars admission to the practice of law. (8%)

IV.

Atty. Doblar represents Eva in a contract suit against Olga. He is also defending Marla
in a substantially identical contract suit filed by Emma. In behalf of Eva, Atty. Doblar
claims that the statute of limitations runs from the time of the breach of the contract.
In the action against Marla, Atty. Doblar now argues the reverse position i.e., that
the statute of limitation does not run until one year after discovery of the breach.

Both cases are assigned to Judge Elrey. Although not the sole issue in the two cases,
the statute of limitations issue is critical in both.

Is there an ethical/professional responsibility problem in this situation? If a problem

exists, what are its implications or potential consequences? (8%)

V.

Atty. Repatriar, a law school classmate, approached you on your 25th Class Reunion,
with questions on how he can resume the practice of law in the Philippines. He left
the country in 1977 after two (2) years of initial law practice, and migrated to the
United States where he was admitted to the practice of law in the State of New York.
He asks that you give him a formal legal opinion on his query.

Outline briefly the steps and the supporting legal reasons you would state in your
legal opinion on what Atty. Repatriar should do to resume his Philippine practice. (8%)
 VI.

An audit team from the Office of the Court Administrator found that Judge
Contaminada committed serious infractions through the indiscriminate grant of
petitions for annulment of marriage and legal separation. In one year, the judge
granted 300 of such petitions when the average number of petitions of similar nature
granted by an individual judge in his region was only 24 petitions per annum.

The audit revealed many different defects in the granted petitions: many petitions
had not been verified; the required copies of some petitions were not furnished to the
Office of the Solicitor General and the Office of the Provincial Prosecutor; docket fees
had not been fully paid; the parties were not actual residents within the territorial
jurisdiction of the court; and, in some cases, there was no record of the cross-
examinations conducted by the public prosecutor or any documentary evidence
marked and formally offered. All these, viewed in their totality, supported the
improvident and indiscriminate grant that the OCA found.

If you were the counsel for Andy Malasuerte and other litigants whose marriages had
been improperly and finally annulled, discuss your options in administratively
proceeding against Judge Contaminada, and state where and how you would exercise
these options. (8%)

VII.

In an action to prevent the condominium developer from building beyond ten (10)
floors, Judge Cerdo rendered judgment in favor of the defendant developer. The
judgment became final after the plaintiffs failed to appeal on time. Judge Cerdo and
Atty. Cocodrilo, counsel for the developer, thereafter separately purchased a
condominium unit each from the developer.

Did Judge Cerdo and Atty. Cocodrilo commit any act of impropriety or violate any law
for which they should be held liable or sanctioned? (8%)

VIII.

The criminal case arising from the P10-Billion Peso pork barrel scandal was raffled to
Sandiganbayan Justice Marciano Cobarde. Afraid that he would antagonize the
parties, his political patrons and, ultimately, his judicial career, he decided to inhibit
from participating in the case, giving "personal reasons" as his justification.

If you were to question the inhibition of SB Justice Cobarde, on what legal basis, and
where and how will you do this? (8%).

IX.

Atty. Hermano requested his fraternity brother, Judge Patron, to introduce him to
Judge Apestado, before whom he has a case that had been pending for sometime.

Judge Patron, a close friend of Judge Apestado, acceded to the request, telling the
latter that Atty. Hermano is his fraternity "brod" and that Atty. Hermano simply
wanted to ask for advice on how to expedite the resolution of his case. They met, as
arranged, in the fine dining restaurant of a five-star hotel. Atty. Hermano hosted the
dinner.
Did Atty. Hermano, Judge Patron and Judge Apestado commit any
ethical/administrative violation for which they can be held liable? (8%)

X.

As a new lawyer, Attorney Novato started with a practice limited to smal lclaims
cases, legal counseling, and notarization of documents. He put up a solo practice law
office and was assisted by his wife who served as his secretary/helper. He used a
makeshift hut in a vacant lot near the local courts and a local transport regulatory
agency. With this strategic location, he enjoyed heavy patronage assisting walk-in
clients in the preparation and filing of pleadings and in the preparation and
notarization of contracts and documents. He had the foresight of investing in a good
heavy duty copier machine that reproduces quality documents, and charges a
reasonable fee for this service. He draws electric power from an extension wire
connected to an adjoining small restaurant. He put up a shingle that reads: "Atty.
Novato, Specialist in Small Claims, Fastest in Notarization; the Best and Cheapest in
Copier Services."

Is Attorney Novatos manner of carrying out his professional practice i.e., mixing
business with the practice of law, announcing his activities via a shingle and locating
his office as above-described in keeping with appropriate ethical and professional
practice? (8%)

MULTIPLE CHOICE QUESTIONS

I. Under the 2004 Rules of Notarial Practice, what may used to satisfy the
requirement of "competent evidence of identity"? (1%)

(A) Passport, Senior Citizen card, HMO card.

(B) Police clearance, credit card, Professional Regulatory Commission ID.

(C) Voters ID, NBI clearance, Drivers license.

(D) Ombudsmans clearance, private office ID, PhilHealth card.

(E) All of the above.

II. The following are duties of a lawyer but only one of these is expressly stated in the
Lawyers Oath. Choose the express duty that the Oath contains. (1%)

(A) To maintain a respectful attitude towards the courts.

(B) To uphold the honor and dignity of the legal profession.

(C) To act with courtesy, candor and fairness toward other lawyers.

(D) To do no falsehood, nor consent to the doing of any in court.

(E) To respect the courts and uphold the dignity of the profession.
III. Atty. Avaro has consistently failed to pay his annual IBP dues for several years.
Demand letters have been sent to him and he has acknowledged receipt of these
letters. However, all the IBPs efforts proved futile. As a result, the IBP sent Atty.
Avaro a notice that his name would be stricken off the Roll of Attorneys.

Was the IBPs action correct? (1%)

(A) No, because default in the payment of annual dues only warrants suspension of
Integrated Bar members.

(B) Yes, because non-payment of annual dues is an indicator of the lawyers moral
fitness; refusal to pay is refusal to honor his obligation to the IBP.

(C) No, because failure to pay affects a members capability to practise, but not his
membership in the Bar.

(D) Yes, because payment of membership dues and other lawful assessments are
conditions sine qua non to the privilege of practising law and to the retention of his
name in the Roll of Attorneys.

(E) None of the above choices is correct.

IV. Ms. Seller and Mr. Buyer presented to a commissioned notary public a deed of sale
for notarization. The notary public explained to them the transaction the deed
embodies and asked them if they were freely entering the transaction. After the
document was signed by all the parties, the notary public collected the notarial fee
but did not issue any BIR-registered receipt.

The notarization of the deed is __________. (1%)

(A) neither unlawful nor improper because he explained the basis for the computation
of the notarial fee

(B) unlawful because he did not issue a BIR-registered receipt and did not post in his
office the complete schedule of chargeable notarial fees

(C) proper because he is not required to issue receipts for notarial fees

(D) improper because he did not ask Ms. Seller and Mr. Buyer if they needed a receipt

(E) proper because any irregularity in the payment of the notarial fees does not affect
the validity of the notarization made

V. In order to comply with the MCLE requirements, Atty. Ausente enrolled in a seminar
given by an MCLE provider. Whenever he has court or other professional
commitments, he would send his messenger or a member of his legal staff to register
his attendance at the MCLE sessions so he could be credited with the required
qualifying attendance. He would also ask them to secure the printed handouts and
the lecturers CDs, all of which he studied in his free time.

Atty. Ausente should be __________. (1%)

(A) required to make up for his absence by attending lecture sessions in other MCLE
providers

(B) sanctioned because he circumvented or evaded full compliance with the MCLE
requirements

(C) excused because he attended to profession-related tasks, and fully studied the
courses through the materials and CDs he secured

(D) penalized by forfeiting all his earned MCLE units

(E) excused because attendance by proxy is a widespread and tolerated MCLE

practice

VI. Plaintiff Jun Ahorro filed a complaint for collection of sum of money before the
Regional Trial Court of Manila. Because of the large amount of his claim, he had to
pay a sizeable docket fee. He insisted on paying the docket fee and other fees in
installments because staggered payment is allowed under Rule 141, as amended.
The Office of the Clerk of Court (OCC) refused to accept the complaint unless he paid
the full amount of the docket and other required fees.

Plaintiff Jun Ahorros position __________. (1%)

(A) is allowed because of the large amount of the docket fee

(B) is justified because it is discretionary on the part of the OCC to accept staggered
payment

(C) is incorrect because the amendment on staggered payment has been suspended

(D) is not allowed because the full payment of docket fee is jurisdictional

(E) cannot be allowed because of its prejudicial impact on the judiciarys financial
operations

VII. Atty. Anunciante is engaged in the practice of law and has a regular, live, weekly
TV program where he gives advice to and answers questions from the audience and
program viewers concerning U.S. immigration problems. Occasionally,
advertisements inviting viewers to watch his TV program are shown outside his
regular program schedule. Because of the popularity of his TV program, the number
of his law practice clients increased tremendously.

The TV program of Atty. Anunciante is __________. (1%)

(A) permissible because it is public service in nature

(B) objectionable because the work involves indirect advertising or solicitation of

business

(C) improper because it gives him an unfair advantage over other lawyers
(D) ethically allowable because it does not violate the traditional standards of the
legal profession

(E) None of the above.

VIII. Vito is a notorious gangster in the province who has been accused of raping and
mercilessly killing a 16-year old girl. Sentiments run very strongly against him and
the local Bar Association met and decided that no lawyer in the locality would
represent him. Vito could not afford the services of an out-of-town counsel.

Choose the most appropriate legal and ethical characterization of the decision of the
local Bar Association. (1%)

(A) It is within its right to make, since lawyers may freely decide who to represent and
who not to represent.

(B) It is unethical; it constitutes a collective denial of Vitos right to the assistance of

counsel.

(C) It constitutes an anticipated act of contempt towards the court that may order
any of the members of the association to represent the accused.

(D) It must be concurred in by each member of the Bar Association to have any
binding force.

(E) It is unethical because the Bar Association already prejudged Vito.

IX. Graft Investigator Atty. Retirada served the Office of the Deputy Ombudsman for
eight years before retiring from the service. While still a Graft Investigator, she
investigated a government contract for office supplies where Mr. Sakim was the
supplier. The transaction was supposedly overpriced. Atty. Retirada recommended
that no charges be filed against the officials involved and the recommendation
benefited Mr. Sakim as the supplier involved in the transaction.

After her retirement from the service, Atty. Retiradas services as counsel were
engaged by Mr. Sakim as counsel to represent the Sakim family in a claim against the
State arising from a family property that had been expropriated. Atty. Retirada now
consults you about the ethical permissibility of accepting the engagement.

What advice would you give Atty. Retirada? (1%)

(A) Having been in government service, she cannot now represent a party with a
claim against the State.

(B) Having once handled a case involving her prospective client, a conflict of interest
would exist if she were to accept the engagement.

(C) Representing the Sakim family would involve the unethical use of information she
obtained while in government service.

(D) There is no ethical objection to her acceptance of the engagement because the
case is neither criminal nor administrative in character.
(E) Acceptance of the engagement should be on condition that Atty. Retirada would
withdraw if a conflict of interest situation arises.

X. Your client is the plaintiff in a civil case for damages arising from a car accident
where he sustained serious physical injuries and damages amounting to P1Million.
The counsel for the defendant asks you to give him a proposed amount for purposes
of settlement and you are aware that whatever amount you tell him would not readily
be accepted and would probably be cut into half.

What is your best legal and ethical course of action? (1%)

(A) Inflate your proposal to make allowances for a compromise.

(B) Tell the defendants counsel the correct amount of damages.

(C) Offer him a reasonably low amount so that the case can immediately be settled.

(D) Ask the defendants counsel to first submit his negotiating figure.

(E) Play hard-to-get and initially refuse all the defendants initiatives to settle.

XI. Candido engaged the services of Atty. Lebron in a criminal case. In the course of
their consultations, Candido admitted to Atty. Lebron that he committed the crime
and in fact actively planned its commission. He stressed, however, that under no
circumstance would he admit or confess to the murder charge he is facing and, in
fact, would enter a plea of "not guilty" on arraignment.

If Candido insists on his planned plea, Atty. Lebron should __________. (1%)

(A) discontinue his representation; to continue would be unethical since he would

then be aiding the accused in foisting a deliberate falsehood on the court

(B) allow Candido to choose his course of action; Atty. Lebrons duty is to protect all
his legal and statutory rights

(C) convince Candido to plead guilty and withdraw from the case if Candido refuses to
heed his advice

(D) file a manifestation, if Candido pleads "not guilty," declaring to the court what he
knows of the truth.

(E) play matters by ear and wait for developments as Candido may still plead guilty.

XII. A Regional Trial Court issues a temporary restraining order ( TRO ) halting the
demolition order issued by the City Mayor who has long loathed the cluster of
shanties put up by informal settlers along the road leading to the citys commercial
district. The TRO, however, carried conditions that must be in place before the
threatened demolition can be fully halted.

The city legal officer advised the City Engineers Office and the local PNP chief that
the TROs conditions are not in place so that the demolition could proceed. The city
filed a manifestation reflecting the city legal officers position, while the informal
settlers counsel sought its own clarification and reconsideration from the court,
which responded by decreeing that the conditions have been fulfilled. Despite this
ruling, the city legal officer insisted that the conditions have not been fulfilled and
thus gave the PNP clearance to aid the City Engineers Office in proceeding with the
demolition.

From the perspective of professional ethics, how would you characterize the city legal
officers actions? (1%)

(A) It is unethical since he counseled civil servants to disregard a court order.

(B) It is ethical, since he acted in accordance with his honest conviction after
considering that the courts conditions have not been met.

(C) It constitutes indirect contempt, but the lawyer cannot be disciplined because he
acted out of his firm and honest conviction.

(D) It is neither contemptuous nor unethical since he was performing his duties as
city legal officer.

(E) It is unethical since the City Legal Officer was simply blindly following the Mayors
wishes.

XIII. The mediator assigned to a civil case happens to be your law school classmate
and he makes a doctrinal statement about the rights of the parties. You knew that the
statement, although favorable to your clients case, is incorrect.

The ethical move to make under the circumstances is to __________. (1%)

(A) correct the mediator and state the right doctrine

(B) just keep quiet because the other counsel might learn about your relationship
with the mediator

(C) reveal your relationship with the mediator and ask the opposing counsel if he has
any objections

(D) request the Mediation Supervisor to immediately change the mediator

(E) simply withdraw from the case because of the unfair advantage that you enjoy

XIV. Wanda finally became pregnant in the 10th year of her marriage to Horacio. As
her pregnancy progressed, she started having difficulty breathing and was easily
fatigued. The doctors diagnosed that she has a heart congestion problem dueto a
valve defect, and that her chances of carrying a baby to full term are slim. Wanda is
scared and contemplates the possibility of abortion. She thus sought legal advice
from Diana, a lawyer-friend and fellow church member, who has been informally
advising her on legal matters.

What is Dianas best ethical response? (1%)

(A) Beg off from giving any advice because it is a situation that is not purely legal.
(B) Advise Wanda on the purely legal side of her problem and assure her that
abortion is allowed by law if the pregnancy endangers the life of the mother.

(C) Advise that it is a religious problem before it is a medical or legal one, and Wanda
should consult and follow the advice of her religious confessor.

(D) Advise Wanda that abortion, above everything else, is a moral problem and she
should only have an abortion if it is an act she can live with.

(E) Refrain from giving any kind of advice as abortion is a serious matter that cannot
be resolved through informal consultations with friends and fellow church members.

XV. Based on the same facts as Question XIV, assume that Diana, aside from being a
family friend of the couple, has been formally and informally acting as their lawyer in
all their personal and family affairs. She has represented them in court in a case
involving a car accident and in the purchase of their family home, for which they
formally paid the attorneys fees that Diana billed.

In this instance, Wanda asked about her legal rights but did not formally ask for a
written opinion from Diana. Horacio never had any input on the query as he was then
away on an out-of-town trip for his office.

Diana advised Wanda that she is fully protected in law and her best course of action
is to have an abortion while her pregnancy is not yet far advanced.

Did Diana violate the prohibition against representing conflicting interests when she
provided legal advice to Wanda without Horacios knowledge? (1%)

(A) Yes. The decision of whether to have an abortion should be decided by both
spouses; thus, Diana should not have provided legal advice in the absence of Horacio
whose concerns and positions are unknown to her.

(B) No. Diana did not give any formal advice that would constitute legal practice
calling for the strict observance of the conflict of interest rules.

(C) No. The decision on whether or not to have an abortion lies solely with Wanda; it
is her body and health that is in issue.

(D) No. Horacio and Wanda are married, any advice given to Wanda is deemed to
have been given to Horacio as well.

(E) No. Giving advice to Wanda is not necessarily acting against Horacios interest;
Diana was giving advice based on the couples best interest.

XVI. ABLE Law Office has a retainer agreement with Santino, a businessman with
shady connections, who has recently been charged with laundering money for an
illegal drugs syndicate using Cable Co., Santinos holding company. The lawyers of
ABLE Law Office assigned to handle Santinos account have been impleaded as co-
defendants for incorporating and actively handling the affairs of Cable Co.
In its bid to strengthen its case against the defendants, the prosecution approached
you (as the least guilty defendant who would qualify for a discharge as a state
witness) and offers to make you a state witness.

Can you accept, within the bounds of professional ethics, the prosecutions offer?
(1%)

(A) No, as Santinos lawyer you are duty-bound to protect his interests, ably represent
him in court, and not turn against him.

(B) Yes, as an officer of the court, you have the duty to disclose to the court
information crucial to the case.

(C) No, the information you acquired involving the criminal case against Santino is
covered by the privileged communications rule.

(D) Yes, a lawyer may testify against his client provided he first severs the lawyer-
client relationship.

(E) Yes, the law of self-preservation is akin to the law of self-defense and stands
higher than any obligation you may have with your client.

XVII. Under the same essential facts as the preceding Question XVI, assume that you
have resigned from ABLE Law Office and that you were never impleaded as a co-
defendant, but during your stay with the firm, you assisted in handling the Cobra Co.
account, which is largely owned by Cable Co.

The prosecutor handling the case against Santino and the law firm asks you, as a
former law firm member, if you can help strengthen the prosecutions case and hints
that you, too, may be impleaded as a co-defendant if you do not cooperate.

What is your best legal and ethical course of action? (1%)

(A) Offer to testify on what you know and provide evidence against the defendants in
exchange for a guarantee of immunity from prosecution in the case.

(B) Offer to provide evidence against Santino, but clarify that you cannot testify
against Santino because of the privileged communications rule

(C) Decline to testify against the defendants and to provide evidence in the case as
the attorney-client privilege lasts even beyond the termination of the relationship.

(D) Decline to testify against the defendants as whatever information you acquired
from Santino and Cable Co. in the course of the lawyer-client relationship is
privileged.

(E) Alert the law firm to the prosecutions offer so that they can prepare for the
evidence within your knowledge that the prosecution may use.

XVIII. You are a lawyer working in the Public Assistance Office. Yolly, a key witness in
the case (reckless imprudence resulting in homicide) you are handling, is indigent
and illiterate. While Yolly is willing to testify in court, you worry that the judge might
not be able to appreciate the impact of her testimony, as she has a difficult time
answering English questions. You also worry that this might affect her credibility.
Further, Yolly has indicated that she might not have the money to pay the fare to
attend the trial. You are presenting her as a witness for the defense at the hearing
next week.

Which of the following is NOT a permissible act for you to do? (1%)

(A) Provide Yolly with money for fare to ensure her attendance in court.

(B) Interview Yolly before trial, so that she will be more at ease when she testifies
before the court.

(C) Prepare a judicial affidavit of Yollys testimony, which she will then verify before
the court.

(D) Provide her with sample questions that you might ask in the hearing tomorrow.

(E) All the above are permissible.

XIX. You are a lawyer working at the Office of the Special Prosecutor and you are part
of the team handling the case against former Senator Avido who is charged with
plunder. Based on your assessment of the evidence that the complainant Linda
submitted, you know that the case against former Senator Avido is weak, although
you instinctively feel that he is guilty. You inform your friend Atty. Curioso (who works
with the office of Senator Elmismo, a known political rival of Senator Avido) regarding
your instinctive feeling about Senator Avido. Atty. Curioso springs a surprise by giving
you a recording of the wiretapped conversation between Senator Avido and Napo, a
private party co-accused, about the transaction complained of and how they would
split the proceeds.

What will you do under these circumstances? (1%)

(A) Disregard the wiretapped conversation as it is inadmissible and will not serve any
useful purpose in the trial of the case.

(B) Present the wiretapped conversation in court; although inadmissible, its

introduction and the disclosure of its existence is a right that the public is entitled to.

(C) Leak the wiretapped conversation to the media, to let the public know what really
happened.

(D) Submit the wiretapped conversation to the Senate which is in the best position to
determine what to do with it.

(E) Let Napo privately know, through 3 rd parties, that you are aware of the existence
of the taped conversation, with the hint that he can still hope for a lighter penalty if
he would cooperate.

XX. Armin, holding a transfer certificate of title to a lot in downtown Calamba in the
name of Bobby, shows you the title and claims that Bobby sold him the lot. He then
asks you to draft a deed of sale covering the transaction. In reply to your query on
where Bobby is, Armin explains that Bobby is currently out of the country but he
(Armin) has his general power of attorney which he also shows to you. The power of
attorney empowers Armin to do everything that Bobby can do with the Calamba lot,
but you note that it does not specifically authorize Armin to sell the property. Armin
also assures you that he wants the deed of sale drafted so he can send it to Bobby for
his signature even while overseas.

How will you act under the given circumstances? (1%)

(A) Agree to draft the deed of sale, subject to your usual 10%commission.

(B) Refuse to draft the deed of sale, as Armin has not presented a special power of
attorney that would support the deed that he is asking you to prepare.

(C) Refuse to draft the deed of sale, as Bobby is not present to sign the deed of sale
and verify that he is indeed selling his lot to Armin.

(D) Agree to draft the deed of sale, since it is only a draft that Bobby still has to
consider and sign.

(E) Refuse to have anything to do with Armins request because it is a potentially

problematic situation given the price of lots in downtown Calamba.

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