I.
Lani filed an action for partition and accounting in the Regional Trial Court (RTC) of Manila against her sister Mary Rose, who is a resident of Singapore and is not found in the Philippines. Upon motion, the court ordered the publication of the summons for three weeks in a local tabloid, Bulgar. Linda, an OFW vacationing in the Philippines, saw the summons in Bulgar and brought a copy of the tabloid when she returned to Singapore. Linda showed the tabloid and the page containing the summons to Mary Rose, who said, "Yes I know, my kumare Anita scanned and e-mailed that page of Bulgar to me!" Did the court acquire jurisdiction over Mary Rose? (4%)
II.
Fe filed a suit for collection of P387,000 against Ramon in the RTC of Davao City. Aside from alleging payment as a defense, Ramon in his answer set up counterclaims for P100,000 as damages and P30,000 as attorney's fees as a result of the baseless filing of the complaint, as well as for P250,000 as the balance of the purchase price of the 30 units of air conditioners he sold to Fe.
a) Does the RTC have jurisdiction over Ramon's counterclaims, and if so, does he have to pay docket fees therefor? (3%)
b) Suppose Ramon's counterclaim for the unpaid balance is P310,000, what will happen to his counterclaims if the court dismisses the complaint after holding a preliminary hearing on RAmon's affirmative defenses? (3%)
c) Under the same premises as paragraph (b) above, suppose that instead of alleging payment as a defense in his answer, Ramon filed a motion to dismiss on that ground, at the same time setting up his counterclaims, and the court grants his motion. What will happen to his counterclaims? (3%)
III.
a) Angela, a resident of Quezon City, sued Antonio, a resident of Makati City before the RTC of Quezon City for the reconveyance of two parcels of land situated in Tarlac and Nueva Ecija, respectively. May her action prosper? (3%)
b) Assuming that the action was for foreclosure on the mortgage of the same parcels of land, what is the proper venue of the action? (3%)
IV.
Filomeno brought an action in the Metropolitan Trial Court (MeTC) of Pasay City against Marcelino pleading two causes of action. The first was a demand for the recovery of physical possession of a parcel of land situated in Pasay City with an assessed value of P40,000; the second was a claim for damages of P500,000 for marcelino's unlawful retention of the property. Marcelino filed a motion to dismiss on the ground that the total amount involved, which is P540,000, is beyond the jurisdiction of the MeTC. Is Marcelino correct? (4%)
V.
Within the period for filing a responsive pleading, the defendant filed a motion for bill of particulars that he set for hearing on a certain date. However, the defendant was surprised to find on the date set for hearing that the trial court had already denied the motion on the day of its filing, stating that the allegations of the complaint were sufficiently made.
a) Did the judge gravely abused his discretion in acting on the motion without waiting for the hearing set for the motion? (3%)
b) If the judge grants the motion and orders the plaintiff to file and serve the bill of particulars, can the trial judge discmiss the case if the plaintiff does not comply with the order? (3%)
VI.
After his properties were attached, defendant Porfirio filed a sufficient counterbond. The trial court dischrged the attachment. Nonetheless, Porfirio suffered substantial prejudice due to the unwarranted attachment. In the end, the trial court rendered a judgment in Porfirio's favor by ordering the plaintiff to pay damages because the plaintiff was not entitled to the attachment. Profirio moved to charge the plaintiff's attacment bond. The plaintiff and his sureties opposed the motion, claiming that the filing of the counterbond had relieved the plaintiff's attachment bond from all liability for the damages. Rule Porfirio's motion. (4%)
VII.
a) The writ of execution was returned unsatisfied. The judgment obligee sebsequently received information that a bank bolds a substantial deposit belonging to the judgment obligor. If you are the counsel of the judgment obligee, what steps would you take to reach the deposit to satisfy the judgment? (3%)
b) If the bank denies holding the deposit in the name of the judgment obligor but your client's information is certain that the deposit belongs to the judgment obligor under an assumes name, what is your remedy to reach the deposit? (3%)
VIII.
Bembol was charged with rape. Bembol's father, Ramil, approached Artemon, the victim's father, during the preliminary investigation and offered P1 Million to Artemon to settle the case. Artemon refused the offer.
a) During trial, the prosecution presented Artemon to testify on Ramil's offer and thereby establish an implied admission of guilt. Is Ramil's offer to settle admissible in evidence? (3%)
b) During the pre-trial, Bembol personally offered to settle the case for P1 Million to the private prosecutor, who immediately put the offer on record in the presence of the trial judge. Is Bembol's offer a judicial admission of his guilt? (3%)
IX.
The search warrant authorized the seizure of "undetermined quantity of shabu". During the service of the search warrant, the raiding team also recovered a kilo of dried marijuana leaves wrapped in newsprint. The accused moved to suppress the marijuana leaves as evidence for the violation of Section 11 of the Comprehensive Drugs Act of 2002 since they were not covered by the search warrant. The State justified the seizure of the marijuana leaves under the "plain view" doctrine. There was no indication of whether the marijuana leaves were discovered and seized before or after the seizure of the shabu. If you are the judge, how would you rule on the motion to suppress? (4%)
X.
Jose, Alberto and Romeo were charged with murder. Upon filing of the information, the RTC judge issued the warrants for their arrest. Learning of the issuance of the warrants, the three accused jointly filed a motion for reinvestigation and for the recall of the warrants of arrest. On the date set for hearing of their motion, none of the accused showed up in court for fear of being arrested. The RTC judge denied their motion because the RTC did not require jurisdiction over the persons of the movants. Did the RTC rule correctly? (4%)
XI.
Arturo lent P1 Million to his friend Robert on the condition that Robert execute a promissory note for the loan and a real estate mortgage over his property located in Tagaytay City. Robert complied. In his promissiory note dated September 20, 2006, Robert undertook to pay the loan within a year from its date at 12% per annum interest. In June 2007, Arturo requested Robert to pay ahead of time but the latter refused and insisted on the agreement. Arturo issued a demand letter and when Robert did not comply, Arturo filed an action to foreclose the mortgage. Robert moved to dismiss the complaint for lack of cause of action as the debt was not yet due. The resolution of the motion to dismiss was delayed because of the retirement of the judge.
a) On October 1, 2007, pending resolution of the motion to dismiss, Arturo filed an amended complaint alleging that Robert's debt had in the meantime become due but that Robert still refused to pay. Should the amended complaint be allowed considering that no answer has been filed? (3%)
b) Would your answer be different had Arturo filed instead a supplemental complaint stating that the debt became due after the filing of the original complaint? (2%)
XII.
After receiving the adverse decision rendered against his client, the defendant, Atty. Sikat duly filed a notice of appeal. For his part, the plaintiff timely filed a motion for partial new trial to seek an increase in the monetary damages awarded. The RTC instead rendered an amended decision further reducing the monetary awards. Is it necessary for Atty. Sikat to file a second notice of appeal after receiving the amended decision? (3%)
XIII.
An heir/oppositor in a probate proceeding filed a motion to remove the administrator on the grounds of neglect of duties as administrator and absence from the country. On his part the heir/oppositor served written interrogatories to the administrator preparatory to presenting the latter as a witness. The administrator objected, insisting that the modes of discovery apply only to ordinary civil actions, not special proceedings. Rule on the matter. (4%)
XIV.
On August 15, 2008, Edgardo committed estafea against Petronilo in the amount of P3 Million. Petronilo brought his complaint to the National Bureau of Investigation, which found that Edgardo had visited his lawyer twice, the first time on August 14, 2008 and the second on August 16, 2008; and that both visits concerned the swindling of Petronilo. During the trial of Edgardo, the RTC issued a subpoena ad testificandum to Edgardo's lawyer for him to testify on the conversation during thei first and second meetings. My the subpoena be quashed on the ground of privileged communication? Explain fully. (4%)
XV.
Half-brothers Roscoe and Salvio inherited form their father a vast tract of unregistered land. Roscoe succeeded in gaining possession of the parcel of land in its entirety and transferring the tax declaration thereon in his name. Roscoe sold the northern half to Bono, Salvio's cousin. Upon learning of the sale, Salcio asked Roscoe to convey the southern half along the West to Carlo. Thereupon, Salvio filed an action for the reconveyance of the southern half against Roscoe only. Carlo was not impleaded. After filing his answer, Roscoe sold the middle third of the southern half to Nina. Salcio did not amend the complaint to implead Nina. After trial, the court rendered judgment ordering Roscoe to reconvey the entire southern half to Salvio. The judgement became final and executory. A writ of execution having been issued, the Sheriff required Roscoe, Carlo and Nina to vacate the southern half and yield possession thereof to Salvio as the prevailing party. Carlo and Nina refused, contending that they are not bound by the judgment as they are not parties to the case. Is the contention tenable? Explain fully. (4%)
XVI.
The mutilated cadaver of a woman was discovered near a creek. Due to witnesses attesting that he was the last person seen with the woman when she was still alive, Carlito was arrested within five hours after the discovery of the cadaver and brought to the police station. The crime laboratory determined that the woman had been raped. While in police custody, Carlito broke down in the presence of an assisting counsel and orally confessed to the investigator that he had raped and killed the woman, detailing the acts he had performed up to his dumping of the body near the creek. He was genuinely remorseful. During the trial, the State prewented the investigator to testify on the oral confession of Carlito. Is the oral confession admissible as evidence of guilt? (4%)
XVII.
Ben sold a parcel of land to Del with right to repurchase within one (1) year. Ben remained in possession of the property. When Ben failed to repurchase the same, title was consolidated in favor of Del. Despite demand, Ben refused to vacate the land, constraining Del to file a complaint for unlawful detainer. In his defense, Ben averred that the case should be dismissed because Del had never been in possession of the property. Is Ben correct? (4%)
XVIII.
Domenico and Gen lived without beneift of marriage for twnety years, during which time they purchased properties together. After Domenico died without a will, Gen filed petition for letters of administration. Domenico's siblings opposed the same on the ground that Gen has no legal personality. Decide. (4%)
XIX.
After Alma had started serving her sentence for violation of Batas Pambansa Blg. 22 (BP 22), she filed a petition for writ of habeas corpus, citing Vaca vs CA where the sentence of imprisonment of a party found guilty of violatioin of BP 22 was reduced to a fine equal tgo double the amount of the check involved. She prayed that her sentence be similarly modified and that she be immediately released from detention. In the alternative, she prayed that pending determination on whether the Vaca ruling applies to her, she be allowed to post bail pursuant to Rule 102, Sec. 14, which provides that if a person is lawfully imprisoned or restrained on a charge of having committed an offense not punishable by death, he may be admitted to bail in the discretion of the court. Accordingly, the trial court allowed Alma to post bail and then ordered her release. In your opinion, is the order of the trial court correct -
a) Under Rule 102? (2%)
b) Under the Rules of Criminal Procedure? (2%)
XX.
A tugboat owned by Speedy Port Service, Inc. (SPS) sand in Manila bay while helping tow another vessel, drowning five (5) of the crew in the resulting shipwreck. At the maritime board inquiry, the four (4) survivors testified. SPS engaged Atty. Ely to defend it against potential claims and to sue the company owning the other vessel for damages to the tug. Ely obtained signed statements from the survivors. He also interviewed other persons, in some instance making memoranda. The heirs of the five (5) victims filed an action for damages against SPS. Plaintiff's counsel sent written interrogatories to Ely, asking whether statements of witnesses were obtained; if written, copies were to be furnished; if oral, the exact provisions were to be set forth in detail. Ely refused to comply, arguing that the documents and information asked are privileged communication. Is the contention tenable? Explain. (4%)
XXI.
a) Compare the certiorari jurisdiction of the Supreme Court under the Constitution with that under Rule 65 of the Rules of Civil Procedure. (4%)
b) Give at least three instances where the Court of Appeals may act as a trial court. (3%)
Monday, September 29, 2008
Legal Ethics and Practical Exercises Bar Questions 2008
I
Christine was appointed counsel de oficio for Zuma, who was accused of raping his own daughter. Zuma pleaded not guilty but thereafter privately admitted to Christine that he did commit the crime charged.
a) In light of Zuma’s admission, what should Christine do? Explain. (3%)
b) Can Christine disclose the admission of Zuma to the court? Why or why not? (2%)
c) Can Christine withdraw as counsel of Zuma should he insist in going to trial? Explain. (3%)
II
In 1998, Acaramba, a telecommunications company, signed a retainer agreement with Bianca & Sophia Law Office (B & S) for the latter’s legal services for a fee of P2,000 a month. From 1998 to 2001, the only service actually performed by B & S for Acaramba was the review of a lease agreement and representation of Acaramba as a complainant in a bouncing checks case. Acaramba stopped paying retainer fees in 2002 and terminated its retainer agreement with B & S in 2005. In 2007, Temavous, another telecommunications company, requested B & S to act as its counsel in the following transactions: (a) the acquisition of Acaramba; and (b) the acquisition of Super-6, a company engaged in the power business.
In which transactions, if any, can Bianca & Sophia Law Office represent Temavous? Explain fully. (7%)
III
Dumbledore, a noted professor of commercial law, wrote an article on the subject of letters of credit which was published in the IBP Journal.
a) Assume he devoted a significant portion of the article to a commentary on how the Supreme Court should decide a pending case involving the application of the law on letters of credit. May he be sanctioned by the Supreme Court? Explain. (4%)
b) Assume Dumbledore did not include any commentary on the case. Assume further after the Supreme Court decision on the case had attained finality, he wrote another IBP Journal article, dissecting the decision and explaining why the Supreme Court erred in all its conclusions. May he be sanctioned by the Supreme Court? Explain. (3%)
IV
Chester asked Laarni to handle his claim to a sizeable parcel of land in Quezon City against a well-known property developer on a contingent fee basis. Laarni asked for 15% of the land that may be recovered or 15% of whatever monetary settlement that may be received from the property developer as her only ee contingent upon securing a favorable final judgment or compromise settlement. Chester signed the contingent fee agreement.
a) Assume the property developer settled the case after the case was decided by the Regional Trial Court in favor of Chester for P1 Billion. Chester refused to pay Laarni P150 Million on the ground that it is excessive. Is the refusal justified? Explain. (4%)
b) Assume there was no settlement and the case eventually reached the Supreme Court which promulgated a decision in favor of Chester. This time Chester refused to convey to Laarni 15% of the litigated land as stipulated on the ground that the agreement violates Article 1491 of the Civil Code which prohibits lawyers from acquiring by purchase properties and rights which are the object of litigation in which they take part by reason of their profession. Is the refusal justified? Explain. (4%)
V
The vendor filed a case against the vendee for the annulment of the sale of a piece of land.
a) Assume the vendee obtained a summary judgment against the vendor. Would the counsel for the defendant vendee be entitled to enforce a charging lien? Explain. (4%)
b) Assume, through the excellent work of the vendee’s counsel at the pre-trial conference and his wise use of modes of discovery, the vendor was compelled to move for the dismissal of the complaint. In its order the court simply granted the motion. Would your answer be the same as in question (a)? Explain. (3%)
VI
Atty. Abigail filed administrative cases before the Supreme Court against Judge Luis. Thereafter, Atty. Abigail filed a Motion for Inhibition praying that Judge Luis inhibit himself from trying, hearing or in any manner acting on all cases, civil and criminal, in which Atty. Abigail is involved and handling. Should Judge Luis inhibit himself as prayed for by Atty. Abigail? Explain fully. (6%)
VII
In need of legal services, Niko secured an appointment to meet with Atty. Henry of Henry & Meyer Law Offices. During the meeting, Niko divulged highly private information to Atty. Henry, believing that the lawyer would keep the confidentiality of the information. Subsequently, Niko was shocked when he learned that Atty. Henry had shared the confidential information with his law partner, Atty. Meyer, and their common friend, private practitioner Atty. Canonigo. When confronted, Atty. Henry replied that Niko never signed any confidentiality agreement, and that he shared the information with the two lawyers to secure affirmance of his legal opinion on Niko’s problem. Did Atty. Henry violate any rule of ethics? Explain fully. (7%)
VIII
State, with a brief explanation, whether the lawyer concerned may be sanctioned for the conduct stated below.
a) Filing a complaint that fails to state a cause of action, thereby resulting in the defendant succeeding in his motion to dismiss. (3%)
b) A suspended lawyer working as an independent legal assistant to gather information and secure documents for other lawyers during the period of his suspension. (3%)
c) A suspended lawyer allowing his non-lawyer staff to actively operate his law office and conduct business on behalf of clients during the period of suspension. (3%)
d) Keeping money he collected as rental from his client’s tenant and remitting it to the client when asked to do so. (3%)
e) Refusing to return certain documents to the client pending payment of his attorney’s fees. (3%)
f) An unwed female lawyer carrying on a clandestine affair with her unwed male hairdresser. (3%)
g) Not paying the annual IBP dues. (3%)
IX
State, with a brief explanation, whether the judge concerned may be sanctioned for the conduct stated below.
a) Refusing to inhibit himself although one of the lawyers in the case is his second cousin. (3%)
b) Deciding a case in accordance with a Supreme Court ruling but adding that he does not agree with the ruling. (3%)
c) Dictating his decision in open court immediately after trial. (3%)
X
Ian Alba owns a house and lot at No. 9 West Aguila, Green Cross Subdivision, Quezon City, which he leased to Jun Miranda for a term of two years starting May 1, 2006, at a monthly rental of P50,000. Jun defaulted in the payments of his rentals for six (6) months, from January 1, 2007 to June 30, 2007.
a) Prepare a demand letter as lawyer of Ian Alba addressed to Jun Miranda preparatory to filing an ejectment case. (3%)
b) Assume Jun Miranda did not heed your demand letter. Draft a complaint for ejectment. (Omit verification and affidavit of non-forum shopping). (9%)
XI
Draft a complete deed of donation of a piece of land in accordance with the form prescribed by the Civil Code. (8%)
Christine was appointed counsel de oficio for Zuma, who was accused of raping his own daughter. Zuma pleaded not guilty but thereafter privately admitted to Christine that he did commit the crime charged.
a) In light of Zuma’s admission, what should Christine do? Explain. (3%)
b) Can Christine disclose the admission of Zuma to the court? Why or why not? (2%)
c) Can Christine withdraw as counsel of Zuma should he insist in going to trial? Explain. (3%)
II
In 1998, Acaramba, a telecommunications company, signed a retainer agreement with Bianca & Sophia Law Office (B & S) for the latter’s legal services for a fee of P2,000 a month. From 1998 to 2001, the only service actually performed by B & S for Acaramba was the review of a lease agreement and representation of Acaramba as a complainant in a bouncing checks case. Acaramba stopped paying retainer fees in 2002 and terminated its retainer agreement with B & S in 2005. In 2007, Temavous, another telecommunications company, requested B & S to act as its counsel in the following transactions: (a) the acquisition of Acaramba; and (b) the acquisition of Super-6, a company engaged in the power business.
In which transactions, if any, can Bianca & Sophia Law Office represent Temavous? Explain fully. (7%)
III
Dumbledore, a noted professor of commercial law, wrote an article on the subject of letters of credit which was published in the IBP Journal.
a) Assume he devoted a significant portion of the article to a commentary on how the Supreme Court should decide a pending case involving the application of the law on letters of credit. May he be sanctioned by the Supreme Court? Explain. (4%)
b) Assume Dumbledore did not include any commentary on the case. Assume further after the Supreme Court decision on the case had attained finality, he wrote another IBP Journal article, dissecting the decision and explaining why the Supreme Court erred in all its conclusions. May he be sanctioned by the Supreme Court? Explain. (3%)
IV
Chester asked Laarni to handle his claim to a sizeable parcel of land in Quezon City against a well-known property developer on a contingent fee basis. Laarni asked for 15% of the land that may be recovered or 15% of whatever monetary settlement that may be received from the property developer as her only ee contingent upon securing a favorable final judgment or compromise settlement. Chester signed the contingent fee agreement.
a) Assume the property developer settled the case after the case was decided by the Regional Trial Court in favor of Chester for P1 Billion. Chester refused to pay Laarni P150 Million on the ground that it is excessive. Is the refusal justified? Explain. (4%)
b) Assume there was no settlement and the case eventually reached the Supreme Court which promulgated a decision in favor of Chester. This time Chester refused to convey to Laarni 15% of the litigated land as stipulated on the ground that the agreement violates Article 1491 of the Civil Code which prohibits lawyers from acquiring by purchase properties and rights which are the object of litigation in which they take part by reason of their profession. Is the refusal justified? Explain. (4%)
V
The vendor filed a case against the vendee for the annulment of the sale of a piece of land.
a) Assume the vendee obtained a summary judgment against the vendor. Would the counsel for the defendant vendee be entitled to enforce a charging lien? Explain. (4%)
b) Assume, through the excellent work of the vendee’s counsel at the pre-trial conference and his wise use of modes of discovery, the vendor was compelled to move for the dismissal of the complaint. In its order the court simply granted the motion. Would your answer be the same as in question (a)? Explain. (3%)
VI
Atty. Abigail filed administrative cases before the Supreme Court against Judge Luis. Thereafter, Atty. Abigail filed a Motion for Inhibition praying that Judge Luis inhibit himself from trying, hearing or in any manner acting on all cases, civil and criminal, in which Atty. Abigail is involved and handling. Should Judge Luis inhibit himself as prayed for by Atty. Abigail? Explain fully. (6%)
VII
In need of legal services, Niko secured an appointment to meet with Atty. Henry of Henry & Meyer Law Offices. During the meeting, Niko divulged highly private information to Atty. Henry, believing that the lawyer would keep the confidentiality of the information. Subsequently, Niko was shocked when he learned that Atty. Henry had shared the confidential information with his law partner, Atty. Meyer, and their common friend, private practitioner Atty. Canonigo. When confronted, Atty. Henry replied that Niko never signed any confidentiality agreement, and that he shared the information with the two lawyers to secure affirmance of his legal opinion on Niko’s problem. Did Atty. Henry violate any rule of ethics? Explain fully. (7%)
VIII
State, with a brief explanation, whether the lawyer concerned may be sanctioned for the conduct stated below.
a) Filing a complaint that fails to state a cause of action, thereby resulting in the defendant succeeding in his motion to dismiss. (3%)
b) A suspended lawyer working as an independent legal assistant to gather information and secure documents for other lawyers during the period of his suspension. (3%)
c) A suspended lawyer allowing his non-lawyer staff to actively operate his law office and conduct business on behalf of clients during the period of suspension. (3%)
d) Keeping money he collected as rental from his client’s tenant and remitting it to the client when asked to do so. (3%)
e) Refusing to return certain documents to the client pending payment of his attorney’s fees. (3%)
f) An unwed female lawyer carrying on a clandestine affair with her unwed male hairdresser. (3%)
g) Not paying the annual IBP dues. (3%)
IX
State, with a brief explanation, whether the judge concerned may be sanctioned for the conduct stated below.
a) Refusing to inhibit himself although one of the lawyers in the case is his second cousin. (3%)
b) Deciding a case in accordance with a Supreme Court ruling but adding that he does not agree with the ruling. (3%)
c) Dictating his decision in open court immediately after trial. (3%)
X
Ian Alba owns a house and lot at No. 9 West Aguila, Green Cross Subdivision, Quezon City, which he leased to Jun Miranda for a term of two years starting May 1, 2006, at a monthly rental of P50,000. Jun defaulted in the payments of his rentals for six (6) months, from January 1, 2007 to June 30, 2007.
a) Prepare a demand letter as lawyer of Ian Alba addressed to Jun Miranda preparatory to filing an ejectment case. (3%)
b) Assume Jun Miranda did not heed your demand letter. Draft a complaint for ejectment. (Omit verification and affidavit of non-forum shopping). (9%)
XI
Draft a complete deed of donation of a piece of land in accordance with the form prescribed by the Civil Code. (8%)
Monday, September 22, 2008
Criminal Law Bar Questions 2008
I.
a) After due hearing on a petition for a writ of amparo founded on the acts of enforced disappearance and extralegal killing of the son of the complainant allegedly done by the respondent military officers, the court granted the petition. May the military officers be criminally charged n court with enforced disappearance and extralegal killing? Explain fully. (3%)
b) Are human rights violations considered as crimes in the Philippines? Explain. (3%)
II.
While Carlos was approaching his car, he saw it being driven away by Paolo, a thief. Carlos tried to stop Paolo by shouting at him, but Paolo ignored him. To prevent his car from being carnapped, Carlos drew his gun, aimed at the rear wheel of the car and fired. The shot blew the tire which caused the car to veer out of control and collide with an oncoming tricycle, killing the tricycle driver.
a) What is the criminal liability of Carlos, if any? Explain. (4%)
b) What is the criminal liability of Paolo, if any? Explain. (4%)
III.
Olimpio caught a cold and was running a fever. His doctor prescribed paracetamol. Olimpio went to a drug store with the prescription, and the pharmacist sold him three (3) tablets. Upon arriving home, he took a tablet. One hour later, he had a seizure and died. The autopsy showed that the tablet he had taken was not paracetamol but a pill to which he was allergic. The pharmacist was charged with murder. Is the charge proper? If not, what should it be? Explain. (6%)
IV.
Manolo revealed to his friend Domeng his desire to kill Cece. He likewise confided to Domeng his desire to borrow his revolver. Domeng lent it. Manolo shot Cece in Manila with Domeng’s revolver. As his gun was used in the killing, Domeng asked Mayor Tan to help him escape. The mayor gave Domeng P5,000 and told him to proceed to Mindanao to hide. Domeng went to Mindanao. The mayor was later charged as an accessory to Cece’s murder.
a) Can he be held liable for the charge? Explain. (4%)
b) Can he be held liable for any other offense? Explain fully. (3%)
V.
Eman, a vagrant, found a bag containing identification cards and a diamond ring along Roxas Blvd. Knowing that it was not his, he went to the nearest police station to seek help in finding the owner of the bag. At the precinct PO1 Melvin attended to him. In the investigation Eman proposed to PO1 Melvin, “in case you don’t find the owner let’s just pawn the ring and split the proceeds fifty-fifty (50/50).” PO1 Melvin then went straight to the pawnshop and pawned the ring for P50,000. Eman never saw PO1 Melvin again.
a) What is the criminal liability of Eman, if any? Explain. (3%)
b) What is the criminal liability of PO1 Melvin, if any? Explain. (3%)
VI.
Hubert and Eunice were married in the Philippines. Hubert took graduate studies in New York and met his former girlfriend Eula. They renewed their friendship and finally decided to get married. The first wife, Eunice, heard about the marriage and secured a copy of the marriage contract in New York. Eunice filed a case of bigamy against Hubert in the Philippines.
a) Will the case prosper? Explain. (4%)
b) If Eunice gave her consent to the second marriage, what will your answer be? Explain. (3%)
VII.
The inter-island vessel M/V Viva Lines I, while cruising off Batanes, was forced to seek shelter at the harbor of Kaoshiung, Taiwan because of a strong typhoon. While anchored in said harbor, Max, Baldo and Bogart arrived in a speedboat, fired a bazooka at the bow of the vessel, boarded it and divested the passengers of their money and jewelry. A passenger of M/V Viva Lines I, Dodong, took advantage of the confusion to settle an old grudge with another passenger, and killed him. After their apprehension, all four were charged with qualified piracy before a Philippine court.
a) Was the charge of qualified piracy against the three persons (Max, Baldo and Bogart) who boarded the inter-island vessel correct? Explain. (4%)
b) Was Dodong correctly charged before the Philippine court for qualified piracy? Explain. (3%)
VIII.
Francis and Joan were sweethearts, but their parents had objected to their relationship because they were first cousins. They forged a pact in writing to commit suicide. The agreement was to shoot each other in the head which they did. Joan died. Due to medical assistance, Francis survived. Is Francis criminally liable for the death of Joan? Explain. (5%)
IX.
Dennis leased his apartment to Myla for P10,000 a month. Myla failed to pay the rent for 3 months. Gabriel, the son of Dennis, prepared a demand letter falsely alleging that his father had authorized him to collect the unpaid rentals. Myla paid the unpaid rentals to Gabriel who kept the payment.
a) Did Gabriel commit a crime? Explain. (4%)
b) Can Gabriel invoke his relationship with Dennis to avoid criminal liability? Explain. (3%)
X.
Upon opening a letter containing 17 money orders, the mail carrier forged the signatures of the payees on the money orders and encashed them. What crime or crimes did the mail carrier commit? Explain briefly. (6%)
XI.
Ricky was reviewing for the bar exam when the commander of a vigilante group came to him and showed him a list of five policemen to be liquidated by them for graft and corruption. He was further asked if any of them is innocent. After going over the list, Ricky pointed to two of the policemen as honest. Later, the vigilante group liquidated the three other policemen in the list. The commander of the vigilante group reported the liquidation to Ricky. Is Ricky criminally liable? Explain. (7%)
XII.
Raissa and Martin are married to each other but had been separated for the last five years. Raissa decided to wed Juan, her suitor, who had no inkling that she was married. Raissa and Juan accomplished an application for marriage license which they subscribed and swore to before the Local Civil Registrar. Raissa declared, in the application, that she is single. The marriage license was issued. In due time, the couple were married by the mayor. Raissa and Juan had their first sexual intercourse later in the evening. What crime or crimes, if any, did Raissa commit? Explain briefly. (7%)
XIII.
Lucas had been the stay-in houseboy of spouses Nestor and Julia for five years. One night, while Nestor and Julia were out having dinner, Lucas and his friend Pedro gained entry into the masters’ bedroom with the use of a false key. They found Julia’s jewelry box in one of the cabinets which was unlocked. Lucas believed that Julia’s jewelry was inside the box. Unknown to Lucas and Pedro, the box was empty. Pedro took the box and left the bedroom with Lucas. They were shocked when they saw Nestor in the sala, pointing a gun at them. Nestor ordered them to stop and hand over the box. Pedro complied. It turned out that Nestor had just arrived in time to see Lucas and Pedro leaving the masters’ bedroom with the box. State with reasons, the crime or crimes, if any, Lucas and Pedro committed. (7%)
XIV.
Eliseo, the deputy sheriff, conducted the execution sale of the property of Andres to satisfy the judgment against him in favor of ABC Corporation, a government-owned or controlled corporation with an original charter. However, the representative of the corporation failed to attend the auction sale. Gonzalo, the winning bidder, purchased the property for P100,000 which he paid to Eliseo. Instead of remitting the amount to the Clerk of Court as ex-officio Provincial Sheriff, Eliseo lent the amount to Myrna, his officemate, who promised to repay the amount within two months, with interest thereon. However, Myrna reneged on her promise. Despite demands of ABC Corporation, Eliseo failed to remit the said amount.
a) State with reasons, the crime or crimes, if any, committed by Eliseo. (4%)
b) Would your answer to the first question be the same if ABC Corporation were a private corporation? Explain. (3%)
XV.
Roger, the leader of a crime syndicate in Malate, Manila, demanded the payment by Antonio, the owner of a motel in that area, of P10,000 a month as “protection money”. With the monthly payments, Roger assured, the syndicate would provide protection to Antonio, his business, and his employees. Should Antonio refuse, Roger warned, the motel owner would either be killed or his establishment destroyed. Antonio refused to pay the protection money. Days later, at around 3:00 in the morning, Mauro, a member of the criminal syndicate, arrived at Antonio’s home and hurled a grenade into an open window of the bedroom where Antonio, his wife and their three year-old daughter were sleeping. All three of them were killed instantly when the grenade exploded. State, with reasons, the crime or crimes that had been committed as well as the aggravating circumstances, if any, attendant thereto. (7%)
a) After due hearing on a petition for a writ of amparo founded on the acts of enforced disappearance and extralegal killing of the son of the complainant allegedly done by the respondent military officers, the court granted the petition. May the military officers be criminally charged n court with enforced disappearance and extralegal killing? Explain fully. (3%)
b) Are human rights violations considered as crimes in the Philippines? Explain. (3%)
II.
While Carlos was approaching his car, he saw it being driven away by Paolo, a thief. Carlos tried to stop Paolo by shouting at him, but Paolo ignored him. To prevent his car from being carnapped, Carlos drew his gun, aimed at the rear wheel of the car and fired. The shot blew the tire which caused the car to veer out of control and collide with an oncoming tricycle, killing the tricycle driver.
a) What is the criminal liability of Carlos, if any? Explain. (4%)
b) What is the criminal liability of Paolo, if any? Explain. (4%)
III.
Olimpio caught a cold and was running a fever. His doctor prescribed paracetamol. Olimpio went to a drug store with the prescription, and the pharmacist sold him three (3) tablets. Upon arriving home, he took a tablet. One hour later, he had a seizure and died. The autopsy showed that the tablet he had taken was not paracetamol but a pill to which he was allergic. The pharmacist was charged with murder. Is the charge proper? If not, what should it be? Explain. (6%)
IV.
Manolo revealed to his friend Domeng his desire to kill Cece. He likewise confided to Domeng his desire to borrow his revolver. Domeng lent it. Manolo shot Cece in Manila with Domeng’s revolver. As his gun was used in the killing, Domeng asked Mayor Tan to help him escape. The mayor gave Domeng P5,000 and told him to proceed to Mindanao to hide. Domeng went to Mindanao. The mayor was later charged as an accessory to Cece’s murder.
a) Can he be held liable for the charge? Explain. (4%)
b) Can he be held liable for any other offense? Explain fully. (3%)
V.
Eman, a vagrant, found a bag containing identification cards and a diamond ring along Roxas Blvd. Knowing that it was not his, he went to the nearest police station to seek help in finding the owner of the bag. At the precinct PO1 Melvin attended to him. In the investigation Eman proposed to PO1 Melvin, “in case you don’t find the owner let’s just pawn the ring and split the proceeds fifty-fifty (50/50).” PO1 Melvin then went straight to the pawnshop and pawned the ring for P50,000. Eman never saw PO1 Melvin again.
a) What is the criminal liability of Eman, if any? Explain. (3%)
b) What is the criminal liability of PO1 Melvin, if any? Explain. (3%)
VI.
Hubert and Eunice were married in the Philippines. Hubert took graduate studies in New York and met his former girlfriend Eula. They renewed their friendship and finally decided to get married. The first wife, Eunice, heard about the marriage and secured a copy of the marriage contract in New York. Eunice filed a case of bigamy against Hubert in the Philippines.
a) Will the case prosper? Explain. (4%)
b) If Eunice gave her consent to the second marriage, what will your answer be? Explain. (3%)
VII.
The inter-island vessel M/V Viva Lines I, while cruising off Batanes, was forced to seek shelter at the harbor of Kaoshiung, Taiwan because of a strong typhoon. While anchored in said harbor, Max, Baldo and Bogart arrived in a speedboat, fired a bazooka at the bow of the vessel, boarded it and divested the passengers of their money and jewelry. A passenger of M/V Viva Lines I, Dodong, took advantage of the confusion to settle an old grudge with another passenger, and killed him. After their apprehension, all four were charged with qualified piracy before a Philippine court.
a) Was the charge of qualified piracy against the three persons (Max, Baldo and Bogart) who boarded the inter-island vessel correct? Explain. (4%)
b) Was Dodong correctly charged before the Philippine court for qualified piracy? Explain. (3%)
VIII.
Francis and Joan were sweethearts, but their parents had objected to their relationship because they were first cousins. They forged a pact in writing to commit suicide. The agreement was to shoot each other in the head which they did. Joan died. Due to medical assistance, Francis survived. Is Francis criminally liable for the death of Joan? Explain. (5%)
IX.
Dennis leased his apartment to Myla for P10,000 a month. Myla failed to pay the rent for 3 months. Gabriel, the son of Dennis, prepared a demand letter falsely alleging that his father had authorized him to collect the unpaid rentals. Myla paid the unpaid rentals to Gabriel who kept the payment.
a) Did Gabriel commit a crime? Explain. (4%)
b) Can Gabriel invoke his relationship with Dennis to avoid criminal liability? Explain. (3%)
X.
Upon opening a letter containing 17 money orders, the mail carrier forged the signatures of the payees on the money orders and encashed them. What crime or crimes did the mail carrier commit? Explain briefly. (6%)
XI.
Ricky was reviewing for the bar exam when the commander of a vigilante group came to him and showed him a list of five policemen to be liquidated by them for graft and corruption. He was further asked if any of them is innocent. After going over the list, Ricky pointed to two of the policemen as honest. Later, the vigilante group liquidated the three other policemen in the list. The commander of the vigilante group reported the liquidation to Ricky. Is Ricky criminally liable? Explain. (7%)
XII.
Raissa and Martin are married to each other but had been separated for the last five years. Raissa decided to wed Juan, her suitor, who had no inkling that she was married. Raissa and Juan accomplished an application for marriage license which they subscribed and swore to before the Local Civil Registrar. Raissa declared, in the application, that she is single. The marriage license was issued. In due time, the couple were married by the mayor. Raissa and Juan had their first sexual intercourse later in the evening. What crime or crimes, if any, did Raissa commit? Explain briefly. (7%)
XIII.
Lucas had been the stay-in houseboy of spouses Nestor and Julia for five years. One night, while Nestor and Julia were out having dinner, Lucas and his friend Pedro gained entry into the masters’ bedroom with the use of a false key. They found Julia’s jewelry box in one of the cabinets which was unlocked. Lucas believed that Julia’s jewelry was inside the box. Unknown to Lucas and Pedro, the box was empty. Pedro took the box and left the bedroom with Lucas. They were shocked when they saw Nestor in the sala, pointing a gun at them. Nestor ordered them to stop and hand over the box. Pedro complied. It turned out that Nestor had just arrived in time to see Lucas and Pedro leaving the masters’ bedroom with the box. State with reasons, the crime or crimes, if any, Lucas and Pedro committed. (7%)
XIV.
Eliseo, the deputy sheriff, conducted the execution sale of the property of Andres to satisfy the judgment against him in favor of ABC Corporation, a government-owned or controlled corporation with an original charter. However, the representative of the corporation failed to attend the auction sale. Gonzalo, the winning bidder, purchased the property for P100,000 which he paid to Eliseo. Instead of remitting the amount to the Clerk of Court as ex-officio Provincial Sheriff, Eliseo lent the amount to Myrna, his officemate, who promised to repay the amount within two months, with interest thereon. However, Myrna reneged on her promise. Despite demands of ABC Corporation, Eliseo failed to remit the said amount.
a) State with reasons, the crime or crimes, if any, committed by Eliseo. (4%)
b) Would your answer to the first question be the same if ABC Corporation were a private corporation? Explain. (3%)
XV.
Roger, the leader of a crime syndicate in Malate, Manila, demanded the payment by Antonio, the owner of a motel in that area, of P10,000 a month as “protection money”. With the monthly payments, Roger assured, the syndicate would provide protection to Antonio, his business, and his employees. Should Antonio refuse, Roger warned, the motel owner would either be killed or his establishment destroyed. Antonio refused to pay the protection money. Days later, at around 3:00 in the morning, Mauro, a member of the criminal syndicate, arrived at Antonio’s home and hurled a grenade into an open window of the bedroom where Antonio, his wife and their three year-old daughter were sleeping. All three of them were killed instantly when the grenade exploded. State, with reasons, the crime or crimes that had been committed as well as the aggravating circumstances, if any, attendant thereto. (7%)
Sunday, September 21, 2008
2008 Bar Questions in Mercantile Law
I.
X Corporation entered into a contract with PT Construction Corp. for the latter to construct and build a sugar mill within six (6) months. They agreed that in case of delay, PT Construction Corp. will pay X Corporation P100,000 for every day of delay. To ensure payment of the agreed amount of damages, PT Construction Corporation secured from Atlantic Bank a confirmed and irrevocable letter of credit which was accepted by X Corporation in due time. One week before the expiration of the six (6) month period, PT Construction Corp. requested for an extension of time to deliver claiming that the delay was due to the fault of X Corporation. A controversy as to the cause of the delay which involved the workmanship of the building ensued. The controversy remained unresolved. Despite the controversy, X Corporation presented a claim against Atlantic Bank by executing a draft against the letter of credit.
a) Can Atlantic Bank refuse payment due to the unresolved controversy? Explain. (3%)
b) Can X Corporation claim directly from PT Construction Corporation? Explain. (3%)
II.
Tom Cruz obtained a loan of P1 Million from XYZ Bank to finance his purchase of 5,000 bags of fertilizer. He executed a trust receipt in favor of XYZ Bank over the 5000 bags of fertilizer. Tom Cruz withdrew the 5,000 bags from the warehouse to be transported to Lucena City where his store was located. On the way, armed robbers took from Tom Cruz the 5,000 bags of fertilizer. Tom Cruz now claims that his obligation to pay the loan to XYZ Bank is extinguished because the loss was not due to his fault. Is Tom Cruz correct? Explain. (4%)
III.
a) As a rule under the Negotiable Instruments Law, a subsequent party may hold a prior party liable but not vice versa. Give two (2) instances where a prior party may hold a subsequent party liable. (2%)
b) How does the “shelter principle” embodied in the Negotiable Instruments Law operate to give the rights of a holder-in-due course to a holder who does not have the status of a holder-in-due course? Briefly explain. (2%)
IV.
AB Corporation drew a check for payment to XY Bank. The check was given to an officer of AB Corporation who was instructed to deliver it to XY Bank. Instead, the officer, intending to defraud the Corporation, filled up the check by making himself as the payee and delivered it to XY bank for deposit to his personal account. XY Bank debited AB Corporation’s account. AB Corporation came to know of the officer’s fraudulent act after he absconded. AB Corporation asked XY Bank to credit its amount. XY Bank refused.
a) If you were the judge, what issues would you consider relevant to resolve the case? Explain. (3%)
b) How would you decide the case? (2%)
V.
Pancho drew a check to Bong and Gerard jointly. Bong indorsed the check and also forged Gerard’s indorsement. The payor bank paid the check and charged Pancho’s account for the amount of the check. Gerard received nothing from the payment.
a) Pancho asked the payor bank to credit his account. Should the bank comply? Explain fully. (3%)
b) Based on the facts, was Pancho as drawer discharged on the instrument? Why? (2%)
VI.
On January 1, 2000, Antonio Rivera secured a life insurance form SOS Insurance Corp. for P1 Million with Gemma Rivera, his adopted daughter, as the beneficiary. Antonio Rivera died on March 4, 2005 and in the police investigation, it was ascertained that Gemma Rivera participated as an accessory in the killing of Antonio Rivera. Can SOS Insurance Corp. avoid liability by setting up as a defense the participation of Gemma Rivera in the killing of Antonio Rivera? Discuss with reasons. (4%)
VII.
Terrazas de Patio Verde, a condominium building, has a value of P50 Million. The owner insured the building against fire with three (3) insurance companies for the following amounts:
Northern Insurance Corporation – P20 Million
Southern Insurance Corporation – P30 Million
Eastern Insurance Corporation – P50 Million
a) Is the owner’s taking of insurance for the building with three (3) insurers valid? Discuss. (3%)
b) The building was totally razed by fire. If the owner decides to claim from Eastern Insurance Corp. only P50 Million, will the claim prosper? Explain. (2%)
VIII.
City Railways, Inc. (CRI) provides train service, for a fee, to commuters from Manila to Calamba, Laguna. Commuters are required to purchase tickets and then proceed to designated loading and unloading facilities to board the train. Ricardo Santos purchased a ticket for Calamba and entered the station. While waiting, he had an altercation with the security guard of CRI leading to a fistfight. Ricardo Santos fell on the railway just as a train was entering the station. Ricardo Santos was run over by the train. He died.
In the action for damages filed by the heirs of Ricardo Santos, CRI interposed lack of cause of action, contending that the mishap occurred before Ricardo Santos boarded the train and that it was not guilty of negligence. Decide. (5%)
IX.
On October 30, 2007, M/V Pacific, a Philippine registered vessel owned by Cebu Shipping Company (CSC), sank on her voyage from Hong Kong to Manila. Empire Assurance Company (Empire) is the insurer of the lost cargoes loaded on board the vessel which were consigned to Debenhams Company. After it indemnified Debenhams, Empire as subrogee filed an action for damages against CSC.
a) Assume that the vessel was seaworthy. Before departing, the vessel was advised by the Japanese Meteorological Center that it was safe to travel to its destination. But while at sea, the vessel received a report of a typhoon moving within its general path. To avoid the typhoon, the vessel changed its course. However, it was still at the fringe of the typhoon when it was repeatedly hit by huge waves, foundered and eventually sank. The captain and the crew were saved except three (3) who perished. Is CSC liable to Empire? What principle of maritime law is applicable? Explain. (3%)
b) Assume that the vessel was not seaworthy as in fact its hull had leaked, causing flooding in the vessel. Will your answer be the same? Explain. (2%)
c) Assume the facts in question (b). Can the heirs of the three (3) crew members who perished recover from CSC? Explain fully. (3%)
X.
Nelson owned and controlled Sonnel Construction Company. Acting for the company, Nelson contracted the construction of a building. Without first installing a protective net atop the sidewalks adjoining the construction site, the company proceeded with the construction work. One day a heavy piece of lumber fell from the building. It smashed a taxicab which at that time had gone offroad and onto the sidewalk in order to avoid the traffic. The taxicab passenger died as a result.
a) Assume that the company had no more account and property in its name. As counsel for the heirs of the victim, whom will you sue for damages, and what theory will you adopt? (3%)
b) If you were the counsel for Sonnel Construction, how would you defend your client? What would be your theory? (2%)
c) Could the heirs hold the taxicab owners and driver liable? Explain. (2%)
XI.
a) Since February 8, 1935, the legislature has not passed even a single law creating a private corporation. What provision of the Constitution precludes the passage of such a law? (3%)
b) May the composition of the Board of Directors of the National Power Corporation (NPC) be validly reduced to three (3)? Explain your answer fully. (2%)
XII.
Pedro owns 70% of the subscribed capital stock of a company which owns an office building. Paolo and Juan own the remaining stock equally between them. Paolo owns a security agency, a janitorial company and a catering business. In behalf of the office building company, Paoplo engaged his companies to render their services to the office building. Are the service contracts valid? Explain. (4%)
XIII.
Grand Gas Corporation, a publicly listed company, discovered after extensive drilling a rich deposit of natural gas along the coast of Antique. For five (5) months, the company did not disclose the discovery so that is could quietly and cheaply acquire neighboring land and secure mining rights to the land. Between the discovery and its disclosure of the information to the Securities and Exchange Commission, all the directors and key officers of the company bought shares in the company at very low prices. After the disclosure, the price of the shares went up. The directors and officers sold their shares at huge profits.
a) What provision of the Securities Regulation Code (SRC) did they violate? Explain. (4%)
b) Assuming that the employees of the establishment handling the printing work of Grand Gas Corporation saw the exploration reports which were mistakenly sent to their establishment together with other materials to be printed. They too bought shares in the company at low prices and later sold them at huge profits. Will they be liable for violation of the SRC? Why? (3%)
XIV.
Ace Cruz subscribe to 100,000 shares of stock of JP Development Corporation, which has a par value of P1 per share. He paid P25,000 and promised to pay the balance before December 31, 2008. JP Development Corporation declared a cash dividend on October 15, 2008, payable on December 1, 2008.
a) For how many shares is Ace Cruz entitled to be paid cash dividends? Explain. (2%)
XV.
Eloise, an accomplished writer, was hired by Petong to write a bi-monthly newspaper column for Diario de Manila, a newly-established newspaper of which Petong was the editor-in-chief. Eloise was to be paid P1,000 for each column that was published. In the course of two months, Eloise submitted three columns which, after some slight editing, were printed in the newspaper. However, Diario de Manila proved unprofitable and closed only after two months. Due to the minimal amounts involved, Eloise chose not to pursue any claim for payment from the newspaper, which was owned by New Media Enterprises.
Three years later, Eloise was planning to publish an anthology of her works, and wanted to include the three columns that appeared in the Diario de Manila in her anthology. She asks for your legal advice:
a) Does Eloise have to secure authorization from New Media Enterprises to be able to publish her Diario de Manila columns in her own anthology? Explain fully. (4%)
b) Assume that the New Media Enterprises plans to publish Eloise’s columns in its own anthology entitled, “The Best of Diario de Manila”. Eloise wants to prevent the publication of her columns in that anthology since she was never paid by the newspaper. Name one irrefutable legal argument Eloise could cite to enjoin New Media Enterprises from including her columns in its anthology. (2%)
XVI.
In 1999, Mocha Warm, an American musician, had hit rap single called Warm Warm Honey which he himself composed and performed. The single was produced by a California record company, Galactic Records. Many noticed that some passages from Warm Warm Honey sounded eerily similar to parts of Under Hassle, a 1978 hit song by the British rock bank Majesty. A copyright infringement suit was filed in the United States against Mocha Warm by Majesty. It was later settled out of court, with Majesty receiving attribution as co-author of Warm Warm Honey as well as a share in the royalties.
By 2002, Mocha Warm was nearing bankruptcy and he sold his economic rights over Warm Warm Honey to Galactic Records for $10,000.
In 2008, Planet Films, a Filipino movie producing company, commissioned DJ Chef Jean, a Filipino musician, to produce an original re-mix of Warm Warm Honey for use of its latest films, Astig!. DJ Chef Jean remixed Warm Warm Honey with a salsa beat, and interspersed as well a recital of a poetic stanza by John Blake, a 17th century Scottish poet. DJ Chef Jean died shortly after submitting the remixed Warm Warm Honey to Planet Films.
Prior to the release of Astig!, Mocha Warm learns of the remixed Warm Warm Honey and demands that he be publiclyidentified as the author of the remixed song in all the CD covers and publicity releases of Planet Films.
a) Who are the parties or entities entitled to be credited as author of the remixed Warm Warm Honey? Reason out your answers. (3%)
b) Who are the particular parties or entities who exercise copyright over the remixed Warm Warm Honey? Explain. (3%)
XVII.
On January 1, 2008, Al obtained a loan of P10,000 from Bob to be paid on January 30, 2008, secured by a chattel mortgage on a Toyota motor car. On February 1, 2008, Al obtained another loan of P10,000 from Bob to be paid on February 15, 2008. He secured this by executing a chattel mortgage on a Honda motorcycle. On the due date of the first loan Al failed to pay. Bob foreclosed the chattel mortgage but the car was bidded for P6,000 only. Al also failed to pay the second loan due on February 15, 2008. Bob filed an action for collection of money. Al filed a motion to dismiss claiming that Bob should first foreclose the mortgage on the Honda motorcycle before he can file the action for sum of money. Decide with reasons. (4%)
XVIII.
a) Can a distressed corporation file a petition for corporate rehabilitation after the dismissal of its earlier petition for insolvency? Why? (2%)
b) Can the corporation file a petition for rehabilitation first, and after it is dismissed file a petition for insolvency? Why? (2%)
c) Explain the phrase “equality is equity” in corporate rehabilitation proceedings. (2%)
XIX.
Industry Bank, which has a net worth of P1 Billion, extended a loan to Celestial Properties Inc. amounting to P270 Million. The loan was secured by a mortgage over a vast commercial lot in the Fort Bonifacio Global City, appraised at P350 Million. After audit, the Bangko Sentral ng Pilipinas gave notice that the loan to Celestial Properties exceeded the single borrower’s limit at 25% of the bank’s net worth under a recent BSP Circular. In light of other previous similar violations of the credit limit requirement, the BSP advised Industry Bank to reduce the amount of the loan to Celestial Properties under pain of severe sanctions. When Industry Bank informed Celestial Properties that it intended to reduce the loan by P50 Million, Celestial Properties countered that the bank should first release a part of the collateral worth P50 Million. Industry Bank rejected the counter-proposal, and referred the matter to you as counsel. How would you advise Industry Bank to proceed, with its best interest in mind? (5%)
X Corporation entered into a contract with PT Construction Corp. for the latter to construct and build a sugar mill within six (6) months. They agreed that in case of delay, PT Construction Corp. will pay X Corporation P100,000 for every day of delay. To ensure payment of the agreed amount of damages, PT Construction Corporation secured from Atlantic Bank a confirmed and irrevocable letter of credit which was accepted by X Corporation in due time. One week before the expiration of the six (6) month period, PT Construction Corp. requested for an extension of time to deliver claiming that the delay was due to the fault of X Corporation. A controversy as to the cause of the delay which involved the workmanship of the building ensued. The controversy remained unresolved. Despite the controversy, X Corporation presented a claim against Atlantic Bank by executing a draft against the letter of credit.
a) Can Atlantic Bank refuse payment due to the unresolved controversy? Explain. (3%)
b) Can X Corporation claim directly from PT Construction Corporation? Explain. (3%)
II.
Tom Cruz obtained a loan of P1 Million from XYZ Bank to finance his purchase of 5,000 bags of fertilizer. He executed a trust receipt in favor of XYZ Bank over the 5000 bags of fertilizer. Tom Cruz withdrew the 5,000 bags from the warehouse to be transported to Lucena City where his store was located. On the way, armed robbers took from Tom Cruz the 5,000 bags of fertilizer. Tom Cruz now claims that his obligation to pay the loan to XYZ Bank is extinguished because the loss was not due to his fault. Is Tom Cruz correct? Explain. (4%)
III.
a) As a rule under the Negotiable Instruments Law, a subsequent party may hold a prior party liable but not vice versa. Give two (2) instances where a prior party may hold a subsequent party liable. (2%)
b) How does the “shelter principle” embodied in the Negotiable Instruments Law operate to give the rights of a holder-in-due course to a holder who does not have the status of a holder-in-due course? Briefly explain. (2%)
IV.
AB Corporation drew a check for payment to XY Bank. The check was given to an officer of AB Corporation who was instructed to deliver it to XY Bank. Instead, the officer, intending to defraud the Corporation, filled up the check by making himself as the payee and delivered it to XY bank for deposit to his personal account. XY Bank debited AB Corporation’s account. AB Corporation came to know of the officer’s fraudulent act after he absconded. AB Corporation asked XY Bank to credit its amount. XY Bank refused.
a) If you were the judge, what issues would you consider relevant to resolve the case? Explain. (3%)
b) How would you decide the case? (2%)
V.
Pancho drew a check to Bong and Gerard jointly. Bong indorsed the check and also forged Gerard’s indorsement. The payor bank paid the check and charged Pancho’s account for the amount of the check. Gerard received nothing from the payment.
a) Pancho asked the payor bank to credit his account. Should the bank comply? Explain fully. (3%)
b) Based on the facts, was Pancho as drawer discharged on the instrument? Why? (2%)
VI.
On January 1, 2000, Antonio Rivera secured a life insurance form SOS Insurance Corp. for P1 Million with Gemma Rivera, his adopted daughter, as the beneficiary. Antonio Rivera died on March 4, 2005 and in the police investigation, it was ascertained that Gemma Rivera participated as an accessory in the killing of Antonio Rivera. Can SOS Insurance Corp. avoid liability by setting up as a defense the participation of Gemma Rivera in the killing of Antonio Rivera? Discuss with reasons. (4%)
VII.
Terrazas de Patio Verde, a condominium building, has a value of P50 Million. The owner insured the building against fire with three (3) insurance companies for the following amounts:
Northern Insurance Corporation – P20 Million
Southern Insurance Corporation – P30 Million
Eastern Insurance Corporation – P50 Million
a) Is the owner’s taking of insurance for the building with three (3) insurers valid? Discuss. (3%)
b) The building was totally razed by fire. If the owner decides to claim from Eastern Insurance Corp. only P50 Million, will the claim prosper? Explain. (2%)
VIII.
City Railways, Inc. (CRI) provides train service, for a fee, to commuters from Manila to Calamba, Laguna. Commuters are required to purchase tickets and then proceed to designated loading and unloading facilities to board the train. Ricardo Santos purchased a ticket for Calamba and entered the station. While waiting, he had an altercation with the security guard of CRI leading to a fistfight. Ricardo Santos fell on the railway just as a train was entering the station. Ricardo Santos was run over by the train. He died.
In the action for damages filed by the heirs of Ricardo Santos, CRI interposed lack of cause of action, contending that the mishap occurred before Ricardo Santos boarded the train and that it was not guilty of negligence. Decide. (5%)
IX.
On October 30, 2007, M/V Pacific, a Philippine registered vessel owned by Cebu Shipping Company (CSC), sank on her voyage from Hong Kong to Manila. Empire Assurance Company (Empire) is the insurer of the lost cargoes loaded on board the vessel which were consigned to Debenhams Company. After it indemnified Debenhams, Empire as subrogee filed an action for damages against CSC.
a) Assume that the vessel was seaworthy. Before departing, the vessel was advised by the Japanese Meteorological Center that it was safe to travel to its destination. But while at sea, the vessel received a report of a typhoon moving within its general path. To avoid the typhoon, the vessel changed its course. However, it was still at the fringe of the typhoon when it was repeatedly hit by huge waves, foundered and eventually sank. The captain and the crew were saved except three (3) who perished. Is CSC liable to Empire? What principle of maritime law is applicable? Explain. (3%)
b) Assume that the vessel was not seaworthy as in fact its hull had leaked, causing flooding in the vessel. Will your answer be the same? Explain. (2%)
c) Assume the facts in question (b). Can the heirs of the three (3) crew members who perished recover from CSC? Explain fully. (3%)
X.
Nelson owned and controlled Sonnel Construction Company. Acting for the company, Nelson contracted the construction of a building. Without first installing a protective net atop the sidewalks adjoining the construction site, the company proceeded with the construction work. One day a heavy piece of lumber fell from the building. It smashed a taxicab which at that time had gone offroad and onto the sidewalk in order to avoid the traffic. The taxicab passenger died as a result.
a) Assume that the company had no more account and property in its name. As counsel for the heirs of the victim, whom will you sue for damages, and what theory will you adopt? (3%)
b) If you were the counsel for Sonnel Construction, how would you defend your client? What would be your theory? (2%)
c) Could the heirs hold the taxicab owners and driver liable? Explain. (2%)
XI.
a) Since February 8, 1935, the legislature has not passed even a single law creating a private corporation. What provision of the Constitution precludes the passage of such a law? (3%)
My Answer: Article XII, Section 16 of the 1987 Constitution provides that the
Congress shall not, except by general law, provide for the formation,
organization, or regulation of private corporations. Government-owned or
controlled corporations may be created or established by special charters in the
interest of the common good and subject to the test of economic viability.
b) May the composition of the Board of Directors of the National Power Corporation (NPC) be validly reduced to three (3)? Explain your answer fully. (2%)
My Answer: No. Sec. 6. of RA 6395, specifically fixes the number of the NPC
Board of Directors to seven members consisting of a chairman, vice-chairman and
five directors who, with the exception of the vice-chairman, shall be appointed
by the President of the Philippines, with the consent of the Commission on
Appointments. In the appointment of said members, the President of the
Philippines shall appoint one to represent Luzon, one to represent the Visayas,
one to represent Mindanao, one to represent labor, and one to represent the
business sector.
My Alternative Answer: Yes. Congress may reduce or increase the number of the members of the NPC Board of Directors by amending Section 6 of RA 6395, which limits the number thereof to seven.
XII.
Pedro owns 70% of the subscribed capital stock of a company which owns an office building. Paolo and Juan own the remaining stock equally between them. Paolo owns a security agency, a janitorial company and a catering business. In behalf of the office building company, Paoplo engaged his companies to render their services to the office building. Are the service contracts valid? Explain. (4%)
XIII.
Grand Gas Corporation, a publicly listed company, discovered after extensive drilling a rich deposit of natural gas along the coast of Antique. For five (5) months, the company did not disclose the discovery so that is could quietly and cheaply acquire neighboring land and secure mining rights to the land. Between the discovery and its disclosure of the information to the Securities and Exchange Commission, all the directors and key officers of the company bought shares in the company at very low prices. After the disclosure, the price of the shares went up. The directors and officers sold their shares at huge profits.
a) What provision of the Securities Regulation Code (SRC) did they violate? Explain. (4%)
b) Assuming that the employees of the establishment handling the printing work of Grand Gas Corporation saw the exploration reports which were mistakenly sent to their establishment together with other materials to be printed. They too bought shares in the company at low prices and later sold them at huge profits. Will they be liable for violation of the SRC? Why? (3%)
XIV.
Ace Cruz subscribe to 100,000 shares of stock of JP Development Corporation, which has a par value of P1 per share. He paid P25,000 and promised to pay the balance before December 31, 2008. JP Development Corporation declared a cash dividend on October 15, 2008, payable on December 1, 2008.
a) For how many shares is Ace Cruz entitled to be paid cash dividends? Explain. (2%)
My Answer: Ace Cruz is entitled to 100,000 shares, 75,000 of which can beb) On December 1, 2008, can Ace Cruz compel JP Development Corporation to issue to him the stock certificate corresponding to the P25,000 paid by him? (2%)
applied to the payment of the unpaid balance. Under Section 72 of the
Corporation Code, holders of subscribed shares not fully paid which are not
delinquent shall have all the rights of a stockholder. This includes the
stockholder's proprietary right to receive cash dividends.
My Answer: No. Ace Cruz cannot compel the corporation to issue him the stock
certificate, insofar as Section 63 of the Corporation Code prohibits the
issuance of certificate of stock to a subscriber until the full amount of his
subscription together with interest and expenses, if any is due, has been
paid.
XV.
Eloise, an accomplished writer, was hired by Petong to write a bi-monthly newspaper column for Diario de Manila, a newly-established newspaper of which Petong was the editor-in-chief. Eloise was to be paid P1,000 for each column that was published. In the course of two months, Eloise submitted three columns which, after some slight editing, were printed in the newspaper. However, Diario de Manila proved unprofitable and closed only after two months. Due to the minimal amounts involved, Eloise chose not to pursue any claim for payment from the newspaper, which was owned by New Media Enterprises.
Three years later, Eloise was planning to publish an anthology of her works, and wanted to include the three columns that appeared in the Diario de Manila in her anthology. She asks for your legal advice:
a) Does Eloise have to secure authorization from New Media Enterprises to be able to publish her Diario de Manila columns in her own anthology? Explain fully. (4%)
b) Assume that the New Media Enterprises plans to publish Eloise’s columns in its own anthology entitled, “The Best of Diario de Manila”. Eloise wants to prevent the publication of her columns in that anthology since she was never paid by the newspaper. Name one irrefutable legal argument Eloise could cite to enjoin New Media Enterprises from including her columns in its anthology. (2%)
XVI.
In 1999, Mocha Warm, an American musician, had hit rap single called Warm Warm Honey which he himself composed and performed. The single was produced by a California record company, Galactic Records. Many noticed that some passages from Warm Warm Honey sounded eerily similar to parts of Under Hassle, a 1978 hit song by the British rock bank Majesty. A copyright infringement suit was filed in the United States against Mocha Warm by Majesty. It was later settled out of court, with Majesty receiving attribution as co-author of Warm Warm Honey as well as a share in the royalties.
By 2002, Mocha Warm was nearing bankruptcy and he sold his economic rights over Warm Warm Honey to Galactic Records for $10,000.
In 2008, Planet Films, a Filipino movie producing company, commissioned DJ Chef Jean, a Filipino musician, to produce an original re-mix of Warm Warm Honey for use of its latest films, Astig!. DJ Chef Jean remixed Warm Warm Honey with a salsa beat, and interspersed as well a recital of a poetic stanza by John Blake, a 17th century Scottish poet. DJ Chef Jean died shortly after submitting the remixed Warm Warm Honey to Planet Films.
Prior to the release of Astig!, Mocha Warm learns of the remixed Warm Warm Honey and demands that he be publiclyidentified as the author of the remixed song in all the CD covers and publicity releases of Planet Films.
a) Who are the parties or entities entitled to be credited as author of the remixed Warm Warm Honey? Reason out your answers. (3%)
b) Who are the particular parties or entities who exercise copyright over the remixed Warm Warm Honey? Explain. (3%)
XVII.
On January 1, 2008, Al obtained a loan of P10,000 from Bob to be paid on January 30, 2008, secured by a chattel mortgage on a Toyota motor car. On February 1, 2008, Al obtained another loan of P10,000 from Bob to be paid on February 15, 2008. He secured this by executing a chattel mortgage on a Honda motorcycle. On the due date of the first loan Al failed to pay. Bob foreclosed the chattel mortgage but the car was bidded for P6,000 only. Al also failed to pay the second loan due on February 15, 2008. Bob filed an action for collection of money. Al filed a motion to dismiss claiming that Bob should first foreclose the mortgage on the Honda motorcycle before he can file the action for sum of money. Decide with reasons. (4%)
XVIII.
a) Can a distressed corporation file a petition for corporate rehabilitation after the dismissal of its earlier petition for insolvency? Why? (2%)
b) Can the corporation file a petition for rehabilitation first, and after it is dismissed file a petition for insolvency? Why? (2%)
c) Explain the phrase “equality is equity” in corporate rehabilitation proceedings. (2%)
XIX.
Industry Bank, which has a net worth of P1 Billion, extended a loan to Celestial Properties Inc. amounting to P270 Million. The loan was secured by a mortgage over a vast commercial lot in the Fort Bonifacio Global City, appraised at P350 Million. After audit, the Bangko Sentral ng Pilipinas gave notice that the loan to Celestial Properties exceeded the single borrower’s limit at 25% of the bank’s net worth under a recent BSP Circular. In light of other previous similar violations of the credit limit requirement, the BSP advised Industry Bank to reduce the amount of the loan to Celestial Properties under pain of severe sanctions. When Industry Bank informed Celestial Properties that it intended to reduce the loan by P50 Million, Celestial Properties countered that the bank should first release a part of the collateral worth P50 Million. Industry Bank rejected the counter-proposal, and referred the matter to you as counsel. How would you advise Industry Bank to proceed, with its best interest in mind? (5%)
Sunday, September 14, 2008
2008 Bar Questions in Taxation
I
In January 1970, Juan Gonzales bought one hectare of agricultural
land in Laguna for P100,000. This property has a current fair market
value of P10 million in view of the construction of a concrete road
traversing the property. Juan Gonzales agreed to exchange his
agricultural lot in Laguna for a one-half hectare residential property
located in Batangas, with a fair market value of P10 million, owned by
Alpha Corporation, a domestic corporation engaged in the purchase and
sale of real property. Alpha Corporation acquired the property in 2007 for
P9 million.
a) What is the nature of the real properties exchanged for tax
purposes – capital asset or ordinary asset? Explain. (3%)
b) Is Juan Gonzales subject to income tax on the exchange of
property? If so, what is the tax base and rate? Explain. (3%)
c) Is Alpha Corporation subject to income tax on the exchange of
property? If so, what is the tax base and rate? Explain. (3%)
II
Jose Cernan, Filipino citizen, married to Maria Cernan, died in a
vehicular accident in NLEX on July 10, 2007. The spouses owned,
among others, a 100-hectare agricultural land in Sta. Rosa, Laguna with
current fair market value of P20 million, which was the subject matter of
a Joint Venture Agreement about to be implemented with Star Land
Corporation (SLC), a well-known real estate development company. He
bought the said real property for P2 million fifty years ago. On January 5,
2008, the administrator of the estate and SLC jointly announced their big
plans to start conversion and development of the agricultural lands in
Sta. Rosa, Laguna, into first-class residential and commercial centers.
As a result, the prices of real properties in the locality have doubled.
The Administrator of the Estate of Jose Cernan filed the estate tax
return on January 9, 2008, by including in the gross estate the real
property at P2 million. After 9 months, the BIR issued deficiency estate
tax assessment, by valuing the real property at P40 million.
a) Is the BIR correct in valuing the real property at P40 million?
Explain. (3%)
b) If you disagree, what is the correct value to use for estate tax
purposes? Explain. (3%)
III
DEF Corporation is a wholly owned subsidiary of DEF, Inc.,
California, USA. Starting December 15, 2004, DEF Corporation paid
annual royalties to DEF, Inc., for the use of the latter’s software, for
which the former, as withholding agent of the government, withheld and
remitted to the BIR the 15% final tax based on the gross royalty
payments. The withholding tax return was filed and the tax remitted to
the BIR on January 10 of the following year. On April 10, 2007, DEF
Corporation filed a written claim for tax credit with the BIR, arising from
erroneously paid income taxes covering the years 2004 and 2005. The
following day, DEF Corporation filed a petition for review with the Court
of Tax Appeals involving the tax credit claim for 2004 and 2005.
a) As a BIR lawyer handling the case, would you raise the defense
of prescription in your answer to the claim for tax credit? Explain. (4%)
b) Can the BIR lawyer raise the defense that DEF Corporation is
not the proper party to file such claim for tax credit? Explain. (3%)
IV
JKL Corporation is a domestic corporation engaged in the
importation and sale of motor vehicles in the Philippines and is duly
registered with the Subic Bay Metropolitan Authority (SBMA). In
December 2007, it imported several second-hand motor vehicles from
Japan and Korea, which it stores in a warehouse in Subic Bay. It sold
these motor vehicles in April 2008, to persons residing in the customs
territory.
a) Are the importations of motor vehicles from abroad subject to
customs duties and value added taxes? Explain. (4%)
b) If they are taxable, when must the duties and taxes be paid?
What are the bases for and purposes of computing customs duties and
VAT? To whom must the duties and VAT be paid? Explain. (3%)
V
Maria Suerte, a Filipino citizen, purchased a lot in Makati City in
1980 at a price of P1 million. Said property has been leased to MAS
Corporation, a domestic corporation engaged in manufacturing paper
products, owned 99% by Maria Suerte. In October 2007, EIP
Corporation, a real estate developer, expressed its desire to buy the
Makati property at its fair market value of P300 million, payable as
follows: (a) P60 million downpayment; and (b) balance, payable equally
in twenty four (24) monthly consecutive installments. Upon the advice of
a tax lawyer, Maria Suerte exchanged her Makati property for shares of
stock of MAS Corporation. A BIR ruling, confirming the tax-free
exchange of property for shares of stock, was secured from the BIR
National Office and a Certificate Authorizing Registration was issued by
the Revenue District Officer (RDO) where the property was located.
Subsequently, she sold her entire stockholdings in MAS Corporation to
EIP Corporation for P300 million. In view of the tax advice, Maria Suerte
paid only the capital gains tax of P29,895,000 (P100,000 x 5% plus
P298,900,000 x 10%), instead of the corporate income tax of
P104,650,000 (35% on P299 million gain from sale of real property).
After evaluating the capital gains tax payment, the RDO wrote a letter to
Maria Suerte, stating that she committed tax evasion.
Is the contention of the RDO tenable? Or was it tax avoidance that
Maria Suerte had resorted to? Explain. (6%)
VI
While driving his car to Baguio last month, Pedro Asuncion,
together with his wife Assunta, and only son, Jaime, met an accident that
caused the instantaneous death of Jaime. The following day, Assunta
also died in the hospital. The spouses and their son had the following
assets and liabilities at the time of death:
................................Assunta........................................................ Jaime
................................Exclusive..................... Conjugal.................. Exclusive
................................______________________________________________
Cash......................................................... P10,000,000............ P1,200,000.
Cars .......................P2,000,000..................... 500,000.
Land........................ 5,000,000.................. 2,000,000.
Residential house .........................................4,000,000.
Mortgage payable........................................ 2,500,000.
Funeral expenses............................................ 300,000.
a) Is the Estate of Jaime Asuncion liable for estate tax? Explain.
(4%)
b) Is vanishing deduction applicable to the Estate of Assunta
Asuncion? Explain. (4%)
VII
After examining the books and records of EDS Corporation, the
2004 final assessment notice, showing basic tax of P1,000,000,
deficiency interest of P400,000, and due date for payment of April 30,
2007, but without the demand letter, was mailed and released by the BIR
on April 15, 2007. The registered letter, containing the tax assessment,
was received by the EDS Corporation on April 25, 2007.
a) What is an assessment notice? What are the requisites of a
valid assessment? Explain. (3%)
b) As tax lawyer of EDS Corporation, what legal defense(s) would
you raise against the assessment? Explain. (3%)
VIII
The City of Manila enacted an ordinance, imposing a 5% tax on
gross receipts on rentals of space in privately-owned public markets.
BAT Corporation questioned the validity of the ordinance, stating that the
tax is an income tax, which cannot be imposed by the city government.
Do you agree with the position of BAT Corporation? Explain. (5%)
IX
William Antonio imported into the Philippines a luxury car worth
US$100,000. This car was, however, declared only for US$20,000 and
corresponding customs duties and taxes were paid thereon.
Subsequently, the Collector of Customs discovered the underdeclaration
and he initiated forfeiture proceedings of the imported car.
a) May the Collector of Customs declare the imported car forfeited
in favor of the government? Explain. (3%)
b) Are forfeiture proceedings of goods illegally imported criminal in
nature? Explain. (3%)
X
John McDonald, a U.S. citizen residing in Makati City, bought
shares of stock of a domestic corporation whose shares are listed and
traded in the Philippine Stock Exchange at the price of P2 million.
Yesterday, he sold the shares of stock through his favorite Makati
stockbroker at a gain of P200,000.
a) Is John McDonald subject to Philippine income tax on the sale
of his shares through his stockbroker? Is he liable for any other tax?
Explain. (3%)
b) If John McDonald directly sold the shares to his best friend, who
is another U.S. citizen residing in Makati, at a gain of P200,000, is he
liable for Philippine income tax? If so, what is the tax base and rate?
(3%)
XI
Pedro Manalo, a Filipino citizen residing in Makati City, owns a
vacation house and lot in San Francisco, California, U.S.A, which he
acquired in 2000 for P15 million. On January 10, 2006, he sold said real
property to Juan Mayaman, another Filipino citizen residing in Quezon
City, for P20 million. On February 9, 2006, Manalo filed the capital gains
tax return and paid P1.2 million representing 6% capital gains tax. Since
Manalo did not derive any ordinary income, no income tax return was
filed by him for 2006. After the tax audit conducted in 2007, the BIR
officer assessed Manalo for deficiency income tax computed as follows:
P5 million (P20 million less P15 million) x 35% = P1.75 million, without
the capital gains tax paid being allowed as tax credit. Manalo consulted a
real estate broker who said that the P1.2 million capital gains tax should
be credited from the P1.75 million deficiency income tax.
a) Is the BIR officer’s tax assessment correct? Explain. (3%)
b) If you were hired by Manalo as his tax consultant, what advice
would you give him to protect his interest? Explain. (3%)
XII
Greenhills Condominium Corporation incorporated in 2001 is a
non-stock, non-profit association of unit owners in Greenhills Tower, San
Juan City. To be able to reduce the association dues being collected
from the unit owners, the Board of Directors of the corporation agreed to
lease part of the ground floor of the condominium building to DEF
Savings Bank for P120,000 a month or P1.44 million for the year,
starting January 2007.
a) Is the non-stock, non-profit association liable for value added
tax in 2007? If your answer is in the negative, is it liable for another kind
of business tax? (4%)
b) Will the association be liable for value added tax in 2008 if it
increases the rental to P150,000 a month beginning January 2008?
Explain. (3%)
XIII
MNO Corporation was organized on July 1, 2006, to engage in
trading of school supplies, with principal place of business in Cubao,
Quezon City. Its books of accounts and income statement showing gross
sales as follows:
July 1, 2006 to December 31, 2006.........................P 5,000,000.
January 1, 2007 to June 30, 2007........................ P 10,000,000.
July 1, 2007 to December 31, 2007....................... P 15,000,000.
Since MNO Corporation adopted fiscal year ending June 30 as its
taxable year for income tax purposes, it paid its 2% business tax for
fiscal year ending June 30, 2007 based on gross sales of P15 million.
However, the Quezon City Treasurer assessed the corporation for
deficiency business tax for 2007 based on gross sales of P25 million
alleging that local business taxes shall be computed based on calendar
year.
a) Is the position of the city treasurer tenable? Explain. (3%)
b) May the deficiency business tax be paid in installments without
surcharge and interest? Explain. (3%)
XIV
Spouses Jose San Pedro and Clara San Pedro, both Filipino
citizens, are the owners of a residential house and lot in Quezon City.
After the recent wedding of their son, Mario, to Maria, the spouses
donated said real property to them. At the time of donation, the real
property has a fair market value of P2 million.
a) Are Mario and Maria subject to income tax for the value of the
real property donated to them? Explain. (4%)
b) Are Jose and Clara subject to donor’s tax? If so, how much is
the taxable gift of each spouse and what rate shall be applied to the gift?
Explain. (4%)
XV
In 2007, spouses Renato and Judy Garcia opened peso and dollar
deposits at the Philippine branch of the Hong Kong Bank in Manila.
Renato is an overseas worker in Hong Kong while Judy lives and works
in Manila. During the year, the bank paid interest income of P10,000 on
the peso deposit and US$1,000 on the dollar deposit. The bank withheld
final income tax equivalent to 20% of the entire interest income and
remitted the same to the BIR.
a) Are the interest incomes on the bank deposits of spouses
Renato and Judy Garcia subject to income tax? Explain. (4%)
b) Is the bank correct in withholding the 20% final tax on the entire
interest income? Explain. (3%)
In January 1970, Juan Gonzales bought one hectare of agricultural
land in Laguna for P100,000. This property has a current fair market
value of P10 million in view of the construction of a concrete road
traversing the property. Juan Gonzales agreed to exchange his
agricultural lot in Laguna for a one-half hectare residential property
located in Batangas, with a fair market value of P10 million, owned by
Alpha Corporation, a domestic corporation engaged in the purchase and
sale of real property. Alpha Corporation acquired the property in 2007 for
P9 million.
a) What is the nature of the real properties exchanged for tax
purposes – capital asset or ordinary asset? Explain. (3%)
b) Is Juan Gonzales subject to income tax on the exchange of
property? If so, what is the tax base and rate? Explain. (3%)
c) Is Alpha Corporation subject to income tax on the exchange of
property? If so, what is the tax base and rate? Explain. (3%)
II
Jose Cernan, Filipino citizen, married to Maria Cernan, died in a
vehicular accident in NLEX on July 10, 2007. The spouses owned,
among others, a 100-hectare agricultural land in Sta. Rosa, Laguna with
current fair market value of P20 million, which was the subject matter of
a Joint Venture Agreement about to be implemented with Star Land
Corporation (SLC), a well-known real estate development company. He
bought the said real property for P2 million fifty years ago. On January 5,
2008, the administrator of the estate and SLC jointly announced their big
plans to start conversion and development of the agricultural lands in
Sta. Rosa, Laguna, into first-class residential and commercial centers.
As a result, the prices of real properties in the locality have doubled.
The Administrator of the Estate of Jose Cernan filed the estate tax
return on January 9, 2008, by including in the gross estate the real
property at P2 million. After 9 months, the BIR issued deficiency estate
tax assessment, by valuing the real property at P40 million.
a) Is the BIR correct in valuing the real property at P40 million?
Explain. (3%)
b) If you disagree, what is the correct value to use for estate tax
purposes? Explain. (3%)
III
DEF Corporation is a wholly owned subsidiary of DEF, Inc.,
California, USA. Starting December 15, 2004, DEF Corporation paid
annual royalties to DEF, Inc., for the use of the latter’s software, for
which the former, as withholding agent of the government, withheld and
remitted to the BIR the 15% final tax based on the gross royalty
payments. The withholding tax return was filed and the tax remitted to
the BIR on January 10 of the following year. On April 10, 2007, DEF
Corporation filed a written claim for tax credit with the BIR, arising from
erroneously paid income taxes covering the years 2004 and 2005. The
following day, DEF Corporation filed a petition for review with the Court
of Tax Appeals involving the tax credit claim for 2004 and 2005.
a) As a BIR lawyer handling the case, would you raise the defense
of prescription in your answer to the claim for tax credit? Explain. (4%)
b) Can the BIR lawyer raise the defense that DEF Corporation is
not the proper party to file such claim for tax credit? Explain. (3%)
IV
JKL Corporation is a domestic corporation engaged in the
importation and sale of motor vehicles in the Philippines and is duly
registered with the Subic Bay Metropolitan Authority (SBMA). In
December 2007, it imported several second-hand motor vehicles from
Japan and Korea, which it stores in a warehouse in Subic Bay. It sold
these motor vehicles in April 2008, to persons residing in the customs
territory.
a) Are the importations of motor vehicles from abroad subject to
customs duties and value added taxes? Explain. (4%)
b) If they are taxable, when must the duties and taxes be paid?
What are the bases for and purposes of computing customs duties and
VAT? To whom must the duties and VAT be paid? Explain. (3%)
V
Maria Suerte, a Filipino citizen, purchased a lot in Makati City in
1980 at a price of P1 million. Said property has been leased to MAS
Corporation, a domestic corporation engaged in manufacturing paper
products, owned 99% by Maria Suerte. In October 2007, EIP
Corporation, a real estate developer, expressed its desire to buy the
Makati property at its fair market value of P300 million, payable as
follows: (a) P60 million downpayment; and (b) balance, payable equally
in twenty four (24) monthly consecutive installments. Upon the advice of
a tax lawyer, Maria Suerte exchanged her Makati property for shares of
stock of MAS Corporation. A BIR ruling, confirming the tax-free
exchange of property for shares of stock, was secured from the BIR
National Office and a Certificate Authorizing Registration was issued by
the Revenue District Officer (RDO) where the property was located.
Subsequently, she sold her entire stockholdings in MAS Corporation to
EIP Corporation for P300 million. In view of the tax advice, Maria Suerte
paid only the capital gains tax of P29,895,000 (P100,000 x 5% plus
P298,900,000 x 10%), instead of the corporate income tax of
P104,650,000 (35% on P299 million gain from sale of real property).
After evaluating the capital gains tax payment, the RDO wrote a letter to
Maria Suerte, stating that she committed tax evasion.
Is the contention of the RDO tenable? Or was it tax avoidance that
Maria Suerte had resorted to? Explain. (6%)
VI
While driving his car to Baguio last month, Pedro Asuncion,
together with his wife Assunta, and only son, Jaime, met an accident that
caused the instantaneous death of Jaime. The following day, Assunta
also died in the hospital. The spouses and their son had the following
assets and liabilities at the time of death:
................................Assunta........................................................ Jaime
................................Exclusive..................... Conjugal.................. Exclusive
................................______________________________________________
Cash......................................................... P10,000,000............ P1,200,000.
Cars .......................P2,000,000..................... 500,000.
Land........................ 5,000,000.................. 2,000,000.
Residential house .........................................4,000,000.
Mortgage payable........................................ 2,500,000.
Funeral expenses............................................ 300,000.
a) Is the Estate of Jaime Asuncion liable for estate tax? Explain.
(4%)
b) Is vanishing deduction applicable to the Estate of Assunta
Asuncion? Explain. (4%)
VII
After examining the books and records of EDS Corporation, the
2004 final assessment notice, showing basic tax of P1,000,000,
deficiency interest of P400,000, and due date for payment of April 30,
2007, but without the demand letter, was mailed and released by the BIR
on April 15, 2007. The registered letter, containing the tax assessment,
was received by the EDS Corporation on April 25, 2007.
a) What is an assessment notice? What are the requisites of a
valid assessment? Explain. (3%)
b) As tax lawyer of EDS Corporation, what legal defense(s) would
you raise against the assessment? Explain. (3%)
VIII
The City of Manila enacted an ordinance, imposing a 5% tax on
gross receipts on rentals of space in privately-owned public markets.
BAT Corporation questioned the validity of the ordinance, stating that the
tax is an income tax, which cannot be imposed by the city government.
Do you agree with the position of BAT Corporation? Explain. (5%)
IX
William Antonio imported into the Philippines a luxury car worth
US$100,000. This car was, however, declared only for US$20,000 and
corresponding customs duties and taxes were paid thereon.
Subsequently, the Collector of Customs discovered the underdeclaration
and he initiated forfeiture proceedings of the imported car.
a) May the Collector of Customs declare the imported car forfeited
in favor of the government? Explain. (3%)
b) Are forfeiture proceedings of goods illegally imported criminal in
nature? Explain. (3%)
X
John McDonald, a U.S. citizen residing in Makati City, bought
shares of stock of a domestic corporation whose shares are listed and
traded in the Philippine Stock Exchange at the price of P2 million.
Yesterday, he sold the shares of stock through his favorite Makati
stockbroker at a gain of P200,000.
a) Is John McDonald subject to Philippine income tax on the sale
of his shares through his stockbroker? Is he liable for any other tax?
Explain. (3%)
b) If John McDonald directly sold the shares to his best friend, who
is another U.S. citizen residing in Makati, at a gain of P200,000, is he
liable for Philippine income tax? If so, what is the tax base and rate?
(3%)
XI
Pedro Manalo, a Filipino citizen residing in Makati City, owns a
vacation house and lot in San Francisco, California, U.S.A, which he
acquired in 2000 for P15 million. On January 10, 2006, he sold said real
property to Juan Mayaman, another Filipino citizen residing in Quezon
City, for P20 million. On February 9, 2006, Manalo filed the capital gains
tax return and paid P1.2 million representing 6% capital gains tax. Since
Manalo did not derive any ordinary income, no income tax return was
filed by him for 2006. After the tax audit conducted in 2007, the BIR
officer assessed Manalo for deficiency income tax computed as follows:
P5 million (P20 million less P15 million) x 35% = P1.75 million, without
the capital gains tax paid being allowed as tax credit. Manalo consulted a
real estate broker who said that the P1.2 million capital gains tax should
be credited from the P1.75 million deficiency income tax.
a) Is the BIR officer’s tax assessment correct? Explain. (3%)
b) If you were hired by Manalo as his tax consultant, what advice
would you give him to protect his interest? Explain. (3%)
XII
Greenhills Condominium Corporation incorporated in 2001 is a
non-stock, non-profit association of unit owners in Greenhills Tower, San
Juan City. To be able to reduce the association dues being collected
from the unit owners, the Board of Directors of the corporation agreed to
lease part of the ground floor of the condominium building to DEF
Savings Bank for P120,000 a month or P1.44 million for the year,
starting January 2007.
a) Is the non-stock, non-profit association liable for value added
tax in 2007? If your answer is in the negative, is it liable for another kind
of business tax? (4%)
b) Will the association be liable for value added tax in 2008 if it
increases the rental to P150,000 a month beginning January 2008?
Explain. (3%)
XIII
MNO Corporation was organized on July 1, 2006, to engage in
trading of school supplies, with principal place of business in Cubao,
Quezon City. Its books of accounts and income statement showing gross
sales as follows:
July 1, 2006 to December 31, 2006.........................P 5,000,000.
January 1, 2007 to June 30, 2007........................ P 10,000,000.
July 1, 2007 to December 31, 2007....................... P 15,000,000.
Since MNO Corporation adopted fiscal year ending June 30 as its
taxable year for income tax purposes, it paid its 2% business tax for
fiscal year ending June 30, 2007 based on gross sales of P15 million.
However, the Quezon City Treasurer assessed the corporation for
deficiency business tax for 2007 based on gross sales of P25 million
alleging that local business taxes shall be computed based on calendar
year.
a) Is the position of the city treasurer tenable? Explain. (3%)
b) May the deficiency business tax be paid in installments without
surcharge and interest? Explain. (3%)
XIV
Spouses Jose San Pedro and Clara San Pedro, both Filipino
citizens, are the owners of a residential house and lot in Quezon City.
After the recent wedding of their son, Mario, to Maria, the spouses
donated said real property to them. At the time of donation, the real
property has a fair market value of P2 million.
a) Are Mario and Maria subject to income tax for the value of the
real property donated to them? Explain. (4%)
b) Are Jose and Clara subject to donor’s tax? If so, how much is
the taxable gift of each spouse and what rate shall be applied to the gift?
Explain. (4%)
XV
In 2007, spouses Renato and Judy Garcia opened peso and dollar
deposits at the Philippine branch of the Hong Kong Bank in Manila.
Renato is an overseas worker in Hong Kong while Judy lives and works
in Manila. During the year, the bank paid interest income of P10,000 on
the peso deposit and US$1,000 on the dollar deposit. The bank withheld
final income tax equivalent to 20% of the entire interest income and
remitted the same to the BIR.
a) Are the interest incomes on the bank deposits of spouses
Renato and Judy Garcia subject to income tax? Explain. (4%)
b) Is the bank correct in withholding the 20% final tax on the entire
interest income? Explain. (3%)
2008 Bar Questions in Civil Law
I
Ana Rivera had a husband, a Filipino citizen like her, who was
among the passengers on board a commercial jet plane which crashed in
the Atlantic Ocean ten(10) years earlier and had never been heard of ever
since. Believing that her husband had died, Ana married Adolf Cruz
Staedtler, a divorced German national born of a German father and a
Filipino mother residing in Stuttgart. To avoid being required to submit the
required certificate of capacity to marry from the German Embassy in
Manila, Adolf stated in the application for marriage license that he was a
Filipino citizen. With the marriage license stating that Adolf was a Filipino,
the couple got married in a ceremony officiated by the Parish Priest of
Calamba, Laguna in a beach in Nasugbu, Batangas, as the local parish
priest refused to solemnize marriages except in his church. Is the marriage
valid? Explain fully. (5%)
II
At age 18, Marian found out that she was pregnant. She insured her
own life and named her unborn child as her sole beneficiary. When she
was already due to give birth, she and her boyfriend Pietro, the father of her
unborn child, were kidnapped in a resort in Bataan where they were
vacationing. The military gave chase and after one week, they were found
in an abandoned hut in Cavite. Marian and Pietro were hacked with bolos.
Marian and the baby she delivered were both found dead, with the baby’s
umbilical cord already cut. Pietro survived.
a) Can Marian’s baby be the beneficiary of the insurance taken on
the life of the mother? (2%)
b) Between Marian and the baby, who is presumed to have died
ahead? (1%)
c) Will Pietro, as surviving biological father of the baby, be entitled to
claim the proceeds of the life insurance on the life of Marian? (2%)
III
Roderick and Faye were high school sweethearts. When Roderick
was 18 and Faye, 16 years old, they started to live together as husband
and wife without the benefit of marriage. When Faye reached 18 years of
age, her parents forcibly took her back and arranged for her marriage to
Brad . Although Faye lived with Brad after the marriage, Roderick continued
to regularly visit Faye while Brad was away at work. During their marriage,
Faye gave birth to a baby girl, Laica. When Faye was 25 years old, Brad
discovered her continued liaison with Roderick and in one of their heated
arguments, Faye shot Brad to death. She lost no time in marrying her true
love Roderick, without a marriage license, claiming that they have been
continuously cohabiting for more than 5 years.
a) Was the marriage of Roderick and Faye valid? (2%)
b) What is the filiation status of Laica? (2%)
c) Can Laica bring an action to impugn her own status on the ground
that based on DNA results, Roderick is her biological father? (2%)
d) Can Laica be legitimated by the marriage of her biological
parents? (1%)
IV
Gianna was born to Andy and Aimee, who at the time of Gianna’s
birth were not married to each other. While Andy was single at that time,
Aimee was still in the process of securing a judicial declaration of nullity on
her marriage to her ex-husband. Gianna’s birth certificate, which was
signed by both Andy and Aimee, registered the status of Gianna as
“legitimate”, her surname carrying that of Andy’s, and that her parents
were married to each other.
a) Can a judicial action for correction of entries in Gianna’s birth
certificate be successfully maintained to:
i) Change her status from “legitimate” to “illegitimate” (1%);
and
ii) Change her surname from that of Andy’s to Aimee’s maiden
surname? (1%)
b) Instead of a judicial action, can administrative proceedings be
brought for the purpose of making the above corrections? (2%)
c) Assuming that Aimee is successful in declaring her former
marriage void, and Andy and Aimee subsequently married each other,
would Gianna be legitimated? (1%)
V
Despite several relationships with different women, Andrew remained
unmarried. His first relationship with Brenda produced a daughter, Amy,
now 30 years old. His second, with Carla, produced two sons: Jon and
Ryan. His third, with Donna, bore him two daughters: Vina and Wilma. His
fourth, with Elena, bore him no children although Elena has a daughter
Jane, from a previous relationship. His last, with Fe, produced no biological
children but they informally adopted without court proceedings, Sandy, now
13 years old, whom they consider as their own. Sandy was orphaned as
a baby and was entrusted to them by the midwife who attended to Sandy’s
birth. All the children, including Amy, now live with Andrew in his house.
a) Is there any legal obstacle to the legal adoption of Amy by
Andrew? To the legal adoption of Sandy by Andrew and Elena? (2%)
b) In his old age, can Andrew be legally entitled to claim support from
Amy, Jon, Ryan, Vina , Wilma and Sandy assuming that all of them have
the means to support him? (1%)
c) Can Amy, Jon, Ryan, Vina, Wilma and Sandy legally claim support
from each other? (2%)
d) Can Jon and Jane legally marry? (1%)
VI
Alex died without a will, leaving only an undeveloped and untitled
lot in Taguig City. He is survived by his wife and 4 children. His wife told the
children that she is waiving her share in the property, and allowed Bobby,
the eldest son who was about to get married, to construct his house on ¼
of the lot, without however obtaining the consent of his siblings. After
settlement of Alex’s estate and partition among the heirs, it was discovered
that Bobby’s house was constructed on the portion allocated to his sister,
Cathy. Cathy asked Bobby to demolish his house and vacate the portion
allotted to her. In lieu of demolition, Bobby offered to purchase from Cathy
the lot portion on which his house was constructed. At that time, the house
was valued at P300,000 while the portion of the lot on which the house was
constructed was valued at P350,000.
a) Can Cathy lawfully ask for demolition of Bobby’s house? (3%)
b) Can Bobby legally insist on purchasing the land? (2%)
VII
Anthony bought a piece of untitled agricultural land from Bert. Bert, in
turn, acquired the property by forging Carlo’s signature in a deed of sale
over the property. Carlo had been in possession of the property for 8 years,
declared it for tax purposes, and religiously paid all taxes due on the
property. Anthony is not aware of the defect in Bert’s title, but has been in
actual physical possession of the property from the time he bought it from
Bert, who had never been in possession. Anthony has since then been in
possession of the property for one year.
a) Can Anthony acquire ownership of the property by acquisitive
prescription? How many more years does he have to possess it to acquire
ownership? (2%)
b) If Carlo is able to legally recover his property, can he require
Anthony to account for all the fruits he has harvested from the property
while in possession? (2%)
c) If there are standing crops on the property when Carlo recovers
possession, can Carlo appropriate them? (2%)
VIII
Adam, a building contractor, was engaged by Blas to construct a
house on a lot which he (Blas) owns. While digging on the lot in order to lay
down the foundation of the house, Adam hit a very hard object. It turned out
to be the vault of the old Banco de las Islas Filipinas. Using a detonation
device, Adam was able to open the vault containing old notes and coins
which were in circulation during the Spanish era. While the notes and coins
are no longer legal tender, they were valued at P 100 million because of
their historical value and the coins’ silver and nickel content. The following
filed legal claims over the notes and coins:
i) Adam, as finder;
ii) Blas, as owner of the property where they were found;
iii) Bank of the Philippine Islands, as successor-in-interest of
the owner of the vault; and
iv) The Philippine Government because of their historical value.
a) Who owns the notes and coins? (4%)
b) Assuming that either or both Adam and Blas are adjudged as
owners, will the notes and coins be deemed part of their absolute
community or conjugal partnership of gains with their respective spouses?
(2%)
IX
The properties of Jessica and Jenny, who are neighbors, lie along the
banks of the Marikina River. At certain times of the year, the river would
swell and as the water recedes, soil, rocks and other materials are
deposited on Jessica’s and Jenny’s properties. This pattern of the river
swelling, receding and depositing soil and other materials being deposited
on the neighbors’ properties have gone on for many years. Knowing this
pattern, Jessica constructed a concrete barrier about 2 meters from her
property line and extending towards the river, so that when the water
recedes, soil and other materials are trapped within this barrier. After
several years, the area between Jessica’s property line to the concrete
barrier was completely filled with soil, effectively increasing Jessica’s
property by 2 meters. Jenny’s property, where no barrier was constructed,
also increased by one meter along the side of the river.
a) Can Jessica and Jenny legally claim ownership over the additional
2 meters and one meter, respectively, of land deposited along their
properties? (2%)
b) If Jessica’s and Jenny’s properties are registered, will the benefit
of such registration extend to the increased area of their properties? (2%)
c) Assume the two properties are on a cliff adjoining the shore of
Laguna Lake. Jessica and Jenny had a hotel built on the properties. They
had the earth and rocks excavated from the properties dumped on the
adjoining shore, giving rise to a new patch of dry land. Can they validly lay
claim to the patch of land? (2%)
X
Arthur executed a will which contained only: (i) a provision
disinheriting his daughter Bernice for running off with a married man, and
(ii) a provision disposing of his share in the family house and lot in favor of
his other children Connie and Dora. He did not make any provisions in
favor of his wife Erica, because as the will stated, she would anyway get ½
of the house and lot as her conjugal share. The will was very brief and
straightforward and both the above provisions were contained in page 1,
which Arthur and his instrumental witness, signed at the bottom. Page 2
contained the attestation clause and the signatures, at the bottom thereof,
of the 3 instrumental witnesses which included Lambert, the driver of
Arthur; Yoly, the family cook, and Attorney Zorba, the lawyer who prepared
the will. There was a 3rd page, but this only contained the notarial
acknowledgement. The attestation clause stated the will was signed on the
same occasion by Arthur and his instrumental witnesses who all signed in
the presence of each other, and the notary public who notarized the will.
There are no marginal signatures or pagination appearing on any of the 3
pages. Upon his death, it was discovered that apart from the house and lot,
he had a P 1million account deposited with ABC Bank.
a) Was Erica preterited? (1%)
b) What other defects of the will, if any, can cause denial of probate?
(2%)
c) Was the disinheritance valid? (1%)
d) How should the house and lot, and the cash be distributed? (1%)
XI
John and Paula, British citizens at birth, acquired Philippine
citizenship by naturalization after their marriage. During their marriage the
couple acquired substantial landholdings in London and in Makati. Paula
bore John three children, Peter, Paul and Mary. In one of their trips to
London, the couple executed a joint will appointing each other as their heirs
and providing that upon the death of the survivor between them the entire
estate would go to Peter and Paul only but the two could not dispose of nor
divide the London estate as long as they live. John and Paula died
tragically in the London Subway terrorist attack in 2005. Peter and Paul
filed a petition for probate of their parent’s will before a Makati Regional
Trial Court.
a) Should the will be admitted to probate? (2%)
b) Are the testamentary dispositions valid? (2%)
c) Is the testamentary prohibition against the division of the London
estate valid? (2%)
XII
Ernesto, an overseas Filipino worker, was coming home to the
Philippines after working for so many years in the Middle East. He had
saved P100,000 in his savings account in Manila which he intended to use
to start a business in his home country. On his flight home, Ernesto had a
fatal heart attack. He left behind his widowed mother, his common-law wife
and their twin sons. He left no will, no debts, no other relatives and no
other properties except the money in his savings account. Who are the
heirs entitled to inherit from him and how much should each receive? (3%)
XIII
Raymond, single, named his sister Ruffa in his will as a devisee of a
parcel of land which he owned. The will imposed upon Ruffa the obligation
of preserving the land and transferring it, upon her death, to her illegitimate
daughter Scarlet who was then only one year old. Raymond later died,
leaving behind his widowed mother, Ruffa and Scarlet.
a) Is the condition imposed upon Ruffa to preserve the property and
to transmit it upon her death to Scarlet, valid? (1%)
b) If Scarlet predeceases Ruffa, who inherits the property? (2%)
c) If Ruffa predeceases Raymond, can Scarlet inherit the property
directly from Raymond? (2%)
XIV
Stevie was born blind. He went to school for the blind, and learned to
read in Braille language. He speaks English fluently. Can he:
a) Make a will? (1%)
b) Act as a witness to a will? (1%)
c) In either of the above instances, must the will be read to him?
(1%)
XV
Eduardo was granted a loan by XYZ Bank for the purpose of
improving a building which XYZ leased from him. Eduardo, executed the
promissory note (“PN”) in favor of the bank, with his friend Recardo as cosignatory.
In the PN, they both acknowledged that they are “individually
and collectively” liable and waived the need for prior demand. To secure
the PN, Recardo executed a real estate mortgage on his own property.
When Eduardo defaulted on the PN, XYZ stopped payment of rentals on
the building on the ground that legal compensation had set in. Since there
was still a balance due on the PN after applying the rentals, XYZ foreclosed
the real estate mortgage over Recardo’s property. Recardo opposed the
foreclosure on the ground that he is only a co-signatory; that no demand
was made upon him for payment, and assuming he is liable, his liability
should not go beyond half the balance of the loan. Further, Recardo said
that when the bank invoked compensation between the rentals and the
amount of the loan, it amounted to a new contract or novation, and had the
effect of extinguishing the security since he did not give his consent (as
owner of the property under the real estate mortgage) thereto.
a) Can XYZ Bank validly assert legal compensation? (2%)
b) Can Recardo’s property be foreclosed to pay the full balance of
the loan? (2%)
c) Does Recardo have basis under the Civil Code for claiming that
the original contract was novated? (2%)
XVI
Dux leased his house to Iris for a period of 2 years, at the rate of
P25,000.00 monthly, payable annually in advance. The contract stipulated
that it may be renewed for another 2-year period upon mutual agreement
of the parties. The contract also granted Iris the right of first refusal to
purchase the property at any time during the lease, if Dux decides to sell
the property at the same price that the property is offered for sale to a third
party. Twenty-three months after execution of the lease contract, Dux sold
the house to his mother for P2 million. Iris claimed that the sale was a
breach of her right of first refusal. Dux said there was no breach because
the property was sold to his mother who is not a third party. Iris filed an
action to rescind the sale and to compel Dux to sell the property to her at
the same price. Alternatively, she asked the court to extend the lease for
another 2 years on the same terms.
a) Can Iris seek rescission of the sale of the property to Dux’s
mother? (3%)
b) Will the alternative prayer for extension of the lease prosper? (2%)
XVII
Felipe borrowed $100 from Gustavo in 1998, when the Phil P - US$
exchange rate was P56 – US$1. On March 1, 2008, Felipe tendered to
Gustavo a cashier’s check in the amount of P4,135 in payment of his US$
100 debt, based on the Phil P – US$ exchange rate at that time. Gustavo
accepted the check, but forgot to deposit it until Sept. 12, 2008. His bank
refused to accept the check because it had become stale. Gustavo now
wants Felipe to pay him in cash the amount of P5,600. Claiming that the
previous payment was not in legal tender, and that there has been
extraordinary deflation since 1998, and therefore, Felipe should pay him
the value of the debt at the time it was incurred. Felipe refused to pay him
again, claiming that Gustavo is estopped from raising the issue of legal
tender, having accepted the check in March, and that it was Gustavo’s
negligence in not depositing the check immediately that caused the check
to become stale.
a) Can Gustavo now raise the issue that the cashier’s check is not
legal tender? (2%)
b) Can Felipe validly refuse to pay Gustavo again? (2%)
c) Can Felipe compel Gustavo to receive US$100 instead? (1%)
XVIII
AB Corp. entered into a contract with XY Corp. whereby the former
agreed to construct the research and laboratory facilities of the latter. Under
the terms of the contract, AB Corp. agreed to complete the facility in 18
months, at the total contract price of P10 million. XY Corp. paid 50% of the
total contract price, the balance to be paid upon completion of the work.
The work started immediately, but AB Corp. later experienced work
slippage because of labor unrest in his company. AB Corp.’s employees
claimed that they are not being paid on time; hence, the work slowdown. As
of the 17th month, work was only 45% completed. AB Corp. asked for
extension of time, claiming that its labor problems is a case of fortuitous
event, but this was denied by XY Corp. When it became certain that the
construction could not be finished on time, XY Corp. sent written notice
canceling the contract, and requiring AB Corp. to immediately vacate the
premises.
a) Can the labor unrest be considered a fortuitous event? (1%)
b) Can XY Corp. unilaterally and immediately cancel the contract?
(2%)
c) Must AB Corp. return the 50% downpayment? (2%)
XIX
Juliet offered to sell her house and lot, together with all the furniture
and appliances therein, to Dehlma. Before agreeing to purchase the
property, Dehlma went to the Register of Deeds to verify Juliet’s title. She
discovered that while the property was registered in Juliet’s name under the
Land Registration Act, as amended by the Property Registration Decree, it
was mortgaged to Elaine to secure a debt of P80,000. Wanting to buy the
property, Dehlma told Juliet to redeem the property from Elaine, and gave
her an advance payment to be used for purposes of releasing the mortgage
on the property. When the mortgage was released, Juliet executed a Deed
of Absolute Sale over the property which was duly registered with the
Registry of Deeds, and a new TCT was issued in Dehlma’s name. Dehlma
immediately took possession over the house and lot and the movables
therein. Thereafter, Dehlma went to the Assessor’s Office to get a new tax
declaration under her name. She was surprised to find out that the property
was already declared for tax purposes in the name of XYZ Bank which had
foreclosed the mortgage on the property before it was sold to her. XYZ
Bank was also the purchaser in the foreclosure sale of the property. At that
time, the property was still unregistered but XYZ Bank registered the
Sheriff’s Deed of Conveyance in the day book of the Register of Deeds
under Act. 3344 and obtained a tax declaration in its name.
a) Was Dehlma a purchaser in good faith? (2%)
b) Who as between Dehlma and XYZ Bank has a better right to the
house and lot? (2%)
c) Who owns the movables inside the house? (2%)
Ana Rivera had a husband, a Filipino citizen like her, who was
among the passengers on board a commercial jet plane which crashed in
the Atlantic Ocean ten(10) years earlier and had never been heard of ever
since. Believing that her husband had died, Ana married Adolf Cruz
Staedtler, a divorced German national born of a German father and a
Filipino mother residing in Stuttgart. To avoid being required to submit the
required certificate of capacity to marry from the German Embassy in
Manila, Adolf stated in the application for marriage license that he was a
Filipino citizen. With the marriage license stating that Adolf was a Filipino,
the couple got married in a ceremony officiated by the Parish Priest of
Calamba, Laguna in a beach in Nasugbu, Batangas, as the local parish
priest refused to solemnize marriages except in his church. Is the marriage
valid? Explain fully. (5%)
II
At age 18, Marian found out that she was pregnant. She insured her
own life and named her unborn child as her sole beneficiary. When she
was already due to give birth, she and her boyfriend Pietro, the father of her
unborn child, were kidnapped in a resort in Bataan where they were
vacationing. The military gave chase and after one week, they were found
in an abandoned hut in Cavite. Marian and Pietro were hacked with bolos.
Marian and the baby she delivered were both found dead, with the baby’s
umbilical cord already cut. Pietro survived.
a) Can Marian’s baby be the beneficiary of the insurance taken on
the life of the mother? (2%)
b) Between Marian and the baby, who is presumed to have died
ahead? (1%)
c) Will Pietro, as surviving biological father of the baby, be entitled to
claim the proceeds of the life insurance on the life of Marian? (2%)
III
Roderick and Faye were high school sweethearts. When Roderick
was 18 and Faye, 16 years old, they started to live together as husband
and wife without the benefit of marriage. When Faye reached 18 years of
age, her parents forcibly took her back and arranged for her marriage to
Brad . Although Faye lived with Brad after the marriage, Roderick continued
to regularly visit Faye while Brad was away at work. During their marriage,
Faye gave birth to a baby girl, Laica. When Faye was 25 years old, Brad
discovered her continued liaison with Roderick and in one of their heated
arguments, Faye shot Brad to death. She lost no time in marrying her true
love Roderick, without a marriage license, claiming that they have been
continuously cohabiting for more than 5 years.
a) Was the marriage of Roderick and Faye valid? (2%)
b) What is the filiation status of Laica? (2%)
c) Can Laica bring an action to impugn her own status on the ground
that based on DNA results, Roderick is her biological father? (2%)
d) Can Laica be legitimated by the marriage of her biological
parents? (1%)
IV
Gianna was born to Andy and Aimee, who at the time of Gianna’s
birth were not married to each other. While Andy was single at that time,
Aimee was still in the process of securing a judicial declaration of nullity on
her marriage to her ex-husband. Gianna’s birth certificate, which was
signed by both Andy and Aimee, registered the status of Gianna as
“legitimate”, her surname carrying that of Andy’s, and that her parents
were married to each other.
a) Can a judicial action for correction of entries in Gianna’s birth
certificate be successfully maintained to:
i) Change her status from “legitimate” to “illegitimate” (1%);
and
ii) Change her surname from that of Andy’s to Aimee’s maiden
surname? (1%)
b) Instead of a judicial action, can administrative proceedings be
brought for the purpose of making the above corrections? (2%)
c) Assuming that Aimee is successful in declaring her former
marriage void, and Andy and Aimee subsequently married each other,
would Gianna be legitimated? (1%)
V
Despite several relationships with different women, Andrew remained
unmarried. His first relationship with Brenda produced a daughter, Amy,
now 30 years old. His second, with Carla, produced two sons: Jon and
Ryan. His third, with Donna, bore him two daughters: Vina and Wilma. His
fourth, with Elena, bore him no children although Elena has a daughter
Jane, from a previous relationship. His last, with Fe, produced no biological
children but they informally adopted without court proceedings, Sandy, now
13 years old, whom they consider as their own. Sandy was orphaned as
a baby and was entrusted to them by the midwife who attended to Sandy’s
birth. All the children, including Amy, now live with Andrew in his house.
a) Is there any legal obstacle to the legal adoption of Amy by
Andrew? To the legal adoption of Sandy by Andrew and Elena? (2%)
b) In his old age, can Andrew be legally entitled to claim support from
Amy, Jon, Ryan, Vina , Wilma and Sandy assuming that all of them have
the means to support him? (1%)
c) Can Amy, Jon, Ryan, Vina, Wilma and Sandy legally claim support
from each other? (2%)
d) Can Jon and Jane legally marry? (1%)
VI
Alex died without a will, leaving only an undeveloped and untitled
lot in Taguig City. He is survived by his wife and 4 children. His wife told the
children that she is waiving her share in the property, and allowed Bobby,
the eldest son who was about to get married, to construct his house on ¼
of the lot, without however obtaining the consent of his siblings. After
settlement of Alex’s estate and partition among the heirs, it was discovered
that Bobby’s house was constructed on the portion allocated to his sister,
Cathy. Cathy asked Bobby to demolish his house and vacate the portion
allotted to her. In lieu of demolition, Bobby offered to purchase from Cathy
the lot portion on which his house was constructed. At that time, the house
was valued at P300,000 while the portion of the lot on which the house was
constructed was valued at P350,000.
a) Can Cathy lawfully ask for demolition of Bobby’s house? (3%)
b) Can Bobby legally insist on purchasing the land? (2%)
VII
Anthony bought a piece of untitled agricultural land from Bert. Bert, in
turn, acquired the property by forging Carlo’s signature in a deed of sale
over the property. Carlo had been in possession of the property for 8 years,
declared it for tax purposes, and religiously paid all taxes due on the
property. Anthony is not aware of the defect in Bert’s title, but has been in
actual physical possession of the property from the time he bought it from
Bert, who had never been in possession. Anthony has since then been in
possession of the property for one year.
a) Can Anthony acquire ownership of the property by acquisitive
prescription? How many more years does he have to possess it to acquire
ownership? (2%)
b) If Carlo is able to legally recover his property, can he require
Anthony to account for all the fruits he has harvested from the property
while in possession? (2%)
c) If there are standing crops on the property when Carlo recovers
possession, can Carlo appropriate them? (2%)
VIII
Adam, a building contractor, was engaged by Blas to construct a
house on a lot which he (Blas) owns. While digging on the lot in order to lay
down the foundation of the house, Adam hit a very hard object. It turned out
to be the vault of the old Banco de las Islas Filipinas. Using a detonation
device, Adam was able to open the vault containing old notes and coins
which were in circulation during the Spanish era. While the notes and coins
are no longer legal tender, they were valued at P 100 million because of
their historical value and the coins’ silver and nickel content. The following
filed legal claims over the notes and coins:
i) Adam, as finder;
ii) Blas, as owner of the property where they were found;
iii) Bank of the Philippine Islands, as successor-in-interest of
the owner of the vault; and
iv) The Philippine Government because of their historical value.
a) Who owns the notes and coins? (4%)
b) Assuming that either or both Adam and Blas are adjudged as
owners, will the notes and coins be deemed part of their absolute
community or conjugal partnership of gains with their respective spouses?
(2%)
IX
The properties of Jessica and Jenny, who are neighbors, lie along the
banks of the Marikina River. At certain times of the year, the river would
swell and as the water recedes, soil, rocks and other materials are
deposited on Jessica’s and Jenny’s properties. This pattern of the river
swelling, receding and depositing soil and other materials being deposited
on the neighbors’ properties have gone on for many years. Knowing this
pattern, Jessica constructed a concrete barrier about 2 meters from her
property line and extending towards the river, so that when the water
recedes, soil and other materials are trapped within this barrier. After
several years, the area between Jessica’s property line to the concrete
barrier was completely filled with soil, effectively increasing Jessica’s
property by 2 meters. Jenny’s property, where no barrier was constructed,
also increased by one meter along the side of the river.
a) Can Jessica and Jenny legally claim ownership over the additional
2 meters and one meter, respectively, of land deposited along their
properties? (2%)
b) If Jessica’s and Jenny’s properties are registered, will the benefit
of such registration extend to the increased area of their properties? (2%)
c) Assume the two properties are on a cliff adjoining the shore of
Laguna Lake. Jessica and Jenny had a hotel built on the properties. They
had the earth and rocks excavated from the properties dumped on the
adjoining shore, giving rise to a new patch of dry land. Can they validly lay
claim to the patch of land? (2%)
X
Arthur executed a will which contained only: (i) a provision
disinheriting his daughter Bernice for running off with a married man, and
(ii) a provision disposing of his share in the family house and lot in favor of
his other children Connie and Dora. He did not make any provisions in
favor of his wife Erica, because as the will stated, she would anyway get ½
of the house and lot as her conjugal share. The will was very brief and
straightforward and both the above provisions were contained in page 1,
which Arthur and his instrumental witness, signed at the bottom. Page 2
contained the attestation clause and the signatures, at the bottom thereof,
of the 3 instrumental witnesses which included Lambert, the driver of
Arthur; Yoly, the family cook, and Attorney Zorba, the lawyer who prepared
the will. There was a 3rd page, but this only contained the notarial
acknowledgement. The attestation clause stated the will was signed on the
same occasion by Arthur and his instrumental witnesses who all signed in
the presence of each other, and the notary public who notarized the will.
There are no marginal signatures or pagination appearing on any of the 3
pages. Upon his death, it was discovered that apart from the house and lot,
he had a P 1million account deposited with ABC Bank.
a) Was Erica preterited? (1%)
b) What other defects of the will, if any, can cause denial of probate?
(2%)
c) Was the disinheritance valid? (1%)
d) How should the house and lot, and the cash be distributed? (1%)
XI
John and Paula, British citizens at birth, acquired Philippine
citizenship by naturalization after their marriage. During their marriage the
couple acquired substantial landholdings in London and in Makati. Paula
bore John three children, Peter, Paul and Mary. In one of their trips to
London, the couple executed a joint will appointing each other as their heirs
and providing that upon the death of the survivor between them the entire
estate would go to Peter and Paul only but the two could not dispose of nor
divide the London estate as long as they live. John and Paula died
tragically in the London Subway terrorist attack in 2005. Peter and Paul
filed a petition for probate of their parent’s will before a Makati Regional
Trial Court.
a) Should the will be admitted to probate? (2%)
b) Are the testamentary dispositions valid? (2%)
c) Is the testamentary prohibition against the division of the London
estate valid? (2%)
XII
Ernesto, an overseas Filipino worker, was coming home to the
Philippines after working for so many years in the Middle East. He had
saved P100,000 in his savings account in Manila which he intended to use
to start a business in his home country. On his flight home, Ernesto had a
fatal heart attack. He left behind his widowed mother, his common-law wife
and their twin sons. He left no will, no debts, no other relatives and no
other properties except the money in his savings account. Who are the
heirs entitled to inherit from him and how much should each receive? (3%)
XIII
Raymond, single, named his sister Ruffa in his will as a devisee of a
parcel of land which he owned. The will imposed upon Ruffa the obligation
of preserving the land and transferring it, upon her death, to her illegitimate
daughter Scarlet who was then only one year old. Raymond later died,
leaving behind his widowed mother, Ruffa and Scarlet.
a) Is the condition imposed upon Ruffa to preserve the property and
to transmit it upon her death to Scarlet, valid? (1%)
b) If Scarlet predeceases Ruffa, who inherits the property? (2%)
c) If Ruffa predeceases Raymond, can Scarlet inherit the property
directly from Raymond? (2%)
XIV
Stevie was born blind. He went to school for the blind, and learned to
read in Braille language. He speaks English fluently. Can he:
a) Make a will? (1%)
b) Act as a witness to a will? (1%)
c) In either of the above instances, must the will be read to him?
(1%)
XV
Eduardo was granted a loan by XYZ Bank for the purpose of
improving a building which XYZ leased from him. Eduardo, executed the
promissory note (“PN”) in favor of the bank, with his friend Recardo as cosignatory.
In the PN, they both acknowledged that they are “individually
and collectively” liable and waived the need for prior demand. To secure
the PN, Recardo executed a real estate mortgage on his own property.
When Eduardo defaulted on the PN, XYZ stopped payment of rentals on
the building on the ground that legal compensation had set in. Since there
was still a balance due on the PN after applying the rentals, XYZ foreclosed
the real estate mortgage over Recardo’s property. Recardo opposed the
foreclosure on the ground that he is only a co-signatory; that no demand
was made upon him for payment, and assuming he is liable, his liability
should not go beyond half the balance of the loan. Further, Recardo said
that when the bank invoked compensation between the rentals and the
amount of the loan, it amounted to a new contract or novation, and had the
effect of extinguishing the security since he did not give his consent (as
owner of the property under the real estate mortgage) thereto.
a) Can XYZ Bank validly assert legal compensation? (2%)
b) Can Recardo’s property be foreclosed to pay the full balance of
the loan? (2%)
c) Does Recardo have basis under the Civil Code for claiming that
the original contract was novated? (2%)
XVI
Dux leased his house to Iris for a period of 2 years, at the rate of
P25,000.00 monthly, payable annually in advance. The contract stipulated
that it may be renewed for another 2-year period upon mutual agreement
of the parties. The contract also granted Iris the right of first refusal to
purchase the property at any time during the lease, if Dux decides to sell
the property at the same price that the property is offered for sale to a third
party. Twenty-three months after execution of the lease contract, Dux sold
the house to his mother for P2 million. Iris claimed that the sale was a
breach of her right of first refusal. Dux said there was no breach because
the property was sold to his mother who is not a third party. Iris filed an
action to rescind the sale and to compel Dux to sell the property to her at
the same price. Alternatively, she asked the court to extend the lease for
another 2 years on the same terms.
a) Can Iris seek rescission of the sale of the property to Dux’s
mother? (3%)
b) Will the alternative prayer for extension of the lease prosper? (2%)
XVII
Felipe borrowed $100 from Gustavo in 1998, when the Phil P - US$
exchange rate was P56 – US$1. On March 1, 2008, Felipe tendered to
Gustavo a cashier’s check in the amount of P4,135 in payment of his US$
100 debt, based on the Phil P – US$ exchange rate at that time. Gustavo
accepted the check, but forgot to deposit it until Sept. 12, 2008. His bank
refused to accept the check because it had become stale. Gustavo now
wants Felipe to pay him in cash the amount of P5,600. Claiming that the
previous payment was not in legal tender, and that there has been
extraordinary deflation since 1998, and therefore, Felipe should pay him
the value of the debt at the time it was incurred. Felipe refused to pay him
again, claiming that Gustavo is estopped from raising the issue of legal
tender, having accepted the check in March, and that it was Gustavo’s
negligence in not depositing the check immediately that caused the check
to become stale.
a) Can Gustavo now raise the issue that the cashier’s check is not
legal tender? (2%)
b) Can Felipe validly refuse to pay Gustavo again? (2%)
c) Can Felipe compel Gustavo to receive US$100 instead? (1%)
XVIII
AB Corp. entered into a contract with XY Corp. whereby the former
agreed to construct the research and laboratory facilities of the latter. Under
the terms of the contract, AB Corp. agreed to complete the facility in 18
months, at the total contract price of P10 million. XY Corp. paid 50% of the
total contract price, the balance to be paid upon completion of the work.
The work started immediately, but AB Corp. later experienced work
slippage because of labor unrest in his company. AB Corp.’s employees
claimed that they are not being paid on time; hence, the work slowdown. As
of the 17th month, work was only 45% completed. AB Corp. asked for
extension of time, claiming that its labor problems is a case of fortuitous
event, but this was denied by XY Corp. When it became certain that the
construction could not be finished on time, XY Corp. sent written notice
canceling the contract, and requiring AB Corp. to immediately vacate the
premises.
a) Can the labor unrest be considered a fortuitous event? (1%)
b) Can XY Corp. unilaterally and immediately cancel the contract?
(2%)
c) Must AB Corp. return the 50% downpayment? (2%)
XIX
Juliet offered to sell her house and lot, together with all the furniture
and appliances therein, to Dehlma. Before agreeing to purchase the
property, Dehlma went to the Register of Deeds to verify Juliet’s title. She
discovered that while the property was registered in Juliet’s name under the
Land Registration Act, as amended by the Property Registration Decree, it
was mortgaged to Elaine to secure a debt of P80,000. Wanting to buy the
property, Dehlma told Juliet to redeem the property from Elaine, and gave
her an advance payment to be used for purposes of releasing the mortgage
on the property. When the mortgage was released, Juliet executed a Deed
of Absolute Sale over the property which was duly registered with the
Registry of Deeds, and a new TCT was issued in Dehlma’s name. Dehlma
immediately took possession over the house and lot and the movables
therein. Thereafter, Dehlma went to the Assessor’s Office to get a new tax
declaration under her name. She was surprised to find out that the property
was already declared for tax purposes in the name of XYZ Bank which had
foreclosed the mortgage on the property before it was sold to her. XYZ
Bank was also the purchaser in the foreclosure sale of the property. At that
time, the property was still unregistered but XYZ Bank registered the
Sheriff’s Deed of Conveyance in the day book of the Register of Deeds
under Act. 3344 and obtained a tax declaration in its name.
a) Was Dehlma a purchaser in good faith? (2%)
b) Who as between Dehlma and XYZ Bank has a better right to the
house and lot? (2%)
c) Who owns the movables inside the house? (2%)
Monday, September 8, 2008
2008 Bar Questions in Political and International Law
I.
a) The legal yardstick in determining whether usage has become customary international law is expressed in the maxim opinio juris sive necessitatis or opinio juris for short. What does the maxim mean? (3%)
b) Under international law, differentiate "hard law" from "soft law". (3%)
II.
May a treaty violate international law? If your answer is in the affirmative, explain when such may happen. If your answer is in the negative, explain why. (5%)
III.
The President alone without the concurrence of the Senate abrogated a treaty. Assume that the other country-party to the treaty is agreeable to the abrogation provided it complies with the Philippine Constitution. If a case involving the validity of the treaty abrogation is brought to the Supreme Court, how should it be resolved? (6%)
IV.
Congress passed a law authorizing the National Housing Authority (NHA) to expropriate or acquire private property for the redevelopment of slum areas, as well as to lease or resell the property to private developers to carry out the redevelopment plan. Pursuant to the law, the NHA acquired all the properties within a targeted badly blighted area in San Nicolas, Manila, except a well-maintained drug and convenience store that poses no blight or health problem itself. Thereafter, NHA sold all the properties it has thus far acquired to a private realty company for redevelopment. Thus, the NHA initiated expropriation proceedings against the store owner who protested that his property could not be taken because it is not residential or slum housing. He also contended that his property is being condemned for a private purpose, not a public one, noting the NHA's sale of the entire area except his property to a private party. If you were the judge, how would you decide the case? (6%)
V.
Having received tips that the accused was selling narcotics, two police officers forced open the door of his room. Finding him sitting partly dressed on the side of the bed, the officers spied two capsules on the night stand beside the bed. When asked, "Are these yours?", the accused seized the capsules and put them in his mouth. A struggle ensued, in the course of which the officers pounced on the accused but failed to extract the capsules. The officers handcuffed the accused, took him to a hospital where at their direction, a doctor forced an emetic solution through a tube into accused's stomach against his will. This process induced vomiting. In the vomited matter were found two capsules which proved to contain heroin. In the criminal case, the chief evidence against the accused was the two capsules.
a) As counsel for the accused, what constitutional rights will you invoke in his defense? (4%)
b) How should the court decide the case? (3%)
VI.
The Philippine National Police (PNP) issued a circular to all its members directed at the style and length of a male police officers' hair, sideburns and moustaches, as well as the size of their waistlines. It prohibits beards, goatees and waistlines over 38 inches, except for medical reasons. Some police officers questioned the validity of the circular, claiming that it violated their right to liberty under the Constitution. Resolve the controversy. (6%)
VII.
JC, a major in the Armed Forces of the Philippines, is facing prosecution before the Regional Trial Court of Quezon City for the murder of his neighbor whom he suspected to have molested his (JC's) 15-year old daughter.
a) Is JC entitled to bail? Why or why not? (3%)
b) Assume that upon being arraigned, JC entered a plea of guilty and was allowed to present evidence to prove mitigating circumstances. JC then testified to the effect that he stabbed the deceased in self-defense because the latter was strangling him and that he voluntarily surrendered to the authorities. Subsequently, the trial court rendered a decision acquitting JC. Would an appeal by the prosecution from the decision of acquittal violate JC's right against double jeopardy? Why or why not? (3%)
VIII.
ST, a Regional Trial Court judge who falsified his Certificate of Service, was found liable by the Supreme Court for serious miconduct and inefficiency, and meted the penalty of suspension from office for 6 months. Subsequently, ST filed a petition for executive clemency with the Office of the President. The Executive Secretary, acting on the said petition issued a resolution granting ST executive clemency. Is the grant of executive clemency valid? Why or why not? (6%)
IX.
Abdul ran and won May 2001, 2004 and 2007 elections for Vice-Governor of Tawi-Tawi. After being proclaimed Vice-Governor in 2004 elections, his opponent, Khalil, filed an election protest before the Commission on Elections. Ruling with finality on the protest, the COMELEC declared Khalil as duly elected Vice-Governor though the decision was promulgated only in 2007, when Abdul had wholly served 2004-2007 term and was in fact already on his 2007-2010 term as Vice-Governor.
a) Abdul now consults you if he can still run for Vice-Governor of Tawi-Tawi in the forthcoming May 2010 elections on the premise that he could not be considered as having served a Vice-Governor from 2004-2007 because he was not duly elected to the post, as he assumed office merely as a presumptive winner and that presumption was later overturned when the COMELEC decided with finality that he had lost in the May 2004 elections. What will be your advice? (3%)
b) Abdul also consults you whether his politcal party can validly nominate his wife as substitute candidate for Vice-Governor of Tawi-Tawi in May 2010 elections in case disqualifies him and denies due course to or cancels his certificate of candidacy in lieu of a false material representation therein. What will be your advice? (3%)
X.
The 1st Legislative District of South Cotabato is composed of General Santos and three municipalities including Polomolok. During the canvassing proceedings before the District Board of Canvassers in connection with the 2007 congressional elections, candidate MP objected the the certificate of canvass for Polomolok on the ground that it was obviously manufactured, submiting as evidence the affidavit of a mayoralty candidate of Polomolok. The certificate of canvass for General Santos was likewise objected to by MP on the basis of the confirmed report of the local NAMFREL that ten election returns from non-existent precincts were included in the certificate. MP moved that the certifcate of canvass for General Santos be corrected to exclude the results from the non-existent precincts. The District Board of Canvassers denied both objections and ruled to include the certificate of canvass. May MP appeal the rulings to the COMELEC? Explain. (6%)
XI.
On August 8, 2008, the Governor of Bohol died and Vice-Governor Cesar by operation of law. Accordingly, Benito, the highest ranking member of the Sangguniang Panlalawigan was elevated to the position of Vice-Governor. By the elevation of Benito to the office of the Vice-Governor, a vacancy in the Sangguniang Panlalawigan was created. How should the vacancy be filled? (3%)
XII.
The Mayor of San Jose City appointed his wife, Amelia, as City Treasurer among three (3) employees of the city considered for the said position. Prior to said promotion, Amelia had been an Assistant City Treasurer for ten (10) years, that is, even before she married the City Mayor. Should the Civil Service Commission the promotional appointment of Amelia? Why or why not? (6%)
XIII.
Congress enacted a law establishing the right to trial by jury of an accused charged with a felony or offense punishable by reclusion perpetua or life imprisonment. The law provides for the qualifications of prospective jury members, the guidelines to be observed by the judge and the lawyers in jury selection including the grounds for challenging the selection of jury members, and the methodology for jury deliberations. Is the law constitutional? Explain fully. (7%)
XIV.
In 1963, Congress passed a law creating a government-owned corporation named Manila War Memorial Commission (MWMC), with the primary function of overseeing the construction of a massive memorial in the heart of Manila to commemorate the victims of the 1945 Battle of Manila.
The MWMC charter provided an initial appropriation of P1,000,000, empowered the corporation to raise funds in its own name, and set aside a parcel of land in Malate for the memorial site. The charter set the corporate life of MWMC at 50 years with a proviso that Congress may not abolish MWMC until after the completion of the memorial.
Forty-five (45) years later, the memorial was only 1/3 complete, and the memorial site itself had long been overrun by squatters. Congress enacted a law abolishing the MWMC and requiring that the funds raised by it be remitted to the National Treasury. The MWMC challenged the validity of the law, arguing that under its charter its mandate is to complete the memorial no matter how long it takes. Decide with reasons. (6%)
XV.
The principal of Jaena High School, a public school, wrote a letter to the parents and guardians of all the school's pupils, informing them that the school was willing to provide religious instruction to its Catholic students during class hours, through a Catholic priest. However, students who wish to avail of such religious instruction needed to secure the consent of their parents and guardians in writing.
a) Does the offer violate the constitutional prohibition against the establishment of religion? (3%)
b) The parents of evangelical Christian students, upon learning of the offer, demanded that they too be entitled to have their children instructed in their own religious faith during class hours. The principal, a devout Catholic, rejected the request. As counsel for the parents of the evangelical student, how would you argue in support of their position? (3%)
XVI.
Nationwide protests have erupted over rising gas prices, including disruptive demonstrations in many universities throughout the country. The Metro Manila State University, a public university, adopted a university-wide circular prohibiting public mass demonstrations and rallies within the campus. Offended by the circular, militant students spread word that on the following Friday, all students were to wear black T-shirts as a symbol of their protest both against high gas prices and the university ban on demonstrations. The effort was only moderately successful, with around 30% of the students heeding the call. Nonetheless, university officials were outraged and compelled the student leaders to explain why they should not be expelled for violating the circular against demonstrations.
The student leaders approached you for legal advice. They contended that they should not be expelled since they did not violate the circular, their protest action being neither a demonstration nor a rally since all they did was wear black T-shirts. What would you advice the students? (6%)
XVII.
As a reaction to the rice shortage and the dearth of mining engineers. Congress passed a law requiring graduates of public science high schools henceforth to take up agriculture or mining engineering as their college course. Several students protested invoking their freedom to choose their profession. Is the law constitutional? (6%)
a) The legal yardstick in determining whether usage has become customary international law is expressed in the maxim opinio juris sive necessitatis or opinio juris for short. What does the maxim mean? (3%)
b) Under international law, differentiate "hard law" from "soft law". (3%)
II.
May a treaty violate international law? If your answer is in the affirmative, explain when such may happen. If your answer is in the negative, explain why. (5%)
III.
The President alone without the concurrence of the Senate abrogated a treaty. Assume that the other country-party to the treaty is agreeable to the abrogation provided it complies with the Philippine Constitution. If a case involving the validity of the treaty abrogation is brought to the Supreme Court, how should it be resolved? (6%)
IV.
Congress passed a law authorizing the National Housing Authority (NHA) to expropriate or acquire private property for the redevelopment of slum areas, as well as to lease or resell the property to private developers to carry out the redevelopment plan. Pursuant to the law, the NHA acquired all the properties within a targeted badly blighted area in San Nicolas, Manila, except a well-maintained drug and convenience store that poses no blight or health problem itself. Thereafter, NHA sold all the properties it has thus far acquired to a private realty company for redevelopment. Thus, the NHA initiated expropriation proceedings against the store owner who protested that his property could not be taken because it is not residential or slum housing. He also contended that his property is being condemned for a private purpose, not a public one, noting the NHA's sale of the entire area except his property to a private party. If you were the judge, how would you decide the case? (6%)
V.
Having received tips that the accused was selling narcotics, two police officers forced open the door of his room. Finding him sitting partly dressed on the side of the bed, the officers spied two capsules on the night stand beside the bed. When asked, "Are these yours?", the accused seized the capsules and put them in his mouth. A struggle ensued, in the course of which the officers pounced on the accused but failed to extract the capsules. The officers handcuffed the accused, took him to a hospital where at their direction, a doctor forced an emetic solution through a tube into accused's stomach against his will. This process induced vomiting. In the vomited matter were found two capsules which proved to contain heroin. In the criminal case, the chief evidence against the accused was the two capsules.
a) As counsel for the accused, what constitutional rights will you invoke in his defense? (4%)
b) How should the court decide the case? (3%)
VI.
The Philippine National Police (PNP) issued a circular to all its members directed at the style and length of a male police officers' hair, sideburns and moustaches, as well as the size of their waistlines. It prohibits beards, goatees and waistlines over 38 inches, except for medical reasons. Some police officers questioned the validity of the circular, claiming that it violated their right to liberty under the Constitution. Resolve the controversy. (6%)
VII.
JC, a major in the Armed Forces of the Philippines, is facing prosecution before the Regional Trial Court of Quezon City for the murder of his neighbor whom he suspected to have molested his (JC's) 15-year old daughter.
a) Is JC entitled to bail? Why or why not? (3%)
b) Assume that upon being arraigned, JC entered a plea of guilty and was allowed to present evidence to prove mitigating circumstances. JC then testified to the effect that he stabbed the deceased in self-defense because the latter was strangling him and that he voluntarily surrendered to the authorities. Subsequently, the trial court rendered a decision acquitting JC. Would an appeal by the prosecution from the decision of acquittal violate JC's right against double jeopardy? Why or why not? (3%)
VIII.
ST, a Regional Trial Court judge who falsified his Certificate of Service, was found liable by the Supreme Court for serious miconduct and inefficiency, and meted the penalty of suspension from office for 6 months. Subsequently, ST filed a petition for executive clemency with the Office of the President. The Executive Secretary, acting on the said petition issued a resolution granting ST executive clemency. Is the grant of executive clemency valid? Why or why not? (6%)
IX.
Abdul ran and won May 2001, 2004 and 2007 elections for Vice-Governor of Tawi-Tawi. After being proclaimed Vice-Governor in 2004 elections, his opponent, Khalil, filed an election protest before the Commission on Elections. Ruling with finality on the protest, the COMELEC declared Khalil as duly elected Vice-Governor though the decision was promulgated only in 2007, when Abdul had wholly served 2004-2007 term and was in fact already on his 2007-2010 term as Vice-Governor.
a) Abdul now consults you if he can still run for Vice-Governor of Tawi-Tawi in the forthcoming May 2010 elections on the premise that he could not be considered as having served a Vice-Governor from 2004-2007 because he was not duly elected to the post, as he assumed office merely as a presumptive winner and that presumption was later overturned when the COMELEC decided with finality that he had lost in the May 2004 elections. What will be your advice? (3%)
b) Abdul also consults you whether his politcal party can validly nominate his wife as substitute candidate for Vice-Governor of Tawi-Tawi in May 2010 elections in case disqualifies him and denies due course to or cancels his certificate of candidacy in lieu of a false material representation therein. What will be your advice? (3%)
X.
The 1st Legislative District of South Cotabato is composed of General Santos and three municipalities including Polomolok. During the canvassing proceedings before the District Board of Canvassers in connection with the 2007 congressional elections, candidate MP objected the the certificate of canvass for Polomolok on the ground that it was obviously manufactured, submiting as evidence the affidavit of a mayoralty candidate of Polomolok. The certificate of canvass for General Santos was likewise objected to by MP on the basis of the confirmed report of the local NAMFREL that ten election returns from non-existent precincts were included in the certificate. MP moved that the certifcate of canvass for General Santos be corrected to exclude the results from the non-existent precincts. The District Board of Canvassers denied both objections and ruled to include the certificate of canvass. May MP appeal the rulings to the COMELEC? Explain. (6%)
XI.
On August 8, 2008, the Governor of Bohol died and Vice-Governor Cesar by operation of law. Accordingly, Benito, the highest ranking member of the Sangguniang Panlalawigan was elevated to the position of Vice-Governor. By the elevation of Benito to the office of the Vice-Governor, a vacancy in the Sangguniang Panlalawigan was created. How should the vacancy be filled? (3%)
XII.
The Mayor of San Jose City appointed his wife, Amelia, as City Treasurer among three (3) employees of the city considered for the said position. Prior to said promotion, Amelia had been an Assistant City Treasurer for ten (10) years, that is, even before she married the City Mayor. Should the Civil Service Commission the promotional appointment of Amelia? Why or why not? (6%)
XIII.
Congress enacted a law establishing the right to trial by jury of an accused charged with a felony or offense punishable by reclusion perpetua or life imprisonment. The law provides for the qualifications of prospective jury members, the guidelines to be observed by the judge and the lawyers in jury selection including the grounds for challenging the selection of jury members, and the methodology for jury deliberations. Is the law constitutional? Explain fully. (7%)
XIV.
In 1963, Congress passed a law creating a government-owned corporation named Manila War Memorial Commission (MWMC), with the primary function of overseeing the construction of a massive memorial in the heart of Manila to commemorate the victims of the 1945 Battle of Manila.
The MWMC charter provided an initial appropriation of P1,000,000, empowered the corporation to raise funds in its own name, and set aside a parcel of land in Malate for the memorial site. The charter set the corporate life of MWMC at 50 years with a proviso that Congress may not abolish MWMC until after the completion of the memorial.
Forty-five (45) years later, the memorial was only 1/3 complete, and the memorial site itself had long been overrun by squatters. Congress enacted a law abolishing the MWMC and requiring that the funds raised by it be remitted to the National Treasury. The MWMC challenged the validity of the law, arguing that under its charter its mandate is to complete the memorial no matter how long it takes. Decide with reasons. (6%)
XV.
The principal of Jaena High School, a public school, wrote a letter to the parents and guardians of all the school's pupils, informing them that the school was willing to provide religious instruction to its Catholic students during class hours, through a Catholic priest. However, students who wish to avail of such religious instruction needed to secure the consent of their parents and guardians in writing.
a) Does the offer violate the constitutional prohibition against the establishment of religion? (3%)
b) The parents of evangelical Christian students, upon learning of the offer, demanded that they too be entitled to have their children instructed in their own religious faith during class hours. The principal, a devout Catholic, rejected the request. As counsel for the parents of the evangelical student, how would you argue in support of their position? (3%)
XVI.
Nationwide protests have erupted over rising gas prices, including disruptive demonstrations in many universities throughout the country. The Metro Manila State University, a public university, adopted a university-wide circular prohibiting public mass demonstrations and rallies within the campus. Offended by the circular, militant students spread word that on the following Friday, all students were to wear black T-shirts as a symbol of their protest both against high gas prices and the university ban on demonstrations. The effort was only moderately successful, with around 30% of the students heeding the call. Nonetheless, university officials were outraged and compelled the student leaders to explain why they should not be expelled for violating the circular against demonstrations.
The student leaders approached you for legal advice. They contended that they should not be expelled since they did not violate the circular, their protest action being neither a demonstration nor a rally since all they did was wear black T-shirts. What would you advice the students? (6%)
XVII.
As a reaction to the rice shortage and the dearth of mining engineers. Congress passed a law requiring graduates of public science high schools henceforth to take up agriculture or mining engineering as their college course. Several students protested invoking their freedom to choose their profession. Is the law constitutional? (6%)
2008 Bar Questions in Labor Law - My Answers
I.
a) Explain the automatic renewal clause of collective bargaining agreements. (3%)
b) Explain the extent of workers' right to participate in policy and decision-making process as provided under Article XIII, Section 3 of the Philippine Constitution. Does it include membership in the Board of Directors of a corporation. (3%)
II.
a) What issues or disputes may be the subject of voluntary arbitration under the Labor Code? (4%)
b) Can a dispute falling within the exclusive jurisdiction of the Labor Arbiter be submitted to voluntary arbitration? Why or why not? (3%)
III.
Savoy Department Store (SDS) adopted a policy of hiring salesladies on five-month cycles. At the end of a saleslady's five-month term, another person is hired as replacement. Salesladies attend to store customers, wear SDS uniforms, report at specified hours, and are subject to SDS workplace rules and regulations. Those who refuse the 5-month employment contract are not hired. The day after the expiration of her 5-month engagement, Lina wore her SDS white and blue uniform and reported for work but was denied entry into the store premises. Agitated, she went on a hunger strike and stationed herself in front of one of the gates of SDS. Soon thereafter, other employees whose 5-month term had also elapsed, joined Lina's hunger strike.
a) Lina and 20 other salesladies filed a complaint for illegal dismissal, contending that they are SDS' regular employees as they performed activities usually necessary or desirable in the usual business or trade of SDS and thus, their constitutional right to security of tenure was violated when they were dismissed without valid, just or authorized cause. SDS, in defense, argued that Lina, et al. agreed - prior to engagement - to a fixed period of employment and thus waived their right to a full-term tenure. Decide the dispute. (4%)
b) The owner of the SDS considered the hunger strike staged by Lina, et al., an eyesore and disruptive of SDS' business. He wrote the Secretary of Labor a letter asking him to assume jurisdiction over the dispute and enjoin the hunger "strike". What answer will you give if you were the Secretary of Labor? (3%)
c) Assume that no fixed-term worker complained, yet in a routine inspection of a labor inspector of the Regional Office of the DOLE found the 5-month term policy of SDS violative of the Labor Code's security of tenure provisions and recommended to the Regional Director the issuance of a compliance order. The Regional Director adopted the recommendation and issued a compliance order. Is the compliance order valid? Explain your answer. (3%)
IV.
Super Comfort Hotel employed a regular pool of "extra waiters" who are called or asked to report for duty when the Hotel's volume of business is beyond the capacity of the regularly employed waiters to undertake. Pedro has been an "extra waiter" for more than 10 years. He is also called upon to work on weekends, on holidays and when there are big affairs at the hotel. What is Pedros' status as an employee under the Labor Code? Why? Explain your answer fully. (6%)
V.
The Pizza Corporation (PizCorp) and Ready Supply Cooperative (RSC) entered into a "service agreement" wherein RSC, in consideration of service fees to be paid by PizCorp, will exclusively supply PizCorp with a group of RSC motorcyle-owning cooperative members who will henceforth perform PizCorp's pizza delivery service. RSC assumes --- under the agreement --- full obligation for the payment of the salaries and other statutory monetary benefits of its members deployed to PizCorp. The parties also stipulated that there shall be no employer-employee relationship between PizCorp and the RSC members. However, if PizCorp is materially prejudiced by any act of the delivery crew that violates PizCorp's directives and orders, PizCorp can directly impose disciplinary actions on, including the power to dismiss, the erring RSC member/s.
a) Is the contractual stipulation that there is no employer-employee relationship binding on labor officials? Why? Explain fully. (3%)
b) Based on the test/s for employer-employee relationship, determine the issue of who is the employer of the RSC members. (4%) c) Assume that RSC has a paid-up capitalization of P1,000,000.00. Is RSC engaged in "labor only" contracting, permissible job contracting or simply, recruitment? (3%)
VI.
On the day that the union could validly declare a strike, the Secretary of Labor issued an order assuming jurisdiction over the dispute and enjoining the strike, or if one has commenced, ordering the striking workers to immediately return to work. The return-to-work order required the employees to return to work within twenty-four hours and was served at 8 a.m. of the day the strike was to start. The order at the same time directed the Company to accept all employees under the same terms and conditions of employment prior to the work stoppage. The Union members did not return to work on the day the Secretary's ssumption order was served, nor on the next day; instead, they held a continuing protest rally against the company's alleged unfair labor practices rally against the company's alleged unfair labor practices. Because of the accompanying picket, some of the employees who wanted to return to work failed to do so. On the 3rd day, the workers reported for work, claiming that they do so in compliance with the Secretary's return-to-work order that binds them as well as the Company. The Company, however, refused to admit them back since they have violated the Secretary's return-to-work order and are now considered to have lost their employment status.
The Union officers and members filed a complaint for illegal dismissal arguing that that there was no strike but a protest rally which is a valid exercise of the workers' constitutional right to peaceable assembly and freedom of expression. Hence, there was no basis for the termination of their employment. You are the Labor Arbiter to whom the case was raffled. Decide, ruling on the following issues:
a) Was there a strike? (4%)
b) Were the employees simply exercising their constitutional right to petition for redress of their grievances? (3%) c) What are the consequences, if any, of the acts of the employees? (3%) VII. Tito Pacencioso is an employee of a foundry shop in Malabon, Metro Manila. He is barely able to make ends meet with his salary of P4,000.00 a month. One day, he asked his employer to stop deducting from his salary his SSS monthly contribution, reasoning out that he is waiving his social security coverage. If you were Tito's employer, would you grant his request? Why? (6%)
VIII.
Carol de la Cruz is the secretary of the proprietor of an auto dealership in Quezon City. She resides in Caloocan City. Her office hours start at 8:00 a.m. and end at 5:00 p.m. On July 30, 2008, at 7 a.m. while waiting for public transport at Rizal Avenue Extension as has been her routine, she was sideswiped by a speeding taxicab resulting in her death. The father of Carol filed a claim for employee's compensation with the Social Security System. Will the claim prosper? Why? (6%)
IX.
Assume that in Problem 5, Mario, an RSC member disgusted with the non-payment of his night shift differential and overtime pay, filed a complaint with the DOLE Regional Office against RSC and PizCorp. After inspection, it was found that indeed Mario was not getting his correct differential and overtime pay and that he was not declared an SSS member (so that no premiums for SSS membership were ever remitted). On this basis, the Regional Director issued a compliance order holding PizCorp and RSC solidarily liable for the payment of the correct differential and overtime pay and ordering PizCorp to report Mario for membership with SSS and remit the overdue SSS premiums. Who has the obligation to report the RSC members for membership with the SSS, with the concommitant obligation to remit SSS premiums? Why? (6%)
X.
Pepe Santos was an international flight steward of FlySafe Airlines. Under FSA's Cabin Crew Administration Manual, Santos must maintain, given his height, a weight of 150 to 170 pounds.
After 5 years as a flight steward, Santos began struggling with his weight; he weighed 200 lbs. , 30 pounds over the prescribed maximum weight. The Airline gave him a one-year period to attain the prescribed weight, and enrolled him ins everal weight reduction programs. He consitently failed to meet his target. He was given a 6-month grace period, after which he still failed to meet the weight limit. FSC thus sent him a Notice of Administrative Charge for violation of company standards on weight requirements. He stated in his answer that, for medical reasons, he cannot have a rapid weight loss. A clarificatory hearing was held where Santos fully explained his predicament. The explanation did not satisfy FSA and so it decided to terminate Santos' service for violation of company standards.
Santos filed a complaint for illegal dismissal, arguing that the comapany's weight requirement policy is unreasonable and that his case is not a disciplinary but a medical issue (as one get older, the natural tendency is to grow heavier). FSA defended its policy as a valid exercise of management prerogative and from the point of view of passenger safety and extraordinary diligence required by law of common carriers; it also posited that Santos' failure to achieve his ideal weight constituted gross and habitual neglect of duty, as well as willful disobedience to lawful employer orders. The Labot Arbiter found the dismissal illegal for there was neither gross and habitual neglect of duty nor willful disobedience.
Is the Labor Arbiter correct? Why or why not? Explain fully. (6%)
XI.
Complainants had worked five (5) years as waitresses in a cocktail lounge owned by the respondent. They did not receive any salary directly from the respondent but shared in all service charges collected for food and drinks to the extend of 75%. With respondent's pripor permission, they could sit with and entertain guests inside the establishment and approrpiate for themselves the tips given by guests. After five (5) years, the complainants' individual shares in the collected service charges dipped to below minimum wage level asa consequence of the lounge's marked business decline. Thereupon, complainants asked respondent to increase their share in the collected service charges to 85%, or the minimum wage level, whichever is higher.
Respondent terminated the services of the complainants who countered by filing a consolidated complaint for unlawful dismissal, with prayer for 85% of the collected services or the minimum wage for the appropriate periods, whichever is higher. Decide. (6%)
XII.
Arnaldo, President of "Bisig" Union in feamwear Company, readied himself to leave exactly at 5:00 pm which was the end of his normal shift to be able to send off his wife who was scheduled to leave for overseas. However, the General Manager required him to render overtime work to meet the company's export quota. Arnaldo begged off, explaining to the General Manager that he had to see of his wife who was leaving to work abroad. The company dismissed Arnaldo for insubordination. He filed a case for illegal dismissal. Decide. (6%)
XIII.
The rank-and-file union staged a strike in the company premises which caused the disruption of business operations. The supervisors' union of the same company filed a money claim for unpaid salaries for the duration of the strike, arguing that the supervisors' failure to report for work was not attributable to them. The company contended that it was equally faultless, for the strike was not the direct consequence of any lockout or unfair labor practice. May the company be held liable for the salaries of the supervisors? Decide. (6%)
XIV.
"Puwersa", a labor federation, after having won in a certification election held in the company premises, sent a letter to respondent company reminding it of its obligation to recognize the local union the federation represents and enter into a CBA with the local union. Respondent company replied that though it is willing, the rank-and-file employees had already lost interest in joining the local union as they had dissolved it. "Puwersa" argued that since it won in a certification election, it can validly perform its function as a bargaining agent and represent the rank-and-file employees despite the union's dissolution.
Is the argument of "Puwersa" tenable? Decide with reasons. (6%)
a) Explain the automatic renewal clause of collective bargaining agreements. (3%)
An automatic renewal clause, sometimes referred to as an "evergreen clause" purports to continue the terms of the contract or agreement indefinitely until the parties renegotiate and ratify a successor agreement. An automatic renewal clause is a cost item and it therefore does not bind the parties unless it has been ratified by the body.
In the absence of a binding automatic renewal clause, a CBA ends on its termination date. Once a CBA expires, while the parties continue to negotiate for a successor agreement, their obligations to one another are governed by the doctrine of maintaining the status quo. The principle of maintaining the status quo demands that all terms and conditions of employment remain the same during collective bargaining after a CBA has expired. This does not mean that the expired CBA continues in effect; rather, it means that the conditions under which the workers worked endure throughout the collective bargaining process.
b) Explain the extent of workers' right to participate in policy and decision-making process as provided under Article XIII, Section 3 of the Philippine Constitution. Does it include membership in the Board of Directors of a corporation. (3%)
The workers have the right to participate in policy and decision-making process on matters affecting their rights and benefits. This participation can be through collective bargaining, grievance machineries, voluntary modes of settling disputes, and conciliation proceedings mediated by government.
This right does not automatically include the right to membership in the Board of Directors of a corporation, insofar as Sec. 23 of the Corporation Code requires the directors to be owners of at least one share of stock in a stock corporation, and must be subsisting members in a non-stock
corporation. Cessation as stockholders or member, respectively, automatically disqualifies them as directors. Moreover, a majority of them must be Philippine residents.
II.
a) What issues or disputes may be the subject of voluntary arbitration under the Labor Code? (4%)
Voluntary arbitrators of voluntary arbitration panels have original and exclusive jurisdiction to hear and decide:
(a) all unresolved grievances, including termination cases, arising from the interpretation or implementation of the CBA, and those arising from the interpretaton or enforcement of company personnel policies submitted to the Grievance Machinery provided for the purpose in the CBA. All grievances unresolved within seven days from the date of its submission for
resolution to the last step of the grievance machinery are automatically referred to voluntary arbitration;
(b) violations of a CBA, except those which are gros in character, such violations are no longer treated as unfair labor practices, but are resolved as grievances under the CBA;
(c) upon agreement of the parties, all other disputes including unfair labor practices and bargaining deadlocks.
b) Can a dispute falling within the exclusive jurisdiction of the Labor Arbiter be submitted to voluntary arbitration? Why or why not? (3%)
Although Article 217 of the Labor Code speaks of exclusive and original jurisdiction of Labor Arbiters, the cases enumerated thereto may be submitted to voluntary arbitration by agreement by the parties under Article 262. This is because the law prefers voluntary to compulsory arbitration.c) Can a dispute falling within the jurisdiction of a voluntary arbitrator be submitted to compulsory arbitration? Why or why not? (3%)
III.
Savoy Department Store (SDS) adopted a policy of hiring salesladies on five-month cycles. At the end of a saleslady's five-month term, another person is hired as replacement. Salesladies attend to store customers, wear SDS uniforms, report at specified hours, and are subject to SDS workplace rules and regulations. Those who refuse the 5-month employment contract are not hired. The day after the expiration of her 5-month engagement, Lina wore her SDS white and blue uniform and reported for work but was denied entry into the store premises. Agitated, she went on a hunger strike and stationed herself in front of one of the gates of SDS. Soon thereafter, other employees whose 5-month term had also elapsed, joined Lina's hunger strike.
a) Lina and 20 other salesladies filed a complaint for illegal dismissal, contending that they are SDS' regular employees as they performed activities usually necessary or desirable in the usual business or trade of SDS and thus, their constitutional right to security of tenure was violated when they were dismissed without valid, just or authorized cause. SDS, in defense, argued that Lina, et al. agreed - prior to engagement - to a fixed period of employment and thus waived their right to a full-term tenure. Decide the dispute. (4%)
b) The owner of the SDS considered the hunger strike staged by Lina, et al., an eyesore and disruptive of SDS' business. He wrote the Secretary of Labor a letter asking him to assume jurisdiction over the dispute and enjoin the hunger "strike". What answer will you give if you were the Secretary of Labor? (3%)
c) Assume that no fixed-term worker complained, yet in a routine inspection of a labor inspector of the Regional Office of the DOLE found the 5-month term policy of SDS violative of the Labor Code's security of tenure provisions and recommended to the Regional Director the issuance of a compliance order. The Regional Director adopted the recommendation and issued a compliance order. Is the compliance order valid? Explain your answer. (3%)
IV.
Super Comfort Hotel employed a regular pool of "extra waiters" who are called or asked to report for duty when the Hotel's volume of business is beyond the capacity of the regularly employed waiters to undertake. Pedro has been an "extra waiter" for more than 10 years. He is also called upon to work on weekends, on holidays and when there are big affairs at the hotel. What is Pedros' status as an employee under the Labor Code? Why? Explain your answer fully. (6%)
V.
The Pizza Corporation (PizCorp) and Ready Supply Cooperative (RSC) entered into a "service agreement" wherein RSC, in consideration of service fees to be paid by PizCorp, will exclusively supply PizCorp with a group of RSC motorcyle-owning cooperative members who will henceforth perform PizCorp's pizza delivery service. RSC assumes --- under the agreement --- full obligation for the payment of the salaries and other statutory monetary benefits of its members deployed to PizCorp. The parties also stipulated that there shall be no employer-employee relationship between PizCorp and the RSC members. However, if PizCorp is materially prejudiced by any act of the delivery crew that violates PizCorp's directives and orders, PizCorp can directly impose disciplinary actions on, including the power to dismiss, the erring RSC member/s.
a) Is the contractual stipulation that there is no employer-employee relationship binding on labor officials? Why? Explain fully. (3%)
b) Based on the test/s for employer-employee relationship, determine the issue of who is the employer of the RSC members. (4%) c) Assume that RSC has a paid-up capitalization of P1,000,000.00. Is RSC engaged in "labor only" contracting, permissible job contracting or simply, recruitment? (3%)
VI.
On the day that the union could validly declare a strike, the Secretary of Labor issued an order assuming jurisdiction over the dispute and enjoining the strike, or if one has commenced, ordering the striking workers to immediately return to work. The return-to-work order required the employees to return to work within twenty-four hours and was served at 8 a.m. of the day the strike was to start. The order at the same time directed the Company to accept all employees under the same terms and conditions of employment prior to the work stoppage. The Union members did not return to work on the day the Secretary's ssumption order was served, nor on the next day; instead, they held a continuing protest rally against the company's alleged unfair labor practices rally against the company's alleged unfair labor practices. Because of the accompanying picket, some of the employees who wanted to return to work failed to do so. On the 3rd day, the workers reported for work, claiming that they do so in compliance with the Secretary's return-to-work order that binds them as well as the Company. The Company, however, refused to admit them back since they have violated the Secretary's return-to-work order and are now considered to have lost their employment status.
The Union officers and members filed a complaint for illegal dismissal arguing that that there was no strike but a protest rally which is a valid exercise of the workers' constitutional right to peaceable assembly and freedom of expression. Hence, there was no basis for the termination of their employment. You are the Labor Arbiter to whom the case was raffled. Decide, ruling on the following issues:
a) Was there a strike? (4%)
b) Were the employees simply exercising their constitutional right to petition for redress of their grievances? (3%) c) What are the consequences, if any, of the acts of the employees? (3%) VII. Tito Pacencioso is an employee of a foundry shop in Malabon, Metro Manila. He is barely able to make ends meet with his salary of P4,000.00 a month. One day, he asked his employer to stop deducting from his salary his SSS monthly contribution, reasoning out that he is waiving his social security coverage. If you were Tito's employer, would you grant his request? Why? (6%)
VIII.
Carol de la Cruz is the secretary of the proprietor of an auto dealership in Quezon City. She resides in Caloocan City. Her office hours start at 8:00 a.m. and end at 5:00 p.m. On July 30, 2008, at 7 a.m. while waiting for public transport at Rizal Avenue Extension as has been her routine, she was sideswiped by a speeding taxicab resulting in her death. The father of Carol filed a claim for employee's compensation with the Social Security System. Will the claim prosper? Why? (6%)
IX.
Assume that in Problem 5, Mario, an RSC member disgusted with the non-payment of his night shift differential and overtime pay, filed a complaint with the DOLE Regional Office against RSC and PizCorp. After inspection, it was found that indeed Mario was not getting his correct differential and overtime pay and that he was not declared an SSS member (so that no premiums for SSS membership were ever remitted). On this basis, the Regional Director issued a compliance order holding PizCorp and RSC solidarily liable for the payment of the correct differential and overtime pay and ordering PizCorp to report Mario for membership with SSS and remit the overdue SSS premiums. Who has the obligation to report the RSC members for membership with the SSS, with the concommitant obligation to remit SSS premiums? Why? (6%)
X.
Pepe Santos was an international flight steward of FlySafe Airlines. Under FSA's Cabin Crew Administration Manual, Santos must maintain, given his height, a weight of 150 to 170 pounds.
After 5 years as a flight steward, Santos began struggling with his weight; he weighed 200 lbs. , 30 pounds over the prescribed maximum weight. The Airline gave him a one-year period to attain the prescribed weight, and enrolled him ins everal weight reduction programs. He consitently failed to meet his target. He was given a 6-month grace period, after which he still failed to meet the weight limit. FSC thus sent him a Notice of Administrative Charge for violation of company standards on weight requirements. He stated in his answer that, for medical reasons, he cannot have a rapid weight loss. A clarificatory hearing was held where Santos fully explained his predicament. The explanation did not satisfy FSA and so it decided to terminate Santos' service for violation of company standards.
Santos filed a complaint for illegal dismissal, arguing that the comapany's weight requirement policy is unreasonable and that his case is not a disciplinary but a medical issue (as one get older, the natural tendency is to grow heavier). FSA defended its policy as a valid exercise of management prerogative and from the point of view of passenger safety and extraordinary diligence required by law of common carriers; it also posited that Santos' failure to achieve his ideal weight constituted gross and habitual neglect of duty, as well as willful disobedience to lawful employer orders. The Labot Arbiter found the dismissal illegal for there was neither gross and habitual neglect of duty nor willful disobedience.
Is the Labor Arbiter correct? Why or why not? Explain fully. (6%)
XI.
Complainants had worked five (5) years as waitresses in a cocktail lounge owned by the respondent. They did not receive any salary directly from the respondent but shared in all service charges collected for food and drinks to the extend of 75%. With respondent's pripor permission, they could sit with and entertain guests inside the establishment and approrpiate for themselves the tips given by guests. After five (5) years, the complainants' individual shares in the collected service charges dipped to below minimum wage level asa consequence of the lounge's marked business decline. Thereupon, complainants asked respondent to increase their share in the collected service charges to 85%, or the minimum wage level, whichever is higher.
Respondent terminated the services of the complainants who countered by filing a consolidated complaint for unlawful dismissal, with prayer for 85% of the collected services or the minimum wage for the appropriate periods, whichever is higher. Decide. (6%)
XII.
Arnaldo, President of "Bisig" Union in feamwear Company, readied himself to leave exactly at 5:00 pm which was the end of his normal shift to be able to send off his wife who was scheduled to leave for overseas. However, the General Manager required him to render overtime work to meet the company's export quota. Arnaldo begged off, explaining to the General Manager that he had to see of his wife who was leaving to work abroad. The company dismissed Arnaldo for insubordination. He filed a case for illegal dismissal. Decide. (6%)
XIII.
The rank-and-file union staged a strike in the company premises which caused the disruption of business operations. The supervisors' union of the same company filed a money claim for unpaid salaries for the duration of the strike, arguing that the supervisors' failure to report for work was not attributable to them. The company contended that it was equally faultless, for the strike was not the direct consequence of any lockout or unfair labor practice. May the company be held liable for the salaries of the supervisors? Decide. (6%)
XIV.
"Puwersa", a labor federation, after having won in a certification election held in the company premises, sent a letter to respondent company reminding it of its obligation to recognize the local union the federation represents and enter into a CBA with the local union. Respondent company replied that though it is willing, the rank-and-file employees had already lost interest in joining the local union as they had dissolved it. "Puwersa" argued that since it won in a certification election, it can validly perform its function as a bargaining agent and represent the rank-and-file employees despite the union's dissolution.
Is the argument of "Puwersa" tenable? Decide with reasons. (6%)
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