Training & Convention Division

University of the Philippines Law Center

SUGGESTED ANSWERS
to the
2018 BAR EXAMINATIONS IN
POLITICAL AND INTERNATIONAL LAW

Congress enacted a law to provide Filipinos, especially the poor and the
marginalized, access and information to a full range of modern family planning
methods, including contraceptives, intrauterine devices, injectibles, non-
abortifacient hormonal contraceptives, and family planning products and
supplies, but expressly prohibited abortion. To ensure its objectives, the law
made it mandatory for health providers to provide information on the full range
of modern family planning methods, supplies and services, for schools to
provide reproductive health education, for non-governmental medical
practitioners to render mandatory 48 on hours pro bono reproductive health
services as a condition to Philhealth accreditation, and for couples desiring to
marry attend a family planning seminar prior to issuance to a marriage license. It
also punishes certain acts of refusal to carry out its mandates. The spouses
Aguiluz, both Roman Catholics, filed a petition to declare the law as
unconstitutional based on, among others, the following grounds:

(a) It violates the right to life, since it practically sanctions abortion.

Despite express terms prohibiting abortion, petitioners claim that the
family planning products and supplies oppose the initiation of life
which is fundamental human right, and the sanction of contraceptive
use contravenes natural law and as an affront to the dignity of man.

(b) It violates the constitutional prohibition against involuntary

servitude because it requires medical practitioners to render 48 hours
of pro bono reproductive health services which may be against their
will.

(c) It violates the Freedom of Religion, since petitioners’ religious

beliefs prevent them from using contraceptives, and that any State-
sponsored procurement of contraceptives, funded by taxes, violates
the guarantee of religious freedom.

Rule on each of the above objections. (2.5% each)

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SUGGESTED ANSWER:

(a) The law in question does not sanction abortion even in practical
terms. In the case of Imbong v. Ochoa (GR No. 204819, April 8,
2014), the law on its face expressly mentioned that abortion is
not permissible, and this was the determinative factor in making
the ruling. In the same case, the Court also found that the RH
law was replete with provisions that embody the policy of
protecting the unborn from the moment of fertilization.
In addition, the majority of the court believes that the
question of when life starts is a scientific and medical issue;
hence, the Court refused to make a ruling on this issue.
(b) Involuntary servitude denotes compulsion or coercion to do
something either through force, threats, intimidation or other
means. The accreditation with the PhilHealth, as ruled by the
Supreme Court in the case of Imbong v. Ochoa, should be
viewed as an incentive and not a punishment. These health
service providers also enjoy the liberty to choose which kind of
health service they wish to provide. Clearly, there is no
compulsion, force or threat upon them to render the pro bono
services against their will.
(c) What is prohibited in the Constitution is the establishment of a
state religion. While the establishment clause in the Constitution
restricts what the government can do with religion, it also limits
what religious sects can or cannot do with the government. They
can neither cause the government to adopt their particular
doctrine as policy for everyone, nor can they cause the
government to restrict other groups. To do so would cause the
State to adhere to a particular religion, and thus establish a state
religion (Imbong v. Ochoa, GR No. 204819, April 8, 2014).

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 II

Agnes was allegedly picked up by a group of military men headed by Gen.

Altamirano, and was brought to several military camps where she was
interrogated, beaten, mauled, tortured, and threatened with death if she would not
confess her membership in the New People’s Army (NPA) and point to the
location of the NPA camps. She suffered for several days until she was released
after she signed a document saying that she was a surenderee, and was not
abducted or harmed by the military. After she was released, alleging that her
rights to life, liberty and security had been violated and continued to be
threatened by violation of such rights, she filed with the Supreme Court (the
Court) a Petition for the Writs of Amparo and Habeas Corpus with prayers for
Temporary Protection Orders, Inspection of Place and Production of Documents
and Personal Properties. The case was filed against President Amoyo (who was
the President of the Philippines when the abduction, beating, mauling and life
threats were committed), General Altamirano, and several military men whom
Agnes was able to recognize during her ordeal. The Court, after finding the
petition to be in order, issued the writ of amparo and the writ of habeas data and
directed the respondents to file a verified return on the writs, and directed the
Court of Appeals (CA) to hear the petition. The respondents duly filed their
return on the writs and produced the documents in their possession. After
hearing, the CA ruled that there was no more need to issue the temporary
protection orders since the writ of amparo had already been issued, and dismissed
the petition against President Amoyo on the ground the he was immune from suit
during his incumbency as president. Agnes appealed the CA ruling to the Court.
The appeal was lodged after President Amoyo’s terms had ended.

(a) Was the CA correct in saying that the writ of amparo rendered
unnecessary the issuance of the temporary protection order? (2.5%)

SUGGESTED ANSWER:

(a) Yes. The writ of amparo is an extraordinary and independent

remedy that provides rapid judicial relief, as it partakes of a
summary proceeding and requires only substantial evidence to
make the appropriate interim and permanent reliefs to the
petitioner. It serves both preventive and curative reliefs in
addressing extrajudicial abduction and torture. Temporary
protection orders are merely intended to assist the Court before
it can arrive at a judicious determination of the amparo
petition. A temporary protection order, being an interim relief,
can only be granted before final adjudication on the amparo
case is made. The privilege of the writ of amparo, once granted,

3
 already entails the protection of the aggrieved party. Thus, since
the writ of amparo was already granted and issued, there is no
more need to issue a temporary protection order (Yano v.
Sanchez, G.R. No. 186640, Feb. 11, 2010; Rodriguez v.
Macapagal-Arroyo, G.R. Nos. 191805 & 193160, Nov. 15, 2011).

(b) Will the president’s immunity from suit continue even after his term
has ended, considering that the events covered by the petition took
place during his terms? (2.5%)

SUGGESTED ANSWER:

(b) No. The presidential immunity from suit exists only in

concurrence with the President’s incumbency. A non-sitting
President cannot claim immunity even if the acts complained of
were committed while he was still a sitting President. The reason
for this is that if the immunity is not granted while he is in office,
he might be spending all his time in attending to litigations.
After his term, he can already attend to them (Estrada v.
Desierto, G..R Nos. 146710-15, 146738, April 3, 2001;Rodriguez v.
Macapagal-Arroyo, G.R. Nos. 191805 & 193160, Nov. 15, 2011).

III

What and whose vote is required for the following acts: (2% each)

(a) the repeal of a tax exemption law;

SUGGESTED ANSWER:

(a) The Constitution is silent on the voting requirement for

repealing a tax exemption. However, it could be considered that
the voting requirement to grant is also the voting requirement
to repeal; hence, the required vote is the majority of all the
members of Congress.

ALTERNATIVE SUGGESTED ANSWER:

(a) The granting of tax exemptions requires the majority of all
members of the Congress, because granting such will impair the lifeblood of

4
the government. Repealing such tax exemption, however, is not inimical to
such lifeblood and a simple majority is needed instead of a qualified
majority.

(b) a declaration of the existence of a state of war;

SUGGESTED ANSWER:

(b) Two-thirds of all members of Congress, voting separately

(Article VI, Section 23, 1).

(c ) The amendment of a constitutional provisions through a constituent

assembly;

SUGGESTED ANSWER:

(c) The proposal for the amendment shall be valid, upon a vote of
three-fourths of all its Members (Article XVII, Section 1, 1). For
the effectivity of the amendment; however, the vote needed is
the majority of all those who voted (Article XVII, Section 4).
[Note: Any of these two answers should be acceptable as the
question is not clear on whether it is asking for the voting
requirement for the validity of the proposal or the effectivity of the
amendment].

(d) The resolution of a tie in a presidential election; and

SUGGESTED ANSWER:

(d) A majority of all the members of both Houses of Congress,

voting separately (Article VII, Section 4).

(e) The extension of the period for the suspension of the privilege of the
writ of habeas corpus?

SUGGESTED ANSWER:

(e) The Congress, voting jointly, by a vote of at least a majority of all

its Members in regular or special session (Article VII, Section 18).

5
 IV

The Province of Amaya is one of the smallest province in the Philippines

with only one legislative district composed of four municipalities: Uno, Dos, Tres
and Cuatro.

Andres, a resident and registered voter of Cuatro municipality, ran and was
elected as member of Sangguniang Panlalawigan (SP) of Amaya in the 2010 and
2013 local elections.

While Andres was serving his second term as SP member, a law was
enacted re-apportioning the four towns of Amaya into two legislative districts:
Uno and Dos comprising the First District, and Tres and Cuatro comprising the
Second District.

In the 2016 local elections, Andres ran and was elected as member of the
SP of Amaya representing Second district.

Andres seeks your legal advice regarding his intention to run as a member
of the SP of Amaya for the Second District in the next local election in 2019.
What will you advise Andres? (2.5%)

SUGGESTED ANSWER:

My advise is for him not to run for SP member, because doing so

violates the limitation of three consecutive terms upon local elective officials.
In the cases of Latasa v. COMELEC (G.R. 154289, December 10, 2003) and
Naval v. COMELEC (G.R. No. 207851, July 8, 2014]), the Court ruled that
the three-term limit applies notwithstanding any reapportionment,
renaming, or reclassification of any local government unit. The clear intent
of the framers of the Constitution was to limit the term to three consecutive
elections to the same position.

State whether or not the following acts are constitutional: (2% each)

(a) A law prescribing as qualifications for appointment to any court

lower than the Supreme Court, Philippine citizenship, whether
natural born or naturalized, 35 years of age on the date of
appointment, and at least eight years as a member of the Philippine
Bar.

SUGGESTED ANSWER:

(a) The law prescribing as a qualification for appointment to any

lower court mere Philippine citizenship, whether natural-born

6
 or naturalized, would be unconstitutional with respect to
appointments to collegiate courts (CA, CTA, Sandiganbayan)
because all appointees to these courts must be natural-born
citizens (Article VIII, Section 7).

(b) A law requiring all candidates for national or local elective offices to
be college degree holders;

SUGGESTED ANSWER:

(b) The law requiring all candidates for national or local elective
offices to be college degree holders should be considered as
unconstitutional with respect to national elective offices, because
it is not one of the qualifications specifically required for these
offices. The qualifications for these positions under the
Constitution are exclusive in character and the Congress would
be incompetent to prescribe this requirement as an additional
qualification for candidates for national elective office. This
additional requirement would, however, be valid with respect to
candidates for local elective posts (Social Justice Society v.
Dangerous Drugs Board, 570 SCRA 410).

(c ) The designation by the president of an acting Associate

Commissioner of the Civil Service Commission;

SUGGESTED ANSWER:

(c) Such designation is unconstitutional because the Constitution

provides that no person shall be appointed or designated in any
of the constitutional commissions in a temporary or acting
capacity (Articles IX-B, Section 1(2), IX-C, Section 2 and IX-D,
Section 2).

(d) The appointment by the President as Deputy Ombudsman of a

lawyer who has been engaged in the practice of law for five years;
and

7
SUGGESTED ANSWER:

(d) The appointment can be upheld, because only the Ombudsman

is required under the Constitution to have been engaged in the
practice of law for at least ten years prior to his appointment.
(Article XI, Section 8).

(e) The nomination by a national party-list of a person who is not one of

its bona fide members

SUGGESTED ANSWER:

(e) The nomination is invalid, because nominees of national parties

must be bona fide members of such parties (Atong Paglaum v.
Commission on Elections, 694 SCRA 477, G.R. No. 203766, April
2, 2013).

VI

Ang Araw, a multi-sectoral party-list organization duly registered as such

with the Commission on Elections (Comelec), was proclaimed as one of the
winning party-list groups in the last national elections. Its first nominee,
Alejandro, assumed office as the party-list representative.

About one year after Alejandro assumed office, the Interim Central
Committee of Ang Araw expelled Alejandro from the party for disloyalty and
replaced him with Andoy, its second nominee. Alejandro questioned before the
Comelec his expulsion ad replacement by Andoy.

The Comelec considered Alejandro’s petition as an intra-party dispute

which it could resolve as an incident of its power to register political parties; it
proceeded to uphold the expulsion.

Is the Comelec’s ruling correct? (5%)

SUGGESTED ANSWER:

Alejandro’s petition should be dismissed for lack of jurisdiction. It is

the HRET which has jurisdiction over the case, because Alejandro is already
a Member of the House of Representatives (Lico v. Commission on Elections,
G.R. No. 205505, September 29, 2015).

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 VII

The 2016 mayorality race in the City of Ardania included Arnaldo and
Anacleto as contenders.

Arnaldo filed a petition with the Comelec to cancel Anacleto’s Certificate

of Candidacy (CoC) for misrepresenting himself as a Filipno citizen. Arnaldo
presented as evidence a copy of Anacleto’s Spanish passport and a certification
from the Bureau of Immigration (BI) showing that Anacleto used the same
passport several times to travel to and from Manila and Madrid or Barcelona.

In his Comment, Anacleto claimed that, a year prior to filing his CoC, he
had complied with all the requirements of R.A. No. 9225 (Citizenship Retention
and Re-acquisition of Act of 2003) to reacquire his Philippine citizenship by
taking an oath of allegiance and executing a sworn renunciation of his Spanish
citizenship. He defended the use of his Spanish passport subsequent to taking
his oath of allegiance to the Philippines as a practical necessity since he had yet
to obtain his Philippine passport despite reacquiring his Philippine citizenship.
Even after he secured his Philippine passport, he said he had to wait for the
issuance of a Schengen visa to allow him to travel to Spain to visit his wife and
minor children.

(a) Based on the allegations of the parties, is there sufficient ground to

cancel Anacleto’s CoC (2.5%)

SUGGESTED ANSWER:

(a) The sole act of using a foreign passport does not divest Anacleto
of his Filipino citizenship which he acquired by repatriation. By
representing himself as a Spanish citizen; however, Anacleto
voluntarily and effectively reverted to his earlier status as a dual
citizen. Such reversion was not retroactive; it took place the
instant Anacleto represented himself as a Spanish citizen by
using his Spanish passport. He is, thus, disqualified for being a
dual citizen, and his CoC should be cancelled (Macquiling v.
Comelec, G.R. No. 195649, April 16, 2013).
[Note: The use of the foreign passport amounts to a recantation of
the Oath of Renunciation required to qualify one to run for an
elective position].

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 (b) In case Anacleto’s CoC is properly cancelled, who should serve as
mayor of Ardania City: Arnaldo, who obtained the second highest
number votes, or Andrea, the duly-elected Vice Mayor of the City?
(2.5%)

SUGGESTED ANSWER:

(b) The rule on succession would not apply if the permanent

vacancy was caused by one whose certificate of candidacy was
void ab initio. Specifically with respect to dual citizens, their
certificates of candidacy are void ab initio, because they possess
"a substantive [disqualifying circumstance] . . . [existing] prior
to the filing of their certificate of candidacy. "Legally, they
should not even be considered candidates. The votes cast for
them should be considered stray and should not be counted.
In cases of vacancies caused by those with void ab initio
certificates of candidacy, the person legally entitled to the vacant
position would be the candidate who garnered the next highest
number of votes among those eligible; in this case, it was
Arnaldo (Chua v. COMELEC, G.R. No. 216607, April 5, 2016).

VIII

Two petitions for the cancellation of Certification of Candidacy

(CoC)/Denial of Due Course were filed with the Comelec against two candidates
running as municipal mayors of different towns.

The first petition was against Anselmo. Years, ago, Anselmo was charged
and convicted of the crime of rape by final judgment, and was sentenced to suffer
the principal penalty of reclusion perpetua which carried the accessory penalty
of perpetual absolute disqualification. While Anselmo was in prison, the
President commuted his sentenced and he was discharged for prison.

The second petition was against Ambrosio. Ambrosio’s residency was

questioned because he was allegedly a “green card holder,” i.e. a permanent
resident of the US, as evidenced by a certification to this effect from the US
Embassy.

Acting on the recommendation of its Law Department, the Comelec en

banc, motu proprio issued two resolutions granting the petitions against Anselmo
and Ambrosio.

10
 Both Anselmo and Ambrosio filed separate petitions with the Supreme
Court assailing the resolutions cancelling their respective CoCs. Both claimed
that the Comelec en banc acted with grave abuse of discretion amounting to lack
or excess of jurisdiction because the petition should have first heard and resolved
by one of the Comelec’s Division.

Are Anselmo and Ambrosio correct? (5%)

SUGGESTED ANSWER:

Anselmo is incorrect. The rule is every quasi-judicial matter must

first be tackled by a division subject to appeal by way of a Motion for
Reconsideration to the COMELEC en banc. In Jalosjos v. COMELEC (G.R.
No. 205033, June 18, 2013), it was determined that a cancellation on the
basis of perpetual disqualification is a matter that can be taken judicial
notice of. When it cancels A CoC on that ground, it is acting in
performance of an administrative function and, therefore, the rule in Article
XI, Section 3 does not apply.
Ambrosio, on the other hand, is correct that the petition for the
cancellation of his CoC should have been first heard and resolved by the
Comelec Division. Cancellation proceedings involve the COMELEC's quasi-
judicial functions. The Constitution mandates the COMELEC, in the
exercise of its adjudicatory or quasi-judicial powers, to hear and decide
cases first by division and, upon motion for reconsideration, by the
COMELEC en banc (Bautista v. Comelec, G.R. Nos. 154796-97, October 23,
2003).

IX

In 1990, Agripina migrated to Canada and acquired Canadian citizenship.

In 2008, Agripina retired and returned to the Philippines to permanently

reside in her hometown of Angeles, Pampanga. A month after returning to the
Philippines, Agripina took her oath of allegiance and executed a sworn
renunciation of her Canadian citizenship in accordance with R.A. No. 9225.

In 2009, Agripina filed her certificate of candidacy for Congress for the
2010 elections. Agripina’s political rivals lost no time in causing the filing of
various actions to question her candidacy. They questioned her eligibility to run
as member of Congress. Since Agripina had to take an oath under RA No. 9225,
it meant that she needed to perform an act to perfect her Philippine citizenship.

11
They claimed, therefore, that Agripina could not be considered a natural-born
citizen. Agripina raised the defense that, having complied with the requirements
of RA No. 9225, she had reacquired, and was deemed never to have lost, her
Philippine citizenship.

Is Agripina disqualified to run for Congress for failing to meet the

citizenship requirement? (2.5%)

SUGGESTED ANSWER:

Agripina is eligible to run as member of Congress. Repatriation

results in the recovery of a person’s original nationality. This means that a
naturalized Filipino who lost his citizenship will be restored to his prior
status as a Filipino citizen. If she were originally a natural-born citizen
before she lost her Philippine citizenship, she would be restored to her
former status as a natural-born Filipino (Bengson III vs. HRET, G.R. No.
142840, May 7, 2001. See also: Parreno v. Commission on Audit, G.R. No.
162224, June 7, 2007, and Tabasa v. Commission on Elections, G.R. Nos.
221697 & 221698-700, March 8, 2016).
RA 9225 makes a distinction between those natural-born Filipinos who
became foreign citizens before and after the effectivity of RA No. 9225. For
those who were naturalized in a foreign country, they shall be deemed to
have reacquired their Philippine citizenship which was lost pursuant to CA
63. In the case of those who became foreign citizens after RA 9225 took
effect, they shall retain Philippine citizenship despite having acquired
foreign citizenship, provided they take the oath of allegiance under the new
law.
Considering that petitioner was naturalized as a Canadian citizen
prior to the effectivity of RA 9225, she belongs to the first category of
natural-born Filipinos who lost their Philippine citizenship by naturalization
in a foreign country, under the first paragraph of Section 3. As the new law
allows dual citizenship, she was able to reacquire her Philippine citizenship
by taking the required oath of allegiance (See Bengson v. HRET and as
affirmed by Poe-Llamanzares v. COMELEC, G.R. No. 221697, March 8, 2016).

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 X

Ascertain the constitutionality of the following acts: (2.5% each)

(a) An investigation conducted by the Ombudsman against a

Commissioner of the Commission on Audit for serious misconduct.

SUGGESTED ANSWER:

(a) The act is constitutional. Article XI, Section 13(1) of the

Constitution expressly gives the Ombudsman the power to
investigate on its own or on complaint by any person, any act or
omission of any public official, employee, office or agency, when
such act or omission appears to be illegal, unjust, improper or
inefficient.

ALTERNATIVE ANSWER:

(a) The act is constitutional. Although a Commissioner of any

of the Constitutional Commissions is removable only through
impeachment, this rule does not preclude the Ombudsman from
conducting an investigation into the alleged serious misconduct
committed by impeachable officials for the purpose of filing a
verified complaint for impeachment (Section 22, RA 6770;
Carpio-Morales v. CA, GR 217126-27, 10 Nov 2015).

ANOTHER ALTERNATIVE ANSWER:

(a) The act is unconstitutional since serious misconduct is not a

ground for impeachment. Given the limited facts of the case, it
cannot be assumed that serious misconduct in this case amounts
to betrayal of public trust.

(b) A law prohibiting any court, other than the Supreme Court, from
issuing a writ of injunction against an investigation being conducted
by the Ombudsman.

SUGGESTED ANSWER:

(b) The law is unconstitutional. The power to issue injunctive writs

is part of judicial power. The rules governing the exercise of
this power are within the powers of the Supreme Court to

13
 promulgate. The law therefore is an encroachment of the
Court's rule-making power (Carpio-Morales v CA, GR 217126-
27, 10 Nov 2015).

(c ) A law prohibiting any appeal from the decision or final order of the
Ombudsman in an administrative proceeding, except through a
petition for review on certiorari filed before the Supreme Court.

SUGGESTED ANSWER:

(c) The law is unconstitutional. In Fabian v. Desierto (G.R. No.

129742, 16 September 1998), the Court invalidated Section 27 of
R.A. No. 6770 insofar as it provided for appeal by certiorari
under Rule 45 from the decisions or orders of the Ombudsman
in administrative cases. Section 27 of R.A. No. 6770 had the
effect, not only of increasing the appellate jurisdiction of the
Supreme Court without its advice and concurrence in violation
of Section 30, Article VI of the Constitution; it is also
inconsistent with Section 1, Rule 45 of the Rules of Court which
provides that a petition for review on certiorari shall apply only
to a review of "judgments or final orders of the Court of
Appeals, the Sandiganbayan, the Court of Tax Appeals, the
Regional Trial Court, or other courts authorized by law." In the
absence of concurrence by the Supreme Court, such a law would
be unconstitutional.

XI

Under Section 6 of Article V (on Criminal Jurisdiction) of the Visiting

Forces Agreement, (VFA), the custody of a United States (US) personnel who
becomes subject to criminal prosecution before a Philippine court shall be with
the US military authorities, if the latter so requests. The custody shall begin from
the commission of the offense until the completion of all judicial proceedings.
When requested, the US military authorities, however, shall make the US
personnel available to Philippine authorities for any investigative or judicial
proceedings relating to the offense which the person has been charged. In the
event that the Philippine judicial proceedings are not completed with one year,
the US shall be relieved of any obligation under Section 6.

14
 The constitutionality of Section 6, Article V of the VFA is challenged on
two grounds: (1) it nullifies the exclusive power of the Supreme Court to adopt
rules of procedure for all courts in the Philippines; and (2) it violates the equal
protection clause to the extent that it allows the transfer of the custody of an
accused to a foreign power as providing a different rule of procedure for that
accused.

Rule on the challenge. (5%)

SUGGESTED ANSWER:

The challenge is without merit.

The rule in international law is that foreign armed forces allowed to
enter one’s territory are immune from local jurisdiction, except to the extent
agreed upon. As a result, the situation involved is not one in which the
power of the Supreme Court to adopt rules of procedure is curtailed or
violated, rather, it is one in which, as is normally encountered around the
world, the laws (including rules of procedure) of one State do not extend or
Apply, except to the extent agreed upon, to subjects of another State due to
the recognition of extraterritorial immunity given to such bodies as visiting
foreign armed forces.
Nothing in the Constitution prohibits such agreements recognizing
immunity from jurisdiction or some aspects of jurisdiction (such as custody),
in relation to long-recognized subjects of such immunity, like Heads of State,
diplomats and members of the armed forces contingents of a foreign State
allowed to enter another State’s territory. The Constitution, on the
contrary, states that the Philippines adopts the generally accepted principles
of international law as part of the law of the land (Art. II, Sec. 2).
The equal protection clause is not violated, either, because there is a
substantial basis for a different treatment of foreign military armed forces
allowed to enter our territory and all other accused (Nicolas v. Romulo, G.R.
No. 175888, February 11, 2009).

XII

Section 9 of PD No. 1606, as amended, provides that the Sandiganbayan

may adopt internal rules governing all allotment of cases among its divisions, the
rotation of justices among them, and other matters relating to the internal
operations of the court.

15
 Section 6 of Article IX-A of the Constitution allows each of the
Constitutional Commissions “en banc [to] promulgate its own rules concerning
pleadings and practice before it or before any of its offices. Such rules however
shall not diminish, increase, or modify substantive rights.”

Section 16(3) of Article VI of the Constitution states that “Each House

may determine the rules of its proceedings.” Section 21, Article VI of the
Constitution further provides that “[T]he Senate or the House of Representatives
or any of its respective committees may conduct inquiries… in accordance with
its duly published rules of procedure.”

Finally, Section 3(8) of Article XI of the Constitution declares that “[T]he

Congress shall promulgate its rules on impeachment to effectively carry out the
purpose of this section.

Are the rules promulgated pursuant to these provisions subject to review

and disapproval by the Supreme Court? (5%)

SUGGESTED ANSWER:

Section 5[5] of Article VIII of the Constitution clearly provides that

the “[R]ules of procedure of special courts and quasi-judicial bodies shall
remain effective unless disapproved by the Supreme Court;” accordingly, it
is clear that the Supreme Court may review and reverse the rules of
procedure of the Sandiganbayan and the Constitutional Commissions.
With respect to the rules of procedure of Congress in its proceedings,
legislative inquiries and on impeachment, while these rules may be generally
considered as political questions, when questioned before the courts in a
proper case, they would nevertheless be subject to the power of judicial
review under the second paragraph of Section 1, Article VIII of the
Constitution, which authorizes it to review and annul all acts of any branch
or instrumentality of the government which may be tainted with grave abuse
of discretion amounting to lack or excess of jurisdiction.

ALTERNATIVE ANSWER:
Although the Rules of Procedure of the Sandiganbayan are covered by
the disapproval authority of the Supreme Court as stated in Section 5(5) of
Article VIII of the Constitution, the same thing cannot be said for the Rules
of Procedure promulgated by Congress by virtue of the doctrine of
separation of powers, unless these rules are tainted with grave abuse of

16
discretion. The Rules of Procedure of Constitutional Commissions are
likewise outside the disapproval authority of the Supreme Court as these
commissions are deliberately placed in the Constitution to be independent,
unless these are tainted with grave abuse of discretion.

XIII

PO1 Adrian Andal is known to have taken bribes from apprehended

motorists who have violated traffic rules. The National Bureau of Investigation
conducted an entrapment operation where PO1 Adrian was caught red-handed
demanding and taking PhP500.00 from a motorist who supposedly beat a red
light.

After he was apprehended, PO1 Adrian was required to submit a sample of

his urine. The drug test showed that he was positive for dangerous drugs.
Hence, PO1 Adrian was charged with violation of Section 15, Article II of RA
No. 9165 or the Comprehensive Dangerous Drugs Act of 2002.

PO1 Adrian argues against the admissibility of the urine test results and
seeks its exclusion. He claims that the mandatory drug test under RA No. 9165
is a violation of the accused’s right to privacy and against self-incrimination.

Are PO1 Adrian’s contentions correct? (2.5%)

SUGGESTED ANSWER:

PO1 Adrian is correct that his rights to privacy and against self-
incrimination have been violated. The results of the “confirmatory” urine
test should therefore be rejected as evidence against him.

It should be noted that RA 9165 allows the conduct of urine tests only
for persons arrested for acts prohibited under said law, such as, among
others, the manufacturing, sale, use or possession of illegal drugs, and not
for any unlawful act, like extortion, for which PO1 Adrian was arrested (De
la Cruz v. People, G.R. No. 200748, July 23, 2014).

XIV

Amoroso was charged with treason before a military court martial. He was
acquitted.

He was later charged with the same offense before a Regional Trial Court.
He asks that the information be quashed on the ground of double jeopardy.

17
 The prosecution objects, contending that for purpose of double jeopardy,
the military court martial cannot be considered as a “competent court”.

Should the Regional Trial Court grant Amoroso’s motion to quash on the
ground of double jeopardy? (2.5%)

SUGGESTED ANSWER:

Yes, the Motion to Dismiss should be granted.

A defendant, having been acquitted of a crime by a court martial of
competent jurisdiction proceeding under lawful authority, cannot be
subsequently tried for the same offense in a civil court.
It appearing that the offense charged in the Court Martial and in the
Regional Trial Court is the same, that the military court had jurisdiction to
try the case and that both courts derive their powers from one sovereignty,
the acquittal by the military court should be a bar to Amoroso’s further
prosecution for the same offense in the Regional Trial Court (Crisologo v.
People, (G.R. No. L-6277, February 26, 1954); Marcos v. Chief of Staff (G.R.
No. L-4663, May 30, 1951); Garcia v. Executive Secretary (G.R. 198554, July
30, 2012).

XV

Annika sued the Republic of the Philippines, represented by the Director of

the Bureau of Plant Industry, and asked for the revocation of a deed of donation
executed by her in favor of said Bureau. She alleged that, contrary to the terms
of the donation, the donee failed to install lighting facilities and a water system
on the property donated, and to build an office building and parking lot thereon,
which should have been constructed and made ready for occupancy on or before
the date fixed in the deed of donation.

The Republic invoked state immunity and moved for the dismissal of the
case on the ground that it had not consented to be sued. Should the Republic’s
motion be granted? (2.5%)

SUGGESTED ANSWER:

The motion of the Republic should be granted. There appears to be no

consent on the part of the State to be sued.
In Section 3, Article XVI of the Constitution it is provided that:
“The State shall not be sued without its consent.”

18
 That no consent was given by the Republic is shown by the fact that
the Bureau or the Government did seem to have complied with the demands
of the deed of donation.
Compliance with the state immunity is essential for two reasons:
1. It is required as a provision of the Constitution; and
2. Immunity is an essential element of state sovereignty.

ALTERNATIVE ANSWER:
The motion should be denied.
The doctrine of governmental immunity from suit cannot serve as an
instrument for perpetrating an injustice on a citizen. Here, the alleged
failure to abide by the conditions under which a donation was given should
not prove an insuperable obstacle to a civil action, the consent likewise being
presumed when the State entered into a contract. Under the circumstances,
the fundamental postulate of non-suability of the state cannot stand in the
way (Santiago vs. Republic, G.R. No. L-48214, December 19, 1978).

XVI

Five foreign nationals arrived at the NAIA from Hong Kong. After
retrieving their checked-in luggage, they placed all their bags in one pushcart and
proceeded to Express Lane 5. They were instructed to place their luggage on the
examiner’s table for inspection.

The examiner found brown-colored boxes, similar in size to powdered

milk boxes, underneath the clothes inside the foreigners’ bags. The examiner
discovered white crystalline substances inside the boxes that were the inspected
and proceeded to bundle all of the boxes by putting masking tape around them.
He thereafter handed the boxes over to Bureau of Customs agents. The agents
called out the names of the foreigners one by one and ordered them to sign their
names on the masking tape placed on the boxes recovered from their respective
bags. The contents of the boxes were thereafter subjected to tests which
confirmed that the substance was shabu.

Can the shabu found inside the boxes admitted in evidence against the five
foreigners for the charge of illegal possession of drugs in violation of the
Comprehensive Dangerous Drugs Act of 2002? (2.5%)

19
SUGGESTED ANSWER:

Yes, shabu obtained in ordinary customs searches such as those done

in airport, which is a valid warrantless search, are admissible in evidence
(Dela Cruz v. People G.R. 209387, January 11, 2016).

ALTERNATIVE ANSWER:

No, those boxes containing the shabu are inadmissible in evidence

against them.

The signatures of the accused on the boxes constitute as tacit

admission of the crime charged and are tantamount to an uncounselled
extra-judicial confession which is not sanctioned by the Bill of Rights
(Section 12[1] and [3], Article III, 1987 Constitution). They are, therefore,
inadmissible as evidence for any admission wrung from them in violation of
their constitutional rights is inadmissible against them. The fact that all
accused were foreign nationals does not preclude application of the
exclusionary rule because the constitutional guarantees embodied in the Bill
of Rights are given and extend to all persons, both aliens and citizens (People
v. Wong Chuen Ming, G.R. Nos. 112801-11, April 12, 1996).

XVII

The police served a warrant of arrest on Ariston who was suspected of

raping and killing a female high school student. While on the way to the police
station, one of the police officers who served the warrant asked Ariston in the
local dialect if he really raped and killed the students, and Ariston nodded and
said, “Opo.”

Upon arriving at the police station, Ariston saw the City Mayor, whom he
approached and asked if they could talk privately. The mayor led Ariston to his
office and, while there in conversation with the Mayor, Ariston broke down and
admitted that he raped and killed the student. The mayor thereafter opened the
door of the room to let the public and media representatives witness Ariston’s
confession. In the presence of the Mayor, the police and the media, and in
response to questions asked by some members of the media, Ariston sorrowfully
confessed his guilt and sought forgiveness for his actions.

Which of these extrajudicial confessions, if any, would you consider as

admissible in evidence against Ariston? (5%)

20
SUGGESTED ANSWER:

Ariston was already under custodial investigation when he confessed

to the police. It is admitted that the police failed to inform him of his
constitutional rights when he was investigated and interrogated. His
confession to the police is therefore inadmissible in evidence.
His confession before the mayor, however, is admissible. While it may
be true that a mayor has “operational supervision and control” over the
local police and may arguably be deemed a law enforcement officer for
purposes of applying Section 12(1) and (3) of Article III of the Constitution,
Ariston’s confession to the mayor, as described in the problem, was not
made in response to any interrogation by the latter. In fact, the mayor did
not appear as having questioned Ariston at all. No police authority ordered
Ariston to talk to the mayor. It was he himself who spontaneously, freely
and voluntarily sought the mayor for a private meeting. The mayor did not
know that he was going to confess his guilt to him. When he talked with the
mayor as a confidant and not as a law enforcement officer, his uncounselled
confession to the Mayor did not violate his constitutional rights.
His confession to the media can likewise be properly admitted. The
confessions were made in response to questions by news reporters, not by the
police or any other investigating officer. Statements spontaneously made by
suspects to news reporters during televised interviews are deemed voluntary
and are admissible in evidence (People v. Andan, G.R. No. 116437, March 3,
1997).

XVIII

Two police teams monitored the payment of ransom in a kidnapping case.

The bag containing the ransom money was placed inside an unlocked trunk
of a car which was parked at the Angola Commercial Center in Mandaluyong
City.

The first police team, stationed in an area near where the car was parked,
witnessed the retrieval by the kidnappers on the bag from the unlocked trunk.
The kidnappers thereafter boarded their car and proceeded towards the direction
of Amorsolo St. in Makati City where the second police team was waiting.

21
 Upon confirmation by radio report from the first police team that the
kidnappers were heading towards their direction, the second police team
proceeded to conduct surveillance on the car of the kidnappers, eventually saw it
enter Ayala Commercial Center in Makati City, and the police team finally
blocked it when it slowed down. The members of the second police team
approached the vehicle and proceeded to arrest the kidnappers.

Is the warrantless arrest of the kidnappers by the second police team

lawful? (5%)

SUGGESTED ANSWER:

The warrantless arrest is lawful.

There are two requirements before a warrantless arrest can be
effected under Section 5(b), Rule 113, Rules of Court: (1) an offense has just
been committed, and (2) the person making the arrest has personal
knowledge of facts indicating that the person to be arrested has committed
it.
Both requirements are present in the instant case. The first police team
present in the Angola Commercial Center was able to witness the pay-off
which effectively consummated the crime of kidnapping. Its team members
all saw the kidnappers take the money from the car trunk. Such knowledge
was then relayed to the other police officers comprising the second police
team stationed in Amorsolo St. where the kidnappers were expected to pass.
It is sufficient for the arresting team that they were monitoring the
pay-off for a number of hours long enough for them to be informed as to
who the kidnappers were. This is equivalent to personal knowledge based
on probable cause (People v. Uyboco, G.R. No. 178039, January 19, 2011).

XIX

President Alfredo died during his third year in office. In accordance with
the Constitution, Vice President Anastasia succeeded him. President Anastasia
then nominated the late President Alfredo’s Executive Secretary, Anna Maria, as
her replacement as Vice President. The nomination was confirmed by a majority
of all the Members of the House of Representatives and the Senate, voting
separately.

(a) Is Anna Maria’s assumption as Vice President valid? (2.5%)

22
SUGGESTED ANSWER:

No, Anna Maria’s assumption is unconstitutional, because only a

member of the Senate or House of Representatives may be nominated by a
successor-President as Vice President. (Article VII, Section 9).

(b) Can Anastasia run as President in the next election? (2.5%)

SUGGESTED ANSWER:

Yes, Anastacia can still run as President in the next election since she
has served for less than four years. Section 4, Article VII provides that “no
person who has succeeded as President and has served as such for more than
four years shall be qualified for election to the same office at any time.”

XX

Andreas and Aristotle are foreign nationals working with the Asian
Development Bank (ADB) in its headquarters in Manila. Both were charged
with criminal acts before the local trial courts.

Andreas was caught importing illegal drugs into the country as part of his
“personal effects” and was thus charged with violation of Comprehensive
Dangerous Drugs Act of 2002. Before the criminal proceedings could
commence, the President had him deported as an undesirable alien. Aristotle was
charged with grave oral defamation for uttering defamatory words against a
colleague at work. It his defense, Aristotle claim diplomatic immunity. He
presented as proof a communication from the Department of Foreign Affairs
stating that, pursuant to the Agreement between the Philippine Government and
the ADB, the bank’s officers and staff are immune from legal processes with
respect to acts performed by them in their official capacity.

(a) Can the President’s act of deporting an undesirable alien be

subjected to judicial review? (2.5%)

SUGGESTED ANSWER:

(a) The power to deport aliens is an act of State, an act done by or

under the authority of the sovereign power. It is a police
measure against undesirable aliens whose continued presence in
the country is found to be injurious to the public good and the
domestic tranquility of the people (Rosas v. Montor, G.R. No.

23
 204105, October 14, 2015). An act of State is one done by the
sovereign power of a country, or by its delegate, within the limits
of the power vested in him. An act of State cannot be questioned
or made the subject of legal proceedings in a court of law
(Black’s Law Dictionary, 4th ed., 44). With particular reference to
Political Law, an act of State is an act done by the political
departments of the government and not subject to judicial
review.

(b) Is Aristotle’s claim of diplomatic immunity proper? (2.5%)

SUGGESTED ANSWER:

(b) The claim of diplomatic immunity is improper. Courts cannot

blindly adhere to and take on its face the communication from
the DFA that Aristotle is covered by an immunity. The DFA’s
determination that a certain person is covered by immunity is
only preliminary and has no binding effect on courts. Besides,
slandering a person cannot possibly be covered by the immunity
agreement because our laws do not allow the commission of a
crime, such as defamation, under the guise of official duty.
Under the Vienna Convention on Diplomatic Relations, a
diplomatic agent enjoys immunity from criminal jurisdiction of
the receiving state except in the case of an action relating to any
professional or commercial activity exercised by the diplomatic
agent outside his official functions in the receiving state. The
commission of a crime is not part of official duty (Liang vs.
People, G.R. No. 125865, January 28, 2000).

-NOTHING FOLLOWS-

24
 Training & Convention Division
University of the Philippines Law Center

SUGGESTED ANSWERS
to the
2018 BAR EXAMINATIONS IN
LABOR LAW

I
Narciso filed a complaint against Norte University for the payment of
retirement benefits after having been a part-time professional lecturer in the
same school since 1974. Narciso taught for two semesters and a summer term
for the school year 1974-1975, took a leave of absence from 1975 to 1977, and
resumed teaching until 2003. Since then, his contract has been renewed at the
start of every semester and summer, until November 2005 when he was told
that 
he could no longer teach because he was already 75 years old. Norte
University also denied Narciso's claim for retirement benefits stating that only
full-time permanent faculty, who have served for at least five years
immediately preceding the termination of their employment, can avail
themselves of post-employment benefits. As part-time faculty member, Narciso
did not acquire permanent employment status under the Manual of Regulations
for Private Schools, in relation to the Labor Code, regardless of his length of
service.
(a) Is Narciso entitled to retirement benefits? (2.5%)

SUGGESTED ANSWER:

(a) As a part-time employee with fixed-term employment, Narciso

is entitled to retirement benefits. Book VI, Rule II of the Rules
Implementing the Labor Code states that the rule on
retirement shall apply to all employees in the private sector,
regardless of their position, designation or status and
irrespective of the method by which their wages are paid,
except to those specifically exempted. Part-time faculty
members do not fall under the exemption. Based also on the
Retirement Pay Law, and its Implementing Rules, part-time
faculty members of private educational institutions are entitled
to full retirement benefits even if the services are not
continuous, and even if their contracts have been renewed after
their mandatory age of retirement.

1
ALTERNATIVE ANSWERS:

(a) Under Art 302 (287) of the Labor Code as amended by

Republic Act No. 7641, part-timers are entitled to retirement
benefits (De La Salle Araneta University v. Bernardo, G.R. No.
190809, February 13, 2017).

ANOTHER ALTERNATIVE ANSWER:

(a) Narciso is not entitled to his retirement benefit anymore

because of prescription. Money claims prescribes in 3 years
(Art. 306). Narciso’s retirement claim accrued in 2005, the
year he was considered retired by the school. He should have
filed his claim in the year 2008.

(b) If he is entitled to retirement benefits, how should retirement pay

be 
computed in the absence of any contract between him and
Norte 
University providing for such benefits? (2.5%)

SUGGESTED ANSWER:

(b) In the absence of any contract providing for higher retirement

benefits, private educational institutions, including Norte
University, are obligated to set aside funds for the retirement
pay of all its part-time faculty members. A covered employee
who retires pursuant to the Retirement Pay Law shall be
entitled to retirement pay equivalent to at least one-half (1/2)
month salary for every year of service, a fraction of at least six
(6) months being considered as one whole year. One-half
month salary shall mean fifteen (15) days plus one-twelfth
(1/12) of the 13th month pay and the cash equivalent of not
more than five (5) days service incentive leaves. In total, this
should amount to 22.5 days for every year of service (De La
Salle Araneta University v. Bernardo, G.R. No. 190809,
February 13, 2017).

2
 II

Nayon Federation issued a charter certificate creating a rank-and-file

Neuman Employees Union. On the same day, New Neuman Employees Union
filed a petition for certification election with the Department of Labor and
Employment (DOLE) Regional Office, attaching the appropriate charter
certificate.

(a) The employer, Neuman Corporation, filed a motion to dismiss the


petition for lack of legal personality on the part of the petitioner

union. Should the motion be granted? (2.5%)

SUGGESTED ANSWER:

(a) No. The motion should be denied. Under Article 240 of the
Labor Code (LC), a petition for certification election may be
filed on the basis of a valid charter certificate issued to a
chartered local by a duly registered federation.

(b) The employer likewise filed a petition for cancellation of union

registration against New Neuman Employees Union, alleging that
Nayon Federation already had a chartered local rank-and-file
union, Neuman Employees Union, pertaining to the same
bargaining unit 
within the establishment. Should the petition for
cancellation prosper? (2.5%)

SUGGESTED ANSWER:

(b) No. The existence of another chartered local under the same
federation within the same bargaining unit is not among the
grounds to cancel union registration under Article 247 LC, as
amended by RA 9481.

ALTERNATIVE ANSWER:
(b) Petition for cancellation of union registration filed by employer
Neuman Corporation may prosper. While the employer may
file a case as it is considered a party-in-interest in cancellation
proceedings (Del Castillo, Asian Institute of Management v
Asian Institute of Management Faculty Association, G.R. No.
207971, January 23, 2017), the union’s certification may be
revoked or cancelled if it appears that there are sufficient
grounds for its cancellation viz., fraud or misrepresentation in

3
 the election of officers xxx; fraud or misrepresentation in the
ratification of constitution and by-laws.

III

Due to his employer's dire financial situation, Nicanor was prevailed

upon by his employer to voluntarily resign. In exchange, he demanded payment
of salary differentials, 13th month pay, and financial assistance, as promised by
his 
employer. Management promised to pay him as soon as it is able to pay off
all retrenched rank-and-file employees. Five years later, and before
management was able to pay Nicanor the amount promised to him, Nicanor
died of a heart 
attack. His widow, Norie. filed a money claim against the
company before the National Labor Relations Commission (NLRC), including
interest on the amount 
of the unpaid claim. She also claimed additional
damages arguing that the 
supposed resignation letter was obtained from her
spouse through undue 
pressure and influence. The employer filed a motion to
dismiss on the ground 
that (A) the NLRC did not have jurisdiction over money
claims, and (8) the action has prescribed.

(a) Does the NLRC have jurisdiction to award money claims including
interest on the amount unpaid? (2.5%)

SUGGESTED ANSWER:

(a) The NLRC has jurisdiction over money claims arising from an
employer-employee relationship where the amount claimed is
in excess of PhP 5,000, including interest, regardless of whether
or not there is a claim for reinstatement. (Sec. 10, RA 8042, as
amended by RA 10022.

(b) Assuming that the NLRC has jurisdiction, has the action
prescribed?(2.5%)

SUGGESTED ANSWER:

(b) In Accessories Specialists, Inc. v. Alabama, (G.R. No. 168985,

July 23, 2008), the Supreme Court held that the principle of
promissory estoppel can apply as a recognized exception to the
three-year prescriptive period under Article 291 (now 306) of
the Labor Code. Nicanor relied on the promise of the
employer that he would be paid as soon as the claims of
retrenched employees were paid. If not for this promise, there
would have been no reason why Nicanor would delay the filing

4
 of the complaint. Great injustice would be committed if the
employee’s claim were brushed aside on mere technicality,
especially when it was the employer’s action that prevented
Nicanor from filing the claims within the required period.

ALTERNATIVE ANSWER:
(b) Yes, the action has unfortunately prescribed as there is only a
three-year prescriptive period for monetary claims under the
Labor Code as in the case of retirement benefits.

(c) May Nicanor's spouse successfully claim additional damages as a

result of the alleged undue pressure and influence? (2.5%)

SUGGESTED ANSWER:

(c) Norrie failed to establish that Nicanor’s consent was vitiated

when he filed his resignation letter. In BMG Record v.
Aparecio, (G.R. No. 153290, September 5, 2007), the SC ruled
that the matter of “financial assistance” was an act of
generosity on the part of management. Under the
circumstances, Nicanor had the intention to resign. Once
management had accepted the resignation, Nicanor could not
unilaterally withdraw this voluntary act of termination of
employment.

ALTERNATIVE ANSWER:

(c) No. In this case Nicanor voluntarily resigned. Burden of

proof of the fact of dismissal, and of the alleged undue pressure
and influence, is upon Nicanor’s wife as claimant. Absent such
proof, the claim of damages must fail (Del Castillo, Malixi v.
Mexicali Philippines, G.R. No. 205061, June 8, 2016).

IV

Natasha Shoe Company adopted an organizational streamlining program

that resulted in the retrenchment of 550 employees in its main plant. After
having been paid their separation benefits, the retrenched workers demanded
payment of retirement benefits under a CBA between their union and
management. Natasha Shoe Company denied the workers' demand.

5
 (a) What is the most procedurally peaceful means to resolve this
dispute? (2.5%)

SUGGESTED ANSWER:
(a) The parties may resolve this through plant-level mechanisms
such as a labor-management committee or a grievance
machinery under a collective bargaining agreement.

(b) Can the workers claim both separation pay and retirement
benefits? (2.5%)

SUGGESTED ANSWER:

(b) In Santos v. Senior Philippines, (G.R. No. 166377, November 28,

2008), the Supreme Court held that retirement benefits and
separation pay are not mutually exclusive, and both benefits
may be paid in the absence of a contrary stipulation in the
retirement plan and/or in the CBA.

ALTERNATIVE ANSWER:
(b) Yes. In the absence of any express or implied prohibition
against it, collection of both retirement benefits and separation
pay upon severance from employment is allowed. This is
grounded on the social justice policy that doubts should always
be resolved in favor of labor (Goodyear Philippines, Inc. v.
Angus, G.R. No. 185449, November 12, 2014).

Nelda worked as a chambermaid in Hotel Neverland with a basic wage of

PhP560.00 for an eight-hour workday. On Good Friday, she worked for one (1)
hour from 10:00 PM to 11 :00 PM. Her employer paid her only PhP480.00 for
each 8-hour workday, and PhP70.00 for the work done on Good Friday. She
sued for underpayment of wages and non-payment of holiday pay and night
shift 
differential pay for working on a Good Friday. Hotel Neverland denied
the alleged underpayment, arguing that based on long-standing unwritten
tradition, food and 
lodging costs were partially shouldered by the employer
and partially paid for by 
the employee through salary deduction. According to
the employer, such valid 
deduction caused the payment of Nelda's wage to be

6
below the prescribed 
minimum. The hotel also claimed that she was not
entitled to holiday pay and 
night shift differential pay because hotel workers
have to work on holidays and 
may be assigned to work at night.
(a) Does the hotel have valid legal grounds to deduct food and lodging
costs from Nelda's basic salary? (2.5%)

SUGGESTED ANSWER:

(a) In Mabeza v. NLRC, (271 SCRA 670 [1997]), the Supreme

Court established three requirements before the value of
“facilities” such as food and lodging may be deducted from an
employee’s wages: first, proof must be shown that such
facilities are customarily furnished by the trade; second, the
provision of deductible facilities must be voluntarily accepted
in writing by the employee; and finally, facilities must be
charged at fair and reasonable value. In the case at hand, the
second and third requisites on voluntary acceptance of
deductible facilities in writing, at fair and reasonable value,
was not established.

ALTERNATIVE ANSWER:
(a) No. In Atok Big Wedge Association v. Atok Big Wedge Company,
(G.R. No. L-7349, July 19, 1955), the Supreme Court
distinguished facilities from supplement. Supplements
constitutes extra remuneration given to laborers above their
wage. Facilities are items of expense necessary for the laborer’s
and his family’s existence and subsistence. Board and
lodging are treated as supplement if the company benefits
from the employees not going home anymore or not leaving his
work station to eat. Since Nelda is a chambermaid, her board
and lodging should be treated as supplement.

(b) Applying labor standards law, how much should Nelda be paid for
work done on Good Friday? Show the computation in your test
booklet and encircle your final answer. (2.5%)

7
SUGGESTED ANSWER:

(b) As an employee paid PhP 70 an hour, Nelda was entitled to an

additional 100% of her hourly wage for working on a Good
Friday, plus 10% for night differential pay. Nelda should be
paid a total of PhP 154.00 for working that day.

VI
A certification election was conducted in Nation Manufacturing

Corporation, whereby 55% of eligible voters in the bargaining unit cast their

votes. The results were as follows:

Union Nana: 45 votes

Union Nada: 40 votes
Union Nara: 30 votes
No Union: 80 votes



Union Nana moved to be declared as the winner of the certification election.

(a) Can Union Nana be declared as the winner? (2.5%)

SUGGESTED ANSWER:

(a) Union Nana cannot be immediately declared as the winner. A

run-off election pursuant to Article 268 of the Labor Code
(LC) must be first be conducted. A run-off election is required
since the present case involves an election which provided for
three or more choices, with no choice receiving a majority of
the valid votes cast, and the total number of votes for all
contending unions being at least 50% of the number of votes
cast.

(b) Assume that the eligibility of 30 voters was challenged during the
pre-election conference. The ballots of the 30 challenged voters
were placed inside an envelope sealed by the DOLE Election

Officer. Considering the said envelope remains sealed, what
should 
be the next course of action with respect to the said
challenged votes? (2.5%)

SUGGESTED ANSWER:

(b) Since the challenged votes may materially affect the

results of the election, and may in fact even give Union
Nada or Union Nara an absolute majority, then the said

8
 challenged votes should be opened. Pursuant to Rule IX,
Section 11 of the Rules Implementing Book V of the Labor
Code, the envelope with the challenged votes shall be
opened and the question of eligibility shall be passed upon
by the DOLE med-arbiter.

VII

Nico is a medical representative engaged in the promotion of

pharmaceutical products and medical devices for Northern Pharmaceuticals,
Inc. 
He regularly visits physicians' clinics to inform them of the chemical
composition and benefits of his employer's products. At the end of every day,
he receives a basic wage of PhP700.00 plus a PhP150.00 "productivity
allowance." For purposes of computing Nico's 13th month pay, should the
daily "productivity
allowance" be included? (2.5%)

SUGGESTED ANSWER:

No. The second paragraph of Section 5(a) of the Revised Guidelines

Implementing the 13th Month Pay Law states that “employees who are
paid a fixed or guaranteed wage plus commission are also entitled to the
mandated 13th month pay, based on their total earnings during the
calendar year, i.e., on both their fixed or guaranteed wage and
commission.” However, the SC in Philippine Duplicators, Inc. v. NLRC,
241 SCRA 380 (G.R. No. 110068 February 15, 1995), declared the aforesaid
provision as null and void with respect to those medical representatives
who do not obtain productivity allowances by virtue of generated sales.
Such allowances are in the nature of profit-sharing bonuses or
commissions that should be properly excluded from the ambit of the term
“basic salary” for purposes of computing 13th month pay due to
employees.

ALTERNATIVE ANSWER :

Yes, the productivity allowance should be included in the

computation of the 13th month pay. The said allowance is a fixed amount
and made part of Nico’s daily compensation, and as such this is

9
demandable and enforceable as a matter of right. The “basic salary” of an
employee for the purposes of computing the 13th month pay include all
remuneration or earnings paid by his employer for services rendered but
does not include allowances and monetary benefits which are not
considered or integrated as part of the regular or basic salary (Protacio v.
LayaMananghaya & Co., G.R. No. 168654, March 25, 2009).

ANOTHER ALTERNATIVE ANSWER:

Yes. Central Azucarera De Tarlac v. CetralAzucarera De Tarlac Labor

Union , (G.R. No. 188949, July 26,2010), pronounced that the 13th-month
pay mandated by Presidential Decree No. 851 represents an additional
income based on wage but not part of the wage. It is equivalent to one-
twelfth (1/12) of the total basic salary earned by an employee within a
calendar year.

ANOTHER SUGGESTED ALTERNATIVE ANSWER:

The issue in this case is whether or not to include “productivity

allowance” in the computation of 13th month pay. If what is contemplated
is productivity allowance in essence, it should be excluded according to the
ruling in Boie-Takeda case, but the nature of the allowance in this case is
not clear— whether it is really productivity allowance, or is just called
“productivity allowance” in name. If there is no showing that the allowance
is really a productivity allowance, we must look at Article 4 of the Labor
Code, that in case of obscurity or ambiguity as to interpretation, we favor
the laborer. Based on the with the facts, the productivity allowance should
be included in the computation, as the nomenclature of “productivity
allowance” is not binding; moreover, the facts show that Nico receives the
allowance everyday. There is no condition with regard the “productivity
allowance” as to performance. In the old definition of bonus, which does
not include basic wage, it should be conditioned on particular hours
worked, or sales made etc.

10
 VIII

Nathaniel has been a salesman assigned by Newmark Enterprises

(Newmark) for nearly two years at the Manila office of Nutrition City, Inc.
(Nutrition City). He was deployed pursuant to a service agreement between
Newmark and Nutrition City, the salient provisions of which were as follows:

(a) the Contractor (Newmark) agrees to perform and provide the

Client (Nutrition City), on a non-exclusive basis, such tasks or
activities that are considered contractible under existing laws, as
may be needed by the Client from time to time;

(b) the Contractor shall employ the necessary personnel like helpers,

salesmen, and drivers who are determined by the Contractor to be

efficiently trained;

(c) the Client may request replacement of the Contractor's personnel if


quality of the desired result is not achieved;

(d) the Contractor's personnel will comply with the Client's policies,

rules, and regulations; and

(e) the Contractor's two service vehicles and necessary equipment will

be utilized in carrying out the provisions of this Agreement.

When Newmark fired Nathaniel, he filed an illegal dismissal case against

the wealthier company, Nutrition City, Inc., alleging that he was a regular
employee of the same. Is Nathaniel correct? (2.5%)

SUGGESTED ANSWER:
Yes, Nathaniel is correct. Similar to the case of Coca-Cola Bottlers
Philippines, Inc. v. Agito, (G.R. No. 179546, February 13, 2009), the lack of
control by the Contractor (Newmark) over the worker Nathaniel can be
gleaned from the Service Agreement. It is apparent that Newmark has to
comply with Nutrition City’s regulations, and that Nutrition City has the
right to request the replacement of Newmark’s personnel. It is likewise
apparent that the Agreement did not identify the work needed to be
performed and the final result to be accomplished, pointing to the
conclusion that Newmark did not obligate itself to perform an identifiable
job, work, or service. Nathaniel, thus, was under the control of Nutrition
City.
With respect to the service vehicles and equipment, these may not be
considered as substantial capital on the part of Newmark, as the facts do
not establish their sufficiency to carry out the Agreement. The presence of

11
Newmark’s vehicles and equipment did not necessarily preclude the use of
Nutrition City’s own capital and assets.

ALTERNATIVE ANSWER:

Nathaniel’s contention is not correct. He is not a regular employee of

Nutrition but rather of Newmark Enterprises. Assuming that Newmark
has a DO 174 certification, this is a valid job contracting arrangement
especially so that the Newmark has sufficient capitalization in the form of
tools, equipment, machineries xxx and that Nutrition has no control over
the manner and means by which Newmark and its employees are to do the
work.

IX

Sgt. Nemesis was a detachment non-commissioned officer of the Armed

Forces of the Philippines in Nueva Ecija. He and some other members of his
detachment sought permission from their Company Commander for an
overnight 
pass to Nueva Vizcaya to settle some important matters. The
Company 
Commander orally approved their request and allowed them to
carry their 
firearms as the place they were going to was classified as a "critical
place." They 
arrived at the place past midnight; and as they were alighting
from a tricycle, one 
of his companions accidentally dropped his rifle, which
fired a single shot, and in 
the process hit Sgt. Nemesis fatally. The shooting
was purely accidental. At the 
time of his death, he was still legally married to
Nelda, but had been separated 
de facto from her for 17 years. For the last 15
years of his life, he was living in with Narda, with whom he has two minor
children. Since Narda works as a kasambahay, the two children lived with their
grandparents, who provided their daily support. Sgt. Nemesis and Narda only
sent money to them every year to 
pay for their school tuition.

Nelda and Narda, both for themselves and the latter, also on behalf of her
minor children, separately filed claims for compensation as a result of the death
of Sgt. Nemesis. The line of Duty Board of the AFP declared Sgt. Nemesis'
death to have been "in line of duty", and recommended that all benefits due to
Sgt. Nemesis be given to his dependents. However, the claims were denied by
GSIS because Sgt. Nemesis was not in his workplace nor performing his duty
as 
a soldier of the Philippine Army when he died.

(a) Are the dependents of Sgt. Nemesis entitled to compensation as a


result of his death? (2.5%)

SUGGESTED ANSWER:
(a) The death of Sgt. Nemesis arose out of and in the course of his
employment as a soldier on active duty in the AFP and hence,

12
 compensable. The concept of a “workplace” cannot always be
literally applied to a soldier on active duty. Sgt. Nemesis had
permission to go to Nueva Vizcaya and he and his companions
had permit to carry their firearms which they could use to
defend themselves when attacked. A soldier on active duty is
really on duty 24 hours a day since he can be called upon
anytime by his superiors, except when he is on vacation leave
status, which Sgt. Nemesis was not, at the time of his death
(Hinoguin v. ECC, G.R. No. 8430, April 17, 1989).

(b) As between Nelda and Narda, who should be entitled to the

benefits? (2.5%)

SUGGESTED ANSWER:
(b) To be considered as a beneficiary, the spouse must be the legal
spouse and living with the employee at the time of his death.
Nelda, as the surviving spouse who has been separated de facto
from the deceased employee, may still however be entitled if
the separation was due to the covered employee’s
abandonment of the spouse without valid reason, or for other
justifiable reasons. Narda, not being a legitimate spouse, is
not entitled to the benefits; however, the ECC may act as
referee and arbitrator between two (2) claimants to help each
other reach a mutually acceptable compromise settlement of
allocating the compensation among themselves and their
dependent children (Samar Mining Co. Inc. v. WCC, G.R. No.
L-29938-39, March 31, 1971).

(c) Are the minor children entitled to the benefits considering that they
were not fully dependent on Sgt. Nemesis for support? (2.5%)

SUGGESTED ANSWER:
(c) Being a dependent does not mean absolute dependency for the
necessities of life, but rather, that the claimant looked up to
and relied on the contribution of the covered employee for his

13
 means of living as determined by his position in life. One need
not be in the deceased’s household in order to be a dependent.
(Malate Taxicab v. Del Villar G.R. No. L-7489, Feb. 29, 1956).

Nonato had been continuously employed and deployed as a seaman who

performed services that were necessary and desirable to the business of N-
Train Shipping, through its local agent, Narita Maritime Services (Agency), in
accordance with the 2010 Philippine Overseas Employment Administration
Standard Employment Contract (2010 POEA-SEC). Nonato's last contract (for
five months) expired on November 15, 2016. Nonato was then repatriated due
to a "finished contract." He immediately reported to the Agency and
complained that he had been experiencing dizziness, weakness, and difficulty in
breathing. The
Agency referred him to Dr. Neri, who examined, treated, and
prescribed him with medications. After a few months of treatment and
consultations, Nonato was declared fit to resume work as a seaman. Nonato
went back to the Agency to ask for re-deployment but the Agency rejected his
application. Nonato filed an illegal dismissal case against the Agency and its
principal, with a claim for total disability benefits based on the ailments that he
developed on board N- Train 
Shipping vessels. The claim was based on the
certification of his own physician, 
Dr. Nunez, that he was unfit for sea duties
because of his hypertension and 
diabetes.

(a) Was Nonato a regular employee of N-Train Shipping? (2.5%)

SUGGESTED ANSWER:

(a) No. Seafarers are considered contractual employees. They

cannot be considered as regular employees under Article 280
of the Labor Code. Their employment is governed by the
contracts they sign every time they are hired or rehired and
their employment is terminated when the contract expires.
Their employment is contractually fixed for a certain period of
time (Millares v. NLRC, G.R. No. 110524, July 29, 2002).

(a) Can Nonato successfully claim disability benefits against N-Train

Shipping and its agent Narita Maritime Services? (2.5%)

SUGGESTED ANSWER:

(b) No. Nonato was repatriated due to a finished contract and not
due to any accident or illness he suffered while on board N-
Train's vessel. Moreover, Nonato was declared fit-to-work by

14
 the company-designated physician. Under the 2010 POEA-
SEC, if a doctor appointed by the seafarer disagrees with the
assessment of the company-designated physician, a third
doctor may be agreed upon jointly between the employer and
the seafarer. The third doctor’s decision shall be final and
binding on both parties. In this case, no third doctor was
appointed. Thus, the fit-to-work assessment by the company-
designated physician stands.

ALTERNATIVE EXPLANATION:

(b) No, Nonato cannot claim disability benefits. He was not

medically repatriated but repatriated due to a “finished
contract”. Although the seafarer is repatriated for completion
of his contract, however, if it can be shown by substantial
evidence that he acquired his illness during the term of his
contract or that his work conditions caused or at least
increased the risk of contracting the disease, then his illness is
compensable as it is work-connected (MallariMagat v.
Interorient Maritime Enterprises, Inc. G.R. No. 232892, April 4,
2018).

XI

Your favorite relative, Tita Nilda, approaches you and seeks your advice
on her treatment of her kasambahay, Noray. Tita Nilda shows you a document
called a "Contract of Engagement" for your review. Under the Contract of
Engagement, Noray shall be entitled to a rest day every week, provided that she
may be requested to work on a rest day if Tita Nilda should need her services
that day. Tita Nilda also claims that this Contract of Engagement should
embody all terms and conditions of Noray's work as the engagement of a
kasambahay is a private matter and should not be regulated by the State.
(a) Is Tita Nilda correct in saying that this is a private matter and
should not be regulated by the State? (2.5%)

SUGGESTED ANSWER:

(a) Tita Nilda is incorrect. The relationship between Tita Nilda

and Noray is an employer-employee arrangement that is

15
 regulated by the police power of the State. Through the Batas
Kasambahay (R.A. 10361), the State recognizes this employment
relationship and establishes minimum labor standards for
domestic workers, toward decent employment and income,
enhanced coverage of social protection and respect for human
rights, and strengthened social dialogue. Also, since domestic
workers are generally working women in vulnerable working
conditions, the State regulates domestic worker employment to
prevent abuse and exploitation and uphold the gender rights of
domestic workers.

(b) Is the stipulation that she may be requested to work on a rest day
legal? (2.5%)

SUGGESTED ANSWER:

(b) Yes. Such a stipulation is legal as it states that Noray may

only be “requested” to work on a rest day, thereby recognizing
that the consent of Noray is needed in order to waive her right
to a weekly rest day. Section 21 of the Kasambahay Law
allows both the employer and domestic worker to agree on
certain arrangements to offset, waive, or accumulate rest days,
subject to payment of appropriate wages and benefits.

(c) Are stay-in family drivers included under the Kasambahay Law?
(2.5%)

SUGGESTED ANSWER:

(c) No. Family drivers are not included under the Kasambahay
Law. A “Kasambahay” refers to any person engaged in
domestic work within an employment relationship such as, but
not limited to, the following: general househelp, nursemaid or
“yaya”, cook, gardener, or laundry person, but shall exclude
any person who performs domestic work only occasionally or
sporadically and not on an occupational basis.

16
ALTERNATIVE ANSWER:
(c) The Republic Act No. 10361 does not exclude family drivers
from the coverage of the Kasambahay law. It is only in the
Implementing Rules that the family drivers were excluded.
Note that the Labor Code explicitly includes “family drivers
and other persons in the personal service of another in the
coverage of the Labor Code, and hence, it is believed that the
family drivers should fall within the ambit of the Kasambahay
Law. The exclusion of driver in the Implementing Rules is
without basis.
Domestic helper or househelper or domestic servant
shall refer to any person, whether male or female, who renders
services in and about the employer’s home and which services
are usually necessary or desirable for the maintenance and
enjoyment thereof, and ministers exclusively to the personal
comfort and enjoyment of the employers’ family. Such
definition covers family drivers, domestic servants, laundry
women, yayas, gardeners, houseboys and other similar
househelps (Apex Mining Company, Inc. v. NLRC, 196 SCRA
251 [1991]).

XII

Nena worked as an Executive Assistant for Nesting, CEO of Nordic

Corporation. One day, Nesting called Nena into his office and showed her lewd
pictures of women in seductive poses which Nena found offensive. Nena
complained before the General Manager who, in turn, investigated the matter
and recommended the dismissal of Nesting to the Board of Directors. Before
the Board of Directors, Nesting argued, that since the Anti-Sexual Harassment
Law requires the existence of "sexual favors," he should not be dismissed from
the 
service since he did not ask for any sexual favor from Nena. Is Nesting
correct? (2.5%)

SUGGESTED ANSWER:

Nesting’s argument on lack of sexual favor is incorrect. While his

actions require further proof of being a “sexual favor” in terms of criminal
liability under RA 7877, he may still be held liable under the just causes of
termination in Article 297 of the Labor Code. In Villarama v. NLRC and

17
Golden Donuts, (G.R. No. 106341, September 2, 1994), the Supreme Court
held that a managerial employee is bound by more exacting work ethics,
with a high standard of responsibility. Sexual harassment of a subordinate
amounts to “moral perversity” which provides a justifiable ground for
dismissal due to lack of trust and confidence.

ALTERNATIVE ANSWER:

Nesting is not correct. Section 3 paragraph a in relation to paragraph

(b) states of RA 7877 states: “[I]n a work-related or employment
environment, it is committed when sexual harassment results in an
intimidating hostile or offensive environment for the employee. In
Philippines Aeolus Automative United Corp. v. NLRC, (G.R. 124617, April
28, 2000), the Supreme Court ruled that the gravamen of the offense in
sexual harassment is not the violation of the employee’s sexuality but the
abuse of power by the employer. In the Rayala case, (G.R. No. 155831,
February 18, 2008), sexual harassment was said to be an imposition of
misplaced superiority. The fact that no sexual favor was asked by Nesting
does not mean he did not violate R.A. 7877. His act of showing lewd
pictures to a subordinates is clearly sexual harassment.

ANOTHER ALTERNATIVE ANSWER:

Nesting is not correct. In a work-related or employment

environment, sexual harassment is committed when Nesting, who is the
boss of Nena, showed her nude pictures of women in seductive poses,
because said act resulted in an intimdating, hostile or offensive
environment for Nena (Sec 3 (a) (3), RA 7877; Domingo v. Rogelio I.
Rayala, GR. No. 155831, Feb 18, 2008).

XIII

Nicodemus was employed as a computer programmer by Network

Corporation, a telecommunications firm. He has been coming to work in short
and sneakers, in violation of the "prescribed uniform policy" based on company
rules and regulations. The company human resources manager wrote him a
letter, giving him 10 days to comply with the company uniform policy.

18
Nicodemus 
asserted that wearing shorts and sneakers made him more
productive, and cited 
his above-average output. When he came to work still in
violation of the uniform 
policy, the company sent him a letter of termination
of employment. Nicodemus 
filed an illegal dismissal case. The Labor Arbiter
ruled in favor of Nicodemus and 
ordered his reinstatement with backwages.
Network Corporation, however, 
refused to reinstate him. The NLRC 1st
Division sustained the Labor Arbiter's 
judgment. Network Corporation still
refused to reinstate Nicodemus. Eventually, 
the Court of Appeals reversed the
decision of the NLRC and ruled that the 
dismissal was valid. Despite the
reversal, Nicodemus still filed a motion for 
execution with respect to his
accrued backwages.
(a) Were there valid legal grounds to dismiss Nicodemus from his
employment?2.5%)
SUGGESTED ANSWER:

(a) Yes. Nicodemus clearly committed willful disobedience of

lawful orders issued by the Network Corporation, with respect
to the uniform policy. This is a ground for termination under
Article 288(a) of the Labor Code.

ALTERNATIVE ANSWER:
(a) The “dismissal too harsh” doctrine may be invoked which
means the illegal dismissal case filed by Nicodemus may
prosper. It may be argued that the “uniform policy” need not
warrant dismissal as penalty for violation, as it may have no
direct bearing on company operations. This is in the context of
Nicodemus’ above-average performance as an employee.

(b) Should Nicodemus' motion for execution be granted? (2.5%)

SUGGESTED ANSWER:

(b) Yes. In Garcia v. Philippine Airlines, Inc.,( G.R. No. 164856,

January 20, 2009), the employer who did not reinstate an
employee pending appeal may be held liable for wages of the
dismissed employee covering the period from the time he was
ordered reinstated by the Labor Arbiter to the reversal of the
NLRC’s decision by the Court of Appeals.

19
 XIV

Nelson complained before the DOLE Regional Office about Needy

Corporation's failure to pay his wage increase amounting to PhP5,000.00as
mandated in a Wage Order issued by the Regional Tripartite Wages and
Productivity Board. Consequently, Nelson asked the DOLE to immediately
issue an Order sustaining his money claim. To his surprise, he received a notice
from the DOLE to appear before the Regional Director for purposes of
conciliating the dispute between him and Needy Corporation. When
conciliation before the Regional Director failed, the latter proceeded to direct
both parties to submit their respective position papers in relation to the dispute.
Needy Corporation argued, that since Nelson was willing to settle for 75% of
his money claim during conciliation proceedings, only a maximum of 75% of
the said money claim may 
be awarded to him.

(a) Was DOLE's action to conduct mandatory conciliation in light of

Nelson's complaint valid? (2.5%)

SUGGESTED ANSWER:

(a) Yes. In relation to R.A. 10396 or the “Mandatory

Conciliation-Mediation Law”, Article 234 of the Labor Code
provides that “all issues arising from labor and employment
shall be subject to mandatory conciliation-mediation. The
Labor Arbiter or appropriate DOLE agency or office that has
jurisdiction over the dispute shall entertain only endorsed or
referred cases by the duly authorized officer.”

(b) Should the Regional Director sustain Needy Corporation's

argument? (2.5%)

SUGGESTED ANSWER:

(b) No. Article 239 of the Labor Code provides that the
information and statements given in confidence at the
conciliation-mediation proceedings shall be treated as
privileged communication and shall not be used as evidence in
any arbitration proceeding, except when there is a waiver of
confidentiality. In the present case, Nelson’s willingness to
settle for 75% of his money claim may not be used against him
in the money claims case before the Regional Director due to
the confidentiality rule.

20
 XV

Nexturn Corporation employed Nini and Nono, whose tasks involved


directing and supervising rank-and-file employees engaged in company

operations. Nini and Nono are required to ensure that such employees obey

company rules and regulations, and recommend to the company's Human

Resources Department any required disciplinary action against erring

employees. In Nexturn Corporation, there are two independent unions,

representing rank-and-file and supervisory employees, respectively.
(a) May Nini and Nono join a union? (2.5%)
SUGGESTED ANSWER:

(a) Yes. Nini and Nono, in effect, are supervisors as defined under
Article 219(m) who may join a supervisory union pursuant to
Article 255 of the Labor Code.

ALTERNATIVE ANSWER:
(a) No. Nini and Nono are confidential employees as they have
access to confidential labor relations information. The broad
rationale behind this rule is that employees should not be
placed in a position involving a potential conflict of interest
(San Miguel Corp. Supervisors and Exempt Employees Union v.
Laguesma, 277 SCRA 370 [1997]).

(b) May the two unions be affiliated with the same Union Federation?
(2.5%)

SUGGESTED ANSWER:

(b) Yes. Article 255, as amended by Republic Act 9481, allows a

rank-and-file union and a supervisors’ union operating within
the same establishment to join one and the same federation or
national union as affiliates thereof.

XVI

Nagrab Union and Nagrab Corporation have an existing CBA which

contains the following provision: "New employees within the coverage of the
bargaining unit who may be regularly employed shall become members of
Nagrab Union. Membership in good standing with the Nagrab Union is a

21
requirement for continued employment with Nagrab Corporation." Nagrab
Corporation subsequently acquired all the assets and rights of Nuber
Corporation and absorbed all of the latter's employees. Nagrab Union
immediately demanded enforcement of the above-stated CBA provision with
respect to the absorbed 
employees. Nagrab Corporation refused on the ground
that this should not apply to the absorbed employees who were former
employees of another corporation whose assets and rights it had acquired.

(a) Was Nagrab Corporation correct in refusing to enforce the CBA

provision with respect to the absorbed employees? (2.5%)

May a newly-regularized employee of Nagrab Corporation (who is

not part of the absorbed employees) refuse to join Nagrab Union?

SUGGESTED ANSWER:

(a) Nagrab Corporation’s argument that the union security clause

should not apply to absorbed employees resulting from the
acquisition is untenable. In BPI Employees Union-Davao City-
FUBU (BPIEU-Davao City-FUBU) v. Bank of the Philippine
Islands, (G.R. No. 174912, July 24, 2013), the Supreme Court
ruled that the subject union security clause does not make a
distinction as to how a regular employee should attain such
status as a “new employee” in order to be covered by the
clause. Absorbed employees as a result of merger or
acquisition of assets and rights between two corporations,
therefore, should be considered as “new employees” of the
surviving or acquiring corporation.

(b) How would you advise the human resources manager of Nagrab
Corporation to proceed? (2.5%)

SUGGESTED ANSWER:

(b) The HR Manager should heed the Supreme Court’s

proscription in Alabang Country Club, Inc. v. NLRC, (G.R. No.
170287, February 14, 2008), in cases involving termination of
employment due to enforcement of a union security clause.
The following requirements must be observed:
1) The union security clause is applicable;
2) The certified bargaining agent is requesting for
enforcement of such clause; and

22
 3) There is sufficient evidence to support the sole and
exclusive bargaining agent’s decision to expel the
employee from membership.

XVII

Upon compliance with the legal requirements on the conduct of a strike,

Navarra Union staged a strike against Newfound Corporation on account of a
collective bargaining deadlock. During the strike, some members of Navarra
Union broke the windows and punctured the tires of the company-owned buses.
The Secretary of Labor and Employment assumed jurisdiction over the dispute.

(a) Should all striking employees be admitted back to work upon the
assumption of jurisdiction by the Secretary of Labor and
Employment? Will these include striking employees who damaged
company properties? (2.5%)

SUGGESTED ANSWER:

(a) Yes. Under Article 278(g) of the Labor Code, all striking
employees shall immediately return to work and the employer
shall immediately resume operations and re-admit all workers
under the same terms and conditions prevailing before the
strike or lockout.
Regarding the striking union members who damaged
company property, the employer should still reinstate them,
but after their reinstatement, the employer may institute the
appropriate disciplinary proceedings, or raise the matter on
the illegality of the strike on the ground of violence and illegal
acts committed during the strike before the Secretary of Labor
and Employment assumed jurisdiction.

ALTERNATIVE ANSWER:
(a) Yes, all striking employees should be admitted to work upon
assumption of jurisdiction by the Secretary of DOLE. The
mere issuance of an assumption order by the Secretary
automatically carries with it a return-to-work order, even if
the directive to return to work is not expressly stated in the

23
 assumption order (Telefunken Semiconductors Employees
Union-FFW v Court of Appeals, 348 SCRA 565 [2000]).

(b) May the company readmit strikers only by restoring them to the

payroll? (2.5%)

SUGGESTED ANSWER:

(b) As a general rule the answer is no, as actual reinstatement is

envisioned by Article 278(g) of the Labor Code. The purpose
of the law is to bring back the workers to their original work
under the same terms and conditions prevailing before the
strike.

ALTERNATIVE ANSWER:

(b) Yes, payroll reinstatement is acceptable, if there are

compelling reasons like in the Nuwhrain Dusit Hotel case
(G.R. No. 163942, November 11, 2008) where the employees
were not physically reinstatement for they shaved their heads
bald, or in the UST v. NLRC case (G.R. No. 89920, October 18,
1990) where reinstatement was not possible because it was
already the middle of the semester.

XVIII

Nestor and Nadine have been living in for the last 10 years without the
benefit of marriage. Their union has produced four children. Nadine was three
months pregnant with her 5th child when Nestor left her for another woman.
When Nadine was eight months pregnant with her 5th child, she applied for
maternity leave benefits. Her employer refused on the ground that this was
already her 5th pregnancy and that she was only living in with the father of her
child, who is now in a relationship with another woman. When Nadine gave
birth, 
Nestor applied for paternity leave benefits. His employer also denied the
application on the same grounds that Nadine's employer denied her application.

24
 (a) Can Nadine's employer legally deny her claim for maternity
benefits? (2.5%) .

SUGGESTED ANSWER:
(a) Yes, Nadine is not entitled to maternity benefits since it is only
available for the first four (4) deliveries or miscarriages. On
the other hand, her employer cannot refuse on the ground that
Nadine was only living in with her partner since a valid marriage is
not a condition for the grant of maternity leave benefits.

(b) Can Nestor's employer legally deny his claim for paternity
benefits? (2.5%)

SUGGESTED ANSWER:
(b) Yes, Nestor is not entitled to paternity benefits since it is only
available for the first four (4) deliveries or miscarriages of his
legitimate spouse with whom he is living with.

XIX

Northeast Airlines sent notices of transfer, without diminution in salary

or rank, to 50 ground crew personnel who were front-liners at Northeast
Airlines 
counters at the Ninoy Aquino International Airport (NAIA). The 50
employees were informed that they would be distributed to various airports in
Mindanao to 
anticipate robust passenger volume growth in the area. North
Union, 
representing rank-and-file employees, filed unfair labor practice and
illegal 
dismissal cases before the NLRC, citing, among others, the
inconvenience of the 50 concerned employees and union discrimination, as 8 of
the 50 concerned 
ground crew personnel were union officers. Also, the Union
argued that Northeast Airlines could easily hire additional employees from
Mindanao to boost 
its ground operations in the Mindanao airports.
(a) Will the transfer of the 50 ground crew personnel amount to illegal

dismissal? (2.5%)

25
SUGGESTED ANSWER:

(a) Yes. The transfer of an employee is an exercise of a managerial

prerogative, which must be exercised without grave abuse of
discretion, bearing in mind the basic elements of justice and
fair play. Such transfer cannot be used as a subterfuge by the
employer to rid itself of an undesirable worker. In particular,
the employer must be able to show that the transfer is not
undesirable, inconvenient or prejudicial to the employee; nor
does it involve a demotion in rank or a diminution of his
salaries, privileges, and other benefits. Should the employer
fail to overcome this burden of proof, the employee’s transfer
shall be tantamount to constructive dismissal which exists
when an act of clear discrimination, insensibility or disdain by
an employer has become so unbearable to the employee,
leaving him with no option but to forego with his continued
employment (Best Wear Garments v. De Lemos, G.R. No.
191281, December 5, 2012).
In the present case, the impending transfer of 50
employees based in Luzon to Mindanao, allegedly borne out of
business necessity, is unreasonable and inconvenient to the
concerned employees and their families. It was not shown also
if Northeast Airlines looked into the option of hiring workers
from Mindanao to run its counters in the Mindanao airports.

ALTERNATIVE ANSWER:

(a) No. As a management prerogative, the employer has the

inherent right to transfer or assign employees in the pursuance
of its legitimate business interest subject only to the condition
that it is not motivated by discrimination or bad faith (PT&T v.
Laplana, 199 SCRA 465 [1991]). It is the prerogative of
management to transfer employees where they can be most
useful to the company (Pharmacia and UPDJOHN. Inc. [now

26
 Pfizer Philippines, Inc] v. Albayda. Jr. G.R. No 172724, August
23, 2010). The mere fact that it would be inconvenient does
not by itself make the transfer illegal (DSS Security v. NLRC,
325 SCRA 157 [2000]).

(b) Will the unfair labor practice case prosper? (2.5%)

SUGGESTED ANSWER:

(b) No. In ascertaining whether Northeast Airlines’ proposed

transfer amounted to an unfair labor practice or interference
with, restraint or coercion of the employees’ exercise of their
right to self-organization, the “totality of conduct doctrine”
test should be applied, Insular Life Assurance Co., Ltd.
Employees Association-NATU v. Insular Life Assurance Co.,
Ltd., G.R. No. L-25291, January 30, 1971. A finding of an
unfair labor practice should not be based on a single act in
isolation, but should be viewed on the basis of the employer’s
acts outside of the bigger context of the accompanying labor
relation situation. In the case at hand, Northeast Airlines’ act
of transferring the 50 employees, while it may amount to
constructive dismissals, cannot translate into an unfair labor
practice, absent any other indicia of anti-union bias on the part
of the Company.

XX

In Northern Lights Corporation, union members Nad, Ned, and Nod

sought permission from the company to distribute flyers with respect to a
weekend union activity. The company HR manager granted the request through
a text message sent to another union member, Norlyn.

While Nad, Ned, and Nod were distributing the flyers at the company
assembly plant, a company supervisor barged in and demanded that they cease
from distributing the flyers, stating that the assembly line employees were
trying to beat a production deadline and were thoroughly distracted. Norlyn
tried to 
show the HR manager's text message authorizing flyer distribution
during work 
hours, but the supervisor brushed it aside.

27
 As a result, Nad, Ned, and Nod were suspended for violating
company
rules on trespass and highly-limited union activities during work
hours. The Union filed an unfair labor practice (ULP) case before the NLRC for
union
discrimination.

(a) Will the ULP case filed by the Union prosper? (2.5%)

SUGGESTED ANSWER:

(a) Yes. The supervisor of Nad, Ned and Nod directly interfered
with union activities and ultimately with the right to self-
organization. Good faith can be ascribed to Nad, Ned and
Nod’s actions, as prior permission was obtained thru the HR
Manager who apparently failed to communicate such
permission to the plant supervisor.

ALTERNATIVE ANSWER:
(a) No. Unfair labor practice refers to acts that violate the
workers’ right to organize. The prohibited acts are related to
the workers’ right to self-organization, and to the observance
of the collective bargaining agreement. Without this element,
the acts of the Northern Light Corporation in suspending Nad,
Ned and Nod for violating company rules (on trespass and
highly-limited activities during work hours), even if unfair, are
not unfair labor practices (General Santos Coca-Cola Plant
Free Workers Union-TUPAS v Coca-Cola Bottlers Phil. Inc., GR
No. 178647, February 13, 2009).

(b) Assume the NLRC ruled in favor of the Union. The Labor Arbiter's
judgment included, among others, an award for moral and
exemplary damages at PhP50,000.00 each for Nad, Ned, and Nod.
Northern Lights Corporation argued that any award of damages
should be given to the Union, and not individually to its members.
Is
Northern Lights Corporation correct? (2.5%)
SUGGESTED ANSWER:

(b) No. In Digitel Telecommunications Philippines, Inc. v. Digitel

Employees Union (DEU), G.R. No. 184903-04, October 10, 2012,
the Supreme Court ruled that the award of moral and

28
exemplary damages in illegal dismissal cases (applicable to
suspension) resulting from unfair labor practices may be made
in individual or aggregate amounts. If the offended parties can
be identified, then damages may be awarded individually, such
as in the case at hand.

- NOTHING FOLLOWS -

29
 Training & Convention Division
University of the Philippines Law Center

SUGGESTED ANSWERS
to the
2018 BAR EXAMINATIONS IN
CIVIL LAW

Sidley and Sol were married with one (1) daughter, Solenn. Sedfrey and
Sonia were another couple with one son, Sonny. Sol and Sedfrey both perished in
the same plane accident. Sidley and Sonia met when the families of those who
died sued the airlines and went through grief-counseling sessions. Years later,
Sidley and Sonia got married. At that time, Solenn was four (4) years old and
Sonny was 5 years old. These two (2) were then brought up in the same
household. Fifteen (15) years later, Solenn and Sonny developed romantic
feelings towards each other, and eventually eloped. On their own and against
their parents’ wishes, they procured a marriage license and got married in church.

(a) Is the marriage of Solenn and Sonny valid, voidable, or void? (2.5%)

SUGGESTED ANSWER:
The marriage is voidable for lack of parental consent. At the time of
their marriage, Solenn and Sonny were only 19 and 20 years old,
respectively. Assuming their marriage was under the Family Code, Article 14
provides that parental consent is required where either or both of the parties
are between 18 and 21 years old at the time of marriage. In the absence of
such parental consent, Article 45 of the Family Code provides that the
marriage is voidable. Since the marriage was against their parents’ wishes,
their marriage is voidable. Unlike in the Civil Code, their being step-siblings
is immaterial under the Family Code and will not render the marriage void
since such is not considered incestuous nor against public policy.

(b) If the marriage is defective, can the marriage be ratified by free

cohabitation of the parties? (2.5%)

SUGGESTED ANSWER:
Yes, it can be ratified by free cohabitation. Article 45(1) of the Family
Code provides that such voidable marriage may be ratified by free

1
cohabitation of the party/ies over 18 years old but below 21 who married
without the consent of his/her parents, by living together as husband and wife
after attaining the age of 21.
Here, Solenn and Sonny freely cohabitated and lived as husband and
wife after attaining 21 years, then the marriage is considered ratified,
provided that the parents have not filed an action for annulment before the
parties reached 21 years old.

II

After finding out that his girlfriend Sandy was four months pregnant,
Sancho married Sandy. Both were single and had never been in any serious
relationship in the past. Prior to the marriage, they agreed in a marriage
settlement that the regime of conjugal partnership of gains shall govern their
property relations during marriage. Shortly after the marriage, their daughter,
Shalimar, was born.

Before they met and got married, Sancho purchased a parcel of land on
installment, under a Contract of Sale, with the full purchase price payable in equal
annual amortizations over a period of ten (10) years, with no down payment, and
secured by a mortgage on the land. The full purchase price was PhP 1million,
with interest at the rate of 6% per annum. After paying the fourth (4th) annual
installment, Sancho and Sandy got married, and Sancho completed the payments
in the subsequent years from his salary as an accountant. The previous payments
were also paid out of his salary. During their marriage, Sandy also won
PhP1million in the lottery and used it to purchase jewelry. When things didn’t
work out for the couple, they filed an action for declaration of nullity of their
marriage based on the psychological incapacity of both of them. When the
petition was granted, the parcel of land and the jewelry bought by Sandy were
found to be the only properties of the couple.

(a) What is the filiation status of Shalimar? (2.5%)

SUGGESTED ANSWER:

Shalimar is a legitimate child. Children conceived or born before the

judgment of absolute nullity of the marriage because of psychological
incapacity under Article 36 has become final and executory shall be
considered legitimate (Article 54, Family Code). Since Shalimar was born
before the judgment granting the petition for declaration of absolute nullity
of marriage of Sancho and Sandy under Art. 36 became final and executory.
Shalimar is a legitimate child.

2
 (b) What system of property relationship will be liquidated following the
declaration of nullity of their marriage? (2.5%)

SUGGESTED ANSWER:
The property regime that will be liquidated is co-ownership under
Article 147 of the Family Code. When a man and a woman who are
capacitated to marry each other live exclusively with each other as husband
and wife under a void marriage, their wages and salaries shall be owned by
them in equal shares and the property acquired by both of them through
their work or industry shall be governed by the rules on co-ownership
(Article 147, Family Code). Sancho and Sandy were capacitated to marry
each other; however, their marriage was declared void under Article 36.

(c) In the liquidation, who should get the parcel of land? The jewelry?
(2.5%)
SUGGESTED ANSWER:
Sancho should get the parcel of land while Sandy should get the
jewelry. According to Article 147 of the Family Code, property acquired
through their work or industry by a man and a woman, who are capacitated
to marry each other and who cohabited under a void marriage, shall be
governed by rules on co-ownership and in the absence of proof to the
contrary, properties acquired while they live together shall be presumed to
have been obtained by their joint efforts, work or industry. In the given case,
Sancho bought the parcel of land and paid for it using his salary while Sandy
used her winnings from the lottery to purchase the jewelry.

It was not established that Sandy cared for or maintained the family;
hence, she should not be deemed to have contributed to the acquisition of the
parcel of land. The jewelry was acquired by Sandy using her lottery winnings
which she obtained not by work or industry but by chance.

(d) Is Shalimar entitled to payment of presumptive legitime? If yes, how

much should be her share and from where should this be taken?
(2.5%)

3
SUGGESTED ANSWER:
No, Shalimar is not entitled to presumptive legitime. The liquidation of
the co-ownership under Article 147 did not provide for the obligation to pay
the presumptive legitime of the common children. Said obligation applies
only to the liquidation of the absolute community or conjugal partnership of
gains pursuant to Articles 50 and 51 of the Family Code, which provisions
are inapplicable to a void marriage under Article 36 of the Family Code. The
rules on co-ownership apply and the properties of the parties should be
liquidated in accordance with the Civil Code provisions on co-ownership
[Dino v. Dino, 640 SCRA 178 (2011); Valdes v. RTC, 260 SCRA 221 (1996)].

III

Silverio was a woman trapped in a man’s body. He was born male and his
birth certificate indicated his gender as male, and his name as Silverio Stalon.
When he reached the age of 21, he had a sex reassignment surgery in Bangkok,
and, from then on, he lived as a female. On the basis of his sex reassignment, he
filed an action to have his first name changed to Shelley, and his gender, to
female. While he was following up his case with the Regional Trial Court of
Manila, he met Sharon Ston, who also filed a similar action to change her first
name to Shariff, and her gender, from female to male.

Sharon was registered as a female upon birth. While growing up, she
developed male characteristics and was diagnosed to have congenital adrenal
hyperplasia (“CAH”) which is a condition where a person possesses both male
and female characteristics. At puberty, tests revealed that her ovarian structures
had greatly minimized, and she had no breast or menstrual development. Alleging
that for all intents and appearances, as well as mind and emotion, she had become
a male, she prayed that her birth certificate be corrected such that her gender
should be changed from female to male, and that her first name should be changed
from Sharon to Shariff.

Silverio and Sharon fell in love and decided to marry. Realizing that their
marriage will be frowned upon in the Philippines, they travelled to Las Vegas,
USA where they got married based on the law of the place of celebration of the
marriage. They, however, kept their Philippine citizenship.

(a) Is there any legal bases for the court to approve Silverio’s petition for
correction of entries in his birth certificate? (2.5%)
SUGGESTED ANSWER:
No, there is no legal bases for the court to approve Silverio’s petition.
As settled in the case of Silverio v. Republic (G.R. No. 174689, October 22,

4
2007), our laws do not sanction change of name and correction of entry in the
civil register as to sex on the ground of sex reassignment. Sex reassignment is
not one of the grounds for which change of first name may be allowed under
Republic Act No. 9048. The petition for correction of entry as to sex of the
birth certificate of Silverio cannot prosper, because the said document
contained no error and it cannot be corrected. Silverio was born a male. The
sex of a person is determined at birth. Considering that there is no law legally
recognizing sex reassignment, the determination of a persons sex made at the
time of his or her birth, if not attended by error, is immutable.

(b) Will your answer be the same in the case of Sharon’s petition?
(2.5%)
SUGGESTED ANSWER:
No, my answer will not be the same. In the case of Republic v.
Cagandahan (G.R. 166676, September 12, 2008), the Supreme Court held that
where the person is biologically or naturally intersex the determining factor
in his gender classification would be what the individual, having reached the
age of majority, with good reason thinks of his/her sex. Sharon is considered
an intersex, because he has CAH, which means that she has the biological
characteristics of both male and female. Based on that case, Sharon’s petition
should be granted since he has simply let nature take its course and has not
taken unnatural steps to arrest or interfere with what he was born with. The
change of name should also be granted considering that it merely recognizes
Sharon’s preferred gender.

(c) Can the marriage of Silverio (Shelley) and Sharon (Shariff) be legally
recognized as valid in the Philippines? (2.5%)

SUGGESTED ANSWER:
No, it cannot be legally recognized as valid. Laws relating to the status,
condition and legal capacity of persons are binding upon citizens of the
Philippines even though living abroad (Article 15, Civil Code). One of the
requisites of a marriage is that the contracting parties must be a male and a
female (Article 2, Family Code). Since Silverio and Sharon are Filipino

5
citizens their status, condition and legal capacity is determined by Philippine
law, their marriage abroad is not a valid marriage under Philippine law,
because both contracting parties are males.

ALTERNATIVE ANSWER:

Yes, the marriage can be legally recognized in the Philippines. Since

Silverio is male and Sharon is also male, they cannot be legally married in the
Philippines; however, they got married in a place outside the Philippines
where same-sex marriages are allowed. Under Article 26 of the Family Code,
marriages solemnized outside the Philippines and considered valid there
should also be considered valid here, except for specific exceptions. Being of
the same gender is not one of the exceptions, so the marriage should be
considered valid.

ANOTHER ALTERNATIVE ANSWER:

Yes. If Silverio and Sharon used their original birth certificates-- one
showing that one is registered male and the one showing that other is
registered female, then the marriage may be a valid marriage under
Philippine law.

IV

Severino died intestate, survived by his wife Saturnina, and legitimate

children Soler, Sulpicio, Segundo and the twins Sandro and Sandra. At the time
of his death, the twins were only 11 years of age, while all the older children were
of age. He left only one property: a 5,000 sq. m. parcel of land. After his death,
the older siblings Soler, Sulpicio, and Segundo sold the land to Dr. Santos for
PhP500,000 with a right to repurchase, at the same price, within five (5) years
from the date of the sale. The deed of sale was signed only by the three (3) older
siblings and covered the entire property. Before the five (5) years expired, Soler
and Sulpicio tendered their respective shares of PhP166,666 each to redeem the
property. Since Segundo did not have the means because he was still
unemployed, Saturnina paid the remaining PhP166,666 to redeem the property.
After the property was redeemed from Dr. Santos, the three (3) older children and
Saturnina, for herself and on behalf of the twins who were still minors, sold the
property to Dr. Sazon, in an absolute sale, for PhP1 million. In representing the
twins, Saturnina relied on the fact that she was the natural guardian of her minor
children.

6
 (a) Was the first sale to Dr. Santos, and the subsequent repurchase,
valid? (2.5%)

SUGGESTED ANSWER:
Yes, the sale is valid but only with respect to the shares pertaining to
Soler, Sulpicio and Segundo. Upon Severino’s death, his heirs became the co-
owners of the only property he left since the rights to the succession are
transmitted from the moment of the death of the decedent (Art. 777, Civil
Code). In a co-ownership, each co-owner may alienate his part but the effect
of the alienation with respect to the co-owners shall be limited to the portion
which may be allotted to the co-owner who alienated his share (Article 493,
Civil Code). The repurchase by Soler and Sulpicio was valid up to their
respective shares. The repurchase of Segundo’s share did not make
Saturnina the owner of the share redeemed although she is entitled to
reimbursement.

(b) Was the second sale to Dr. Sazon valid? May the twins redeem their
share after they reach the age of majority? (2.5%)

SUGGESTED ANSWER:
The second sale was valid only as to the aliquot shares of Saturnina and
of the three older siblings. Under Article 225 of the Family Code, the father
and the mother shall jointly exercise legal guardianship over the property of
the unemancipated common child without the necessity of a court
appointment. This guardianship, however, only extends to powers of
administration over the property of the child, and does not include the power
to alienate, which is an act of strict dominion. Saturnina had no authority to
sell the twins’ property, and the sale to that extent is unenforceable. Since it is
already unenforceable, the twins do not need to redeem the property upon
reaching the age of majority.

ALTERNATIVE ANSWER:

The second sale is valid as to Saturnina and the other siblings, but as to
the twins the sale is invalid and the twins are allowed to recover or demand
the reconveyance of their share in the property.

7
 V

Sol Soldivino, widow, passed away, leaving two (2) legitimate children: a
25-year old son, Santino (whom she had not spoken to for five [5] years prior to
her death since he attempted to kill her at that time), and a 20-year-old daughter,
Sara. She left an estate worth PhP 8 million and a will which contained only one
provision: that PhP1 million should be given to “the priest who officiated at my
wedding to my children’s late father.” Sara, together with two (2) of her friends,
acted as an attesting witness to the will.

On the assumption that the will is admitted for probate and that there are no
debts, divide the estate and indicate the heirs/legatees entitled to inherit, the
amount that each of them will inherit, and where (i.e., legitime/free
portion/intestate share) their shares should be charged. (5%)

SUGGESTED ANSWER:
Santino and Sara are entitled to P3.5 Million each while the priest who
officiated at the wedding of Sol to her children’s father is entitled to receive
P1 Million as legacy from the free portion of the Sol’s estate. 2 Million out of
the 3.5 Million comes from their legitime, while the remaining 1.5 Million is
from the free portion.
Santino is not disqualified to inherit from her mother, because an
attempt against the life of the decedent is a cause for unworthiness of an heir
only if there is a final judgment of conviction (Article 1032, Civil Code). The
given facts do not mention that Santino was convicted of an attempt against
the life of Sol.
Sara is also capacitated to inherit from Sol. The statement found in
Article 1027 of the Civil Code that an attesting witness to the execution of a
will shall be incapable of succeeding is qualified by Article 823, Civil Code,
which provides that the devise or legacy in favor of a person who is an
attesting witness to the execution to the will shall be void. Sara is not a
devisee or legatee under Sol’s will. She is an intestate and compulsory heir.
The priest is also capable of succeeding as a legatee, because under
Article 1027, Civil Code only the priest who heard the confession of the
testator during his last illness and his relatives within the fourth degree and
the church to which he belongs are disqualified from inheriting from the
decedent by will. The priest only officiated the wedding of the decedent.

8
 VI
Sammy and Santi are cousins who separately inherited two (2) adjoining
lots from their grandfather. Sammy is based overseas but wants to earn income
from his inherited land, so he asked a local contractor to build a row of apartments
on his property which he could rent out. The contractor sent him the plans and
Sammy noticed that the construction encroached on a part of Santi’s land but he
said nothing and gave approval to construct based on the plans submitted by the
local contractor. Santi, based locally, and who loved his cousin dearly, did not
object even if he knew of the encroachment since he was privy to the plans and
visited the property regularly. Later, the cousins had a falling out and Santi
demanded that the portion of the apartments that encroached on his land be
demolished.

Can Santi successfully file legal action to require the demolition? (5%)

SUGGESTED ANSWER:
No, Santi cannot successfully file a legal action to require the
demolition. Since the builder and the landowner both acted in bad faith,
their rights shall be the same as though both had acted in good faith (Article
453, Civil Code). Sammy is not a builder in good faith with respect to the
portion of the apartment encroaching on Santi’s property, because he knew
that he was not the owner of the land when he built the apartment. There is
bad faith, likewise, on Santi’s part, because he did not object to the
construction although he had knowledge thereof (Article 453, Civil Code).

In cases where both the landowner and the builder acted in good faith,
the landowner does not have the option to demand the demolition of the work
(Article 448, Civil Code).

VII

Sydney, during her lifetime, was a successful lawyer. By her own choice,
she remained unmarried and devoted all her time to taking care of her nephew and
two (2) nieces: Socrates, Saffinia, and Sophia. She wrote a will giving all her
properties remaining upon her death to the three (3) of them. The will was
admitted to probate during her lifetime. Later, she decided to make a new will
giving all her remaining properties only to the two (2) girls, Saffinia and Sophia.
She then tore up the previously probated will. The second will was presented for
probate only after her death. However, the probate court found the second will to
be void for failure to comply with formal requirements.

(a) Will the doctrine of dependent relative revocation apply? (2.5%)

9
SUGGESTED ANSWER:
No, the said doctrine will not apply.
In the case of Molo v. Molo (G.R. No. L-2538, September 21, 1951), the
court stated that the doctrine of relative revocation is a rule where revocation
of the old will is a suspensive condition or depends upon the efficacy of the
new disposition, and if the new will intended as a substitute is inoperative, the
revocation fails and the original will remains in force. This was applied
based on the fact that the original will appears to be lost; hence, the second
will was executed with a revocatoty clause, but in both instances, the wife was
instituted as the universal heir.
In this case, however, the revocation of the original was not through
the execution of a subsequent will with a revocatory clause, but through
destruction with intent to do so. It does not appear either that the
revocation of the old will operates as a suspensive condition to the efficacy of
the subsequent will, because the testator revoked the 1st original will, as she
does not wish to institute the same heirs, unlike in Molo v. Molo where the
wife was the heir in both wills.

ALTERNATIVE ANSWER:
Yes, because the act of destroying the previous will is connected with
the making of the new will raising a presumption that the testator meant the
revocation of the previous will dependent upon the efficacy of the new will.
This is the doctrine of dependent relative revocation. Here, the revocation is
conditional and dependent upon the efficacy of the new will. Since the new
will in this case turns out to be void for failure of to comply with formal
requirements, the previous will is not considered revoked [III Tolentino, Civil
Code of the Philippines, 1990 ed., p. 145].

(b) Will your answer be the same if the second will was found to be valid
but both Saffinia and Sophia renounce their inheritance? (2.5%)

SUGGESTED ANSWER:

Yes, my answer will be the same. The doctrine of dependent relative

revocation does not apply where the the new will is rendered ineffective due
to the renunciation of the heirs instituted therein. Renunciation has nothing
to do with the validity of the will, but only pertains to whether or not the
heirs accept their share in the inheritance. Since the new will is still valid, the
doctrine does not apply (Article 832, Civil Code).

10
 VIII

Sofronio was a married father of two when he had a brief fling with
Sabrina, resulting in her pregnancy and the birth of their son Sinforoso. Though
his wife knew nothing of the affair, Sofronio regretted it, but secretly provided
child support for Sinforoso. Unfortunately, when Sinforoso was 10 years old,
Sofronio died. Only Sofronio’s father, Salumbides, knew of Sabrina and
Sinforoso. For the purpose of providing support to Sinforoso, Salumbides gave
Sabrina usufructruary rights over one of his properties — a house and lot — to
last until Sinforoso reaches the age of majority. Sabrina was given possession of
the property on the basis of caucion juratoria. Two (2) years after the creation of
the usufruct, the house accidentally burned down, and three (3) years thereafter,
Sinforoso died before he could reach the age of 18.

Will the usufruct continue after the house has burned down? If yes, will it
continue after Sinforoso’s death? (2.5 %)

SUGGESTED ANSWER:

Yes, the usufruct will continue after the house was burned. If the
usufruct is constituted on immovable property of which a building forms
part, and the latter should be destroyed in any manner whatsoever, the
usufructuary shall have a right to make use of the land and the materials
(Article 607, Civil Code). The usufruct over the land and the materials
continues. The thing was lost only in part, the right continues on the
remaining parts (Article 604, Civil Code).
No, it will be extinguished after Sinforoso’s death. A usufruct granted
for the time that may elapse before a third person attains a certain age, shall
subsist for the number of years specified, even if the third person should die
before the period expires, unless such usufruct has been expressly granted
only in consideration of the existence of such person or contrary intention
clearly appears (Article 603, 606, Civil Code). The circumstances given show
that the usufruct was established by Salumbides in consideration of the
existence of Sinfroso. It was meant for his support; hence, his death
extinguished the usufruct even though he died before reaching the age of
majority.

IX

Newlyweds Sam and Sienna had contracted with Sangria Hotel for their
wedding reception. The couple was so unhappy with the service, claiming,
among other things, that there was an unreasonable delay in the service of dinner
and that certain items promised were unavailable. The hotel claims that, while
there was a delay in the service of the meals, the same was occasioned by the
sudden increase of guests to 450 from the guaranteed expected number of 350, as

11
stated in the Banquet and Meeting Services Contract. In the action for damages
for breach of contract instituted by the couple, they claimed that the Banquet and
Meeting Services Contract was a contract of adhesion since they only provided
the number of guests and chose the menu. On the other hand, the hotel’s defense
was that the proximate cause of the complainant’s injury was the unexpected
increase in their guests, and this was what set the chain of events that resulted in
the alleged inconveniences.

(a) Does the doctrine of proximate cause apply in this case? (2.5%)

SUGGESTED ANSWER:
No, the doctrine does not apply. In the case of Spouses Guanio v.
Makati Shangri-la Hotel (G.R. No. 190601, September 7, 2011), the doctrine of
proximate cause, is applicable only in actions for quasi-delicts, not in actions
involving breach of contract. The doctrine is a device for imputing liability to
a person where there is no relation between him and another party. Where,
however, there is a pre-existing contractual relation between the parties, it is
the parties themselves who make law between them.
Here, there is a contract, the terms and conditions of such contract will
govern the rights and obligations between the contracting parties in case of
breach thereof, not the doctrine of proximate cause.

(b) Was the Banquet and Meeting Services Contract a contract of

adhesion? If yes, is the contract void? (2.5%)

SUGGESTED ANSWER:
Yes, it is a contract of adhesion, but the same is not void.
A contract of adhesion is defined as one in which one of the parties
imposes a ready-made form of contract, which the other party may accept or
reject, but which the latter cannot modify. Here, the contract is ready-made
by Sangria, as the spouses only chose the menu and provided the number of
guests but they cannot modify the terms thereof; hence, a contract of
adhesion.
Although a contract of adhesion, it is not entirely against the law and is
as binding as ordinary contracts, the reason being that the party who adheres
to the contract is free to reject it entirely, but the effect, as ruled in Orient Air
v. CA (G.R. No. 76931, May 29, 1991), is that in case of ambiguity it is

12
construed against the party who caused it to be drafted and could have
avoided it by the exercise of a little more care.

X
Sinclair and Steffi had an illicit relationship while Sinclair was married to
another. The relationship produced a daughter Sabina, who grew up with her
mother. For most parts of Sabina’s youth, Steffi spent for her support and
education. When Sabina was 21 years old, Sinclair’s wife of many years died.
Sinclair and Steffi lost no time in legitimizing their relationship. After the 40-day
prayers for Sinclair’s late wife, Sinclair and Steffi got married without a marriage
license, claiming that they have been cohabiting for the last 20 years.

After graduating from college, Sabina decided to enroll in law school.

Sinclair said that he was not willing to pay for her school fees since she was no
longer a minor. Sinclair claimed that if Sabina wanted to be a lawyer, she had to
work and spend for her law education.

(a) What is Sabina’s filiation status? (2.5%)

SUGGESTED ANSWER:
Sabina is an illegitimate child of Sinclair and Steffi because she was
conceived and born outside a valid marriage (Article 165, Family Code). She
was not legitimated by the subsequent marriage between Sinclair and Steffi.
Only children conceived and born outside of wedlock of parents who, at the
time of conception of the former, were not disqualified by any impediment to
marry each other may be legitimated (Art. 177, Family Code). At the time of
Sabina’s conception, her parents were disqualified by an impediment to
marry each other, because Sinclair was married to someone else.

(b) Is Sinclair legally required to finance Sabina’s law education? (2.5%)

SUGGESTED ANSWER:

Yes, he is legally required to finance Sabina’s education. Support

comprises everything indispensable for education among other things in
keeping with the financial capacity of the family. The education of the person
entitled to be supported shall include his schooling or training for some
profession even beyond the age of majority (Art. 194, Family Code). Parents
and their illegitimate children are obliged to support each other (Article 195,

13
Family Code). Considering the foregoing rules, Sinclair is enjoined by law to
finance Sabrina’s law education even beyond the age of majority.

XI
Samantha sold all her business interest in a sole proprietorship to Sergio for
the amount of PhP 1 million. Under the sale agreement, Samantha was supposed
to pay for all prior unpaid utility bills incurred by the sole proprietorship. A
month after the Contract to Sell was executed, Samantha still had not paid
the PhP 50,000 electricity bills incurred prior to the sale. Since Sergio could not
operate the business without electricity and the utility company refused to restore
electricity services unless the unpaid bills were settled in full, Sergio had to pay
the unpaid electricity bills. When the date for payment arrived, Sergio only
tendered PhP 950,000 representing the full purchase price, less the amount he paid
for the unpaid utility bills. Samantha refused to accept the tender on the ground
that she was the one supposed to pay the bills and Sergio did not have
authorization to pay on her behalf.

(a) What is the effect of payment made by Sergio without the knowledge
and consent of Samantha? (2.5%)

SUGGESTED ANSWER:

The payment by Sergio resulted in the extinguishment of the obligation

of Samantha to the utility company and Sergio was legal subrogated to the
utility company’s credit. Sergio, thus, became Samantha’s new creditor.
Under Article 1302 (3), Civil Code, it is presumed that there is legal
subrogation when, even without the knowledge of the debtor, a person
interested in the fulfillment of the obligation pays, without prejudice to the
effects of confusion as to the latter's share. A person interested in the
fulfillment is one who will benefit from the extinguishment of the obligation.
Here, Sergio is an interested person since he was the business
successor-in-interest of the Samantha and he cannot conduct his business
without paying the debtor of Samantha. Since there is legal subrogation,
Sergio stepped into the shoes of the utility company as the new creditor to the
P50,000 credit; thus there can be valid partially legal compensation of the
two credits between him and Samantha who are principally debtors and
creditors of each other up to the concurrent amount of P50,000 (Art. 1279,
NCC).

14
 (b) Is Samantha guilty of mora accipiendi? (2.5%)

SUGGESTED ANSWER:
Yes, Samantha is guilty of mora accipiendi.
The requisites for mora accipiendi are: (i) offer of performance by the
debtor; (ii) offer must be to comply with prestation as it should be
performed; and (iii) the creditor refuses to accept the performance without
just cause.
Here, Sergio validly made an offer to comply with the prestation of
payment, albeit for P950,000 only. Sergio’s offer is justified based on the
concept of partial legal compensation up to the amount of P50,000, since
Sergio and Samantha are in their own right principal debtors and creditors
of each other. Samantha’s refusal was without just cause as she cannot be
permitted to benefit or use as a defense her own failure to fulfill her part of
the obligation to pay the electricity bills.

XII

Saachi opened a savings bank account with Shanghainese Bank. He made

an initial deposit of PhP100,000. Part of the bank opening forms that he was
required to sign when he opened the account was a Holdout Agreement which
provided that should he incur any liability or obligation to the bank, the bank shall
have the right to immediately and automatically take over his savings account
deposit. After he opened his deposit account, the Shanghainese Bank discovered
a scam wherein the funds in the account of another depositor in the bank was
withdrawn by an impostor. Shanghainese Bank suspected Saachi to be the
impostor, and filed a criminal case of estafa against him. While the case was still
pending with the Prosecutor’s office, the bank took over Saachi’s savings deposit
on the basis of the Holdout Agreement.

(a) What kind of contract is created when a depositor opens a deposit

account with a bank? (2.5%)

SUGGESTED ANSWER:
A contract of simple loan is created when a depositor opens a deposit
account with a bank. Fixed, savings and current deposits of money in banks
and similar institutions shall be governed by the provisions concerning
simple loan (Article 1980, Civil Code]. The creditor is the depositor, while the
debtor is the bank.

15
 (b) In this case, did the bank have the right to take over Saachi’s bank
deposit? (2.5%)

SUGGESTED ANSWER:
No, the bank did not have the right to take over Saachi’s bank deposit.
In the case of Metropolitan Bank & Trust Co. v. Rosales (G.R. No. 183204,
January 13, 2014), it was held that the "Hold Out" clause, which was similar
to the Holdout Agreement in the instant case, can be invoked only if there
was a valid and existing obligation arising from any of the sources of
obligation enumerated in Article 1157 of the Civil Code, to wit: law,
contracts, quasi-contracts, delict, and quasi- delict. The only possible source
of obligation of Saachi to Shanghainese Bank based on the given facts is
delict. As the criminal case filed by the bank against Saachi was still pending
and no final judgment of conviction has been rendered, Saachi had no valid
and existing obligation to the bank; thus, the bank had no right to take over
the deposits of Saachi.

XIII

Sonny Inc., (SI) purchased several heavy machineries from Single

Equipment Philippines, Inc. (SEP) for PhP 10 million, payable in 36 monthly
installments. A chattel mortgage was constituted on the same machineries as
security for the amount. As additional security, the President of SI, Stan Smith,
mortgaged his personal house and lot. SI failed to pay the 16th and succeeding
monthly installments. SEP then commenced a collection suit against SI, and in the
course of the proceedings, a writ of attachment was issued against SI’s properties,
including the mortgaged machineries. The attached properties were subsequently
sold at public action, but the proceeds thereof were insufficient to satisfy the
judgment credit.

(a) Can SEP legally recover the deficiency? (2.5%)

SUGGESTED ANSWER:

Yes, SEP can legally recover the deficiency. The prohibition against
further collection under Article 1484 of the Civil Code, or the Recto Law,
only applies if the seller chooses to foreclose the chattel mortgage and not
when the seller opts to exact the fulfilment of the obligation (Tajanlangit v.
Southern Motors, G.R. 10789, May 28, 1957). SEP chose to exact the

16
fulfillment of the obligation by commencing a collection suit against SI. SEP
did not opt to foreclose the chattel mortgage over the equipment. The
machineries were sold in an execution sale and not in a foreclosure sale;
hence, the prohibition against further collection does not apply.

(b) Instead of collecting the deficiency, can SEP commence extrajudicial

proceedings to foreclose the mortgage on Stan’s house and lot in
order to recover the deficiency? (2.5%)

SUGGESTED ANSWER:

Yes, SEP can commence extrajudicial proceedings to foreclose the

mortgage. SEP may choose to foreclose the mortgage on Stan’s house and lot.
What SEP is prohibited to do, based on the case of Cruz v. Filipinas
Investment & Finance Corporation (G.R. No. L-24772, May 27, 1968), is to
extrajudicially foreclose the mortgage after it has extrajudicially foreclosed
the chattel mortgage on the machineries sold on instalment, because if such is
allowed, the protection given by Article 1484 would be indirectly subverted,
and public policy overturned. In this case, SEP has not foreclosed the chattel
mortgage over the machineries.

ALTERNATIVE ANSWER:

No, because when SEP commenced the collection suit, it thereby

waived its mortgage lien (Caltex Philippines, Inc. v. IAC, 176 SCRA 741
(1989). The remedies of an ordinary action to collect the debt and
foreclosure of the real estate mortgage are alternative remedies and not
cumulative. An election of one remedy operates as a waiver of the other. The
mere act of filing a collection suit for the recovery of a debt secured by a
mortgage constitutes waiver of the other remedy of foreclosure (Art. 1484 (3),
Civil Code).

XIV

Socorro is the registered owner of Lot A while Segunda is the registered

owner of the adjoining Lot B. Lot A is located at an elevated plateau of about 15
feet above the level of Lot B. Since Socorro was allegedly removing portions of
the land and cement that supported the adjoining property, Segunda caused the

17
annotation of an adverse claim against 50 sq. m. on Lot A’s Transfer Certificate of
Title, asserting the existence of a legal easement.

(a) Does a legal easement in fact exist? If so, what kind? (2.5%)

SUGGESTED ANSWER:
Yes, a legal easement of lateral and subjacent support exists.
According to Article 684 of the Civil Code, no proprietor shall make such
excavations upon his land as to deprive any adjacent land or building of
sufficient lateral or subjacent support. In the given case, an easement of
lateral and subjacent support exists in the property of Soccoro in favor of the
property of Segunda. In the case of Castro v. Monsod, (G.R. No. 183719,
February 2, 2011) in which the situation of the properties of the two
landowners were similar to that in the given problem, the Supreme Court
held that an easement existed in favor of the property of higher elevation,
because it was the owner of the said property which sued to have the
easement recognized. Such finding, however, does not mean that no similar
easement exists in favor of the property of lower elevation, since Article 684
does not make a distinction as to the elevation of the property.

(b) If a legal easement does in fact exist, is an annotation of an adverse

claim on the title of the servient estate proper? (2.5%)

SUGGESTED ANSWER:
No. The annotation of an adverse claim over registered land under
Section 70 of Presidential Decree 1529 requires a claim on the title of the
disputed land Castro v. Monsod, 641 SCRA 486, Feruary 2, 2011). Segunda is
not claiming ownership over the property of Socorro. She only wanted a
judicial recognition of the existence of the easement. According to the
Supreme Court in the cited case, an annotation of the existence of the lateral
and subjacent support is no longer necessary, because it exists whether or not
it is annotated or registered in the registry of property. A judicial recognition
of the same already binds the property and the owner of the same, including
her successors-in-interest.

18
ALTERNATIVE ANSWER:
No, it is not proper because an annotation of the existence of the lateral
and subjacent support is no longer necessary. It exists whether or not it is
annotated or registered in the registry of property. Although, there is nothing
which bars the annotation of an easement, not as an adverse claim, but as a
real right.

XV

Simon owned a townhouse that he rented out to Shannon, a flight attendant

with Soleil Philippine Airlines (SPA). They had no written contract but merely
agreed on a three (3)-year lease. Shannon had been using the townhouse as her
base in Manila and had been paying rentals for more than a year when she
accepted a better job offer from Sing Airlines. This meant that Singapore was
going to be her new base and so she decided, without informing Simon, to
sublease the townhouse to Sylvia, an office clerk in SPA.

(a) Can Simon compel Shannon to reduce the lease agreement into
writing? (2.5%)

SUGGESTED ANSWER:
Yes, Simon can compel Shannon to reduce the agreement into writing.
While an agreement for the leasing of real property for a longer period than
one year is covered by the Statute of Frauds, thus, requiring a written
memorandum of its essential provisions under Article 1403, Civil Code.
According to Article 1406 of the Civil Code, the parties may only avail
themselves of the right under Article 1357 of the Civil Code if the contract is
enforceable under the Statute of Frauds. The contract was taken out of the
operation of the Statute of Frauds under the Doctrine of Part Performance.

Under Article 1357 of the Civil Code, the contracting parties may
compel each other to observe the form of contract required by law.

(b) Does the sublease without Simon’s knowledge and consent constitute
a ground for terminating the lease? (2.5%)

SUGGESTED ANSWER:
No, it does not constitute a ground for terminating the lease. In the
contract of lease of things, if there is no express prohibition, the lessee may

19
sublet the thing leased (Article 1650, Civil Code). In this contract, there
appears to be no prohibition regarding subleasing; thus, there is no violation
of the contract which can be used as a ground for terminating the contract.
The act of a lessee in subleasing the thing without notifying the lessor leased
is not one of the causes for which the lessor may terminate the lease and
judicially eject the lessee (Article 1673, Civil Code).

XVI

Selena was a single 18-year old when she got pregnant and gave birth to
Suri. She then left to work as a caregiver in Canada, leaving Suri with her parents
in the Philippines. Selena, now 34 years old and a permanent resident in Canada,
met and married Sam who is a 24-year old Canadian citizen who works as a
movie star in Canada. Sam’s parents are of Filipino ancestry but had become
Canadian citizens before Sam was born. Wanting Suri to have all the advantages
of a legitimate child, Selena and Sam decided to adopt her. Sam’s parents,
already opposed to the marriage of their son to someone significantly older,
vehemently objected to the adoption. They argued that Sam was not old enough
and that the requisite age gap required by the Inter-Country Adoption Act between
Sam as adopter and Suri as adoptee was not met.

Are Sam’s parents correct? (2.5%)

SUGGESTED ANSWER:

No, Sam’s parents are incorrect. Under Section 9 of Republic Act No.
8043 or the Inter-Country Adoption Act of 1995, the requirement that the
adopter must be at least twenty-seven years of age and at least sixteen years
older than the adoptee does not apply if the adopter is the spouse of the
parent by nature of the adoptee. Since, Sam is the spouse of Selena, who is
the parent by nature of Suri, Sam may adopt Suri even if he is below twenty-
seven years of age and is not at least sixteen years older than the adoptee.
[NOTE: The Inter-Country Adpotion Act of 1995 requires that only a child who
is below 15 years of age and is voluntarily or involuntarily committed to the
Department of Social Work and Services (DSWD) may be adopted under the
inter-country adoption law, and the adopter must be at least 27 years of age and
at least 16 years older than the child to be adopted at the time of application
unless the adopter is the natural parent of the child to be adopted or the spouse
of such parent].

20
 XVII
Sofia and Semuel, both unmarried, lived together for many years in the
Philippines and begot three children. While Sofia stayed in the Philippines with
the children, Semuel went abroad to work and became a naturalized German
citizen. He met someone in Germany whom he wanted to marry. Semuel
thereafter came home and filed a petition with the Regional Trial Court
(RTC) for partition of the common properties acquired during his union with
Sofia in the Philippines. The properties acquired during the union consisted of a
house and lot in Cavite worth PhP 2 million, and some personal properties,
including cash in bank amounting to PhP 1 million. All these properties were
acquired using Semuel’s salaries and wages since Sofia was a stay-at-home
mother. In retaliation, Sofia filed an action, on behalf of their minor children, for
support.

(a) How should the properties be partitioned? (2.5%)

SUGGESTED ANSWER:

(a) The properties should be divided equally between Sofia and

Semuel. The property relations of Sofia and Semuel is governed by
Article 147 of the Civil Code, because they lived exclusively with each
other as husband and wife and they were capacitated to marry each
other. Under the said provision, the wages and salaries of Sofia and
Semuel shall be owned by them in equal shares; hence, the cash in the
bank from Semuel’s salaries and wages is co-owned by Semuel and
Sofia in equal shares. Article 147 also provides that the property
acquired by the partners through their work or industry shall be
governed by the rules on co-ownership and in the absence of proof to
the contrary, properties acquired during the cohabitation shall be
presumed to have been obtained by their joint efforts, work or industry
and shall be owned by them in equal shares. Article 147 provides
further that if the efforts of one of the parties consisted in the care and
maintenance of the family and of the household, he or she is deemed to
have contributed jointly in the acquisition of the property even if he or
she did not participate in the acquisition by the other party of the said
property. Sofia, as a stay-at-home mother, cared for and maintained
the family, consequently, she is deemed to have contributed in the
acquisition of the house and lot. As co-owner, Sofia is entitled to one-
half of the property.

21
 (b) Should Semuel be required to support the minor children? (2.5%)

SUGGESTED ANSWER:

(b) Yes, Semuel should be required to support the minor children.

Parents and their illegitimate children are obliged to support each
other (Article 195, Family Code). Semuel is required to support his
illegitimate children with Sofia. The children are illegitimate, because
they were conceived and born outside a valid marriage [Article 165,
Family Code].

ANOTHER ANSWER:
Even if the new national law of Samuel does not oblige him to support
his minor illegitimate children in the Philippines, the said foreign law
cannot be applied in the Philippines for two reasons: (1) the Philippines
may refuse to apply said foreign law, because it is contrary to a sound
and established policy of the forum; and (2) the Philippine laws which
have for their object public policy cannot be rendered ineffective by a
foreign law [Art. 17, par. 3, NCC; Del Soccoro v. Van Wilsem, 744 SCRA
516 (2014)].

XVIII

Shasha purchased an airline ticket from Sea Airlines (SAL) covering

Manila-Bangkok-Hanoi-Manila. The ticket was exclusively endorsable to Siam
Airlines (SMA). The contract of air transportation was between Shasha and SAL,
with the latter endorsing to SMA the Hanoi-Manila segment of the journey. All
her flights were confirmed by SAL before she left Manila. Shasha took the flight
from Manila to Bangkok on board SAL using the ticket. When she arrived in
Bangkok, she went to the SAL ticket counter and confirmed her return trip from
Hanoi to Manila on board SMA Flight No. SA 888. On the date of her return trip,
she checked in for SMA Flight No. SA 888, boarded the plane, and before she
could even settle in on her assigned seat, she was off-loaded and treated rudely by
the crew. She lost her luggage and missed an important business meeting. She
thereafter filed a complaint solely against SAL and argued that it was solidarily
liable with SMA for the damages she suffered since the latter was only an agent of
the former.

(a) Should either, or both, SAL and SMA be held liable for damages that
Shasha suffered? (2.5%)

22
SUGGESTED ANSWER:

Only SAL should be held liable for damages.

This case has the same factual milieu with that of China Airlines v.
Daniel Chiok (G.R. No. 152122, July 30, 2003), where the court cited British
Airways v. Court of Appeals (G.R. No. 121824 January 29, 1998), ruling that as
the principal in the contract of carriage, the petitioner was held liable even
when the breach of contract had occurred, not on its own flight, but on that
of another airline. It also cited Lufthansa German Airlines v. Court of Appeals
(G.R. No. 83612, November 24, 1994), in which the Court held that the
obligation of the ticket-issuing airline remained and did not cease, regardless
of the fact that another airline had undertaken to carry the passengers to one
of their destinations.
In this case, since the contract of air transportation is between Shasha
and SAL, the latter as principal remains liable as the principal despite the
fact that the breach occurred in SMA. SMA cannot be held liable in this
case, because the court has no jurisdiction over it. It is imperative and in
accordance with due process and fair play that SMA should have been
impleaded as a party in the present proceedings before this Court can make a
final ruling on this matter.

ALTERNATIVE ANSWER :
SAL and SMA may be held solidarily liable to Sasha. SAL is liable to
Sasha for breach of the contract of carriage, because it failed to bring Sasha
to the latter’s destination as agreed upon in the contract. SAM, on the other
hand, is liable to Sasha for tort under the provisions of Article 2176, in
relation to Article 2180 of the Civil Code. While SAM is an independent
contractor, and not an agent of SAL, both SAL and SAM are solidarily liable
to Sasha, because a contractual obligation can be breached by tort and when
the same act or omission causes the injury, one resulting in culpa contractual
and the other in culpa aquiliana, Article 2194 of the Civil Code can well
apply. In fine, a liability for tort may arise even under a contract, where tort
is that which breaches the contract. Stated differently, when an act which
constitutes a breach of contract would have itself constituted the source of a
quasi-delictual liability had no contract existed between the parties, the

23
contract can be said to have been breached by tort, thereby allowing the rules
on tort to apply (LRTA v. Navidad, G.R. No. 145804, February 6, 2003).

ANOTHER ALTERNATIVE ANSWER:

SAL and SMA are jointly liable. In KLM v. CA (G.R. L-31150, July 22,
1915), the Supreme Court held that the ticket-issuing carrier assumes full
responsibility for the entire trip and shall be held accountable for the breach
of guaranty. Damages may also be exacted from SMA, because their acts fall
under quasi-delict.

ANOTHER SUGGESTED ALTERNATIVE ANSWER:

Only SMA is liable. Under the Warsaw Convention, the ticket-issuing
airline subcontracts the contract of carriage to other airlines, as in this
instance, there is no agency created and the subsequent carrier is liable for
the damages it has incurred.

(b) Assuming that one is an agent of the other, is the agency coupled
with interest? (2.5%)

SUGGESTED ANSWER:
Yes, the agency was constituted as a means of fulfilling an obligation
which had already been contracted and also a bilateral contract depends
upon the agency [Article 1927, Civil Code]. In the case of Philex Mining v.
CIR, (G.R. No. 148187, April 16, 2008) the Court defined an agency coupled
with an interest as one that cannot be revoked or withdrawn by the principal
due to an interest of a third party that depends upon it, or the mutual interest
of both principal and agent.
Here, since the ticket is exclusively endorsable to the agent, SAM, then
it has a mutual interest with the principal, SAL, in the fulfillment of the
obligation.

XIX

Sebastian, who has a pending assessment from the Bureau of Internal

Revenue (BIR), was required to post a bond. He entered into an agreement with
Solid Surety Company (SSC) for SSC to issue a bond in favor of the BIR to

24
secure payment of his taxes, if found to be due. In consideration of the issuance
of the bond, he executed an Indemnity Agreement with SSC whereby he agreed to
indemnify the latter in the event that he was found liable to pay the tax. The BIR
eventually decided against Sebastian, and judicially commenced action against
both Sebastian and SSC to recover Sebastian's unpaid taxes. Simultaneously, BIR
also initiated action to foreclose on the bond. Even before paying the BIR, SSC
sought indemnity from Sebastian on the basis of the Indemnity Agreement.
Sebastian refused to pay since SSC had not paid the BIR anything yet, and alleged
that the provision in the Indemnity Agreement which allowed SSC to recover
from him, by mere demand, even if it (SSC) had not yet paid the creditor, was
void for being contrary to law and public policy.

Can Sebastian legally refuse to pay SSC? (2.5%)

SUGGESTED ANSWER:

No, Sebastian cannot legally refuse to pay. A stipulation in an

indemnity agreement providing that the indemnitor shall pay the surety as
soon as the latter becomes liable to make payment to the creditor under the
terms of the bond, regardless of whether the surety has made payment
actually or not, is valid and enforceable; in accordance therewith, the surety
may demand from the indemnitor even before the creditor has paid [Security
Bank and Trust Co., Inc. v. Globe Assurance Co., Inc., (58 OG 3708, 1962)].
Under the terms of the contract, Sebastian’s obligation to indemnify became
due and demandable from the moment he has incurred liability and not from
the moment of payment.

XX
Simeon was returning to Manila after spending a weekend with his parents in Sariaya,
Quezon. He boarded a bus operated by the Sabbit Bus Line (SBL) on August 30, 2013. In the
middle of the journey, the bus collided with a truck coming from the opposite direction, which
was overtaking the vehicle in front of the truck. Though the driver of the SBL bus tried to avoid
the truck, a mishap occurred as the truck hit the left side of the bus. As a result of the accident,
Simeon suffered a fractured leg and was unable to report for work for one week. He sued SBL
for actual and moral damages. SBL raised the defense that it was the driver of the truck who
was at fault, and that it exercised the diligence of a good father of a family in the selection and
supervision of its driver.

(a) Is SBL liable for actual damages? Moral damages? (2.5%)

SUGGESTED ANSWER:
It depends on what the source of obligation the action is based.

25
 If based on contract, SBL will be liable for actual damages, but not
moral damages. As a common carrier, SBL is required to observe
extraordinary diligence, and the law expressly provides that its liability does
not cease upon proof that it exercised the diligence of a good father of a
family in selecting and supervising its driver. It is not liable, however, for
moral damages as Art. 2220 requires it to have acted fraudulently or in bad
faith, which is not provided by the facts.
If the action, however, is anchored under quasi-delict, SBL will be
liable for actual and moral damages. As a common carrier, it is required to
exercise extraordinary diligence. Moral damages also may be awarded
under Article 2219 if the plaintiff suffered physical injuries as a result of a
quasi-delictual act.

ALTERNATIVE ANSWER:
In a contract of carriage, the carrier is required to exercise
extraordinary diligence and is liable whenever a passenger suffers injury
before he reaches his destination. In an action to recover damages arising
from breach of contract of carriage, the passenger needs only to prove the
existence of the contract and the failure of the carrier to safely bring him to
his destination. Moral damages may not however be recovered from the
carrier unless: (a) the passenger dies, or (b) the carrier is guilty of bad faith
or gross negligence. Neither applies in this case. (Estrada v. Philippine Rabbit
Bus Co., G.R. No. 203902, July 19, 2017).
(b) Will SBL be liable to pay interest if it is required to pay damages,
and delays in the payment of the judgment award? What is the rate of
interest, and from when should the interest start running? (2.5%)

SUGGESTED ANSWER:
Yes, SBL will be liable to pay interest at the rate of 6% from the
finality of the judgment until satisfaction. According to the case of Nacar v.
Gallery Frames (G.R. No. 189871, August 13, 2013), when the judgment of the
court awarding a sum of money becomes final and executory, the rate of legal
interest, shall be 6% per annum from such finality until its satisfaction.

- NOTHING FOLLOWS -

26
 Training & Convention Division
University of the Philippines Law Center

SUGGESTED ANSWERS
to the
2018 BAR EXAMINATIONS IN
TAXATION LAW

KM Corporation, doing business in the City of Kalookan, has been a distributor

and retailer of clothing and household materials. It has been paying the City of
Kalookan local taxes based on Sections 15 (Tax on Wholesalers, Distributors or
Dealers) and 17 (Tax on Retailers) of the Revenue Code of Kalookan City
(Code). Subsequently, the SangguniangPanglungsod enacted an ordinance
amending the Code by inserting Section 21 which imposes a tax on “Businesses
Subject to Excise, Value-Added and Percentage Taxes under the National
Internal Revenue Code (NIRC),” at the rate of 50% of 1% per annum on the
gross sales and receipts on persons “who sell goods and services in the course of
trade or business.” KM Corporation paid the taxes due under Section 21 under
protest, claiming that (a) local government units could not impose a tax on
businesses already taxed under the NIRC and (b) this would amount to double
taxation, since its business was already taxed under Sections 15 and 17 of the
Code.
(a) May local government units impose a tax on businesses already
subjected to tax under the NIRC? (2.5%)
SUGGESTED ANSWER:
Yes. Section 143 in relation to Section 151 of the Local Government
Code (LGC) provides for the power of cities to impose a local business tax,
and one of those which may be subjected to such tax are those businesses
that are subject to “excise tax, value-added tax or percentage tax” under the
NIRC, other than those specifically enumerated by the same provision.The
tax to be imposed by the city shall not exceed 2% of gross sales or gross
receipts of the preceding calendar year (Sec. 143(h), in relation to Sec. 151,
LGC).

1
 (b) Does this amount to double taxation? (2.5%)

SUGGESTED ANSWER:
Yes. The three taxes are all in the nature of local business taxes on
wholesalers, retailers and service providers which are imposed by the same
taxing authority on the same subject matter for the same tax period; hence,
the elements of double taxation are present (Nursery Care Corporation v.
Anthony Acebedo, G.R. No. 180651, July 30, 2014).

ALTERNATIVE ANSWER:
Yes. Double taxation means taxing the same property twice when it
should be taxed only once; that is, “taxing the same person twice by the same
jurisdiction for the same thing”.

It is obnoxious when the taxpayer is taxed twice, when it should be

only once. In double taxation, which is otherwise described as “direct
duplicate taxation”, the two taxes must be imposed on the same subject
matter, for the same purpose, by the same taxing authority, within the same
jurisdiction, during the same taxing period, and the taxes must be of the
same kind or character.

Using the afore-mentioned test, there is indeed, double taxation since

KM Corporation is subjected to the taxes under both Sections 15 (Tax on
Wholesalers, Distributors or Dealers), 17 (Tax on Retailers) and 21 (tax on
Businesses Subject to Excise, Value-Added and Percentage Taxes under the
NIRC) of the Revenue Code of Kalookan City.These taxes are being
imposed: (1) on the same subject matter – the privilege of doing business in
Kalookan City; (2) for the same purpose – to make persons conducting
business within Kalookan City contribute to city revenues; (3) by the same
taxing authority – Kalookan City; (4) within the same taxing jurisdiction –
within the territorial jurisdiction of Kalookan City; (5) for the same taxing
periods – per calendar year; and (6) of the same kind or character – a local
business tax imposed on gross sales or receipts of the business (City of
Manila v. Coca-Cola Bottlers Philippines, Inc., G.R. No. 181845, August 4,
2009, 595 SCRA 299 and G.R. No. 167283, February 10, 2010, reiterated in
Swedish Match Philippines, Inc. v. The Treasurer of the City of Manila, G.R.

2
No. 181277, July 3, 2013, 700 SCRA 428, 439-442 both cited in Nursery Care
Corporation v. Acevedo, G.R. No. 180651, July 30, 2014).

II
Kronge Konsult, Inc. (KKI) is a Philippine corporation engaged in
architectural design, engineering, and construction work. Its principal office is
located in Makati City, but it has various infrastructure projects in the country
and abroad. Thus, KKI employs both local and foreign workers. The company
has adopted a policy that the employees’ salaries are paid in the currency of the
country where they are assigned or detailed.
Below are some of the employees of KKI. Determine whether the compensation
they received from KKI in 2017 is taxable under Philippine laws and whether
they are required to file tax returns with the Bureau of Internal Revenue (BIR).
(2% each)
(a) Kris Konejero, a Filipino accountant in KKI’s Tax Department in
the Makati office, and married to a Filipino engineer also working in
KKI;

SUGGESTED ANSWER:
Taxable.(Sec. 23 & 24(A), NIRC). Kris must file tax returns with the
BIR, unless she qualifies for substituted filing of income tax returns because
the tax was correctly withheld by the employer (Sec. 51(A)(2)(b), NIRC).

(b) Klaus Kloner, a German national who heads KKI’s Design

Department in its Makati office;
SUGGESTED ANSWER:
Taxable being an income earned by a resident alien from Philippine
sources (Sec. 23 & 24(A), NIRC). Klaus is required to file a tax return, unless
the compensation income from KKI is his only returnable income and the
withholding tax thereon was correctly withheld by his employer (Sec.
51(A)(2)(b), NIRC).

(c) KrisantoKonde, a Filipino engineer in KKI’s Design Department

who was hired to work at the principal office last January 2017. In April 2017,
he was assigned and detailed in the company’s project in Jakarta, Indonesia,
which project is expected to be completed in April 2019;

3
SUGGESTED ANSWER:
His compensation from January 1 up to the time he left the Philippines
is taxable and he must file tax returns, unless the compensation income is his
only returnable income and the withholding tax thereon was correctly
withheld by KKI (Sec. 51(A)(2)(b), NIRC). The compensation for his services
abroad from the date of his actual assignment thereat up to the time of the
completion of the project is tax-exempt being an income from without
earned by a non-resident citizen (Sec. 23 and Sec. 42, NIRC). He is not
required to file a return for this income derived from without, because said
income is not subject to income tax in the Philippines (Sec. 23, NIRC).

(d) Kamilo Konde, Krisanto’s brother, also an engineer assigned to

KKI’s project in Taipei, Taiwan. Since KKI provides for housing and other basic
needs, Kamilo requested that all his salaries paid in Taiwanese dollars, be paid to
his wife in Manila in its Philippine Peso equivalent;
SUGGESTED ANSWER:
Not taxable and no need to file tax returns. Kamilo is a non-resident
citizen who is taxable only on income from within. Compensation for
services rendered outside of the Philippines is an income from without which
is not subject to the Philippine income tax (Sec. 23 and Sec. 42, NIRC).

(e) Karen Karenina, a Filipino architect in KKI’s Design Department

who reported back to KKI’s Makati office in June 2017 after KKI’s project in
Kuala Lumpur, Malaysia was completed.
SUGGESTED ANSWER:
Compensation from January 1 up to the time of her return in June
2017 is an income from without which is not taxable if received by a non-
resident citizen (Sec. 23 and Sec. 42, NIRC). Compensation from June 2017
to December 31, 2017 is an income from within and taxable to Karen who is
taxable on worldwide income from the time she regained the status of a
resident citizen and accordingly, must file returns to pay for the tax, unless
she is purely compensation income earner for which the withholding tax on
wages was correctly withheld by KKI (Sec 51(A)(2)(b), NIRC).

4
 III

Kim, a Filipino national, worked with K-Square, Inc. (KSI), and was
seconded to various KSI-affiliated corporations:
1. from 1999 to 2004 as Vice President of K-Gold Inc.,
2. from 2004 to 2007 as Vice President of KPB Bank;
3. from 2007 to 2011 as CEO of K-Com Inc.;
4. from 2011 to 2017 as CEO of K-Water Corporation, where Kim
served as CEO for seven years until his retirement last December 12, 2017 upon
reaching the compulsory retirement age of 60 years.
All the corporations mentioned are majority-owned in common by the Koh
family and covered by a BIR-qualified multi employer-employee retirement plan
(MEERP), under which the employees may be moved around within the
controlled group (i.e., from one KSI subsidiary or affiliate to another) without
loss of seniority rights or break in the tenure. Kim was well-loved by his
employer and colleagues, so upon retirement, and on his last day in office, KSI
gave him a Mercedes Benz car worth PhP 5 million as a surprise, with a streamer
that reads: “You’ll be missed. Good luck, Sir Kim.”
(a) Are the retirement benefits paid to Kim pursuant to the MEERP
taxable? (2.5%)

SUGGESTED ANSWER:
(a) No. The recipient having served the group of companies covered by
the BIR-Qualified Retirement Plan for at least 10 years, not less than 50
years of age at the time of retirement and avails of the benefit only once, will
receive his retirement benefits tax-free (Sec. 32(B)(6)(a), NIRC).

(b) Which internal revenue tax, if any, will apply to the grant of the car
to Kim by the company? (2.5%)

SUGGESTED ANSWER:
It is subject to the income tax. The value of the Mercedes Benz car is
an income to Kim. It is in the nature of a compensatory gift which is
considered as income to the recipient. The car is in reality a recompense for
Kim’s past services. Compensation for services in whatever form paid is
part of gross income [Sec. 32(A)(1), NIRC; Commissioner v. Duberstein, 363
US 278 (1960)].

5
ALTERNATIVE ANSWER:
The car was given on account of merits and the services he rendered to
KSI which do not constitute a demandable debt is renumeratory donation
and bsed on the generosity of KSI. It is a gift subject to donor’s tax,
provided Kim accepts the car (Art. 726, Civil Code).

IV

Years ago, Krisanto bought a parcel of land in Muntinlupa for only

PhP65,000. He donated the land to his son, Kornelio, in 1980 when the property
had a fair market value of PhP75,000, and paid the corresponding donor’s tax.
Kornelio, in turn, sold the property in 2000 to Katrina for PhP 6.5 million and
paid the capital gains tax, documentary stamp tax, local transfer tax, and other
fees and charges. Katrina, in turn, donated the land to Klaret School last August
30, 2017 to be used as the site for additional classrooms. No donor’s tax was
paid, because Katrina claimed that the donation was exempt from taxation. At
the time of the donation to Klaret School, the land had a fair market value of PhP
65 million.
(a) Is Katrina liable for donor’s tax? (2.5%)

SUGGESTED ANSWER:
No. Donations in favor of an educational institution is exempt from
donor’s tax (Sec. 101, NIRC).

(b) How much in deduction from gross income may Katrina claim on
account of the said donation? (2.5%)

SUGGESTED ANSWER:
If Klaret School is an accredited non-government organization,
having been established as a non-profit domestic corporation, organized and
operated exclusively for educational purposes, the donation to it as a
qualified donee-institution is deductible in full (Sec. 34(H)(2)(c), NIRC).
The deduction from gross income shall be the acquisition cost of said
property by the donor which is P6.5 million (Sec. 34(H)(3), NIRC).

6
ALTERNATIVE ANSWER:
Katrina may claim a deduction from her gross income an amount not
in excess of ten percent (10%) of her taxable income derived from trade,
business or profession as computed prior to the deduction of the value of the
donation made to Klaret School, and other charitable contributions that
may have been made by Katrina during the taxable year, after compliance
with the substantiation requirements (NIRC of 1997, Sec. 34 (H).

V
Spouses Konstantino and Korina are Filipino citizens and are principal
shareholders of a restaurant chain, Korina’s, Inc. The restaurant’s principal office
is in Makati City, Philippines.
Korina’s became so popular as a Filipino restaurant that the owners
decided to expand its operations overseas. During the period 2010-2015 alone, it
opened ten (10) stores throughout North America and five (5) stores in various
parts of Europe where there were large Filipino communities. Each store abroad
was in the name of a corporation organized under the laws of the state or country
in which the store was located. All stores had identical capital structures: 60% of
the outstanding capital stock was owned by Korina’s, Inc., while the remaining
40% was owned directly by the spouses Konstantino and Korina.
Beginning 2017, in light of the immigration policy enunciated by US
President Donald Trump, many Filipinos have since returned to the Philippines
and the number of Filipino immigrants in the US dropped significantly. On
account of these developments, Konstantino and Korina decided to sell their
shares of stock in the five (5) US corporations that were doing poorly in gross
sales. The spouses’ lawyer-friend advised them that they will be taxed 5% on the
first PhP100,000 net capital gain, and 10% on the net capital gain in excess of
PhP100,000.
Is the lawyer correct? If not, how should the spouses Konstantino and
Korina be taxed on the sale of their shares? (5%)

SUGGESTED ANSWER:
The lawyer’s advice is wrong. The capital gains tax of 5% for the first
P100,000 net capital gain, and 10% on the net capital gain in excess of
P100,000 applies only to the net capital gains realized from the sale, barter,
exchange or other disposition of shares of stock in a domestic corporation
(Sec. 24(C), NIRC). Since the shares of stock sold are shares of foreign
corporations held as capital assets, the recognized portion of the capital gain

7
realized from the sale must be reported as part of their gross income in their
income tax returns where the taxable income will be subject to the
graduated income tax rates for individuals (Sec. 24(A)(1)(a) in relation to
Sec. 39, NIRC).

[Note: We suggest that the question be treated as a bonus question because of

the amendment of the tax regime under the TRAIN Law. The 5% and 10% on
net capital gain will no longer apply when the Bar Examination takers become
practising lawyers].

VI
Kria, Inc., a Korean corporation engaged in the business of manufacturing
electric vehicles, established a branch office in the Philippines in 2010. The
Philippine branch constructed a manufacturing plant in Kabuyao, Laguna, and
the construction lasted three (3) years. Commercial operations in the Laguna
plant began in 2014.
In just two (2) years of operation, the Philippine branch had remittable
profits in an amount exceeding 175% of its capital. However, the head office in
Korea instructed the branch not to remit the profits to the Korean head office
until instructed otherwise. The branch chief finance officer is concerned that the
BIR might hold the Philippine branch liable for the 10% improperly accumulated
earnings tax (IAET) for permitting its profits to accumulate beyond reasonable
business needs.
(a) Is the Philippine branch of Kria subject to the 10% IAET under the
circumstances stated above? (2.5%)
SUGGESTED ANSWER:
No. The IAET will not apply to a branch of a foreign corporation, it
being a Resident Foreign Corporation (RR No. 2-2001). The IAET applies
only to Domestic Corporations which permits their profits to accumulate
beyond its reasonable business needs, instead of being distributed as
dividends.

(b) Is it subject to 15% branch profit remittance tax (BPRT)? (2.5%)

SUGGESTED ANSWER:

No. It will be subject to BPRT only when actual or constructive

remittance of branch profits is made. The law provides that any profits

8
remitted by a branch to its head office shall be subject to the BPRT (Sec.
28(A)(5), NIRC; Bank of America v. CA, G.R. No. 103092, July 21, 1994).

VII
Karissa is the registered owner of a beachfront property in Kawayan,
Quezon which she acquired in 2015. Unknown to many, Karissa was only
holding the property in trust for a rich politician who happened to be her lover. It
was the politician who paid for the full purchase price of the Kawayan property.
No deed of trust or any other document showing that Karissa was only holding
the property in trust for the politician was executed between him and Karissa.
Karissa died single on May 1, 2017 due to a freak surfing accident. She left
behind a number of personal properties as well as real properties, including the
Kawayan property. Karissa’s sister, Karen, took charge of registering Karissa’s
estate as a taxpayer and reporting, for income tax and VAT purposes, the rental
income received by the estate from real properties. However, it was only on
October 1, 2017 when Karen managed to file an estate tax return for her sister’s
estate. The following were claimed as deductions in the estate tax return:
1. Funeral expenses amounting to PhP 250,000;
2. Medical expenses amounting to PhP 100,000, incurred when Karissa
was hospitalized for pneumonia a month before her death; and
3. Loss valued at PhP 6 million, arising from the destruction of Karissa’s
condominium unit due to fire which occurred on September 15, 2017.
(a) Should the beachfront property be included in Karissa’s gross
estate? (2.5%)
SUGGESTED ANSWER:
Yes. The property is registered in the name of the decedent, so it’s a
property owned by her as of the time of death which must properly be
included as part of her gross estate. The extent of her interest in the
property, which is full ownership, must form part of her gross estate (Sec.
85(A), NIRC).

(b) Are the claimed deductions proper? (2.5%)

SUGGESTED ANSWER:
The claim of funeral expenses amounting to P250,000 is improper
being excessive in amount. The amount allowable as deduction for funeral
expenses is actual funeral expenses or 5% of the gross estate, whichever is

9
lower, but in no case shall it exceed P200,000 (Sec. 86(a)(1)(a), NIRC). The
law allows the claim of medical expenses within one year prior to the
decedent’s death in an amount not exceeding P500,000. Since the amount
claimed as deduction was only P100,000 and was incurred within one month
from death, it constitutes a proper deduction (Sec. 86(A)(6), NIRC).
Likewise, the loss incurred during the settlement of the estate (after death)
but not beyond the last day prescribed by law for payment of the estate tax
(6 months from date), is a proper deduction from the gross estate, provided,
it is not compensated by insurance and not claimed as deduction for income
tax purposes. (Sec. 86(A)(1)(e), NIRC)

[Note: We suggest full credit be given for any answer. Exclude the question
on deduction. The provisions were amended by the TRAIN Law and is no
longer relevant to new entrants of the profession].

VIII
Upon the death of their beloved parents in 2009, Karla, Karlo, and Karlie
inherited a huge tract of farm land in Kanlaon City. The siblings had no plans to
use the property. Thus, they decided to donate the land, but were not sure to
whom the donation should be made. They consult you, a well-known tax law
expert, on the tax implications of the possible donations they plan to make, by
giving you a list of the possible donees:
1. The Kanlaon City High School Alumni Association (KCHS AA),
since the siblings are all alumni of the same school and are active
members of the organization. KCHS AA is an organization
intended to promote and strengthen ties between the school and its
alumni;
2. The Kanlaon City Water District which intends to use the land for its
offices; or
3. Their second cousin on the maternal side, Kikay, who serves as the
caretaker of the property.
Advise the siblings which donation would expose them to the least tax
liability. (5%)

SUGGESTED ANSWER:
I would advise them that the proposed donation to Kanlaon City
Water District, a government entity, will be exempt from donor’s tax, hence,

10
would expose the siblings to the least donor’s tax liability (Sec. 101(A)(2),
NIRC). Donation to KCHS AA and donation to Kikay, the siblings’ second
cousin, are both donations to strangers, which will expose them to a donor’s
tax of 30% based on the fair market value of the property to be donated
(Sec. 99(B), NIRC).

[Note: The group suggests that any answer be given full credit. The provisions
were amended by the TRAIN Law].

IX
Karlito, a Filipino businessman, is engaged in the business of metal
fabrication and repair of LPG cylinder tanks. He conducts business under the
name and style of “Karlito’s Enterprises,” a single proprietorship. Started only
(5)years ago, the business has grown so enormously that Karlito decided to
incorporate it by transferring all the assets of the business, particularly the
inventory of goods on hand, machineries and equipment, supplies, parts, raw
materials, office furniture and furnishings, delivery trucks and other vehicles,
buildings, and tools to the new corporation, Karlito’s Enterprises, Inc., in
exchange for 100% of the capital stock of the new corporation, the stock
subscription to which shall be deemed fully paid in the form of the assets
transferred to the corporation by Karlito.
As a result, Karlito’s Enterprises, the sole proprietorship, ceased to do
business and applied for cancellation of its BIR Certificate of Registration.
The BIR, however, assessed Karlito VAT on account of the cessation of
business based on the current market price of the assets transferred to Karlito’s
Enterprises, Inc.
(a) Is the transfer subject to VAT? (2.5%)
SUGGESTED ANSWER:
Yes, the transfer of properties is subject to VAT, but only if Karlito is
VAT-registered or VAT registerable person. The transaction is a taxable
exchange involving properties which are for sale or for use in the course of
trade or business (Sec. 105, NIRC; Sec. 4.106-8, RR No. 16-2005).

ANOTHER ANSWER:
Yes, the same is subject to VAT as “transaction deemed sale” due to
retirement from or cessation of business with respect to all goods on hand,
whether capital goods, stock-in-trade, et.al., such as in the case of a change

11
of ownership of business when a sole proprietorship incorporates (Section
106 (B)4, NIRC, in relation to Section 4.106-7 (a)(4)(i), RR No. 16-2005).

[Note: We suggest that any answer should be given full credit. (1) The
exchange of property for shares of stock resulting to corporate control is
rendered exempt from VAT under Section 109(X), NIRC, as amended by
TRAIN Law. (2) It is confusing to the bar candidates on whether it is subject to
VAT due to the actual exchange or due to cessation of the business. While they
might be inclined to consider the transaction as a deemed-sale in view of the
cessation of business and eventual cancellation of Certificate of Registration, it
must be noted that at the time of cessation, the inventory of properties is no
longer with Karlito as an actual exchange took place before he retired from
business.]

(b) Is the transfer subject to income tax? (2.5%)

SUGGESTED ANSWER:
No. The same is considered as tax-free exchange where no gain or loss
shall be recognized in a transfer of property to a corporation by a person in
exchange for stock or unit of participation in such corporation of which as a
result of such exchange Karlito gained control of said corporation (Section
40(C)(2), NIRC).

X
Klaus, Inc., a domestic, VAT-registered corporation engaged in the land
transportation business, owns a house and lot along Katipunan St., Quezon City.
This property is being used by Klaus, Inc.’s president and single largest
shareholder, Atty. Krimson, as his residence. No business activity transpires
there except for the company’s Christmas party which is held there every
December. Atty. Krimson recently grew tired of the long commute from
Katipunan to his office in Makati City and caused the company to sell the house
and lot. The sale was recorded in the books of Klaus, Inc. as investment in real
property.
(a) Is the sale of the said property subject to VAT? (2.5%)
SUGGESTED ANSWER:
Yes. The real property sold is used in trade or business since it is
utilized to extend a fringe benefit, free use of housing unit, to the president

12
of Klaus, Inc. It is considered as a transaction incidental to the VAT-
registered business of the seller (Mindanao Geothermal II v. CIR, G.R. No.
193301, March 11, 2013).

(c) Is the sale subject to 6% capital gains tax or regular corporate

income tax of 30%? (2.5%)

SUGGESTED ANSWER:
The property used in trade or business is not a capital asset but an
ordinary asset; hence, the gain from the sale will be subject to the regular
corporate income tax of 30%.

XI
Koko’s primary source of income is his employment with the government.
He earns extra from the land he inherited from his parents, and which land he has
been leasing to a private, non-stock, non-profit school since 2005.
Last January, the school offered to buy the land from Koko for an amount
equivalent to its zonal value plus 15% of such zonal value. Koko agreed but
required the school to pay, in addition to the purchase price, the 12% VAT. The
school refused Koko’s proposal to pass on the VAT contending that it was an
entity exempt from such tax. Moreover, it said that Koko was not regularly
engaged in the real estate business and, therefore, was not subject to VAT.
Consequently, Koko should not charge any VAT to the school.
(a) Is the contention of the school correct? (2.5%)
SUGGESTED ANSWER:
No. The exemption of the buyer pertains only to taxes for which it is
legally liable but not to taxes passed-on to it. The VAT is not a tax on the
buyer but merely considered as part of the purchase price. Accordingly, if
the sale is subject to VAT, the tax-exempt buyer cannot invoke its exemption
in order to avoid the imposition of the VAT on the transaction. Be that as it
may, the transaction will be subject to VAT only if Koko is either (1) VAT-
registered or (2) VAT-registerable person at the time of sale; otherwise, the
sale of the rented property will not be subject to VAT.

(b) Will your answer be the same if Koko signed up as a VAT-

registered person only in 2017? (2.5%)

13
SUGGESTED ANSWER:

Yes. All transactions involving real property for sale or for lease in the
course of trade or business by VAT-registered person will be subject to
VAT(Sec. 106(A)(1)(a). Since the sale will take place at a time when the
seller is already VAT-registered, the sale is subject to VAT.

XII
The BIR Commissioner, in his relentless enforcement of the Run After Tax
Evaders (RATE) program, filed with the Department of Justice (DOJ) charges
against a movie and television celebrity. The Commissioner alleged that the
celebrity earned around PhP 50 million in fees from product endorsements in
2016 which she failed to report in her income tax and VAT returns for said year.
The celebrity questioned the proceeding before the DOJ on the ground that
she was denied due process since the BIR never issued any Preliminary
Assessment Notice (PAN) or a Final Assessment Notice (FAN), both of which
are required under Section 228 of the NIRC whenever the Commissioner finds
that proper taxes should be assessed.
Is the celebrity’s contention tenable? (2.5%)
SUGGESTED ANSWER:
No. In cases where a fraudulent return is filed with the intent to evade
a tax, a proceeding in court for the collection of such tax maybe filed without
assessment (Sec. 222(a), NIRC). Assessment is not necessary before the filing
of a criminal complaint for tax evasion (CIR v. Pascor Realty and
Development Corp., G.R. No. 128315, June 29, 1999).

XIII
The Collector at the Port of Koronadal seized 100 second-hand right-hand
drive buses imported from Japan. He issued warrants of distraint and scheduled
the vehicles for auction sale. Kamilo, the importer of the second-hand buses,
filed a replevin suit with the Regional Trial Court (RTC). The RTC granted the
replevin upon filing of a bond.
Did the RTC err in granting the replevin? (2.5%)
SUGGESTED ANSWER:
Yes. The RTC erred in granting the replevin. The Collector of
Customs has primary and exclusive jurisdiction in seizure cases. Such

14
exclusive jurisdiction precludes the regular courts from taking cognizance of
the subject matter and divests such courts of the prerogative to replevin
property subject to seizure and forfeiture proceedings for violation of the
Tariff and Customs Code (Collector v. Villaluz, L-34038, June 18, 1976; 71
SCRA 356).

XIV
The City of Kabankalan issued a notice of assessment against KKK, Inc.
for deficiency real property taxes for the taxable years 2013 to 2017 in the
amount of PhP 20 million. KKK paid the taxes under protest and instituted a
complaint entitled “Recovery of Illegally and/or Erroneously-Collected Local
Business Tax, Prohibition with Prayer to Issue TRO and Writ of Preliminary
Injunction” with the RTC of Negros Occidental.
The RTC denied the application for TRO. Its motion for reconsideration
having been denied as well, KKK filed a petition for certiorari with the Court of
Appeals (CA) assailing the denial of the TRO.
Will the petition prosper? (5%)
SUGGESTED ANSWER:
No. The Court of Appeals (CA) has no jurisdiction over the case
considering that it is the CTA which has exclusive appellate jurisdiction over
cases involving local taxes decided by RTC in the exercise of latter’s original
jurisdiction.

The power of the CTA includes that of determining whether or not

there has been grave abuse of discretion amounting to lack or excess of
jurisdiction on the part of the RTC in issuing an interlocutory order in cases
falling within the exclusive appellate jurisdiction of the tax court. It, thus,
follows that it is the CTA, by constitutional mandate, which is vested with
jurisdiction to issue writs of certiorari in these cases (Philam Life v. Secretary
of Finance, G.R. No. 210987, November 24, 2014); hence, the petition filed
with the CA will not prosper.

XV
In 2015, Kerwin bought a three-story house and lot in Kidapawan, North
Cotabato. The property has a floor area of 600 sq.m. and is located inside a gated
subdivision. Kerwin initially declared the property as residential for real property
tax purposes.

15
 In 2016, Kerwin started using the property in his business of
manufacturing garments for export. The entire ground floor is now occupied by
state-of-the-art sewing machines and other equipment, while the second floor is
used as offices. The third floor is retained by Kerwin as his family’s residence.
Kerwin’s neighbors became suspicious of the activities going on inside the
house, and they decided to report it to the Kidapawan City Hall. Upon
inspection, the local government discovered that the property was being utilized
for commercial use. Immediately, the Kidapawan Assessor reclassified the
property as commercial with an assessment level of 50% effective January 2017,
and assessed Kerwin back taxes and interest. Kerwin claims that only 2/3 of the
building was used for commercial purposes since the third floor remained as
family residence. He argues that the property should have been classified as
partly commercial and partly residential.
(a) Is the Kidapawan assessor correct in assessing back taxes and
interest? (2.5%)
SUGGESTED ANSWER:
No. The assessor cannot assess back taxes and interest. Since this
involves a reassessment of real property due to a major change in its actual
use, the same cannot be given a retroactive effect. The reassessment shall
only be effective at the beginning of the quarter next following the
reassessment (Sec. 221, LGC).

(b) Is Kerwin correct that only 2/3 of the property should be considered
commercial? (2.5%)
SUGGESTED ANSWER:
Yes. The property must be classified, valued and assessed on the
basis of its actual use regardless of where located, whoever owns it, and
whoever uses it (Sec. 217, LGC).

ALTERNATIVE ANSWER:
No. One of the fundamental principles in the appraisal, assessment,
levy and collection of real property tax under Section 198 of the LGC is that
the real property shall be classified for assessment purposes on the basis of
its actual use. Section 199 of the LGC defines “actual use” as referring to the
purpose for which the property is principally or predominantly utilized by
the person in possession thereof. Hence, considering that, as admitted by
Kerwin, 2/3 of the property is used for commercial purposes, the entire
property must be classified as “commercial” for real property tax purposes.

16
 (c) If Kerwin wants to file an administrative protest against the
assessment, is he required to pay the assessment taxes first? With
whom shall the protest be filed and within what period? (2.5%)
SUGGESTED ANSWER:
(a) Yes. No protest shall be entertained unless Kerwin first pays the
tax. The words “paid under protest” must be annotated on the tax receipts
issued by the treasurer. The protest in writing must be filed with the
treasurer within 30 days from payment of the tax (Sec. 252, LGC).

XVI
In an action for ejectment filed by Kurt, the lessor-owner, against Kaka,
the lessee, the trial court ruled in favor of Kurt. However, the trial court first
required Kurt to pay the realty taxes due on the property for 2016 before he may
recover possession thereof.
Kurt objected, arguing that the delinquent realty taxes were never raised as
an issue in the ejectment case. At any rate, Kurt claimed that it should be Kaka
who should be made liable for the realty taxes since it was Kaka who possessed
the property throughout 2016.
Is Kurt correct in resisting the trial court’s requirement to pay the taxes
first? (2.5%)
SUGGESTED ANSWER:
No. The Court may require the payment of delinquent real property
taxes before ruling on the ejectment case. The law provides that in any
action involving the ownership or possession of, or succession to, real
property, the Court may, motu proprio upon representation of the local
treasurer, award such ownership, possession or succession to any party to
the action upon payment to the court of the taxes with interest due on the
property (Sec. 268, LGC). Kurt cannot invoke the possession by Kaka in
order to escape payment, because the delinquent real property tax is a lien
on the property superior to all liens (Sec. 257, LGC).

XVII
Kilusang Krus, Inc. (KKI) is a non-stock, non-profit religious organization
which owns a vast tract of land in Kalinga.
KKI has devoted 1/2 of the land for various uses: a church with a cemetery
exclusive for deceased priests and nuns, a school providing K to 12 education,

17
and a hospital which admits both paying and charity patients. The remaining 1/2
portion has remained idle.
The KKI Board of Trustees decided to lease the remaining 1/2 portion to a
real estate developer which constructed a community mall over the property.
Since the rental income from the lease of the property was substantial, the
KKI decided to use the amount to finance (1) the medical expenses of the charity
patients in the KKI Hospital and (2) the purchase of books and other educational
materials for the students of KKI School.
(a) Is KKI liable for real property taxes on the land? (2.5%)

SUGGESTED ANSWER:
Yes, but only on the leased portion. Article VI, Section 28(3) of the
1987 Constitution provides that “charitable institutions, churches and
personages or convents appurtenant thereto, mosques, non-profit
cemeteries, and all lands, buildings, and improvements, actually, directly,
and exclusively used for religious, charitable, or educational purposes shall
be exempt from taxation”. The test of exemption from taxation is the use of
the property for purposes mentioned in the Constitution. The leased portion
of the land may be subject to real property tax since such lease is for
commercial purposes, thereby, removing the asset from the property tax
exemption granted under the Constitution (CIR v. De La Salle University,
Inc., G.R. Nos. 196596, 198841, 198941, November 9, 2016).

(b) Is KKI’s income from the rental fees subject to income tax? (2.5%)
SUGGESTED ANSWER:
Yes. Despite falling under the organizations enumerated under Section
30 of the NIRC, the last paragraph of the same provision makes KKI’s
income of whatever kind and character from any of its properties, real or
personal, or from any of its activities conducted for profit regardless of the
disposition made of such income, subject to income tax (Sec. 30, NIRC last
paragraph).

XVIII
Kathang Isip, Inc. (KII) is a domestic corporation engaged in the business
of manufacturing, importing, exporting, and distributing toys both locally and
abroad. Its principal office is located in Kalookan City, Philippines. It has 50

18
branches in different cities and municipalities in the country. When KII applied
for renewal of its mayor’s permit and licenses in its principal office in January
this year, Kalookan City demanded payment of the local business tax on the basis
of the gross sales reported by the corporation in its audited financial statements
for the preceding year. KII protested, contending that Kalookan City may tax
only the sales consummated by its principal office but not the sales consummated
by its branch offices located outside Kalookan City.
When Kalookan City denied the protest, KII engaged the services of Atty.
Kristeta Kabuyao to file the necessary judicial proceedings to appeal the decision
of Kalookan City. Atty. Kabuyao is a legal expert, but resides in Kalibo, Aklan
where her husband operates a resort. She, however, practices in Metro Manila,
including Kalookan City. The counsel representing the city, in the case filed in
Kalookan City by KII, questioned the use of Atty. Kabuyao’s Professional Tax
Receipt (PTR) issued in Aklan for a case filed in Kalookan City.
(a) Is KII’s contention that Kalookan City can only collect local
business taxes based on sales consummated in the principal office
meritorious? (2.5%)
SUGGESTED ANSWER:
Yes. Section 150 of the Local Government Code (LGC) provides that
for purposes of collection of taxes on business, when the taxpayer is
operating a branch or sales outlet elsewhere, the tax on the sales made
therein shall accrue and shall be paid to the city or municipality where such
branch or sales outlet is located.

(b) Is the Kalookan City counsel correct in saying that Atty. Kabuyao’s
PTR issued in Aklan cannot be used in Kalookan? (2.5%)
SUGGESTED ANSWER:
No. As provided under Section 139 of the LGC, payment of Atty.
Kabuyao of her PTR in Aklan entitles her to practice her profession in any
part of the Philippines.

XIX
The BIR assessed Kosco, Inc., an importer of food products, deficiency
income and value-added tax, plus 50% surcharge after determining that Kosco
Inc. had under-declared its sales by an amount exceeding 30% of that declared in
its income tax and VAT returns. Kosco denied the alleged under-declaration,
protested the deficiency assessment for income and value-added taxes and
challenged the imposition of the 50% surcharge on the ground that the surcharge
may only be imposed if Kosco Inc. fails to pay the deficiency taxes within the
time prescribed for their payment in the notice of assessment.

19
 (a) Is the imposition of the 50% surcharge proper? (2.5%

SUGGESTED ANSWER:
Yes. As provided under Section 248(B) of the NIRC, 50% surcharge
on tax or on deficiency tax is also imposable in case a false or fraudulent
return is willfully made. Further, failure to report sales, receipts or income
in an amount exceeding 30% of that declared per return constitutes
substantial underdeclaration of sales and is prima facie evidence of a false or
fraudulent return. If not controverted, Kosco, Inc.’s underdeclaration of
sales is considered substantial as to consider the tax returns it filed as
falsified or fraudulent; hence, the imposition of 50% surcharge is proper.

(b) If your answer to (a) is yes, may Kosco enter into a compromise
with the BIR for reduction of the amount of surcharge to be paid?
(2.5%)
SUGGESTED ANSWER:
No. Surcharge is in the nature of a penalty, and not an internal
revenue tax that may be subject to compromise, pursuant to Section 204 of
the NIRC.

XX
Krisp Kleen, Inc. (KKI) is a corporation engaged in the manufacturing and
processing of steel and its by-products. It is both registered with the Board of
Investments, with a pioneer status, and with the BIR as a VAT entity. On
October 10, 2010, it filed a claim for refund/credit of input VAT for the period
January 1 to March 31, 2009 before the Commissioner of Internal Revenue
(CIR). On February 1, 2011, as the CIR had not yet made any ruling on its claim
for refund/credit, KKI, fearful that its period to appeal to the courts might
prescribe, filed an appeal with the Court of Tax Appeals (CTA).
(a) Can the CTA act on KKI’s appeal? (2.5%)
SUGGESTED ANSWER:
No. Pursuant to the pronouncement made the Supreme Court in the
case of Commissioner of Internal Revenue v. Aichi Forging Company of Asia,
Inc. (G.R. No. 184823, February 12, 2013), the observance of the “120+30-
day” period is jurisdictional. Now, counting 120 days from October 10, 2010,
the last day for the CIR to act on the claim for refund/credit fell on
February 7, 2011, thus making the February 1, 2011 filing premature.

20
 (b) Will your answer be the same if KKI filed its appeal on March 20,
2011 and CIR had not yet acted on its claim? (2.5%)
SUGGESTED ANSWER:
Yes. The filing on March 20, 2011 is still not compliant with the
“120+30-day” rule. As mentioned, the CIR has until February 7, 2011 to
decide on the claim for refund/credit of input VAT. After the lapse of the
120-day period, the taxpayer-claimant has 30 days to file an appeal before
the CTA. In the present case, KKI had until March 9, 2011 to file the appeal
based on a deemed adverse decision on the claim for refund/credit; hence,
the filing on March 20, 2011 was belatedly done, and the CTA has no
jurisdiction over such claim for refund/credit.

-NOTHING FOLLOWS-

21
 Training & Convention Division
University of the Philippines Law Center

SUGGESTED ANSWERS
to the
2018 BAR EXAMINATIONS IN
MERCANTILE LAW

Yeti Export Corporation {YEC), thru its President, negotiated for Yahoo
Bank of Manila {YBM) to issue a letter of credit to course the importation of
electronic parts from China to be sold and distributed to various electronic
manufacturing companies in Manila. YBM issued the letter of credit and forwarded
it to its correspondent bank, Yunan Bank (YB) of Beijing, to notify the Chinese
exporters to submit the bill of lading in the name of YBM covering the goods to be
exported to Manila and to pay the Chinese exporters the purchase price upon
verification of the authenticity of the shipping documents.

The electronic parts arrived in the Port of Manila, and YBM released them to
the custody of YEC as an entrustee under a trust receipt. When YEC unpacked the
imported parts in its warehouse, it found that they were not only of inferior quality
but also did not fit the descriptions contained in the bill of lading. YEC refused to
pay YBM the amount owed under the trust receipt. YBM thereafter commenced the
following:

(a) Civil suit to hold YB liable for failure to ensure that the electronic
parts loaded for exportation in China corresponded with those
described in the bill of lading. Is there any merit in the case against
YB? (2.5%)

SUGGESTED ANSWER:

(a) There is no merit in the case against YB. YB only acted as an

advising bank whose only obligation after determining the
apparent authenticity of the letter of credit is to transmit a copy
thereof to the beneficiary of the letter of credit. It has no obligation
to ensure that the goods loaded for exportation corresponded with
those described in the bill of lading (Bank of America v. Court of
Appeals, G..R No. 105395, Dec. 10, 1993). YB cannot be considered
a confirming bank, because to be one it must have assumed a
direct obligation to the seller as if it has issued the letter of credit

1
 (Marphil Export Corporation v. Allied Banking Corporation, (G.R.
No. 187922, September 21, 2016). YB not a negotiating bank
either, because it did not buy the draft of the beneficiary of the
letter of credit. Even if, however, YB acted as a confirming or
negotiating bank, such kind of correspondent bank has no similar
obligation to ensure that the goods shipped match with those
described in the bill of lading.

(b) Criminal suit against YEC and its President for estafa, and sought the
payment of the amount covered in the trust receipt. The defense of the
YEC President is that he cannot be held liable for a transaction of the
corporation, of which he only acted as an officer, and that it is YEC as
the principal that should be held liable under the trust receipt, which
was entered into in the name of YEC and pursuant to YEC's corporate
purposes. He cited as his legal ground the "Doctrine of Separate
Juridical Personality." Is the President's contention meritorious?
(2.5%)

SUGGESTED ANSWER:

(b) The President of YEC cannot invoke as a defense the doctrine of

separate juridical personality to avoid criminal liability. The law
specifically makes the director, officer or any person responsible
for the violation of the Trust Receipt agreement criminally liable
precisely for the reason that a Corporation, being a juridical
entity, cannot be the subject of the penalty of imprisonment.
Nevertheless, following the same doctrine of separate legal
personality, he cannot be civilly liable there being no showing that
he bound himself with YEC to pay the loan. Only YEC is liable to
pay the loan covered by the letter of credit/trust receipt [Ching v.
Secretary of Justice, (G. R. No. 164317, February 6, 2006 and
Section 13 of PD 115)].

2
 II.

Yolanda executed and signed a promissory note with all the requisites for
negotiability being present, except for the amount which was left blank. She kept
the promissory note in her desk and decided to place the amount at a later date. The
indicated payee, Yohann, managed to obtain the promissory note from Yolanda's
desk and filled out the amount for the sum of PhP 10 million, which was the
amount actually lent by him to Yolanda, but excluding the agreed interest. Yohann
later endorsed and delivered the check to Yvette, under circumstances that would
constitute the latter to be a holder in due course.
(a) May Yvette hold Yolanda liable on the note? (2.5%)

SUGGESTED ANSWER:

(a) Yvette cannot hold Yolanda liable on the note. This is a case of
incomplete and undelivered instrument, insofar as Yolanda is
concerned. Where an incomplete instrument has not been
delivered, it will not, if completed and negotiated without
authority, be a valid contract in the hands of any holder, including
a holder in due course as against Yolanda, whose signature was
placed thereon before delivery (Section 15 of the Negotiable
Instruments Law [NIL]).

(b) Would your answer be the same if the promissory note was actually
completed by Yolanda (including the amount of PhP 10 million), but
stolen from her desk by Yohann? Can Yvette enforce the note against
Yolanda? (2.5%)

SUGGESTED ANSWER:

(b) The answer will not be the same. Now that the instrument is
complete but undelivered and in the hands of Yvette, a holder in
due course, a valid and intentional delivery to make all parties
prior to Yvette liable is conclusively presumed under Section 16 of
the NIL, therefore, Yvette can hold Yolanda , a prior party, liable.
A complete but undelivered instrument is only a personal defense
not available againt a holder in due course.

3
 III

On November 23, 2017, Yas Ysmael loaned the amount of PhP 5 million to
Yarn & Thread Corporation (YTC), through its President, Ylmas
Yektas (Yektas), which loan was evidenced by a Promissory Note
(PN), which reads as follows:

Date: _______________

Within one year from date hereof, I promise to pay to the order of YAS
YSMAEL, the sum of PhP5,000,000 with interest at 120% per
annum.

YARN & THREAD Corporation

By:

(Sgd.)
Ylmas Yektas

Yektas was the controlling stockholder of YTC at the time the PN was
issued. As security for the payment of the PN, Yektas issued and
delivered to Yas Ysmael a postdated personal check covering the face
value of the PN drawn from his account with Yellow Bell Bank and
Trust Company (YBTC). The proceeds of the loan under the PN were
used by YTC as working capital.

A year later, Yas Ysmael inserted the date of “ November 23, 2017” on the
date section of the PN, and made a formal demand upon YTC, through
Yektas, to pay the note, but which was refused on the ground that
Yektas was no longer the President and controlling shareholder of
YTC. By this time, all the shares of YTC had already been sold to a
new group of investors. Yas Ysmael deposited the personal check
issued by Yektas which bounced. He then filed a collection suit
against YTC and Yektas including the accrued interest.

The defendants raised the following defenses in the collection suit. Rule on
the merits of each defense. (2% each)

(a) A PN issued with a blank date is one that is not payable on demand or
on a fixed or determinable future time, and therefore the insertion of
the date constituted material alteration that nullified it, so that no cause
of action arose.

4
SUGGESTED ANSWER:

(a) The defense is not meritororious. Where the instrument is not

dated, it will be considered to be dated as of the time it was issued

(Section 17 of NIL (c)). Section 14 of NIL also concedes to the

payee the prima facie authority to fill-in the blanks in a negotiable
instrument. Such prima facie stands in the absence of evidence to
the contrary.

(b) Yektas cannot be made liable on the PN since he signed in his capacity
as President of YTC, which fact was known to Ysmael although not
indicated on the PN.

SUGGESTED ANSWER:

(b) The defense is not meritorious. Where the instrument contains, or

a person adds to his signature words indicating that he signs for or
on behalf of a principal or in a representative capacity, he must
disclose his principal and must indicate that he is acting on benalf
of his principal (Section 20 of NIL).

ALTERNATIVE ANSWER:
(b) The defense is meritorious. Since the matter of signing the note by
Yektas on behalf of YTC is known to Ysmael, then, Yektas has no
personal liability as it may be inferred from the note that he is
acting only in a representative capacity.

(c) Yektas signed the PN merely as an accommodation to YTC. As he

received no consideration for the PN, it is void for lack of
consideration.

SUGGESTED ANSWER:
(c) The defense is not meritorius. An accommodation party signs a
negotiable instrument as a maker, drawer, endorser, acceptor
without receiving value therefor and only for the purpose of
lending his name in another, he is liable to a holder for value

5
 notwithstanding that such holder, at the time of taking the
instrument, knew him only to be an accommodation party
(Section 29 of NIL).

(d) YTC, now owned by new owners, cannot be held liable on the PN
since it was entered into by its former owner and President, which act
the new Board of Directors did not ratify.

SUGGESTED ANSWER:
(d) The defense is not meritorius. In stock sales, where shareholder
sell a block of stock to new or existing shareholders, the
transaction takes place at the shareholder level only. Because the
corporation has a legal personality separate and distinct from that
of its shareholders, a change in the composition of shareholders
will not affect its existence or extinguish its separate legal
personality (SME Bank v. Samson, (G.R. No. 186641, October 8,
2013)).

(e) The PN is void for being in violation of the Usury Law seeking interest
at an unconscionable rate of 120% p.a.

SUGGESTED ANSWER:
(e) The defense is not meritorius. The Usury law is currently
suspended in view of CB Circular 905 series of 1982, which lifted
the ceiling on interest rate for loans. If the interest rate is deemed
to be unconscionable by the courtdespite the absence of the Usury
Law, the legal rate of interest shall be deemed to apply; thus, the
PN remains valid.

ALTERNATIVE ANSWER:

(e) The PN remains valid, because the obligation to pay the principal
amount of the loan is distinct from the obligation to pay the
interest on the loan.

6
 IV
Ysidro, a paying passenger, was on board Bus No. 904 owned and operated
by Yatco Transportation Company (“Yatco”). He boarded the bus at Munoz, Nueva
Ecija with Manila as his final destination. He was seated on the first row, window
seat on the left side of the bus. As the bus was negotiating the national highway in
front of the public market of Gerona, Tarlac, the bus came to a full stop because of
the traffic. The driver of the bus took this opportunity to check on the tires of the
bus and to relieve himself. As he was alighting from the bus to do these, an
unidentified man standing along the highway hurled a huge rock at the left side of
the bus and hit Ysidro between his eyes. He lost consciousness and immediately the
driver, with the conductor, drove the bus to bring him to the nearest hospital. He
expired before the bus could reach the hospital.

Ysidro’s wife and children brought a civil action to collect damages from
Yatco, alleging that, as a common carrier, it was required to exercise extraordinary
diligence in ensuring the safety of its passengers. They contended that in case of
injuries and/or death on the part of any of its passengers, the common carrier is
presumed to be at fault. In its defense, Yatco alleged that it is not an absolute
insurer of its passengers and that Ysidro’s death was not due to any defect in the
means of transport or method of transporting passengers, or the negligent acts of its
employees. Since the accident was due to the fault of a stranger over whom the
common carrier had no control, or of which it did not have any prior knowledge to
be able to prevent it, the cause of Ysidro’s death should be considered a fortuitous
event and not the liability of the common carrier.

(a) Is a common carrier presumed to be at fault whenever there is death or

injury to its passengers, regardless of the cause of death or injury?
(2.5%)

SUGGESTED ANSWER:

(a) Yes, by express provision of law, in case of death or injuries to

passengers, common carriers are presumed to have been at fault
or to have acted negligently, unless they prove that they exercised
extraordinary diligence (Art. 1756 of the Civil Code).

(b) What kind of diligence is required of common carriers like Yatco for
the protection of its passengers? (2.5%)

SUGGESTED ANSWER:

(b) A common carrier is bound to carry the passengers safely as far as

human care and foresight can provide, using the utmost diligence
of a very cautious person with a due regard for all the
circumstances or simply put, with extraordinary diligence (Art.
1755 of the Civil Code).

7
 (c) Will your answer be the same as your answer in (b) above, if the
assailant was another paying passenger who boarded the bus and
deliberately stabbed Ysidro to death? (2.5%)

SUGGESTED ANSWER:

(c) My answer will be different. A common carrier is responsible for

death or injuries caused by wilfull acts of other passengers or
strangers, only if the common carrier’s employees through the
exercise of the diligence of a good father of a family could have
prevented the act (Art 1763 of the Civil Code; GV. Florida
Transport v. Heirs of Romeo Battung, Jr, (G.R. No. 208802,
October 14, 2015).

Yellow Fin Tuna Corporation (Yellow Fin), a domestic corporation, applied

for a credit facility in the amount of PhP 50 million with Yengzi Financial
Corporation (YFC). The application was approved and the Credit Agreement was
signed and took effect. Ysko and Yuan, Yellow Fin Chairman and President,
respectively, executed a Continuing Suretyship Agreement in favor of YFC wherein
they guaranteed the due and full payment and performance of Yellow Fin’s
guarantee obligations under the credit facility. YFC soon discovered material
inconsistencies in the financial statements given by Yellow Fin, drawing YFC to
conclude that Yellow Fin committed misrepresentation. Under the Credit
Agreement, any misrepresentation by Yellow Fin or its sureties will constitute an
event of default. YFC thus called an event of default and filed a complaint for sum
of money against Yellow Fin, Ysko, and Yuan. Immediately thereafter, Yellow Fin
filed a petition for rehabilitation. The court suspended the proceedings in YFC’s
complaint until the rehabilitation court disposed of the petition for rehabilitation.
YFC posits that the suspension of the proceedings should only be with respect to
Yellow Fin but not with respect to Ysko and Yuan. Is YFC correct? (2.5%)

SUGGESTED ANSWER:

YFC is correct. Actions or proceedings against the surety of the insolvent

debtor that filed a petition for rehabilitation are not subject to the stay order;
consequently, the suit may continue against him (Section 18 (c) of FRIA).

8
 VI.

Shortly after Yin and Yang were wed, they each took out separate life
insurance policies on their lives, and mutually designated one another as sole
beneficiary. Both life insurance policies provided for a double indemnity clause,
the cost for which was added to the premium rate. During the last 10 years of their
marriage, the spouses had faithfully paid for the annual premiums over the life
policies from both their salaries. Unfortunately, Yin fell in love with his
officemate, Yessel, and they carried on an affair. After two years, their relationship
bore them a daughter named Yinsel. Without the knowledge of Yang, Yin changed
the designation of the beneficiary to an "irrevocable designation" of Yinsel and
Yessel jointly. When Yang learned of the affair, she was so despondent that, having
chanced upon Yin and Yessel on a date, she rammed them down with the car she
was driving, resulting in Yin's death and Yessel's complete loss of mobilization.
Yang was sued for parricide, and while the case was pending, she filed a claim on
the proceeds of the life insurance of Yin as irrevocable beneficiary, or at least his
legal heir, and opposed the claims on behalf of Yessel and her daughter Yinsel.
Yang claimed that her designation as beneficiary in Yin's life insurance policy was
irrevocable, in the nature of one "coupled with interest," since it was made in
accordance with their mutual agreement to designate one another as sole beneficiary
in their respective life policies. She also claimed that the beneficiary designation of
Yessel and the illegitimate minor child Yinsel was void being the product of an
illicit relationship, and therefore without "insurable interest."

(a) Is Yang correct in saying that her designation as beneficiary was

irrevocable? (2.5%)

SUGGESTED ANSWER:

(a) Yang is not correct. The insured shall have the right to change the
beneficiary he designated in the policy, unless he has expressly
waived this right in the policy. There is nothing in the life
insurance policy taken by Yang which indicated that the
designation of Yin is irrevocable. As such, it is deemed to be
revocable.

(b) Do Yessel and Yinsel have “insurance interest” on the life of Yin?
(2.5%)

SUGGESTED ANSWER:
(b) Yessel has no insurable interest on the life of Yin, because she can
not be lawfully designated as beneficiary. Persons who are
proscribed to become donees under the rules on donation cannot
be designated as beneficiary in life insurance. These include

9
 persons in illicit relations as in the case of Yin and Yessel. Yinsel,
however, has insurable interest on the life of Yin. There is no
proscription in naming an illegitimate child as a beneficiary (Heirs
of Loreta Maramag v. Maramag, (G.R. No. 181132, June 5, 2009)).

VII

Pictures Inc., a movie production company based in California, USA, entered

into a contract with Yehey Movies Inc., a Filipino movie production and
distribution company which is registered in the Philippines under the Securities
Regulation Code (SRC) and listed in the Philippine Stock Exchange Inc. (PSE), for
the exclusive distribution in the Philippines of movies produced in the USA by
Yelp Pictures Inc. Yehey Movies is currently owned 85% by Yavic Yamson, and
the balance, by the public in the Philippines. For purposes of entering into the
contract, suing for breach of such contract, and prosecuting unauthorized showing
of movies produced by Yelp Pictures, it appointed Atty. Yson, a local lawyer, as its
attorney-in-fact.

Simultaneously with the execution of the film distribution agreement, Yehey

Movies also granted Yelp Pictures an option to acquire up to 40% of the total
outstanding capital stock in Yehey Movies post-exercise of the option, at the option
price of PhP .01 per number of shares covered by the option, exercisable within a
period of one year from the date of the grant, at the exercise price of PhP 100 per
share. Once exercised, Yelp Pictures was granted the right to nominate two (2)
directors to the Board of Yehey Movies, and Yavic Yamson agreed to vote all his
shares for the election of directors to be nominated by Yelp Pictures.

(a) May the acts of entering into the film distribution contract, the
subsequent execution and performance of the terms of the contract in
the Philippines, and the appointment of Atty. Yson, be considered as
act of “doing business” in the Philippines that will require Yelp
Pictures to register as a foreign corporation and obtain a license to do
business in the Philippines? (2.5%)

SUGGESTED ANSWER:

(a) A foreign Corporation which owns the Copyright to foreign films

and exclusive distribution rights in the Philippines and appointed
an attorney in-fact to file criminal cases on behalf of the
corporation is not doing business in the Philippines, because the
contract was executed abroad and the hiring of the attorney-in-
fact is merely for the protection of its property rights [Columbia
Pictures vs Court of Appeals (261 SCRA 144 (1996)].

10
 (b) Will your answer in (a) be the same if Yelp Picture exercises the
option, becomes a substantial shareholder, and is able to elect two (2)
directors in the Board of Directors of Yehey Movies? (2.5%)

SUGGESTED ANSWER:

(b) It will be the same. Mere passive investment in equity and voting
the equity shares of the corporation to elect its director in the
board of a domestic corporation is not tantamount to doing
business.

(c) Must the option granted to Yelp Pictures be registered under the SRC?
(2.5%)

SUGGESTED ANSWER:
(c)

(c) While options are securities, the option was granted only to Yelp
Pictures and not to the public. As a consequence, the option need
not be registered with the SEC.

VIII

Yenkell Cement Corporation (YCC) is a public corporation whose shares are

listed at the PSE. It is 60% owned by Yenkell Holdings Corporation (YHC) and
20% by Yengco Exploration Inc. (YEI). The remaining 20% is held by the public.

YHC is a private non-listed corporation which, in turn, is 60% owned by

Yatlas Mines Inc. (YMI), and 40% by Yacnotan Consolidated Inc. (YCI). On
August 8, 2008, the Board of Directors of YEI passed a resolution approving the
acquisition of 50% and 25% of the shares held by YMI and YCI, respectively, in
the authorized capital stock of YHC.

Yolly, one of the staff members in the office of the Corporate Secretary of
YEI was immediately asked to type the resolution and file the disclosure with the
PSE and the Securities and Exchange Commission (SEC). Before doing that, she
secretly called her brother who works with a stock brokerage company, to purchase,
in the name of Yolly’s husband, 5,000 shares in YCC. After the acquisition was
disclosed to the SEC and the PSE, the market price of YCC increased by 50%.

(a) In acquiring 75% of the total capital stock of YHC, should YEI be
required to do a mandatory tender offer? (2.5%)

SUGGESTED ANSWER:

(a) In acquiring 75% of the total capital stock of YCC, YEI should be
required to do a mandatory tender offer. By acquiring the

11
 combined 75% shareholdings of YMI and YCIin YCC, YEI
effectively owns 45% of YCC. Add that to the 20% it directly owns
in YCC, YEI now owns and controls 65% of YCC. Once a person
singly or in concert with others acquires more than 50% of the
voting stock of a public company, the mandatory tender offer rule
applies. The tender offer rule covers not only direct acquisition
but also indirect acquisition or any type of acquisition. Whatever
may be the method by which control of a public company is
obtained either through the direct purchase of its stocks or
through indirect means, mandatory tender offer rule applies
(Cemco Holdings v. National Life Insurance Company, [529 SCRA
(2007).

(b) Can Yolly be held liable for insider trading? (2.5%)

SUGGESTED ANSWER:
(b) Yolly cannot be held liable for insider trading. Insider trading is
the buying and selling of securities by an insider while in the
possession of a material non-public information. While Yolly is an
insider, because she has access to material non-public information
by reason of her relationship with the Issuer, she did not, however,
buy or sell securities. She is liable, however, for having
communicated material non-public information about the issuer to
any broker who by virtue of such communication becomes an
insider considering that Yolly, the insider communicating the
information knows or has reason to believe that the broker will
likely buy or sell a security of the issuer while in possession of such
information (Section 27.3 of the SRC). The law makes no
distinction that the insider is buying for himself or for the account
of another, as such, it is immaterial that the broker purchased
securities for the account of Yolly’s husband. The information
about the MTO is also material as it will likely affect the decision
of a reasonable person to buy or sell the securities.

12
 IX

Yangchou lnc.'s (YI) Articles of Incorporation (AOI) provides for two (2)
types of shares of stock: common and preferred shares. Its AOI further provides that
"the preferred shares shall have a guaranteed annual dividend of 3% of the par
value." Its By-Laws also specifically provides that "preferred shareholdings shall be
cumulative and participating." No other terms of preference are provided for
preferred shares in either the AOI or By-Laws of YI.

For the first five years of operations, the company was operating at a loss. At
the end of the sixth year, YI realized a net profit of PhP 100 million, and
unrestricted retained earnings of PhP 30 million. The YI Board of Directors
declared and paid out dividends of 1 % on common shares, and 5% on preferred
shares, which amounted to a total of PhP 30 million.

However, the preferred shareholders made a formal demand that they be

given an additional 3% dividend for each of the five (5) years based on the
preferred shares features of "cumulative and participating," and an additional 1 %
given to the common shareholders, which could all be accommodated within the
remaining balance of the net profits.

Should Vi's Board heed the demand of its preferred shareholders? (2.5%)

SUGGESTED ANSWER:

YI’s Board should not heed the demand of its preferred shareholders.
While the preferred shares are cumulative and participating, the holders
thereof are entitled to dividends only if the unrestricted retained earnings are
sufficient to pay such dividends. Dividends are declared based on unrestricted
retained earnings and not on the amount of net profit Republic Planters Bank
v. Agana, (G.R. No. 51765, March 3, 1997; Section 43 of the Corporation Code).

ALTERNATIVE ANSWER:

The dividends paid to the holders of the common shares should be

recalled and added to the dividends due to the holder of the preferred shares.
Holders of common shares are entitled to receive dividends only after the
dividends due to the holder of preferred shares shall have been fully paid.

Ybarra is the registered shareholder of 500 shares in Yakal Inc., of which

only 50% has been paid up, but for which the corporation had erroneously issued a
covering certificate of stock for the entire 500 shares. Ybarra sells the entire 500

13
shares for cash pursuant to a notarized Deed of Sale in favor of Ynchon, and which
certificate was duly endorsed and delivered. When Ynchon presented the Deed of
Sale and the endorsed certificate of stock, as well as proof of payment to the Bureau
of Internal Revenue (BIR) of the tax due on the sale of shares, the Corporate
Secretary of Yakal Inc. refused to register the sale on the ground of lack of written
authority from Ybarra to cancel the certificate and have the shares registered in the
name of Ynchon.

(a) Does Ynchon have a cause of action to file a petition for mandamus to
compel the corporation to register the 500 shares in his name in the
corporation books? (2.5%)

SUGGESTED ANSWER:

(a) Yes, Ynchon has a cause of action to file the petition for
mandamus to compel the corporation to register the 500 shares in
the corporation’s books. In Andaya v. Rural Bank of Cabadbaran,
(G.R. No. 188769, August 3, 2016), the Supreme Court abandoning
its previous ruling in (Ponce v. Alsons Cement) ruled that the
transferees of shares of stock are real parties in interest having a
cause of action for mandamus to compel registration of the
transfer and the corresponding issuance of stock certificates even
without the written authority from the seller to cancel the
certificate and register the shares in the books of the corporation.

(b) Who is liable to pay the remaining unpaid 50% balance - Ybarra or
Ynchon? (2.5%)

SUGGESTED ANSWER:

(b) Ynchon should be the one to pay the remaining balance but
without prejudice to his right to recover from Ybarra. The effect
of the sale of the shares was to extinguish the obligation of the
seller to the Corporation to pay whatever is the balance in the
contract of subscription. The sale of shares to the buyer with the
consent of the corporation effectively resulted in novation
(Interport Resources Corporation v. Securities Specialist Inc., G.R.
No. 154069, June 6, 2016).

14
 XI

Yenetic Corporation wants to increase its Authorized Capital Stock (which is

currently fully subscribed and issued) to be able to increase its working capital to
undertake business expansions.

The Board of Directors consults with you as legal counsel on the proper
answers to the following issues: (2.5% each)

(a) Can Yenetic's AOI be formally amended to remove the right of

appraisal on all dissenting stockholders in all matters under the law
which requires a ratification vote of the stockholders?

SUGGESTED ANSWER:

(a) Yenetic’s AOI cannot be amended to remove the appraisal right

of the stockholders on matters requiring their approval in cases
where the law grants them such appraisal right, like :
i) In case any amendment to the articles of incorporation has
the effect of changing or restricting the rights of any
stockholder or class of shares, or of authorizing preferences in
any respect superior to those of outstanding shares of any
class, or of extending or shortening the term of corporate
existence;
ii) In case of sale, lease, exchange, transfer , mortgage, pledge or
other disposition of all or substantially all of the corporate
property and assets;
iii) In case of merger (Section 81 of the Corporation Code);
iv) In case of investment of funds in the secondary purpose of the
corporation or another business (Section 42).
Appraisal right is a statutory right. It cannot be denied
to the stockholders in cases where the law allows such right.
For all the other matters under the Corporation Code which
require ratificatory approval of the shareholders, the AOI
may be formally amended to remove appraisal right, because
the right does not exist anyway in those cases.

(b) If the increase in Authorized Capital Stock is formally submitted to the

stockholders in a meeting duly called for the purpose, what is the vote

15
 necessary for the stockholders’ ratification, and would the dissenting
stockholders have a right to exercise their right of appraisal?

SUGGESTED ANSWER:

(b) Any provision or matter stated in the AOI may be amended by a

majority vote of the board of directors and the vote or written
assent of the stockholders representing at least 2/3 of the
outstanding capital stock. Stockholders cannot exercise any
appraisal right in case of amendment to the articles of
incorporation to increase capital stock, because this is not one of
the cases allowed by law where appraisal right may be exercised
(Articles 81 and 42 of the Corporation Code).

(c) Once the increase in the Authorized Capital Stock of Yenetic has been
legally effected with the SEC, can the new shares from the unissued
shares be offered to a new limited group of investors without having to
offer them to the shareholders of record since no pre-emptive right is
provided for in the AOI and By-laws of Yenetic?

SUGGESTED ANSWER:

(c) The new shares from the unissued shares cannot be validly offered to a
new limited group of investors without having to offer to shareholders
of record, as pre-emptive rights are not explicitly denied in the AOI.
Section 39 of the Corporation Code provides that all stockholders of a
stock corporation shall enjoy pre-emptive right to subscribe to all
issues or disposition of shares of any class, in proportion to their
respective shareholdings. There need not be an explicit grant of pre-
emptive rights in the AOI for it to exercised.

XII

Yashtag Holdings, lnc.'s (Yashtag Holdings) AOI states that its primary
purpose is "to invest in real and personal properties of every kind or otherwise
acquire and deal with stocks, bonds, and other securities or evidence of
indebtedness of any other corporation, and to hold or to own, use, sell, deal in, and
dispose of, any such stock." It further states that it has an authorized capital stock of
PhP 1 million, all of which have been fully subscribed and paid up.

Yashtag Holdings' President, Mr. Yokada, convinced Yeh, Yah, and Yo to

lend/invest money with Yashtag, which money will be invested in a sister company,
Yashtag Realty, Inc. (Yashtag Realty), a corporation that develops premium real
estate projects in the Philippines. For the amount loaned/invested, Yashtag

16
Holdings issued two (2) postdated checks to each lender/investor, one representing
the principal amount, and the other covering the guaranteed interest that ranged
between 18-32% p.a. On the maturity dates of the checks, the individual
lender/investor can review the loans/investment, and may either collect only the
interest or roll over the same with the principal amounts. Eventually, the bursting of
the real estate bubble brought about a serious financial crisis around the world,
including the Philippines. Yashtag Realty collapsed and with it Yashtag Holdings
defaulted in the payment of its loans/investments, as well as the dishonor of the tens
of thousands of postdated checks issued to its various lenders/investors.

Yeh, Yah, and Yo filed several charges against Yashtag Holdings and its
President, making them solidarily liable for the investments they failed to recover.
Yeh, Yah, and Yo proved that Yashtag Holdings, acting through Mr. Yokada, was
able to get a total of PhP 800 million of loans/investments from the public under the
scheme, and from which Mr. Yokada, as the controlling stockholder, was able to
withdraw a total amount of PhP 300 million for his personal account and entered
into the books of Yashtag Holdings as "Advances to Stockholders." Mr. Yokada
pleads as a defense that he cannot be made personally liable on the claim of the
group under the doctrines of "Separate Juridical Personality" and "Limited
Liability."

(a) What are the doctrines of "Separate Juridical Personality" and "Limited
Liability"? (2.5%)

SUGGESTED ANSWER:

(a) The doctrine of separate juridical personality is a principle of law

which ordains that the corporation has a separate legal personality
from the stockholders, directors and officers composing it. The
limited liability rule, on the other hand, means that the liability of
a stockholder who is not a director, officer or agent of the
corporation, is limited to his subscription to the capital stock of the
corporation.

ALTERNATIVE ANSWER:

[NOTE: The following answer should also be given credit because the
question may be construed as to whether this defense is pertinent
under the second question].
(a) The limited liability rule, also known as the real or the
hyphotecary nature of maritime law, simply means that that the
liability of the shipowner or ship agent arising from the
transportation of goods and passengers is limited to their interest

17
 in the vessel which is hyphotecated for such obligations or which
stands as a guaranty for their settlement. This rule may be best
explained by the doctrine, “no vessel, no liability” [Aboitiz Shipping
Corporation v. General Accident Fire and Life Assurance
Corporation, 217 SCRA 359, (1993)].

(b) Decide on the merits of Mr. Yokada’s defense against being made
liable for Yashtag Holdings’ obligations. (2.5%)

SUGGESTED ANSWER:
(b) Yokada cannot validaly invoke the doctrine of separate juridical
personality and limited liability. Yokada acted in bad faith in
withrawing 300M for his personal account. Having acted in bad
faith, he becomes solidarily liable with the corporation;
furthermore, having issued securities to the public without prior
approval of the SEC is also another basis to hold him solidarily
liable with the issuer corporation.

ALTERNATIVE ANSWER:

NOTE: (b) It is respectfully suggested that an examinee who answers that the
limited liability rule is a maritime law concept and has no bearing to
the issue, should also be given credit.

XIII

YBC Bank extended a loan of PhP 50 million to Mr. Yamato secured by a

real estate mortgage (REM) on a large tract of land. The covering Transfer
Certificate of Title (TCT) of the property mortgaged did not indicate any
encumbrance or lien on it, and the bank was able to obtain a certified true copy of
the TCT from the Register of Deeds showing that the owner's copy submitted to the
bank was a genuine title. The Loan Agreement provided an escalation clause which
stated that, at the anniversary date of the loan, YBC Bank was granted the option to
increase the interest rate whenever there would be an increase in the Bangko Sentral
ng Pilipinas' prevailing rates. Three years later, Mr. Yamato received a formal
notice from YBC Bank raising the interest rate of the loan based on the escalation
clause provided for in the Loan Agreement. Mr. Yamato refused to pay based on
the increased interest rate that was effected without his consent. YBC Bank insists
on the binding effect of the escalation clause appearing on their Loan Agreement.

18
 Mr. Yamato subsequently defaulted on the loan and vanished. Thus, YBC
Bank extrajudicially foreclosed on the REM, and was the highest bidder at the
public auction sale. It was only then that the bank determined that there were
actually two separate TCTs issued for the property and one of which was in the
name of Mr. Yamsuan who occupied the property after having bought it earlier
from Mr. Yamato.

(a) Can YBC Bank unilaterally increase the interest rates on the loan?
(2.5%)

SUGGESTED ANSWER:

(a) YBC Bank cannot unilaterally increase the interest rates on the
loan. A stipulation allowing the bank to increase the interest rate
unilaterally is a solely-potestative condition which violates the
principle of mutuality of contracts and as such is null and void
[PNB v. Padilla SCRA 259 SCRA 174 (1991)].

(b) Is YBC Bank a mortgagee buyer in good faith? Is it preferred over Mr.
Yamsuan? (2.5%)

SUGGESTED ANSWER:

(b) YBC Bank is not a mortgagee-buyer in good faith. As a bank, it

should have exercised due diligence to determine who the actual
and true owner of the real property is prior to the grant of the
loan; also, Yamsuan, being the first buyer, has a prior right to the
property.

XIV

On June 21, 2008, Yate took out a life insurance policy on her life in the
amount of PhP 10 million and named her husband Vandy and daughter as joint
irrevocable beneficiaries. Before the policy was issued and the premiums were paid,
Yate underwent a medical checkup with a physician accredited by the insurer, and
the only result found was that she was suffering from high blood pressure. Yate was
previously diagnosed by a private physician of having breast cancer which she did
not disclose to the insurer in her application, nor to the insurer's accredited
physician because by then, she was told that she was already cancer-free after
undergoing surgery which removed both her breasts. She was later diagnosed with
psychotic tendency that graduated into extreme despondency. She was found dead
hanging in her closet 36 months after the issuance of the policy. The police
authorities declared it to be a case of suicide. The policy did not include suicide as
an excepted risk.

19
 (a) Can the insurer raise the issue of failure to disclose that she had cancer
as a cause for denying the claim of the beneficiaries? (2.5%)

SUGGESTED ANSWER:

(a) The insurer cannot raise the issue of concealment, because only
material facts known to the insured at the time of the issuance of
the policy should be disclosed to the insurer (Section 28 of the
Insurance Code). Yate’s previous cancer diagnosis is no longer a
material fact at the time she procured the policy.

(b)
Are the beneficiaries entitled to receive the proceeds of the life
insurance notwithstanding the fact that the cause of death was suicide?
(2.5%)
SUGGESTED ANSWER:

(b) Yes, the beneficiaries are entitled to received the proceeds. The
rule is that the insurer in life insurance is liable in case of suicide
only when it is committed after the policy has been in force for a
period of two years from the date of issue or last reinstatement.
The rule, however, admits of an exception so that when suicide is
committed in the state of insanity, it shall be compensable
regardless of the date of commission (Section 183 of the Insurance
Code). In the facts given, Yate was diagnosed with psychotic
tendency that graduated into extreme despondency; thus, even
though Yate committed suicide 36 months from issuance of the
policy, the insurer is liable.

XV

A distinctive-tasting pastillas is well-known throughout the country as having

been developed within a close-knit women's group in Barangay San Ysmael which
is located along a very busy national highway. Its popularity has encouraged the
setting up of several shops selling similar delicacies, with the most famous product
being the pastillas of "Barangay San Ysmael." Eventually, the pastillas of Aling
Voling under the brand name "Ysmaellas" began to attract national distinction.
Aling Voling therefore registered it as a copyright with the National Library. Her
neighbor, Aling Yasmin, realizing the commercial value of the brand, started using
the term "Ysmaellas" for her pastillas but used different colors. Aling Yasmin
registered the brand name "Ysmaellas" with the Intellectual Property Office (IPO).

20
 (a) Can Aling Voling successfully obtain court relief to prohibit Aling
Yasmin from using the brand name "Ysmaellas" in her products on the
basis of her (Aling Yoling's) copyright? What is the difference between
registration as a copyright and registration as a trade or brand name?
(2.5%)

SUGGESTED ANSWER:

(a) Aling Yoling cannot successfully obtain court relief to prohibit

Aling Yasmin from using the brand name “ Ysmaellas “ in her
product on the basis of Aling Yoling’s copyright. The brand name
“ Ysmaellas “ is proper subject of trademark, not copyright. They
can not be interchanged. The copyright on a trade name or mark
does not guarantee her the right to the exclusive use of the same
for the reason that it is not a proper subject of said intellectual
right (Kho v. Court of Appeals, (G.R. No. 115758, March 19, 2002);
Juan v. Juan, (G.R. No. 221372, August 23, 2017)).
The registration of a copyright is only a proof of the
recording of the copyright but not a condition precedent for the
copyright to subsist and for copyright infringement suit to
prosper; whereas, registration of a trademark is an indispensable
requisite for any trademark infringement suit.

(b) Can Aling Yasmin seek injunctive relief against Aling Yoling from
using the brand name “Ysmaellas,” the latter relying on the doctrine of
“prior use” as evidenced by her prior copyright registration? (2.5%)

SUGGESTED ANSWER:

(b) Aling Yasmien can seek injunctive relief against Aling Yoling from
using the brand name “ Ysmaellas “ because of the doctrine of
prior use. It is ownership of the trademark that confers the right to
register. Registration does not confer ownership. Since Aling
Yasmin was the first one to use the brand or trade name in
commerce, then she is considered the owner thereof [EY Industrial
Sales v. Shen Dar 634 SCRA 363(2010)].

21
 (c) Can Aling Yoling seek the cancellation of Aling Yasmin’s trademark
registration of the brand name “Ysmaellas” on the ground of “Well
Known Brand” clearly evidenced by her (Aling Yoling’s) prior
copyright registration, actual use of the brand, and several magazine
coverages? (2.5%)

SUGGESTED ANSWER:

(c) NO, Aling Yoling can not seek the cancellation of Aling Yasmin’s
trademark registration of the brand name “ Ysmaellas on the
ground of well-known brand, because the well- known mark rule
only applies to a mark which is well-known internationally and in
the Philippines [Section 123 ( E ) of the Intellectual Property Code].
She, however, can seek the cancellation of the trademark for being
the prior user even though the mark is not well-known.

XVI

Yosha was able to put together a mechanical water pump in his garage
consisting of suction systems capable of drawing water from the earth using less
human effort than what was then required by existing models. The water pump
system provides for a new system which has the elements of novelty and inventive
steps. Yosha, while preparing to have his invention registered with the IPO, had
several models of his new system fabricated and sold in his province.

Is Yosha’s invention no longer patentable by virtue of the fact that he had

sold several models to the public before the formal application for
registration of patent was filed with the IPO? (2.5%)

SUGGESTED ANSWER:

(a) Yosha’s invention is still patentable despite the fact he had sold
several models to the public before the formal application for
registration of the patent was filed with the IPO. It is true that an
invention shall not be considered new if it forms part of a prior art
and that prior art shall consist of everything which has been made
available to the public anywhere in the world, before the filing
date or the priority date of the application claiming the
invention.This, however, presupposes that the one who has made
available the patentable invention to the public is a person other
than the applicant for patent.

22
 (b) If Yosha is able to properly register his patent with the IPO, can he
revent anyone who has possession of the earlier models from using
them? (2.5%)

SUGGESTED ANSWER:

(b) Yosha can no longer prevent anyone who has possession of the
earlier models from using them even if Yosha is able to properly
register the patent with the IPO. One of the limitations of patent
rights is the use of the patented product which has been put on the
market in the Philippines by the owner of the product insofar as
such use is performed after the product has been so put on the said
market [Section 172 of the Intellectual Property Code].

XVII

Yvan was a slot machine operator supervisor in a casino operated by the

Philippine Amusement and Gaming Corporation (PAGCOR). On the basis of an
intelligence report, he was found, in connivance with some slot machine customers,
to have padded the credit meter readings of slot machines in the casino where he
was employed. After being served with notice and opportunity to contest the
findings, he was found guilty of the charges and ordered dismissed by PAGCOR.
After receiving his copy of the order for dismissal, he claimed to have sent to the
Board of PAGCOR his motion for reconsideration through facsimile transmission.
After a considerable time, when his motion for reconsideration was unacted upon,
he filed an action with the Civil Service Commission (CSC) for illegal dismissal.
PAGCOR claimed that his action has prescribed because it was filed more than 15
days after his dismissal became final. Yvan claimed that there was no final
decision yet because the Board of PAGCOR has not yet acted on his motion for
reconsideration. He presented a copy of his facsimile transmission addressed to the
Board of PAGCOR seeking reconsideration of his dismissal, and the fact that there
has been no action taken. He claimed that based on the Electronic Commerce Act of
2000, his facsimile transmission should be considered like any genuine and
authentic paper pleading. PAGCOR denied having received it and was able to prove
that the telephone number of PAGCOR used in the facsimile transmission was
wrong. CSC denied his complaint on account of prescription. He appealed CSC's
dismissal in court.

(a) Was CSC correct in dismissing the case? (2.5%)

SUGGESTED ANSWER:

(a) CSC is correct in dismissing the case. The E-commerce law does
not cover or allow e-filing or facsimile transmission as a mode of

23
 filing of pleadings in administrative cases [Torres v. PAGCOR,
(G.R. No. 193531, December 6, 2011)].

(b) Can Yvan’s bank be ordered by the court to disclose if there were
unreasonable increases in his bank deposit when the alleged acts were
committed? (2.5%)
SUGGESTED ANSWER:

(b) No, Yvan’s bank cannot be ordered by the court to disclose if there
were unreasonable increases in his bank deposit when the alleged
acts were committed. The inquiry into bank deposits allowable
under RA 1405 must be premised on the fact that the money
deposited in the account is itself the subject of the action;
otherwise, the inquiry will amount to an impermissible
encroachment into one’s right to privacy (BSB Group v. Go, G.R.
No. 168644, February 16, 2010)].

XVIII

Through various acts of graft and bribery, Mayor Ycasiano accumulated a

large amount of wealth which he converted into U.S. dollars and deposited in a
Foreign Currency Deposit Unit (FCDU) account with the Yuen Bank (YB). On a tip
given by the secretary of the mayor, the Anti-Money Laundering Council (AMLC)
sent an order to YB to confirm the amount of U.S. dollars that Mayor Ycasiano had
in his FCDU account. YB claims that, under the Foreign Currency Deposit Act
(R.A. No. 6426, as amended), a written permission from the depositor is the only
instance allowed for the examination of FCDU accounts. YB alleges that AMLC on
its own cannot order a banking institution to reveal matters relating to bank
accounts.

(a) Is the legal position of YB, in requiring written permission from the
depositor, correct? (2.5%)

SUGGESTED ANSWER:

(a) Yes, the legal position of YB in requring written permission from

the depositor is correct. The AMLC cannot order the bank to
inquire into the bank account of any depositor on mere suspicion
of acts of graft and bribery without his written consent or a bank
inquiry order issued by the competent court.

24
 (b) Does AMLC have the power to order a banking institution to reveal
matters relating to bank accounts? (2.5%)

SUGGESTED ANSWER:

(b) The AMLC has no power to order a banking institution to reveal

matters relating to bank accounts without a bank inquiry order
issued by the competent court about the existence of probable
cause that the deposits, funds or investments of the person relate to
unlawful activities under the Anti-Money Laundering law. A bank
inquiry order, however, is not necessary, however, and as such, the
AMLA may order the disclosure of information about bank
accounts if the predicate crime/s is/are: a) hijacking, b)
kidnapping, c) violation of the terrorism financing act, d) murder,
e) arson and, f) violation of the Dangerous Drugs law (Section 11 of
AMLA).

- Nothing follows -

25
 Training & Convention Division
University of the Philippines Law Center

SUGGESTED ANSWERS
to the
2018 BAR EXAMINATIONS IN
CRIMINAL LAW

Roberto and Ricardo have had a long-standing dispute regarding conflicting

claims over the ownership of a parcel of land. One night, Roberto was so enraged
that he decided to kill Ricardo. Roberto asked his best friend, Rafael, to lend him a
gun and drive him to Ricardo's house. Rafael knew about Roberto's plan to kill
Ricardo, but agreed to lend him a gun nevertheless. Rafael also drove Roberto to
the street corner nearest the house of Ricardo. Rafael waited for him there, until the
task had been accomplished, so that he could drive Roberto to the next town to
evade arrest. Roberto also asked another friend, Ruel, to stand guard outside
Ricardo's house, for the purpose of warning him in case there was any danger or
possible witnesses, and to keep other persons away from the vicinity. All three -
Roberto, Rafael and Ruel - agreed to the plan and their respective roles.

On the agreed date, Rafael drove Roberto and Ruel to the nearest corner near
Ricardo's house. Roberto and Ruel walked about 50 meters where Ruel took his
post as guard, and Roberto walked about five (5) meters more, aimed the gun at
Ricardo's bedroom, and peppered it with bullets. When he thought that he had
accomplished his plan, Roberto ran away, followed by Ruel, and together they rode
in Rafael's car where they drove to the next town to spend the night there. It turned
out that Ricardo was out of town when the incident happened, and no one was in his
room at the time it was peppered with bullets. Thus, no one was killed or injured
during the incident.

(a) Was a crime committed? If yes, what is/are the crime/s committed
(2.5%); and

SUGGESTED ANSWER:

Yes. In the case of Intod v. Court of Appeals (G.R. No. 103119, Oct. 21,
1992), the Supreme Court ruled that when factual impossibility occurs because
extraneous circumstances unknown to the actor or beyond his control,
rendered the intended crime impossible of accomplishment, the offense
committed is an impossible crime (Art. 4, Par. 2, RPC); the factual situation
that made impossible the accomplishment of the crime intended when they

1
prepared Ricardo’s room with bullets, was the physical absence of the
intended victim of the room.

(b) If a crime was committed, what is the degree of participation of

Roberto, Rafael, and Ruel? (2.5%)

SUGGESTED ANSWER:

All the perpetrators (Roberto, Ricardo and Rafael) are criminally liable
as principals since the conspiracy among them was clearly established by their
participation.
Roberto is principal by direct participation as he took a direct part in
the execution of the plan to kill Ricardo by firing his gun at the room of the
intended victim. Rafael is principal by indispensable cooperation not only
becuase he lent his gun to Roberto fully knowing the unlawful intent of the
latter, but also drove him to the place of the commission of crime and to a
place where he could escape.
Ruel being involved in the criminal plan to kill Ricardo acted in
conspiracy with the two (2) other perpetrators staying in the place from the
time they planned the crime up to its finalization. They were together in the
car driven by Rafael going to the next town in escaping from the scene of the
crime.

II

Rico, a hit man, positioned himself at the rooftop of a nearby building of a

bank, to serve as a lookout for Red and Rod while the two were robbing the bank,
as the three of them had previously planned. Ramiro, a policeman, responded to the
reported robbery. Rico saw Ramiro and, to eliminate the danger of Red and Rod
being caught, pulled the trigger of his rifle, intending to kill Ramiro. He missed as
Ramiro slipped and fell down to the ground. Instead, a woman depositor who was
coming out of the bank was fatally shot. After their apprehension, Rico, Red, and
Rod were charged with the special complex crime of robbery with homicide. Rico's
defense was that he never intended to shoot and kill the woman, only Ramiro. Red
and Rod's defense was that they were not responsible for the death of the woman as
they had no participation therein.

(a) Is Rico's defense meritorious? (2.5%)

2
SUGGESTED ANSWER:

Rico’s defense is not meritorious, because the hoicide was committed on

the occasion of robbery; thus, the crime committed is robbery with homicide
as long as the killing occurred on the occasion of the robbery whoever be the
victim, whether intended or not.

(b) Is Red and Rod’s defense meritorious? (2.5%)

SUGGESTED ANSWER:

No, the defense of Red and Rod’s is also not meritorious. The concerted
manner in which the three (Rico, Red and Rod) perpetrated the crime showed
clearly the presence of conspiracy. When a homicide takes place by reason or
on the occasion of robbery, all those who took part shall be guilty of the special
complex crime of robbery with homicide, whether or not they actually
participated in the killing.
Regardless of the fact that the killing of the woman depositor was
individually performed by Rico, the basic principal in conspiracy is that the
“act of one is the act of all”, the criminal liability of Rod and Red is one and
the same with that of Rico (P. v. Hinlo (G.R. No. 212151, Feb. 18, 2015).

III

On February 5, 2017, Rho Rio Fraternity held initiation rites. Present were:
(i) Redmont, the Lord Chancellor and head of the fraternity; (ii) ten ( 10) members,
one (1) of whom was Ric, and (iii) five (5) neophytes, one (1) of whom was
Ronald. Absent were: (i) Rollie, the fraternity's Vice Chancellor and who actually
planned the initiation; and (ii) Ronnie, the owner of the house where the initiation
was conducted.

Due to the severe beating suffered by Ronald on that occasion, he lost

consciousness and was brought to the nearest hospital by Redmont and Ric.
However, Ronald was declared dead on arrival at the hospital.

During the investigation of the case, it was found out that, although Ronald
really wanted to join the fraternity because his father is also a member of the same
fraternity, it was his best friend Ric who ultimately convinced him to join the
fraternity and, as a prerequisite thereto, undergo initiation. It was also shown that
Redmont and Ric did not actually participate in the beating of the neophytes
(hazing). The two (2) either merely watched the hazing or helped in preparing food.

3
And, lastly, two (2) days prior thereto, Ronnie texted Rollie that the fraternity may
use his house as the venue for the planned initiation.

Aside from those who actually participated in the hazing, Redmont, Rollie,
Ric, and Ronnie were criminally charged for the hazing of Ronald that resulted in
the latter's death.

(a) Are the four criminally liable? (2.5%)

SUGGESTED ANSWER:

Yes. Redmont’s presence during the hazing is prima facie evidence of

participation therein as principal, unless he prevented the commission of the
hazing that caused physical harm to Ronald.
Ric is also liable criminally, because as member of the Fraternity who
knowingly cooperated in carrying out the initiation by inducing the victim to
be present thereat is liable as principal. He is penalized, not because of any
participation in the infliction of harm to the victim but due to his indispensable
cooperation in the crime by successfully inducing or convincing the victim to
undergo the hazing.
Rollie as Vice Chancellor of Rho Rio Fraternity, who actually planned
the initiation though not present when the acts of hazing were committed, is
liable as principal.
Ronnie the owner of the place where hazing was conducted is liable as
accomplice, because he has actual knowledge of the hazing conducted therein
and failed to take any action to prevent occurrence of the same [Sec. 45 of R.A.
8049 the Anti Hazing Law; Dungo & Sibal, Jr., G.R. No. 20964 (July 1, 2015)].

(b) Can all those criminally charged be exonerated upon proof that
Ronald, knowing the risks, voluntarily submitted himself to the initiation? Will the
absence of proof that the accused intended to kill the victim affect their liability?
(2.5%)

SUGGESTED ANSWER:
The defense of consent will not apply, because the very act of inflicting
physical pain or psychological suffering is, by itself punishable; that it resulted
in the neophytes death or physical injuries merely aggravates the act resulting
in the imposition of higher penalty.

4
 R.A. 8049, the Anti-Hazing Law, is also malum prohibtum, thus then
existence criminal intent is immaterial.

ALTERNATIVE ANSWER:

Under Section 12 of R.A. No. 11053, or the “Anti-Hazing Law of 2018,”

the defense that the recruit, neophyte, or applicant consented to being
subjected to hazing shall not be available to persons prosecuted under this
Act.” It is likewise stated that any person charged under said law shall not be
entitled to the mitigating circumstance that there was no intention to commit
so grave a wrong.

IV

On the way home from work, Rica lost her necklace to a snatcher. A week
later, she saw what looked like her necklace on display in a jewelry store in Raon.
Believing that the necklace on display was the same necklace snatched from her the
week before, she surreptitiously took the necklace without the knowledge and
consent of the store owner. Later, the loss of the necklace was discovered, and Rica
was shown on the CCTV camera of the store as the culprit. Accordingly, Rica was
charged with theft of the necklace. Rica raised the defense that she could not be
guilty as charged because she was the owner of the necklace and that the element of
intent to gain was lacking.

What should be the verdict if:

(a) The necklace is proven to be owned by Rica? (2.5%)

SUGGESTED ANSWER:
Under Art. 308 of the RPC, theft is committed by any person who, with
intent to gain but without violence, against, or intimidation of persons nor
force upon things, shall take personal property of another without the latter's
consent. While the CCTV captured Rica surreptitiously taking the necklace
from a jewelry store without the knowledge and consent of the store owner, she
cannot be charged with theft, because the taking was made under a claim of
ownership. The fact of ownership negates any intention to gain, as Rica cannot
steal the necklace which she claims to own.

(b) It is proven that the store acquired the necklace from another person
who was the real owner of the necklace? (2.5%)

5
SUGGESTED ANSWER:
Even if it was proven that the necklace was bought by the store from
another person who was the real owner of the necklace, Rica still cannot be
held liable for theft absent a felonious intent. “Actus non facit reum, nisi mens
sit rea”. A crime is not committed if the mind of the person performing the act
complained of is innocent.

The ruling in U.S. v. Vera, 1 Phil 485, May 31, 1974 is emphatic; i.e. if a
person takes personal property of another believing it to be his own, the
presumption of intent to gain is rebutted and therefore he is not guilty of theft.

V
With a promise of reward, Robert asked Romy to bring him a young girl that
he (Robert) can have carnal knowledge with. Romy agreed, seized an eight-year old
girl and brought her to Robert. After receiving his reward, Romy left while Robert
proceeded to have carnal knowledge with the girl.

(a) For what felony may Robert and Romy be charged? (2.5%)

SUGGESTED ANSWER:

Robert may be charged with the crime of Child Prostitution or other

sexual abuse under Section 5(b) of R.A. No. 7610 (the Special Protection of
Children Against Child Abuse, Exploitation and Discrimination Act) by having
sexual intercourse with a child exploited in prostitution. Because the victim
was under 12 years of age, (in this case, 8 years), Robert shall be prosecuted
under Article 266-A and 266-B of the Revised Penal Code. Romy, on the other
hand, may be charged with the crime of Child Prostitution or other sexual
abuse under Section 5(a) of R.A. No. 7610 by acting as procurer of a child
prostitute.

(b) Will your answer in (a) be the same if the victim is a 15-year old lass
who was enticed, through cunning and deceit of Romy, to voluntarily
go to the house of Robert where the latter subsequently had carnal
knowledge with her? (2.5%)

SUGGESTED ANSWER:

Yes. R.A. No. 7610 covers sexual abuse committed against a child or
children below eighteen (18) years of age. Children, who for money, profit or

6
any other consideration due to the coercion or influence of any adult, syndicate
or group, indulge in sexual intercourse or lascivious conduct, are deemed to be
children exploited in prostitution and other sexual abuse. Robert and Romy
may be prosecuted under the said law.

VI

A group of homeless and destitute persons invaded and occupied the houses
built by the National Housing Authority (NHA) for certain military personnel. To
gain entry to the houses, the group intimidated the security guards posted at the
entrance gate with the firearms they were carrying and destroyed the padlocks of
the doors of the houses with the use of crowbars and hammers. They claimed that
they would occupy the houses and live therein because the houses were idle and
they were entitled to free housing from the government.

For the reason that the houses were already awarded to military personnel
who have been found to have fully complied with the requirements for the award
thereof, NHA demanded the group to vacate within ten (10) days from notice the
houses they occupied and were still occupying. Despite the lapse of the deadline,
the group refused to vacate the houses in question.

What is the criminal liability of the members of the group, if any, for their
actions? (5%)

SUGGESTED ANSWER:

The members of the group who, by means of violence against or

intimidation, shall take possession of any real property or shall usurp any real
rights in property belonging to another, is criminally liable under Art. 312 of
the RPC or Occupation of real property or usurpation of real rights in property.
In addition, they may also be charged with other crimes resulting from their
acts of violence.

VII

Robbie and Rannie are both inmates of the National Penitentiary, serving the
maximum penalty for robbery which they committed some years before and for
which they have been sentenced by final judgment. One day, Robbie tried to collect
money owed by Rannie. Rannie insisted that he did not owe Robbie anything, and
after a shouting episode, Rannie kicked Robbie in the stomach. Robbie fell to the
ground in pain, and Rannie left him to go to the toilet to relieve himself. As Rannie
was opening the door to the toilet and with his back turned against Robbie, Robbie
stabbed him in the back with a bladed weapon that he had concealed in his waist.
Hurt, Rannie ran to the nearest "kubol" where he fell. Robbie ran after him· and,

7
while Rannie was lying on the ground, Robbie continued to stab him, inflicting a
total of 15 stab wounds. He died on the spot. Robbie immediately surrendered to the
Chief Warden. When prosecuted for the murder of Rannie, Robbie raised
provocation and voluntary surrender as mitigating circumstances. The prosecution,
on the other hand, claimed that there was treachery in the commission of the crime.

(a) Is Robbie a recidivist, or a quasi-recidivist? (2.5%)

SUGGESTED ANSWER:

Robbie is considered a quasi-recidivist pursuant to Article 160 of the

RPC. At the time he stabbed Rannie which resulted in the latter's death, he
had been convicted by final judgment and had been serving sentence at the
National Penitentiary. In quasi-recidivism, the first and second offenses need
not be embraced in the same title of the RPC. A recidivist, on the other hand,
requires that the crimes committed must be embraced in the same title of the
RPC. Because the killing of Rannie and the robbery, in which Robbie was
previously convicted by final judgment, were not under the same title, Robbie
cannot be considered a recidivist.

(b) Can the mitigating circumstances raised by Robbie, if proven, lower

the penalty for the crime commit+d? (2.5%)

SUGGESTED ANSWER:

No. If proven, the presence of the mitigating circumstances of lack of

sufficient provocation and voluntary surrender would be of no consequence as
quasi-recidivism cannot be offset by any ordinary mitigating circumstance
(People v. Macariola, GR No. L-40757, 24 January 1983).

VIII

Randy was prosecuted for forcible abduction attended by the aggravating

circumstance of recidivism. After trial, the court held that the prosecutor was able
to prove the charge. Nonetheless, it appreciated in favor of Randy, on the basis of
the defense's evidence, the mitigating circumstances of voluntary surrender,
uncontrollable fear, and provocation. Under Art. 342 of the Revised Penal Code
(RPC), the penalty for forcible abduction is reclusion temporal.

Applying the Indeterminate Sentence Law, what penalty should be imposed

on Randy? (5%)

8
SUGGESTED ANSWER:

Since he was found guilty of Forcible Abduction with one aggravating

circumstances of recidivism, this aggravating circumstance is off-set by one of
the three mitigating circumstances; so the penalty to be imposed is still
Reclusion Temporal (Art. 342, RPC) but because there are two (2) more
mitigating circumstances left and the penalty is divisible, in determining the
maximum term, we have to reduce to Prision Mayor and because there is no
more mitigating and aggravating circumstances to be considered, the
maximum term shall be prision mayor in its medium period that is eight (8)
years and one (1) day to ten (10) years. The minimum, term shall be any range
within, that is from six (6) years and one (1) day to six (8) years.
Thus Randy will suffer as Minimum term any penalty ranging from six
(6) months and one (1) day, and the maximum term will be, any range from
eight (8) years and one (1) day to ten (10) years of Prision Mayor.

ALTERNATIVE ANSWER:

Section 1 of Act No. 4103, otherwise known as the “Indeterminate

Sentence Law” provides:
Hereafter, in imposing a prison sentence for an offense punished
by the Revised Penal Code, or its amendments, the court shall
sentence the accused to an indeterminate sentence the maximum
term of which shall be that which, in view of the attending
circumstances, could be properly imposed under the rules of the
said Code, and the minimum which shall be within the range of
the penalty next lower to that prescribed by the Code for the
offense
xxx
Reclusion temporal is a single divisible penalty. In determining
the proper penalty vis-à-vis the aggravating circumstance of
recidivism and the mitigating circumstances of voluntary
surrender, uncontrollable fear, and provocation, Article 64 of the
Revised Penal Code should be applied. Pursuant to Article 64(4)
of the RPC, upon offsetting one ordinary aggravating

9
 circumstance with one mitigating circumstance, two (2) mitigating
circumstances may be appreciated in favor of the accused in
determining the maximum imposable penalty.
Thus, the maximum imposable penalty is prision mayor in
its medium period. The minimum imposable penalty shall be
within the range prision correccional which is the penalty next
lower to the maximum imposable penalty.

ANOTHER ALTERNATIVE ANSWER:

Uncontrollable fear is not a mitigating circumstance but an exempting
circumstance. Hence, there is no penalty that can be imposed upon Randy
since he is exempt from criminal liability.
[Note: Provocation can only be appreciated in crime against person. One cannot
provoke another person to commit theft, estafa or forcible abduction. Credit
should be given to those, who disregarded provocation as a mitigating
circumstance in answer this question].

IX

Rashid asked Rene to lend him PhP50,000, payable in six (6) months and, as
payment for the loan, Rashid issued a postdated check for the said amount plus the
agreed interest. Rashid assured Rene that the account would have sufficient funds
on maturity date. On that date, Rene presented the check to the drawee bank for
payment but it was dishonored for the reason that it was drawn against insufficient
funds (DAIF).

Rene sent Rashid a timely notice of dishonor of the check and demanded the
latter to make good the same within five (5) days from notice. After the lapse of the
five (5)-day notice, Rene redeposited the check with the drawee bank but it was
again dishonored for the same reason, i.e., DAIF. Rene thereafter filed two (2)
separate criminal actions against Rashid: (1) Estafa under Art. 315(2)(d) of the
RPC, as amended by R.A. No. 4885, i.e, estafa committed by postdating a check, or
issuing a check in payment of an obligation without sufficient funds in the bank;
and (2) Violation of B.P. 22 or the Bouncing Checks Law.

(a) Can he be held liable under both actions? (2.5%)

SUGGESTED ANSWER:

Yes. Rashid can be liable for estafa and also for violation of B.P. Bldg.
22. While the two criminal actions of estafa under Art. 315(2)(d) of the RPC

10
and violation of Batas Pambansa (BP) Bilang 22 may refer to identical acts
committed by Rashid, the prosecution thereof cannot be limited to one offense,
because a single criminal act may give rise to a multiplicity of offenses and
where there is variance or differences between the elements of an offense in
one law and another law, as in this case, there will be no double jeopardy,
because what the rule on double jeopardy prohibits refers to identity of
elements in the two (2) offenses. Otherwise stated, prosecution for the same
act is not prohibited. What is forbidden is prosecution for the same offense.
Essentially, while a BP 22 case and an estafa case may be rooted from an
identical set of facts, they nevertheless present different causes of action,
which, under the law, are considered “separate, distinct, and independent”
from each other. Both cases, therefore, can proceed to their final adjudication
– both as to their criminal and civil aspects (Rimando v. Spouses Aldaba and
People, G.R. No. 203583, 13 October 2014).

(b) If the check is presented for payment after four (4) months, but before
it becomes stale, can the two actions still proceed? (2.5%)

SUGGESTED ANSWER:

Yes. The presentation of the check beyond the 90-day period would be
of no consequence per Section 2 of B.P. Blg. 22. The 90-day period is not an
element of the offense but merely a condition for the prima facie presumption
of knowledge of the insufficiency of funds. That the check must be deposited
within ninety (90) days is simply one of the conditions for the prima facie
presumption of knowledge of lack of funds to arise. It does not discharge
Rashid from his duty to maintain sufficient funds in the account.

Rafa caught his wife, Rachel, in the act of having sexual intercourse with
Rocco in the maid's room of their own house. Rafa shot both lovers in the chest, but
they survived. Rafa charged Rachel and Rocco with adultery, while Rachel and
Rocco charged Rafa with frustrated parricide and frustrated homicide.

In the adultery case, Rachel and Rocco raised the defense that Rafa and
Rachel, prior to the incident in question, executed a notarized document whereby
they agreed to live separately and allowed each of them to get a new partner and

11
live with anyone of their choice as husband and wife. This document was executed
after Rachel discovered that Rafa was cohabiting with another woman. Thus, they
also raised the defense of in pari delicto. In the frustrated parricide and frustrated
homicide cases, Rafa raised the defense that, having caught them in flagrante
delicto, he has no criminal liability.

Assuming that all defenses have been proven:

(a) Will the action for adultery prosper? (2.5%)

SUGGESTED ANSWER:

While the defense of pari delicto is not available in criminal cases, but
when the facts stated in the notarized agreement between Rafa and Rachel
constitute consent on the part of both of them, it is submitted that the action
for adultery will not prosper otherwise it cannot affect the private criminal
action for adultery.

(b) Will the actions for frustrated parricide and frustrated homicide
prosper? (2.5%)

SUGGESTED ANSWER:

Yes. The actions for frustrated parricide and frustrated homicide will
prosper, and Rafa will be found guilty of these crimes. The penalty, however,
that the Trial Court can impose is only destierro not penalties for frustrated
parricide and frustrated homicide, being the spouse of Rachel (Art. 246, RPC).

ALTERNATIVE ANSWER:

No, the actions for frustrated parricide and frustrated homicide will not
prosper because Rafa is entitled to the benefit of Article 247 of the Revised
Penal Code.
Article 247 of the RPC states that any legally married person who having
surprised his spouse in the act of committing sexual intercourse with another
person, shall kill any of them or both of them in the act or immediately
thereafter, or shall inflict upon them any serious physical injury, shall suffer
the penalty of destierro. If he shall inflict upon them physical injuries of any
other kind, he shall be exempt from punishment.

12
 The action will prosper to allow the court to receive evidence. However,
Rafa can be held liable only for destierro based on Art. 247 of the RPC. The
act committed by Rafa amounts to at least, serious physical injuries, so the
penalty of destierro will be imposed. If the court finds that the act amounts to
less than serious physical injuries, Rafa will not have any criminal liability.

XI

Wielding loose firearms, Rene and Roan held up a bank. After taking the
bank's money, the robbers ran towards their getaway car, pursued by the bank
security guards. As the security guards were closing in on the robbers, the two fired
their firearms at the pursuing security guards. As a result, one of the security guards
was hit on the head causing his immediate death.

For the taking of the bank's money and killing of the security guard with the
use of loose firearms, the robbers were charged in court in two separate
informations, one for robbery with homicide attended by the aggravating
circumstance of use of loose firearms, and the other for illegal possession of
firearms.

(a) Are the indictments correct? (5%)

SUGGESTED ANSWER:

The indictment for Robbery with homicide is correct. Robbery with

homicide, a special complex crime, is primarily a crime against property and
not against persons, homicide being a mere incident of the robbery with the

latter being the main purpose of the criminal. The elements of robbery with
homicide are: (a) the taking of personal property with the use of violence or
intimidation against a person; (b) the property thus taken belongs to another;
(c) the taking is characterized by intent to gain or animus lucrandi; and (d) on
the occasion, the crime of homicide, which is therein used in a generic sense,
was committed.

The indictment for illegal possession of firearm is wrong. In the case of

People v. Gaborne, G.R. No. 210710, July 27, 2016, the Supreme Court clarified
the issue, to wit:

In view of the amendments introduced by R.A. No.

8294 and R.A. No. 10591, to Presidential Decree No. 1866,

13
 separate prosecutions for homicide and illegal possession
are no longer in order. Instead, illegal possession of firearm
is merely to be taken as an aggravating circumstance in the
crime of murder. It is clear from the foregoing that where
murder results from the use of an unlicensed firearm, the
crime is not qualified illegal possession but, murder. In such
a case, the use of the unlicensed firearm is not considered as
a separate crime but shall be appreciated as a mere
aggravating circumstance. Thus, where murder was
committed, the penalty for illegal possession of firearms is
no longer imposable since it becomes merely a special
aggravating circumstance. The intent of Congress is to treat
the offense of illegal possession of firearm and the
commission of homicide or murder with the use of
unlicensed firearm as a single offense.

XII

Orphaned when still an infant, Rocky lived under the care of his grandmother
Rosario. Now 18, Rocky entered Rosario's bedroom who was then outside doing
her daily marketing. He ransacked the bedroom and took Rosario's money and
valuables amounting to PhP100,000.

When Rosario came home, she found her room in disarray, and her money
and valuables gone. She confronted Rocky, who confessed to taking the money and
valuables in order to pay his debts.

(a) What crime, if any, did Rocky commit? (2.5%)

SUGGESTED ANSWER:

Rocky committed the crime of theft by taking his grandmother’s money

and valuables. He committed theft under Art. 308 which says: theft is
committed by any person who, with intent to gain but without violence against
or intimidation of person or force upon things shall take the personal property
of another.
(b) Does he incur criminal and/or civil liability? (2.5%)

14
SUGGESTED ANSWER:

Rocky could incur civil liability only, not criminal liability, as Art. 332
(RPC) provides that no criminal but only civil shall result from the commission
of the crime of theft, swindling or malicious mischief committed caused
mutually by the following persons:

1. Ascendants and descendant.

XIII

The brothers Roberto and Ricardo Ratute, both Filipino citizens, led a group
of armed men in seizing a southern island in the Philippines, and declaring war
against the duly constituted government of the country. The Armed Forces of the
Philippines (AFP), led by its Chief of Staff, General Riturban, responded and a full
scale war ensued between the AFP and the armed men led by the brothers. The
armed conflict raged for months.

When the brothers-led armed men were running out of supplies, Ricalde, also
a Filipino, and a good friend and supporter of the Ratute brothers, was tasked to
leave for abroad in order to solicit arms and funding for the cash-strapped brothers.
He was able to travel to Rwanda, and there he met with Riboli, a citizen and
resident of Rwanda, who agreed to help the brothers by raising funds
internationally, and to send them to the Ratute brothers in order to aid them in their
armed struggle against the Philippine government. Before Ricalde and Riboli could
complete their fund-raising activities for the brothers, the AFP was able to reclaim-
the island and defeat the Ratute-led uprising.

Ricalde and Riboli were charged with conspiracy to commit treason. During
the hearing of the two cases, the government only presented as witness, General
Riturban, who testified on the activities of the Ratute brothers, Ricalde, and Riboli.

(a) Can Ricalde and Riboli be convicted of the crime of conspiracy to

commit treason? (2.5%)

SUGGESTED ANSWER:

Ricalde and Riboli cannot be convicted of the crime of conspiracy to

commit treason, because there was no war existing when they committed the
acts. Jurisprudence considers treason as a crime committed in times only of an
international armed conflict. The same is true with the felony of conspiracy to
commit treason.
Moreover, the crimes were committed outside the jurisdiction of
Philippine Court.

15
 (b) Will the testimony of General Riturban, assuming he can testify on
acts within his personal knowledge, be sufficient to convict the Ratute
brothers, Ricalde, and Riboli? (2.5%)

SUGGESTED ANSWER:

Yes, assuming Gen. Riturban can testify on acts within his personal
knowledge, as to the offense of seizing a Southern Island in the Philippines
which raged for months in the country. This is sufficient to convict the Ratute
brothers and Riboli but the crime could be Rebellion, and the two-witness rule
is not required in the case of Rebellion.

XIV

Robin and Rowell are best friends and have been classmates since grade
school. When the boys graduated from high school, their parents gifted them with a
trip to Amsterdam, all expenses paid. At age 16, this was their first European trip.
Thrilled with a sense of freedom, they decided to try what Amsterdam was known
for. One night, they scampered out of their hotel room, went to the De Wallen,
better known as the Red-light District of Amsterdam. There, they went to a "coffee
shop" which sells only drinks and various items made from opium poppy, cannabis,
and marijuana, all of which are legal in Amsterdam. They represented themselves to
be of age, and were served, and took shots of, cannabis and marijuana products.
They indulged in these products the whole night, even if it was their first time to try
them.

Before returning to Manila, they bought a dozen lollipops laced with

cannabis, as souvenir and "pasalubong" for their friends. They were accosted at the
Manila International Airport and were charged with importation of dangerous drugs
under the Comprehensive Dangerous Drugs Act of 2002. They were also charged
with use of dangerous drugs after pictures of them in the "coffee shop" in
Amsterdam were posted on Facebook, showing them smoking and taking shots of a
whole menu of cannabis and marijuana products. Their own captions on their
Facebook posts clearly admitted that they were using the dangerous products. The
pictures were posted by them through Private Messenger (PM) only for their close
friends, but Roccino, the older brother of one of their best friends, was able to get
hold of his younger brother's password, and without authority from his brother,
accessed his PM and shared Robin and Rowell's Amsterdam photos on Facebook.

(a) Can Robin and Rowell be prosecuted for use of dangerous drugs for
their one-night use of these products in Amsterdam? (2.5%)

SUGGESTED ANSWER:

Robin and Rowell cannot be prosecuted by Philippine courts, because

16
they did not use the dangerous drug within its territory, under the principle of
territoriality.

(b) Can they be prosecuted for importation of dangerous drugs? (2.5%)

SUGGESTED ANSWER:

They can be prosecuted for importation of dangerous drugs under RA

9165, which provides:

“Section 4. Importation of Dangerous Drugs and/or

Controlled Precursors and Essential Chemicals.- .The
penalty of life imprisonment to death and a ranging from
Five hundred thousand pesos (P500,000.00) to Ten million
pesos (P10,000,000.00) shall be imposed upon any person,
who, unless authorized by law, shall import or bring into
the Philippines any dangerous drug, regardless of the
quantity and purity involved, including any and all species
of opium poppy or any part thereof or substances derived
therefrom even for floral, decorative and culinary
purposes”.

(c) If found liable under either (a) or (b) above, what is the penalty that
may be imposed on them? (2.5%)

SUGGESTED ANSWER:

If found guilty, they will be exempt from criminal liability, because they
are minors (16 years old), as provided in Chapter 2, section 6 of RA 9344
("Juvenile Justice and Welfare Act of 2006"), to wit:

“A child above fifteen (15) years but below eighteen

(18) years of age shall likewise be exempt from criminal
liability and be subjected to an intervention program, unless
he/she has acted with discernment, in which case, such child
shall be subjected to the appropriate proceedings in
accordance with this Act”.

17
ALTERNATIVE ANSWER:
The penalty that may be imposed is reclusion perpetua. Article 68 (2) of
the Revised Penal Code states that the penalty next lower than that prescribed
by law shall be imposed upon a person over 15 years and under 18 years, but
always in the proper period. Robin and Rowell are minors who acted with
discernment, so as to fall under the scope of Section 98 of the Dangerous Drugs
Act, in relation to Article 68 (2) of the Revised Penal Code. Discernment is that
mental capacity of a minor to fully appreciate the consequences of his unlawful
act. The surrounding circumstances must demonstrate that the minor knew
what he was doing and that it was wrong (People v. Jacinto, G.R. No. 182239,
16 March 2011).In this case, Robin and Rowell: (a) misrepresented that they
were of age so that they may be able to consume cannabis and marijuana
products; and (b) deliberately shared photos of their experience with said
products, indicate their mental capacity to understand that said products are
prohibited drugs as defined under the Dangerous Drugs Act.

(d) Can Roccino be prosecuted for the act of accessing and sharing on
Facebook the private pictures sent by PM to his brother? If yes, for
what crime? (2.5%)

SUGGESTED ANSWER:

Roccino, who accessed the private messages of his brother and shared in
Facebook pictures of other people without their consent, can be charged with
violation of RA 10173 (Data Privacy Act of 2012) in relation to Chapter II,
section 6 of RA 10175 (“Cybercrime Prevention Act of 2012″: All crimes defined
and penalized by the Revised Penal Code, as amended, and special laws, if
committed by, through and with the use of information and communications
technologies). Roccino committed unauthorized access and disclosure of
personal data (Sections 29 and 32 of RA 10173).

XV

During the presentation of the prosecution's evidence, Reichter was called to

the witness stand with the stated purpose that he would testify that his wife Rima
had shot him in the stomach with a .38 caliber pistol, resulting in near fatal injuries.
Upon objection of the defense on the ground of the marital disqualification rule, the
presiding judge (Judge Rossano) disallowed Reichter from testifying in the case. Its

18
motion for reconsideration having been denied, the People of the Philippines went
up on certiorari to the Court of Appeals (CA) questioning Judge Rossano's ruling.

After due proceedings, the CA rendered judgment declaring Judge Rossano's

ruling void ab initio for having been made with grave abuse of discretion
amounting to lack or excess of jurisdiction, and directing Judge Rossano to allow
Reichter to testify in the criminal case for the stated purpose. This is based on the
fact that the marital privilege rule does not apply where a spouse committed the
crime against the other.

As the CA decision became final and executory, the criminal case before the
RTC was calendared for trial. At the scheduled trial, the prosecution called Reichter
to the witness stand in order to testify on the same matter it earlier announced. The
defense objected on the ground that the CA erred in its disposition of the certiorari
case. Judge Rossano sustained the objection and again disallowed Reichter from
testifying in the criminal case. Repeated pleas from the prosecution for Judge
Rossano to reconsider his ruling and to allow Reichter to testify fell on deaf ears.

May Judge Rossano be convicted of a crime? If yes, what crime did he

commit? (5%)

SUGGESTED ANSWER:

Yes. Judge Rossano may be convicted of the crime of open disobedience

(Art. 231, RPC) which provides that any judicial or executive officer who shall
openly refuse to execute the judgment, decision or order of any suspension
authority made within the scope of the jurisdiction of the latter and issued with
all the legal formalities shall suffer the penalties of Arresto Mayor in its
medium period to prision correctional, special disqualification and fine.
The ruling was issued by the Court of Appeals, it was already final and
executor; the act of Judge disallowing Reichter from testifying is open
disobedience under the law.

ALTERNATIVE ANSWER:

Judge Rossano may be charged and convicted of the crime of dereliction

of duty under Article 206 of the Revised Penal Code, which provides: Article
206. Unjust interlocutory order. - Any judge who shall knowingly render an
unjust interlocutory order or decree shall suffer the penalty of arresto mayor
in its minimum period and suspension; but if he shall have acted by reason of
inexcusable negligence or ignorance and the interlocutory order or decree be
manifestly unjust, the penalty shall be suspension.

19
ANOTHER ALTERNATIVE ANSWER:

Judge Rosario can be held liable for violation of Section 3 (e) of RA No.
3019 for giving unwarranted preference, advantage or benefits to private party
through manifest partiality and evident bad faith. In People v. Reyes, G.R. No.
177105-06, August 12, 2010, arrogant refusal to recognize and obey the CA
decision causing undue injury to the complainant and giving unwarranted
benefits to private individuals constitutes evident bad faith and manifest
partiality contemplated in in violation of Section 3 (e) of R.A. No. 3019.

XVI

For the past five years, Ruben and Rorie had been living together as husband
and wife without the benefit of marriage. Initially, they had a happy relationship
which was blessed with a daughter, Rona, who was born on March 1, 2014.
However, the partners' relationship became sour when Ruben began indulging in
vices, such as women and alcohol, causing frequent arguments between them. Their
relationship got worse when, even for slight mistakes, Ruben would lay his hands
on Rorie. One day, a tipsy Ruben barged into their house and, for no reason,
repeatedly punched Rorie in the stomach. To avoid further harm, Rorie ran out of
the house. But Ruben pursued her and stripped her naked in full view of their
neighbors; and then he vanished.

Ten days later, Ruben came back to Rorie and pleaded for forgiveness.
However, Rorie expressed her wish to live separately from Ruben and asked him to
continue providing financial support for their daughter Rona. At that time, Ruben

was earning enough to support a family. He threatened to withdraw the support he

was giving to Rona unless Rorie would agree to live with him again. But Rorie was
steadfast in refusing to live with Ruben again, and insisted on her demand for
support for Rona. As the ex-lovers could not reach an agreement, no further support
was given by Ruben.

What crimes did Ruben commit:

(a) For beating and humiliating Rorie? (2.5%)

SUGGESTED ANSWER:

For beating and humiliating Rorie, such acts violate Ra 9262, known as
the "Anti-Violence Against Women and Their Children Act of 2004,”
particularly section 3 (a) thereof under "Physical Violence" referring to acts
that include bodily or physical harm against a woman with whom the person
has or had a sexual or dating relationship.

20
 (b) For withdrawing support for Rona? (2.5%)

SUGGESTED ANSWER:

For withdrawing support for Rona, such act is a violation of RA 9262,

section 3 (d), which reads:

"Economic abuse" refers to acts that make or attempt to

make a woman financially dependent which includes, but is
not limited to the following:

1. Withdrawal of financial support or preventing the victim

from engaging in any legitimate profession, occupation,
business or activity, except in cases wherein the other
spouse/partner objects on valid, serious and moral grounds
as defined in Article 73 of the Family Code;

XVII

Robina bought from Ramsey a seaside property located in Romblon. At that

time, she was in the process of returning to the Philippines as a returning resident,
after retiring from her work in Russia, and was planning to set up a diving school in
the area. In a non-notarized "Kasunduan ng Pagbibili," Ramsey represented the
property as alienable and disposable, and that he had a valid title to the property.
When the sale was completed, and as she was applying for permits and licenses for
her school, she found out that the property was a public non-alienable and
nondisposable land which Ramsey had bought from someone who only had a
foreshore lease over the same. As she was bent on setting up the diving school in
the area, having made all the preparations and having already bought all the
equipment, she filed a Miscellaneous Lease Application (MLA) with the
Department of Environment and Natural Resources (DENR) at the Community
Environment and Natural Resources Office in Romblon. In her application, she
stated that she was a Filipino citizen, although she was still a naturalized Russian
citizen at that time. It was only six months after she filed the MLA that she filed her
petition for dual citizenship under R.A. No. 9225. When DENR discovered that, at
the time of filing the MLA, she was still a Russian citizen, her application was
denied and she was charged with falsification of a public document for
misrepresenting herself as a Filipino citizen. Infuriated, Robina also filed charges
against Ramsey for falsification of a private document for stating in their
"Kasunduan" that the property was alienable and disposable.

In the case for falsification of a public document, Robina's defense was that,
at the time she filed the MLA, she had every intention to reacquire Philippine
citizenship, as in fact she filed for dual citizenship six months thereafter, and that
she had no intent to gain or to injure the Philippine government since she expected
that her application for dual citizenship would be approved before the MLA could

21
be approved. On the other hand, she claimed in the action against Ramsey that
intent to gain was present since he received the purchase price as a result of his
misrepresentation. Ramsey's defense was that he had a valid Transfer Certificate of
Title in his name, and he had a right to rely on his title.

(a) Will the case for falsification of public document filed against Robina
prosper? (2.5%)

SUGGESTED:

The elements of Falsification of public documents under Article 171 of

the RPC, are:

1. That the offender is a public officer, employee, or

notary public.

2. That he takes advantage of his official position.

3. That he falsifies a document by causing it to appear

that persons have participated in any act or
proceeding.

4. That such person or persons did not in fact so

participate in the proceeding.

In this case, since Robina is not a public officer, employee or notary

public then she cannot be validly charged with falsification of public
documents.

ALTERNATIVE ANSWER:

NO. She is being charged for falsification due to her misrepresentation of

her citizenship. However, under RA9225, she is deemed not to have lost her
Philippine citizenship. Therefore, there has been no misrepresentation.
RA 9225, Section 2. Declaration of Policy - It is hereby declared the
policy of the State that all Philippine citizens of another country shall be
deemed not to have lost their Philippine citizenship under the conditions of this
Act. There has been no misrepresentation.

(b) Will the case for falsification of private document filed against
Ramsey prosper? (2.5%)

22
SUGGESTED:

The elements of falsification of private documents under paragraph 1,

Article 172 of the RPC are:

(1) that the offender is a private individual or a public

officer or employee who did not take advantage of his
official position;

(2) that he committed any of the acts of falsification

enumerated in Article 171 of the RPC; and,

(3) that the falsification was committed in a public, official

or commercial document.

Yes. Ramsey, as a private individual, committed the act of making

untruthful statements in a narration of facts on a commercial document
(unnotarized Kasunduan ng Pagbibili).

XVIII

Mrs. Robinson is a teacher at an elementary school. In one of her classes, she

found, to her consternation, that an 8-year old Richard was always the cause of
distraction, as he was fond of bullying classmates smaller in size than him.

One morning, Reymart, a 7-year old pupil, cried loudly and complained to
Mrs. Robinson that Richard had boxed him on the ear. Confronted by Mrs.
Robinson about Reymart's accusation, Richard sheepishly admitted the same.
Because of this, Mrs. Robinson ordered Richard to lie face down on a desk during
class. After Richard obliged, Mrs. Robinson hit him ten (10) times on the legs with
a ruler and pinched his ears. Richard ran home and reported to his mother what he
had suffered at the hands of Mrs. Robinson. When Richard's parents went to Mrs.
Robinson to complain, she interposed the defense that she merely performed her
duty as a teacher to discipline erring pupils.

Richard's parents ask your advice on what actions can be instituted against
Mrs. Robinson for acts committed on their minor child.

(a) May Mrs. Robinson be charged with child abuse OR slight physical
injuries? (2.5%)

SUGGESTED:
Yes, Mrs. Robinson can be charged with either child abuse under R.A.

23
7610 R.A. 7610 or slight physical injuries if the injuries inflicted constitute
slight physical injuries.
(Sec. 10 of R.A. 7610 provides:
Any person who shall commit any other acts of child
abuse, cruelty or exploitation or be responsible for other
conditions prejudicial to the child’s development including
those covered by Art. 59 of P.D. 603 but not covered by the
Revised Penal Code shall suffer the penalty of prision
mayor”.
In other words, Richard’s parents was choose to prosecute Mrs.
Robinson under the Revised Penal Code or R.A. 7610. I will advise them to
consider R.A. 7610 as there was no showing of the extent of the physical
injuries inflicted.

(b) May Mrs. Robinson be charged with child abuse AND slight physical
injuries? (2.5%)

SUGGESTED:

No, Mrs. Robinson cannot be charged with both of child abuse and slight
physical injuries, because the latter is deemed absorbed in the charge of child
abuse.

XIX.

Ricky was driving his car when he was flagged down by a traffic enforcer for
over speeding. Realizing his undoing, but in a hurry for a meeting, Ricky shoved a
PhP500 bill in the traffic enforcer's pocket and whispered to the latter to refrain
from issuing him a traffic violation receipt. The traffic enforcer still issued him a
ticket, and returned his money.

What crime, if any, was committed by Ricky? (5%)

SUGGESTED:

Ricky in showing a P500 bill in the traffic enforcer’s pocket, clearly

committed the crime of corruption of public under Art. 212 of the RPC, which
states that any person who shall have made the offers or promises or given the
gifts or present to a public officer is guilty of corruption of public officer. Even

24
if the P500 bill was returned it cannot erase the fact that gifts or presents was
given to the traffic enforcer.

ALTERNATIVE ANSWER:
Art. 212 provides that the penalties imposed upon the officer corrupted
except those of disqualification and suspension shall be imposed upon the
corruptor. Since the traffic officer was not corrupted as he still a issued a
ticket and returned the money, it would seem that in this particular instance
there is no penalty provided for Ricky who shoved the money to the traffic
officer’s pocket. As there is no penalty imposable on Ricky as no public officer
was corrupted, it seems there was no crime committed. An act however illegal
or immoral cannot be considered a crime if there is no penalty imposed by the
law.
This is like the situation of a battered-wife who killed her husband who
was sleeping due to exhaustion after subjecting her to physical, psychological
and verbal abuse. It is clear she committed parricide in killing her husband
but since R.A. 9262, Sec. 26 says: Victim survivors of Battered-Woman
Syndrome do not incur any criminal or civil liability, there is no crime
committed by the wife as there is no penalty imposable on her.

ANOTHER ALTERNATIVE ANSWER:

No crime was committed because the traffic enforcer still issued him a
ticket and returned his money. There was no penalty imposed. The crime of
corruption of a public official under Art 212, RPC would have been committed
had the traffic enforcer accepted Ricky’s money, and refrained from issuing
him a traffic violation receipt.

-NOTHING FOLLOWS-

25
 Training & Convention Division
University of the Philippines Law Center

SUGGESTED ANSWERS
to the
2018 BAR EXAMINATIONS IN
REMEDIAL LAW

Danielle, a Filipino citizen and permanent resident of Milan, Italy, filed

with the Regional Trial Court (RTC) of Davao City, where she owns a rest
house, a complaint for ejectment against Dan, a resident of Barangay Daliao,
Davao City. Danielle’s property, which is located in Digos City, Davao del Sur,
has an assessed value of PhP 25,000. Appended to the complaint was Danielle’s
certification on non-forum shopping executed in Davao City duly notarized by
Atty. Dane Danoza, a notary public.

(a) Was there a need to refer the case to the Lupong

Tagapamayapa for prior barangay conciliation before the
court can take cognizance of the case? (2.5%)

SUGGESTED ANSWERS:

(a) No. Since Danielle is not an actual resident of Barangay Daliao,

or a barangay adjacent thereto, this case is not subject to the
Katarungang Pambarangay Law; hence, prior referral to the
Lupong Tagamayapa is not a pre-condition to the filing of this
case in court (Pascual v. Pascual, G.R. No. 157830, 17 November
2005).

(b) Was the action properly instituted before the RTC of Davao
City? (2.5%)

SUGGESTED ANSWERS:

(b) No. Batas Pambansa Blg. 129 vests the Municipal Trial Court
with the exclusive jurisdiction over unlawful detainer cases,
regardless of the assessed value of the property; hence, the
action was wrongfully instituted with the RTC.
 (c) Should the complaint be verified or is the certification
sufficient? (2.5%)

SUGGESTED ANSWERS:

(c) Yes. Considering that the action is for unlawful detainer, the
Rules on Summary Procedure will apply. Rule II, Section 3(B)
of the Rules on Summary Procedure requires that all pleadings
submitted to the court be verified; hence, a mere certification on
non-forum shopping, the complaint being an initiatory pleading
is insufficient.

II

Dendenees Inc. and David, both stockholders owning collectively 25% of

Darwinkle Inc., filed an action before the RTC of Makati to compel its Board of
Directors (BOD) to hold the annual stockholders’ meeting (ASM) on June 21,
2017, as required by Darwinkle Inc.’s By-Laws, with prayer for preliminary
mandatory injunction to use, as record date, April 30, 2017. The complaint
alleged, among others, that the refusal to call the ASM on June 21, 2017 was
rooted in the plan of the BOD to allow Databank, Inc. (which would have owned
50% of Darwinkle Inc. after July 15, 2017) to participate in the ASM to
effectively dilute the complainants’ shareholdings and ease them out of the
BOD. Dendenees Inc. and David paid the amount of PhP 7,565 as filing fees
based on the assessment of the Clerk of Court. The Board of Directors filed a
motion to dismiss on the ground of lack of jurisdiction. They averred that the
filing fees should have been based on the actual value of the shares of
Dendenees Inc. and David, which were collectively worth PhP 450 million.

If you were the Judge, will you grant the motion to dismiss? (5%)

SUGGESTED ANSWER:
No. While the payment of the prescribed docket fee is a jurisdictional
requirement, even its non-payment at the time of filing does not
automatically cause the dismissal of the case. The court may allow payment
of the fee within a reasonable time, but in no case beyond the applicable
prescriptive or reglementary period. Here, Dendenees Inc. and David
merely relied on the assessment made by the clerk of court. If incorrect, the
clerk of court has the responsibility of reassessing how much they must pay
within the prescriptive period (Proton Pilipinas v. Banque Nationale de
Paris, (G.R. No. 151242, June 15, 2005).

2
ALTERNATIVE ANSWER:

No. Since the case is an intra-corporate suit, BOD’s motion to dismiss

on the ground of deficient filing fees must be denied for being a prohibited
pleading. Under Rule 1, Section 8 of the Interim Rules on Intra-Corporate
Controversies (A.M. No. 01-2-04-SC), a motion to dismiss is a prohibited
pleading.
III
On February 3, 2018, Danny Delucio, Sheriff of the RTC of Makati,
served the Order granting the ex-parte application for preliminary attachment of
Dinggoy against Dodong. The Order, together with the writ, was duly received
by Dodong. On March 1, 2018, the Sheriff served upon Dodong the complaint
and summons in connection with the same case. The counsel of Dodong filed a
motion to dissolve the writ.

(a) Can the preliminary attachment issued by the Court in favor

of Dinggoy be dissolved? What ground/s can Dodong’s
counsel invoke? (2.5%)

SUGGESTED ANSWERS:

(a) Yes, the preliminary attachment issued by the court in favor of

Dinggoy can be dissolved, because the enforcement thereof was
improper.
In Torres, et al. v. Satsatin, (G.R. No. 166759, 25 November
2009), the Supreme Court ruled that once the implementation
of a writ of preliminary attachment commences, the court must
have acquired jurisdiction over the defendant, for without such
jurisdiction, the court has no power and authority to act in any
manner against the defendant, consequently, any order issuing
from the Court will not bind the defendant. It is, thus,
indispensable not only for the acquisition of jurisdiction over
the person of the defendant; but also upon
consideration of fairness, to apprise the defendant of the
complaint against him and the issuance of a writ of preliminary
attachment and the grounds therefore that prior or
contemporaneously to the serving of the writ of attachment,
service of summons, together with a copy of the complaint, the

3
 application for attachment, the applicants affidavit and bond,
and the order must be served upon him.
In this case, since copies of the complaint and summons
were served after the writ of preliminary attachment was served
upon Dodong, the writ therefore, was improvidently issued; the
writ of preliminary attachment may be dissolved.

ALTERNATIVE ASNWER:

(a) Yes, the party whose property has been ordered attached may
file a motion to quash the order by filing a motion in court in
which the action is pending before or after the levy (Rule 57,
Sec. 13).

Other grounds:

1. Writ was improvidently issued

2. A counter-bond has been posted by the defendant
3. The attachment bond is insufficent

(b) If Dodong posts a counter bond, is he deemed to have

waived any of his claims for damages arising from the
issuance of the Order and writ of attachment? (2.5%)

SUGGESTED ANSWER:

(b) No, the posting of a counter-bond does not amount to a waiver

of his claim for damages arising from the issuance of the Order
and the writ of attachment. The counter-bond and a claim for
damages pertain to two (2) different aspects in the issuance and
implementation of a writ of preliminary attachment.
A counter-bond posted by the person against whom the
writ of preliminary attachment was issued, does not answer for
damages on account of the lifting of the attachment, but for the
payment of the amount due under the judgment that may be
recovered by an attaching creditor. The counter-bond stands
“in place of the properties so released” (Dizon v. Valdes, G.R.
No. L-23920, 25 April 1968).

4
 On the other hand, a claim for damages by the person
against whom the writ of preliminary attachment was issued is
governed by Rule 57, Section 20 of the Rules of Court, which
states that “an application for damages on account of improper,
irregular or excessive attachment must be filed before the trial
or before appeal is perfected or before the judgment becomes
executory, with due notice to the attaching party and his surety
or sureties setting forth the facts showing his right to damages
and the amount thereof. Such damages may be awarded only
after proper hearing and shall be included in the judgment on
the main case x x x”.
Considering that the Rules of Court provided different
purposes for the filing of a counter-bond and the filing of claim
for damages, Dodong’s posting of a counter-bond cannot be
deemed a waiver of his claim for damages.

IV

Dick Dixson had sons with different women — (i) Dexter with longtime
partner Delia and (ii) Dongdong and Dingdong with his housemaid Divina.
When Dick fell ill in 2014, he entrusted all his property titles and shares of stock
in various companies to Delia who, in turn, handed them to Dexter for
safekeeping. After the death of Dick, Dexter induced Dongdong and Dingdong
to sign an agreement and waiver of their right to Dick’s estate in consideration of
PhP 45 million. As Dexter reneged on his promise to pay, Dongdong and
Dingdong filed with the RTC of Manila a complaint for annulment of the
agreement and waiver. The summons and complaint were received by Dalia, the
housemaid of Dexter, on the day it was first served. Hence, Dexter filed a
motion to dismiss on the ground of lack of jurisdiction over his person. RTC
Manila granted the motion to dismiss.

Dongdong and Dingdong thereafter filed a new complaint against Dexter

for annulment of the agreement and waiver. Before Dexter could file his answer,
Dongdong and Dingdong filed a motion to withdraw their complaint praying that
it be dismissed without prejudice. An Order was issued granting the motion to
withdraw without prejudice on the basis that the summons had not yet been
served on Dexter. Dexter filed a motion for reconsideration of the order of
dismissal. He argued that the dismissal should have been with prejudice under
the “two-dismissal rule” of Rule 17, Section 1 of the Rules of Court, in view of
the previous dismissal of the first case.

5
 Will the two-dismissal rule apply making the second dismissal with
prejudice? (5%)

SUGGESTED ANSWER:
No, the two-dismissal rule will not apply, because the first dismissal
was at the instance of the defendant.
The requirements for the application of the two-dismissal rule under
Rule 17, Section 1 of the Rules of Court are: (a) [t]here was a previous case
that was dismissed by a competent court; (b) [b]oth cases were based on or
include the same claim; (c) [b]oth notices for dismissal were filed by the
plaintiff; and (d) [w]hen the motion to dismiss filed by the plaintiff was
consented to by the defendant on the ground that the latter paid and
satisfied all the claims of the former (Ching, et al. v. Cheng, et al., G.R. No.
175507, 8 October 2014).
In this case, the third requisite is absent because the first dismissal
was upon the motion to dismiss filed by Dexter; hence, the two-dismissal
rule will not apply.

Dorton Inc. (Dorton) sued Debra Commodities Inc. (Debra), Daniel, and
Debbie in the RTC of Manila for recovery of sum of money. The complaint
alleged that, on October 14, 2017, Debra obtained a loan from Dorton in the
amount of PhP 10 million with interest of 9% per annum. The loan was
evidenced by a promissory note (PN) payable on demand signed by Daniel and
Debbie, the principal stockholders of Debra, who also executed a Surety
Agreement binding themselves as sureties. Copies of both the PN and the Surety
Agreement were attached to the complaint. Dorton further alleged that it made a
final demand on March 1, 2018 for Debra and the sureties to pay, but the demand
was not heeded.

Debra, Daniel, and Debbie filed their answer, and raised the affirmative
defense that, while the PN and the Surety Agreement appeared to exist, Daniel
and Debbie were uncertain whether the signatures on the documents were theirs.
The PN and the Surety Agreement were pre-marked during pre-trial, identified
but not authenticated during trial, and formally offered.

Can the RTC of Manila consider the PN and the Surety Agreement in
rendering its decision? (5%)

6
SUGGESTED ANSWER:
Yes, the RTC of Manila may consider the PN and the surety
agreement in rendering its decision.
The PN and the surety agreement are actionable documents, defined
under Rule 8, Section 7 of the Rules of Court as a written instrument upon
which an action is founded upon Rule 8, Section 8, moreover, provides that
when an action is founded upon a written instrument, copied in or attached
to the corresponding pleading, the genuineness and due execution of the
instrument shall be deemed admitted unless the adverse party, under oath
specifically denies them, and sets forth what he claims to be the facts.
In this case, Debra, Daniel, and Debbie are parties to the PN and the
surety agreement. Since the PN and surety agreement are attached to the
complaint, Debra, Daniel, and Debbie are deemed to have admitted the
genuineness and due execution thereof for their failure to: (a) deny the
genuineness and due execution of these documents under oath; and (b) to set
for what they claim to be facts.
The court, therefore, may consider the PN and the surety agreement
in rendering its decision.

VI

Daribell Inc. (Daribell) filed a complaint for sum of money and damages
against spouses Dake and Donna Demapilis for unpaid purchases of construction
materials in the sum of PhP 250,000. In their answer, spouses Demapilis
admitted the purchases from Daribell, but alleged that they could not remember
the exact amount since no copies of the documents were attached to the
complaint. They nevertheless claimed that they made previous payments in the
amounts of PhP 110,000 and PhP 20,000 and that they were willing to pay the
balance of their indebtedness after account verification. In a written

manifestation, spouses Demapilis stated that, in order to buy peace, they were
willing to pay the sum of PhP 250,000, but without interests and costs.
Subsequently, Daribell filed a Motion for partial summary judgment. Thereafter,
Daribell filed an amended complaint, alleging that the total purchases of
construction materials were PhP 280,000 and only PhP 20,000 had been paid.
Daribell also served upon the spouses Demapilis a request for admission asking
them to admit the genuineness of the statement of accounts, delivery receipts and
invoices, as well as the value of the principal obligation and the amount paid as
stated in the amended complaint.

7
 Daribell thereafter amended the complaint anew. The amendment
modified the period covered and confirmed the partial payment of PhP110,000
but alleged that this payment was applied to the spouses’ other existing
obligations. Daribell however reiterated that the principal amount remains
unchanged.

(a) Is the request for admission deemed abandoned or withdrawn by

the filing of the second amended complaint? (2.5%)

SUGGESTED ANSWERS:

(a) No. The second amended complaint merely supersedes the first
amended complaint and nothing more, pursuant to Rule 10,
Section 8 of the Rules of Court; thus, the Request for Admission
is not deemed abandoned or withdrawn by the filing of the
Second Amended Complaint (Spouses Villuga v. Kelly Hardware
and Construction Supply, Inc., G.R. No. 176570, 18 July 2012).

(b) Can the amendment of the complaint be allowed if it

substantially alters the cause of action? (2.5%)

SUGGESTED ANSWERS:

(b) Such amendment could still be allowed when it is sought to

serve the higher interest of substantial justice, prevent delay,
and secure a just, speedy and inexpensive disposition of actions
and proceedings (Valenzuela v. Court of Appeals, G.R. No.
131175, August 28, 2001). The amended complaint may be
allowed if it will not prejudice the rights of the parties.

(c) Can the facts subject of an unanswered request for admission

be the basis of a summary judgment? (2.5%)

SUGGESTED ANSWERS:

(c) Yes. Summary judgment is a procedural device resorted to in

order to avoid long drawn-out litigations, and useless delays.
Such judgment is generally based on the facts proven
summarily by affidavits, depositions, pleadings, or admissions
of the parties (Spouses Villuga v. Kelly Hardware and
Construction Supply, Inc. G.R. No. 176570, 18 July 2012).

8
 In this case, the facts subject of an unanswered request
for admission are deemed admissions by the adverse party
(Rule 26, Section 2, Rules of Court). Applying the Supreme
Court’s ruling in Spouses Villuga v. Kelly Hardware and
Construction Supply, Inc., (G.R. No. 176570, 18 July 2012), these
facts may be the basis of a summary judgment.

VII

Dory Enterprises Inc. (Dory) leased to Digna Corporation (Digna) a

parcel of land located in Diliman, Quezon City. During the term of the lease,
Digna was informed by DBS Banking Corporation (DBS) that it had acquired
the leased property from the former owner Dory and required Digna to pay the
rentals directly to it. Digna promptly informed Dory of DBS’ claim of
ownership. In response, Dory insisted on its right to collect rent on the leased
property.

Due to conflicting claims of Dory and DBS over the rental payments,
Digna filed a complaint for interpleader in the RTC of Manila. Digna also prayed
that it be allowed to consign in court the succeeding monthly rentals, and that
Dory and DBS be required to litigate their conflicting claims. It later appeared
that an action for nullification of a dacion en pago was filed by Dory against
DBS in the RTC of Quezon City. In said case, Dory raised the issue on which of
the two corporations had better right to the rental payments. Dory argued that, to
avoid conflicting decisions, the interpleader case must be dismissed.

Does the action for nullification of the dacion en pago bar the filing of the
interpleader case? (2.5%)

SUGGESTED ANSWER:
Yes. The interpleader case should be dismissed in view of the action
for nullification of the dacion en pago.
Under Rule 2, Section 4 of the Rules of Court, if two or more suits are
instituted on the basis of the same cause of action, the filing of one or a
judgment upon the merits in any one is available as a ground for dismissal
of the others. In the situation above, the interpleader case filed by Digna
seeks to resolve who between Dory and DBS has the right to receive the
rental payments. Similarly, Dory’s action for nullification of the dacion en
pago will determine who between Dory and DBS has the right to collect
rental payments from Digna. Considering that the two cases involve the
same cause of action, the interpleader case should be dismissed.
9
ALTERNATIVE ANSWER:
Yes, the interpleader case must be dismissed. Interpleader, in this
case, should have been raised as a compulsory counterclaim. Failure to raise
the same amounts to a waiver of the counterclaim (Wack Wack Golf &
Country Club, Inc. v. Won and Tan, G.R. L-23851, March 26, 1976).

VIII
Spouses Dondon and Donna Dumdum owned a residential lot in Dapitan
City. Doy Dogan bought said lot and took possession thereof with the promise
to pay the purchase price of PhP 2 million within a period of six (6) months.
After receiving only PhP 500,000, spouses Dumdum executed the Deed of
Absolute Sale and transferred the title to Doy Dogan. The balance was not paid
at all. Spouses Dumdum, through counsel, sent a demand letter to Doy Dogan
for him to pay the balance of PhP 1.5 million plus interest of PhP150,000. Doy
Dogan responded in a letter by saying that “while the remaining balance is
admitted, the interest charged is excessive.” There being no payment, Spouses
Dumdum filed a complaint for reconveyance with damages against Doy Dogan
in the RTC of Dapitan City.

In his Answer, Doy Dogan raised, by way of affirmative defense, that the
purchase price had been fully paid and for this reason the complaint should have
been dismissed.

Spouses Dumdum then filed a motion for judgment on the pleadings

which was granted by the RTC of Dapitan City. The Court awarded PhP1.5
million actual damages representing the balance of the purchase price,
PhP200,000 as moral damages, PhP 200,000 as exemplary damages,
PhP 90,000 as interest, PhP 50,000 as attorney’s fees, and PhP 5,000 as cost of
suit.
Was it proper for the RTC of Dapitan City to grant the motion for
judgment on the pleadings? (2.5%)

SUGGESTED ANSWER:
No. It was improper for the RTC of Dapitan City to grant the motion
for judgment of the pleadings.
Rule 34 of the Rules of Court states that a judgment on the pleadings
is proper where an answer failed to tender an issue or otherwise admits the
material allegations of the adverse party’s pleading. In this case, Doy
Dogan alleged that he paid the purchase price in full, contrary to Spouses
Dumdum’s allegation that Doy Dogan did not pay the balance of Php1.5
Million. He tendered an issue in his answer as to whether or not he has an
10
outstanding unpaid balance with Spouses Dumdum. The answer claims that
the purchase price has been fully paid; hence, a judgment on the pleadings
was improper.

IX
In 2015, Dempsey purchased from Daria a parcel of land located in
Dumaguete, Negros Oriental. The latter executed a Deed of Absolute Sale and
handed to Dempsey the owner’s duplicate copy of TCT No. 777 covering the
property. Since he was working in Manila and still had to raise funds to cover
taxes, registration and transfer costs, Dempsey kept the TCT in his possession
without having transferred it to his name. A few years thereafter, when he
already had the funds to pay for the transfer costs, Dempsey went to the Register
of Deeds of Dumaguete and discovered that, after the sale, Daria had filed a
petition for reconstitution of the owner’s duplicate copy of TCT No. 777 which
the RTC granted. Thus, unknown to Dempsey, Daria was able to secure a new
TCT in her name.

What is Dempsey’s remedy to have the reconstituted title in the name of

Daria nullified? (5%)
SUGGESTED ANSWER:
Dempsey may file a Petition for Annulment of Judgment under Rule
47 of the Rules of Court.

The Supreme Court had consistently held that when the owner’s
duplicate certificate of title has not been lost, but is in fact in the possession
of another person, then the reconstituted certificate is void, because the
court that rendered the decision had no jurisdiction. As a rule,
reconstitution can validly be made only in case of loss of the original
certificate. In this regard, the remedy to nullify an order granting
reconstitution is a petition for annulment under Rule 47 of the Rules of
Court (Eastworld Motor Industries Corporation v. Skunac Corporation, G.R.
No. 163994, 16 December 2005).

In this case, RTC Dumaguete had no jurisdiction to order the

reconstitution of the owner’s duplicate copy of TCT No. 777, considering
that the owner’s duplicate copy thereof had not been lost, but is merely in
Dempsey’s possession. The order granting Daria’s petition for
reconstitution is therefore void; accordingly, Dempsey may file a Petition

11
for Annulment of Judgment under Rule 47 to nullify the reconstituted title
in Daria’s name.

X
In a buy-bust operation, 30 kilos of shabu were seized from Dave and
Daryll. They were arrested and placed on inquest before Prosecutor Danilo
Doon who ordered their continued detention. Thereafter, the information for
the sale and distribution of shabu was filed in court. When arraigned, Dave and
Daryll pleaded not guilty to the charge. During pre-trial, counsel for both of the
accused raised, for the first time, the illegality of the arrest. The case proceeded
to trial. After trial, the court scheduled the promulgation of judgment with
notice to both the accused and their counsel, Atty. Dimayuga. During the
promulgation, only Dave and Atty. Dimayuga were present. Both the accused
were convicted of the crime charged.

(a) Was the challenge to the validity of the arrest timely raised?
(2.5%)

SUGGESTED ANSWERS:
(a) No, the challenge to the validity of the arrest was not timely
raised. As a rule, an accused may question the validity of his
arrest through a motion to quash before he enters his or her
plea; otherwise, the objection is deemed waived, and an accused
is estopped from questioning the legality of his or her arrest
(Veridiano v. People of the Philippines, G.R. No. 200370, 7 June
2017).

(b) What is the remedy available to Daryll, if any, to be able to

file an appeal? (2.5%)

SUGGESTED ANSWERS:
(b) In this case, Dave and Daryll questioned the legality of their
arrest only during pre-trial, after they were arraigned; hence,
the challenge to the validity of the arrest was not timely raised.
To be able to file an appeal, Daryll should: (a) surrender,
and (b) file a motion for leave of court to file an appeal, stating
therein the reasons for his absence during the promulgation,
within 15 days from the date of promulgation of judgment.

12
 As a rule, the accused who fails to appear at the
promulgation of the judgment of conviction shall lose the
remedies available under the Rules of Court against the
judgment, such as the filing of: (a) a motion for new trial or
reconsideration; or (b) an appeal from the judgment of
conviction. The Rules of Court, however, allow the accused to
regain his standing in court to avail of these remedies by: (a) his
surrender; and (b) his filing of a motion for leave of court to
avail of these remedies, stating therein the reasons for his
absence within 15 days from the date of promulgation of
judgment (Villena v. People of the Philippines, G.R. No. 184091,
31 January 2011).

XI
In 2007, Court of Appeals Justice (CA Justice) Dread Dong (J. Dong) was
appointed to the Supreme Court (Court) as Associate Justice. Immediately after
the appointment was announced, several groups questioned his qualification to
the position on the ground that he was not a natural born Filipino citizen. In the
same year, the Court issued an Order enjoining him from accepting the
appointment or assuming the position and discharging the functions of his office
until he is able to successfully complete all the necessary steps to show that he is
a natural born citizen of the Philippines. He however, continued to exercise his
functions as CA Justice.

Since the qualification of a natural born citizen applies as well to CA

Justices, Atty. Dacio, a practicing lawyer, asked the Office of the Solicitor
General (OSG), through a verified request, to initiate a quo warranto proceeding
against J. Dong in the latter’s capacity as incumbent CA Justice. The OSG
refused to initiate the action on the ground that the issue of J. Dong’s citizenship
was still being litigated in another case.

When the OSG refused to initiate a quo warranto proceeding, Atty. Dacio
filed a petition for certiorari against the OSG, and certiorari and prohibition
against J. Dong. The petition for certiorari against the OSG alleged that the OSG
committed grave abuse of discretion when it deferred the filing of a quo
warranto proceeding against J. Dong, while the petition for certiorari and
prohibition against J. Dong asked the Court to order him to cease and desist from
further exercising his powers, duties and responsibilities as CA Justice. In both
instances, Atty. Dacio relied on the fact that at the time of J. Dong’s appointment
as CA Justice, J. Dong’s birth certificate indicated that he was a Chinese citizen
and his bar records showed that he was a naturalized Filipino citizen.

13
 (a) May the OSG be compelled, in an action for certiorari, to initiate a
quo warranto proceeding against J. Dong? (2.5%)

SUGGESTED ANSWERS:
(a) No. the OSG has the discretion in determining the presence of
the requisites for a Quo Warranto proceeding. Besides, there is
already a pending case for the purpose of determining
citizenship.
For a Quo Warranto proceeding to be successful the
private person suing must show a clear right to the contested
office (Ferdinand Topacio v. Associate Justice Gregory Ong and
the Office of the Solicitor General, G.R. No. 179895, 18 December
2008).

(b) Does Atty. Dacio have the legal personality to initiate the action for
certiorari and prohibition against J. Dong? (2.5%)
SUGGESTED ANSWERS:

(b) No. He is not clothed with legal interest. Rule 65, Sections 1 and
2 of the Rules of Court state that only an aggrieved party may
file petitions for certiorari and prohibition in the appropriate
court.

An “aggrieved party” is one who was a party to the

original proceedings that gave rise to the original action for
certiorari under Rule 65 (Siguion Reyna Montecillo and
Ongsiako Law Offices v. Chionlo-Sia, G.R. No. 181186, 3
February 2016).
In this case, since there is no “original proceeding” before
J. Dong where Atty. Dacio is a party. Atty. Dacio cannot be
considered an “aggrieved party” for purposes of Rule 65,
Sections 1 and 2 of the Rules of Court. Atty. Dacio therefore,
has no legal personality to file the same.

14
 XII
Dodo was knocked unconscious in a fist fight with Dindo. He was rushed
to the emergency room of the Medical City where he was examined and treated
by Dr. Datu. As he was being examined, a plastic sachet appearing to contain
shabu fell from Dodo’s jacket which was on a chair beside him. Dodo was thus
arrested by the same policemen who assisted him to the hospital. At Dodo’s
trial, the public prosecutor called Dr. Datu to the witness stand. When the public
prosecutor asked Dr. Datu as to what he saw in the emergency room, Dodo’s
counsel objected, claiming doctor-patient privilege rule.

How would you rule on the objection? (2.5%)

SUGGESTED ANSWER:
The objection should be overruled. The doctor-patient privilege under
Rule 130, Section 24 of the Rules of Court is limited to “any advice or
treatment given by him or any information which he may have acquired in
attending such patient in a professional capacity, which information was
necessary to enable him to act in that capacity, and which would blacken the
reputation of the patient” (See also: Lim v. Court of Appeals, G.R. No. 91114,
25 September 1992).
In this case, Dr. Datu is being called to testify on what he saw in the
emergency room, which does not pertain any information which he
acquired in attending to Dodo in a professional capacity. Simply, Dr. Datu
was being asked to testify as an ordinary witness, and not as Dodo’s
physician; hence, doctor-patient privilege under Rule 130, Section 24 of the
Rules of Court does not apply.

XIII

Denny is on trial for homicide. The prosecution calls Danilo, a police

officer, who interviewed the victim, Drew, shortly after the shooting. Danilo’s
testimony is being offered by the prosecution for purposes of proving that (i)
Drew is now dead; (ii) while in the emergency room, Drew was posting his
medical condition on Facebook and was “liking” the posts of his Facebook
friends; (iii) Drew asked the nurse for water but was refused because he was
bleeding, which subsequently angered Drew; and (iv) that before dying, Drew
signed a statement in which he identified Denny as the shooter.

Is the proposed testimony of Danilo admissible? (2.5%)

15
SUGGESTED ANSWER:
Yes. The subject matter of Danilo’s statements could be admitted as
independently relevant statement. They are intended to merely establish
either the truth or falsity of Drew’s statements.

ALTERNATIVE ANSWER:

(i) Danilo’s testimony as to the fact of Drew’s death is admissible,

because he has personal knowledge of Drew’s death. Rule 130,
Section 36 of the Rules of Court states:
“Sec. 36. Testimony generally confined to
personal knowledge; hearsay excluded. — A witness
can testify only to those facts which he knows of his
personal knowledge; that is, which are derived from
his own perception, except as otherwise provided in
these rules”.
In this case, Danilo has personal knowledge of Drew’s
death, because he was present when the latter died in the
emergency room; thus, Danilo’s testimony which pertains to
Drew’s death is admissible.
(ii) Danilo’s testimony as to the fact that Drew was using his
Facebook at the time he was in the emergency is inadmissible
because it is irrelevant. Rule 128, Section 3 of the Rules of
Court states:
“Sec. 3. Admissibility of evidence. —
Evidence is admissible when it is relevant to the
issue and is not excluded by the law of these rules”.
In this case, the fact that Danilo saw Drew using his
Facebook is irrelevant in proving the issue of Denny’s
purported commission of the crime of homicide.
(iii) Danilo’s testimony as to the fact that Drew was mad after the
nurse refused to give him water in the emergency room is
inadmissible, because it is irrelevant and immaterial under Rule
128, Section 3 of the Rules of Court. In this case, Drew’s

16
 reaction upon being refused water by the nurse is irrelevant to
prove Denny’s purported commission of the crime of homicide.
(iv) Danilo’s testimony is admissible to prove the fact that Drew
signed a document which identified Denny as the shooter
because he has personal knowledge of the same. Rule 130,
Section 36 states:
“Sec. 36. Testimony generally confined to
personal knowledge; hearsay excluded. — A witness
can testify only to those facts which he knows of his
personal knowledge; that is, which are derived from
his own perception, except as otherwise provided in
these rules”.
Danilo personally saw Drew sign the document which
purportedly identified Denny as the shooter; thus, his testimony
regarding the fact that Drew signed said document is
admissible.

XIV

Dave is on trial for sexual assault of Delly, a law student who sidelines as
a call center agent. Dave offers the testimony of Danny, who says that Dave is
known in the community as a decent and discerning person. The prosecution
presents a rebuttal witness, Dovie, who testifies that, if Dave was reputed to be a
good person, that reputation was a misperception because Dave had been
previously convicted of homicide. Is Dovie’s testimony admissible as to the
character of Dave? (2.5%)

SUGGESTED ANSWER:

No, Dovie’s testimony on Dave’s previous conviction for homicide as

evidence of his bad character does not refer to a moral trait involved in the
offense charged which is sexual assault (Section 51 (a)(2), Rule 130 of the
Rules of Court) .

XV

Atty. Dalmacio, the Director of the National Bureau of Investigation,

applied for a search warrant before the Executive Judge of RTC Manila. He

17
alleged in his application that a certain alias Django was keeping about 10 kilos
of shabu in a wooden cabinet located at Dillian’s Store in Paseo de Sta. Rosa,
Laguna. The Executive Judge of Manila personally examined Atty. Dalmacio
and his witnesses and thereafter issued the search warrant particularly describing
the place to be searched and the items to be seized.

(a) Can the search warrant issued by the Executive Judge of

Manila be enforced in Laguna? (2.5%)

SUGGESTED ANSWERS:

(a) Yes, the search warrant issued by the Executive Judge of

Manila may be enforced in Laguna.
Administrative No. 99-20-09 of the Supreme Court states
all applications for search warrant personally endorsed by the
head of the Philippine National Police (PNP), the National
Bureau of Investigation (NBI), The Presidential Anti-Organized
Crime Task Force (PAOC-TF) and the Reaction Against Crime
Task Force (REACT-TF) with The Executive Judge and Vice
Executive Judges of Regional Trial Courts, Manila and Quezon
City, may be served in places outside the territorial jurisdiction
of said courts.
In the case at bar, the application for the issuance of
search warrant was filed by the Director of the National Bureau
of the National Bureau of Investigation (NBI) before the
Executive Judge of Manila; hence, the search warrant may be
enforced outside the territorial jurisdiction of Manil

(b) Can the legal concept of “venue is jurisdictional” be validly

raised in applications for search warrants? (2.5%)

SUGGESTED ANSWERS:

(b) No, the legal concept of venue being jurisdictional is not

applicable.
The Supreme Court in Malaloan v. Court of Appeals,
(G.R. No. 104879, 6 May 1994), states that an application for a
search warrant is a special criminal process, rather than a

18
 criminal action; hence, the legal concept of venue being
jurisdictional is not applicable in the case at bar.

XVI

Danjo, a stay-in gardener at the Dy home in Quezon City, applied for

overseas employment in Riyadh as a flower arranger. After he left for abroad,
Dino Dy, head of the family, discovered that all his wristwatches were missing.
Dino followed Danjo’s Instagram account and in one instance saw Danjo
wearing his Rolex watch. He filed a complaint for qualified theft against Danjo
with the Office of the Prosecutor (OP), Quezon City. The subpoena with the
affidavit-complaint was served on Denden, Danjo’s wife, at their house. No
counter-affidavit was filed by Danjo who continued to work in Riyadh. After
conducting a preliminary investigation, the OP found probable cause against
Danjo and subsequently filed the information for qualified theft before the RTC
of Quezon City. The court likewise found probable cause and issued in 2016 a
warrant for Danjo’s arrest.

Danjo was repatriated to the Philippines in 2018. While Danjo was lurking
outside the Dys’ house, which was only about 100 meters away from the police
station, SPO1 Dody recognized Danjo. Realizing that the police station had a
copy of Danjo’s warrant of arrest, SPO1 Dody immediately pursued and arrested
Danjo.

(a) Was the warrant of arrest issued against Danjo who was not
in the Philippines valid? (2.5%)

SUGGESTED ANSWERS:

(a) Yes, the warrant of arrest issued against Danjo is valid.

Section 6, Rule 112 of the Revised Rules of Criminal

Procedure states:

“Section 6: When warrant of arrest may issue. — (a) By

the Regional Trial Court. — Within ten (10) days from the
filing of the complaint or information, the judge shall personally
evaluate the resolution of the prosecutor and its supporting
evidence. He may immediately dismiss the case if the evidence
on record clearly fails to establish probable cause. If he finds
probable cause, he shall issue a warrant of arrest, or a
commitment order if the accused has already been arrested
pursuant to a warrant issued by the judge who conducted the
preliminary investigation or when the complaint or information

19
 was filed pursuant to section 7 of this Rule. In case of doubt on
the existence of probable cause, the judge may order the
prosecutor to present additional evidence within five (5) days
from notice and the issue must be resolved by the court within
thirty (30) days from the filing of the complaint of information”.
Likewise, in Ocampo v. Abando, (G.R. No. 176830, 11
February 2014), the Supreme Court held that,
“[I]t is enough that the judge personally
evaluates the Prosecutor’s report and supporting
documents showing the existence of probable cause
for the indictment and, on the basis thereof, issue a
warrant of arrest; or on the basis of his evaluation
he finds no probable cause, to disregard the
Prosecutor’s resolution and require the submission
of additional affidavits of witnesses to aid him in
determining its existence”.
It is provided that the Judge, may at his discretion, issue a
warrant of arrest to order the arrest of Danjo if the prosecution
sufficiently established the existence of a probable cause as
required by the Revised Rules of Criminal Procedure.
It is clear, therefore, that the warrant of arrest issued
against Danjo is valid

(b) Can the warrant of arrest be served Danjo upon his return?
(2.5%)

SUGGESTED ANSWERS:

(b) Yes, the warrant of arrest may be served on Danjo upon his
return to the Philippines.
The Supreme Court in Manangan v. Court of First
Instance of Nueva Vizcaya (G.R. No. 82760, 30 August 1990)
ruled that unlike a search warrant, which is valid for only ten
(10) days from date (Rule 126, Sec. 9), a Warrant of Arrest
remains valid until arrest is effected or the Warrant lifted.

20
 In the case at bar, absent any indication that the
warrant of arrest is lifted by the Court , the warrant of arrest
issued for the arrest of Danjo is still valid.

XVII

Don Deles, a contractor, was sued together with Mayor Dante Dungo and
Congressman Dal Dilim for malversation of public funds before the Office of the
Ombudsman. Danny Din, a material witness of the complainant Diego
Domingo, was hired as an engineer by a construction company in Qatar and had
to depart in two (2) months. To perpetuate Danny Din’s testimony, Diego
Domingo applied for his conditional examination before the Sandiganbayan.

Should the application for conditional examination of Danny Din be

granted? (2.5%)

SUGGESTED ANSWER:

The application for conditional examination of Danny Din should not

be granted.
The case is still under investigation before the Office of the
Ombudsman. There is no trial of the case before the Sandigan, yet. Rule
119, Section 15 of the Rules of Court on the conditional examination of the
witness of the Prosecution is made before the court where the case is
pending.
Rule 119, Section 12 of the Rules of Court state that a conditional
examination of witnesses for the prosecution may be applied for when a
person has been held to answer for an offense. In addition to this
requirement, the applicant must show that: (a) the witness is sick or infirm
to appear at the trial as directed by the order of the court; (b) or has to
leave the Philippines with no definite date of returning thereto, he may
forthwith be conditionally examined before the judge or the court where the
case in pending.

XVIII

The Republic of the Philippines (Republic) filed a complaint with the

Sandiganbayan in connection with the sequestered assets and properties of Demo
Companies Inc. (Demo) and impleaded its officers and directors. Since the
complaint did not include Demo as defendant, the Sandiganbayan issued a
resolution where it ordered Demo to be impleaded. Thereafter, the Republic
21
filed an amended complaint naming Demo as additional defendant, which
amendment was later admitted.

Demo filed a motion for bill of particulars for the Republic to clarify
certain matters in its amended complaint. The Sandiganbayan immediately
granted the motion. Upon submission of the bill of particulars by the Republic,
Demo filed a motion to dismiss arguing that the answers in the bill of particulars
were indefinite and deficient responses to the question of what the alleged
illegally acquired funds or properties of Demo were. The Sandiganbayan
dismissed the case.

(a) Was the Sandiganbayan correct in dismissing the case? (2.5%)

SUGGESTED ANSWERS:

(a) No, the Sandiganbayan is incorrect in dismissing the case. An

action cannot be dismissed on the ground of vagueness or
indefiniteness (Galeon v. Galeon, G.R. L-30380, 28 February
1973).

ALTERNATIVE ANSWER:

(a) Yes, the Sandiganbayan was correct in dismissing the case.

Under Rule 12, Section 4 of the Rules of Court, the
consequence of insufficient compliance with the court’s order
for a bill of particulars or a more definite pleading is that the
court may order the striking out of said pleading or the portions
thereof.
In this case, the Sandiganbayan dismissed the case upon
non-compliance with its order for a definite pleading. The
dismissal of the case was made by the striking out of the
pleading, which in this case was the complaint by the Republic.
In striking out said pleading, no complaint existed; thus, the
Sandiganbayan effectively dismissed the case.
The Sandiganbayan, therefore, correctly dismissed the
case, as the bill of particulars was deemed insufficient leading to
the striking out of the complaint.

22
 (b) What can the defendant, in a civil case, do in the event that his
motion for bill of particulars is denied? (2.5%) (BRUSELAS)

SUGGESTED ANSWER:

(b) Under Rule 12, Section 5 of the Rules of Court, after notice of
denial of his motion, the moving party may file his responsive
pleading within the period to which he was entitled at the time
of filing his motion, which shall not be less than five (5) days in
any event. If tainted with grave abuse of discretion, the moving
party may question the denial thru a Rule 65 certiorari.

XIX
Drylvik, a German national, married Dara, a Filipina, in Dusseldorf,
Germany. When the marriage collapsed, Dara filed a petition for declaration of
nullity of marriage before the RTC of Manila. Drylvik, on the other hand, was
able to obtain a divorce decree from the German Family Court. The decree, in
essence, states:

The marriage of the Parties contracted on xxx before the Civil Registrar of
Dusseldorf is hereby dissolved. The parental custody of the children Diktor and
Daus is granted to the father.

Drylvik filed a motion to dismiss in the RTC of Manila on the ground that
the court no longer had jurisdiction over the matter as a decree of divorce had
already been promulgated dissolving his marriage to Dara. Dara objected, saying
that while she was not challenging the divorce decree, the case in the RTC still
had to proceed for the purpose of determining the issue of the children’s custody.
Drylvik counters that the issue had been disposed of in the divorce decree, thus
constituting res judicata.

(a) Should Drylvik’s motion to dismiss be granted? (2.5%)

SUGGESTED ANSWER:

(a) No, the motion to dismiss cannot be granted.

In Roehr v. Rodriguez (G.R. No. 142820, 20 June 2003),
the Supreme Court ruled that divorce decrees obtained by
foreigners in other countries are recognizable in our
jurisdiction, but the legal effects thereof, e.g. on custody, care
and support of the children, must still be determined by our
courts. Before our courts can give the effect of res judicata to a
foreign judgment, such as the award of custody of the children,
23
 it must be shown that the parties opposed to the judgment had
been given ample opportunity to do so on grounds allowed
under Rule 39, Section 50 of the Rules of Court.
Rule 39, Section 50 states that “[i]n case of a judgment
against a person, the judgment is presumptive evidence of a
right as between the parties and their successors in interest by a
subsequent title; but the judgment may be repelled by evidence
of a want of jurisdiction, want of notice to the party, collusion,
fraud, or clear mistake of law or fact.” Thus, in actions in
personam, a foreign judgment merely constitutes prima facie
evidence of the justness of the claim of a party and, as such, is
subject to proof to the contrary.
In this case, the divorce decree issued by the German
Family Court merely constitutes prima facie evidence and it
must be proven that Dara was given the opportunity to
challenge the judgment of the German court so that there is
basis for declaring that judgment as res judicata with regard to
the rights of petitioner to have parental custody of their two
children.

(b) Is a foreign divorce decree between a foreign spouse and a

Filipino spouse, uncontested by both parties, sufficient by
itself to cancel the entry in the civil registry pertaining to the
spouses’ marriage? (2.5%)

SUGGESTED ANSWER:
(b) No, a foreign divorce decree between a foreign spouse and a
Filipino spouse, uncontested by both parties is insufficient by
itself to cancel the entry in the civil registry. Before a foreign
divorce decree can be recognized by our courts, the party
pleading it must prove the divorce as a fact and demonstrate its
conformity to the foreign law allowing it (Republic v. Manalo,
G.R. No. 221029, 24 April 2018).

24
 XX

Dominic was appointed special administrator of the Estate of Dakota

Dragon. Delton, husband of Dakota, together with their five (5) children,
opposed the appointment of Dominic claiming that he (Dominic) was just a
stepbrother of Dakota. After giving Dominic the chance to comment, the court
issued an Order affirming the appointment of Dominic.

(a) What is the remedy available to the oppositors? (2.5%)

SUGGESTED ANSWERS:
(a) The remedy available to the oppositors of the appointment of
Dominic as special administrator is to file a petition for certiorari
under Rule 65 of the Rules of Court. The appointment of special
administrators, being discretionary, is thus interlocutory and
may be assailed through a petition for certiorari under Rule 65 of
the Rules of Court (Ocampo v. Ocampo, G.R. No. 187879, 5 July
2010).

(b) If there are no qualified heirs, can the government initiate escheat
proceedings over the assets of the deceased? To whom, in
particular, shall the estate of the deceased go and for whose benefit?
(2.5%)

SUGGESTED ANSWER:
(b) If there are no qualified heirs, Rule 91, Section 1 of the Rules of
Court provides that the Solicitor General or his representatives
in behalf of the Republic of the Philippines, may file a petition
with the Regional Trial Court where the deceased last resided
or in which he had estate, if he resided outside the Philippines,
setting forth the facts and praying that the estate of the
deceased be declared escheated.
Rule 91, Section 3 of the Rules of Court provides that
once a judgment has been rendered in escheat proceedings, the
properties of the deceased shall be assigned as follows: (a)
personal estate to the municipality or city where he last resided
in the Philippines; (b) real estate to the municipalities or cities
in which the same is located; and (c) if the deceased never

25
 resided in the Philippines, the whole estate may be assigned to
the respective municipalities or cities where the same is located.
Such estate shall be for the benefit of public schools, and public
charitable institutions and centers in said municipalities or
cities.
XXI

The municipality of Danao, Cebu was a quiet and peaceful town until a
group of miners from Denmark visited the area and discovered that it was rich in
nickel. In partnership with the municipal mayor, the Danish miners had to
flatten 10 hectares of forest land by cutting all the trees before starting their
mining operations. The local DENR, together with the Samahan Laban sa
Sumisira sa Kalikasan, filed a petition for writ of Kalikasan against the
municipal mayor and the Danish miners in the RTC of Cebu.

(a) Is the petition within the jurisdiction of the RTC of Cebu? (2.5%)

SUGGESTED ANSWERS:

(a) No, the petition for a writ of kalikasan is not within the
jurisdiction of the RTC of Cebu. Rule 7, Section 3 of the Rules
of Procedure for Environmental Cases provides that a petition
for a writ of kalikasan is filed with the Supreme Court or any of
the stations with the Court of Appeals.
(b) What is the Precautionary Principle? (2.5%)

SUGGESTED ANSWERS:

(b) The Precautionary Principle states that when human activities

may lead to threats of serious and irreversible damage to the
environment that is scientifically plausible but uncertain,
actions shall be taken to avoid or diminish that threat (Rule 1,
Section 4(f) of the Rules of Procedure for Environmental Cases).

XXII
Danica obtained a personal loan of PhP 180,000 from Dinggoy, payable in
18 equal monthly installments of PhP 10,000 until fully paid. In order to
complete her payment at an earlier date, Danica instead paid PhP 20,000
monthly, and continued doing so until the 18th month, which payments Dinggoy
all accepted. Later on, she realized that she had overpaid Dinggoy by 100% as
she should have already completed payment in nine (9) months. She demanded
the return of the excess payment, but Dinggoy completely ignored her. Thus,

26
Danica availed of the Rules of Procedure for Small Claims Cases by filing before
the Municipal Trial Court (MTC) a Statement of Claim, together with the
required documents.

Should the MTC proceed with the case under the: (i) Revised Rules on
Summary Procedure; (ii) the Rules of Procedure for Small Claims; or (iii) the
regular procedure for civil cases? (5%)

SUGGESTED ANSWER:
The Municipal Trial Court (MTC) should try the case under the
Revised Rules of Procedure for Small Claims (the “Revised Rules”). As per
the latest amendment of said rules (En Banc Resolution dated 10 July 2018
in A.M. No. 08-8-7-SC), the MTC shall apply the Revised Rules in all actions
which are purely civil in nature where the claim or relief prayed for is solely
for payment or reimbursement of sum of money not exceeding
Php300,000.00,[1] exclusive of interest and costs.
Having overpaid by one hundred percent (100%) of the amount of the
loan, Danica’s claim for reimbursement amounts to One Hundred Eight
Thousand Pesos (Php180,000.00), which is within the threshold of the
Revised Rules. Thus, the MTC should proceed to hear the case under the
Revised Rules.

[1]
The 2016 amendment increased the amount covered from Php100,000.00 to Php200,000.00.

-NOTHING FOLLOWS-

27
 Training & Convention Division
University of the Philippines Law Center

SUGGESTED ANSWERS
to the
2018 BAR EXAMINATIONS IN
LEGAL ETHICS

The lawyer’s oath is a source of any lawyer’s obligations and its violation
is a ground for the lawyer’s suspension, disbarment, or other disciplinary action.
Without stating your name and other circumstances that will identify you,
substantially write down the lawyer’s oath that a person who has passed the bar
examinations is required to take and subscribe to before the Supreme Court.
(5%)

SUGGESTED ANSWER:

I do solemnly swear that I will maintain allegiance to the Republic of

the Philippines; I will support its Constitution and obey the laws as well as
the legal orders of the duly constituted authorities therein; I will do no
falsehood, nor consent to the doing of any in court; I will not wittingly or
willingly promote or sue any groundless, false or unlawful suit, or give aid
nor consent to the same; I will delay no man for money or malice, and will
conduct myself as a lawyer according to the best of my knowledge and
discretion, with all good fidelity as well to the courts as to my clients; and I
impose upon myself these voluntary obligations without any mental
reservation or purpose of evasion. So help me God.

II
In a complaint filed before the Integrated Bar of the Philippines (IBP)
against Atty. Cirilo Celis, a senior citizen, it was shown that: a) he failed to pay
his IBP dues for six (6) years; b) he indicated uniformly in his pleadings for three
(3) consecutive years “IBP Muntinlupa OR No. 12345” as proof of payment of
his IBP fees; and c) he did not indicate any Professional Tax Receipt number. to
prove payment of his professional dues.

1
 In his defense, Atty. Celis alleged that he is only engaged in a “limited”
law practice, and his principal occupation, as disclosed in his income tax return,
is that of a farmer of a 30-hectare orchard and pineapple farm in Camarines Sur.
He also claimed that he believed in good faith that, as a senior citizen, he was
exempt from payment of taxes, such as income tax, under Republic Act No.
7432 which grants senior citizens “exemption from the payment of individual
income taxes provided that their annual taxable income does not exceed the
poverty level as determined by the NEDA for that year.”

As a member of the IBP Board of Governors, decide on the following:

(a) the validity of his claim that, being engaged in a limited practice of
law and being a senior citizen who is exempt from the payment of
taxes, he is not required to pay his IBP and professional dues;
(2.5%)

SUGGESTED ANSWER:

(a) In accordance with Sections 9 and 10, Rule 139-A, Atty. Celis
can engage in the practice of law only by paying his IBP dues,
and it does not matter that his practice is “limited”. While it is
true that R.A. No. 7432, Sec. 4, grants senior citizen exemption
from the payment of individual income taxes provide that their
annual taxable income does not exceed the poverty level as
determined by the National Economic and Development
Authority (NEDA) for that year, the exemption does not include
payment of membership or association dues, which is not a tax
(Santos, Jr. vs. Llamas, 322 SCRA 529 [2000]).

(b) the obligations, if any, under the Rules of Court and the Code of
Professional Responsibility that Atty. Celis may have violated.
(2.5%)

SUGGESTED ANSWER:

(b) Canon 7, Code of Professional Responsibility – A lawyer shall at

all times uphold the integrity and dignity of the legal profession
and support the activities of the integrated Bar.
Sec. 9, Rule 139 – A, Rules of Court. “Every member of
the Integrated Bar shall pay such annual dues as the Board of
Governors shall determine with the approval of the Supreme
Court.”

2
 Sec. 10, Rule 139-A, Rules of Court – “Subject to the
provision of Section 12 of this Rule, default in the payment of
annual dues for six months shall warrant suspension of
members in the Integrated Bar, and default in such payment for
one year shall be a ground for removal of the name of the
delinquent member from the Roll of Attorneys.”

III

Carina was dismissed by her employer for breach of trust and confidence,
and for willful violation of company rules and policies. She filed an action for
illegal dismissal claiming that her termination was without legal basis. The Labor
Arbiter found that she was illegally dismissed and awarded her the amount of
PhP 80 million. On appeal to the National Labor Relations Commission (NLRC),
the award was reduced to PhP 40 million as separation pay, plus PhP 5 million
for the value of her stock option plans which would have vested if she were not
illegally dismissed from her job. Unsatisfied with the NLRC’s decision, she
appealed to the Court of Appeals (CA) the amount of monetary award granted by
the NLRC. She engaged the services of Casal, Casos and Associates to handle
her appeal. Her retainer agreement with Casal, Casos and Associates provided
for contingent fees equivalent to 10% of her claim for separation pay and 10% of
the value of stock options to be awarded to her.

The CA decision was not favorable to Carina, so she appealed the same to
the Supreme Court (the Court). While the case was pending appeal with the
Court, Carina entered into a compromise agreement with her employer to
terminate the case upon payment to her of the full amount of PhP 40 million, less
the PhP 15 million previously paid to her by her employer. Before the
compromise agreement was finalized, Carina terminated the services of Casal,
Casos and Associates and asked them to withdraw from the case pending before
the Court. The parties negotiated the compromise agreement without the
participation of their lawyers since the employer imposed the condition that no
lawyers should be involved in the compromise negotiation. She, together with
her employer, then filed the Compromise Agreement for approval by the Court,
and sought the termination of the case, with prejudice.

Casal, Casos and Associates filed a motion to intervene in the case

pending with the Court, praying that Carina be ordered to pay them PhP 4
million, representing 10% of the amount received by Carina from her employer
in settlement of the case, plus 6% legal interest from the date of filing of the
motion for intervention, until fully paid. The intervenors claimed that they were
dismissed without justifiable cause prior to the signing of the compromise
agreement for the reason that Carina, their client, wanted to evade payment of
their legal fees. Carina claimed they were dismissed because Attys. Casal and
Casos, who personally handled her case, had resigned from the law firm to join
the government, and because of the negligence and failure of her lawyers to

3
attend to her case. In reply, the intervenors said that the engagement was with the
law firm and not with individual lawyers. The law firm also presented letters
signed by their client commending them for work done well in the case.

(a) May lawyers legally charge their clients based on contingent fees?
(2.5%)

SUGGESTED ANSWER:

(a) Yes, Rule 21.01 (h) of the Code of Professional Responsibility

provides the contingency or certainty of compensation as one of
the factors in determining fair and reasonable fees. A
contingent fee is intended to enable a poor person to avail of the
services of a lawyer to protect his rights or redress his
grievances.

(b) Should Casal, Casos and Associates be allowed to intervene in the

case pending before the Court in order to collect their fees from
Carina? (2.5%)

SUGGESTED ANSWER:

(b) Yes. A lawyer is as much entitled to the judicial protection

against injustice, imposition or fraud on the part of the client, as
the client against abuse on the part of his counsel. Rule 16.03 of
the Code of Professional Responsibility permits the registration
of a lien although the lawyer concerned does not finish the case
successfully in favor of his client, because “a lawyer who quits
or is dismissed before the completion of his task is as much
entitled to protection of the rule” (Palanca vs. Pecson, G.R. Nos.
L-6334 and L-6346, February 25, 1954). He may enforce his
right to his fees by a separate action or intervention in the same
case he handled. The latter recourse is the better practice since
the judge is already conversant with the nature and extent of his
services.

4
 (c) Can Carina refuse to pay attorneys’ fees on the ground that the
lawyers who personally handled her case had already resigned from
the law firm with which she had contracted? (2.5%)

SUGGESTED ANSWER:

(c) When a client engages a law firm to represent him, his contract
is with a law firm and not with the individual lawyers. The
resignation, illness or inability of some of their lawyers will not
affect the ability of the law firm to continue its services.
Certainly, it cannot be used to evade payment of attorneys’ fees
due to the law firm.

(d) May Carina’s employer, defendant in this case, be held solidarily

liable with Carina for the payment of the attorneys’ fees of Carina’s
lawyers? (2.5%)

SUGGESTED ANSWER:

(d) If the evidence shows that the employer of Carina imposed the
“no lawyers in the negotiation of the compromise agreement
rule’ because of connivance in evading payment of Carina’s
lawyers, then the defendant employer should be held solidarily
liable in the payment of attorneys’ fees to Carina’s lawyers.
When the other party to the case is also guilty of fraud in the
payment of legal fees, he becomes a joint tortfeasor and should
be held solidarily liable with Carina. By participating in the
fraud, Carina’s employer also becomes liable even if Casals,
Casos and Associates was hired only to represent Carina
(Malvar v. Kraft Foods, G.R. 183952, Sepember 8, 2013).

(e) May the intervenors collect legal interest in addition to their

attorneys’ fees? (2.5%)

SUGGESTED ANSWER:

(e) Legal interest cannot be imposed on attorney’s fees. This is

because even if parties are free to stipulate the amount of

5
 attorney’s fees, the payment of attorneys’ fees is different from
ordinary obligations and contracts. The Civil Code provisions
on payment of legal rate of interest in the event of default apply
only to ordinary obligations and contracts (Bach v. Ongkiko
Kalaw Manhit and Acorda Law Office, G.R. No. 160334,
Sepember 11, 2006).

IV

Atty. Cornelio Carbon, 36 years of age, had always dreamed of becoming

a judge, and eventually, a justice, but his legal career took a different turn. Upon
graduation, he joined a government-owned financial institution where he worked
in the Loans and Claims Division. He also taught Negotiable Instruments Law in
a nearby law school at night. He has been active in his IBP Chapter and other
law organizations. However, in his 12 years of practice, he has never done trial
or litigation work.

(a) Is Atty. Carbon engaged in the “practice of law”? (2.5%)

SUGGESTED ANSWER:

(a) Yes, he is engaged in the practice of law, which has been defined
as “any activity in or out of court which requires the application
of law, legal procedure, knowledge, training and experience”
(Cayetano v. Monsod, 201 SCRA 210 [1991]). Work in the
government that requires the use of legal knowledge is
considered practice of law (Lingan v. Calubaquib, 727 SCRA 355
[2014], Fajardo v. Alvarez, A.C. No. 9018, April 20, 2016).
Lawyers who teach law are considered engaged in the practice
of law (Re: Letter of the UP Law Faculty, A.M. No. 10-10-4-SC,
March 8, 2011).

(b) Is Atty. Carbon qualified to become a Regional Trial Court Judge?

(2.5%)

SUGGESTED ANSWER:

(b) Yes, as long as he is a natural-born citizen of the Philippines, at

least 35 years of age, and has practiced law or held public office

6
 requiring practice of law for at least 10 years. There is no
requirement that he should have done actual trial or litigation
work.

Carlos contracted two marriages: the first was with Consuelo, whom he
left in the province, and the second was with Corinne in Manila, with whom he
had six (6) children. Both women were unaware of Carlo’s marriage to the
other.

When Carlos entered law school, he met Cristina, a classmate, to whom he

confided his marital status. Not long after, Carlos and Cristina became involved
in an extramarital affair, as a result of which Carlos left Corinne and their
children. During Carlos and Cristina’s senior year in law school, Consuelo
passed away. After their admission to the bar, Atty. Carlos and Atty. Cristina
decided to get married in Hong Kong in a very private ceremony. When Corinne
learned of Carlos and Cristina’s wedding in Hong Kong, she filed a disbarment
case against Atty. Carlos and Atty. Cristina on the ground of gross immorality.
Atty. Carlos and Atty. Cristina raised the following defenses:

a) the acts complained of took place before they were admitted to the
bar; and

b) Atty. Carlos’ marriage to Corinne was void ab initio due to his

subsisting first marriage with Consuelo, and they were free to marry
after Consuelo died.

Rule on each defense. (2.5% each)

SUGGESTED ANSWERS:

(a) It is not important that the acts complained of were committed

before they were admitted to the bar. The possession of good
moral character is both a condition precedent for admission to
the bar and a continuing condition to remain a member of the
legal profession. In the case of Garrido v. Garrido, (A.C. No.
6593, February 4, 2010), involving the same facts, the Supreme
Court held as follows:
“Admission to the bar does not preclude a
subsequent judicial inquiry, upon proper complaint,
into any question concerning the mental or moral

7
 fitness of the respondent before he became a lawyer.
Admission to the practice only creates the rebuttable
p resu m p t ion th a t th e ap p l ican t h as al l th e
qualifications to become a lawyer, this may be refuted
by clear and convincing evidence to the contrary even
after admission to the Bar.”
(b) In the same Garrido case, the defense of the second marriage
being void while the third marriage is valid, was also raised. The
Supreme Court held as follows:
“While Atty. Valencia (third wife) contends
that Atty. Garrido’s marriage with Maelotisea
(second wife) was null and void, the fact remains that
(s)he took a man away from a woman who bore him
six (6) children. Ordinary decency would have
required her to ward off Atty. Garrido’s advances, as
he was a married man, in fact a twice-married man
with both marriages subsisting at that time, she
should have said no to Atty. Garrido from the very
start. Instead, she continued her liaison with Atty.
Garrido, driving him, upon the death of Constancia,
away from legitimizing his relationship with
Maelotisea and their children. Worse than this,
because of Atty. Valencia’s presence and willingness,
Atty. Garrido even left his second family and six
children for a third marriage with her. This scenario
smacks of immorality even if viewed outside of the
prism of law.
We are not unmindful of Atty. Valencia’s
expressed belief that Atty. Garrido’s second marriage
to Maelotisea was invalid, hence, she felt free to
marry Atty. Garrido. While this may be correct in
the strict legal sense and was later on confirmed by
the declaration of the nullity of Atty. Garrido’s

8
 marriage to Maelotisea, we do not believe at all in the
honesty of this expressed belief.”

VI

Mrs. Conchita Conchu engaged the services of Atty. Carlo Colorado to act
as private prosecutor to handle a criminal case against persons suspected of
slaying her husband. Atty. Colorado performed his duties -he interviewed
witnesses to build up his case and rel igiously attended hearings. However, he
failed to attend one hearing (allegedly because he did not receive a notice) in
which the court, over Mrs. Conchu’s objections, granted bail to all the accused.
Mrs. Conchu belligerently confronted Atty. Colorado about his absence. Stung
by Mrs. Conchu’s words, Atty. Colorado filed with the court a “Motion to
Withdraw as Counsel”. The motion did not bear the consent of Mrs. Conchu, as
in fact, Mrs. Conchu refused to sign her conformity to Atty. Colorado’s
withdrawal. Meanwhile, the hearing in the criminal case continued, but Atty.
Colorado no longer appeared at the hearings nor did he contact Mrs. Conchu.
Mrs. Conchu then filed a complaint seeking disciplinary sanctions against Atty.
Colorado. Atty. Colorado cited “loss of confidence” and “serious differences”
with the client as his reasons for withdrawing his services unilaterally.

Can Atty. Colorado be sanctioned for his actions? (2.5%)

SUGGESTED ANSWER:

Atty. Colorado can be sanctioned for his actions. Under the Rules of
Court, an attorney who undertakes to conduct an action impliedly stipulates
to carry it to its conclusion. He is not at liberty to abandon it without
reasonable cause. A lawyer’s right to withdraw from a case before its final
adjudication arises only from the client’s written consent or from the
court’s approval of his motion to withdraw based on a good cause.
Furthermore, being an officer of the court in whose favor a lawyer owes the
duty to assist in administering justice, he may not withdraw or be permitted
to withdraw as counsel in a case if such withdrawal will work injustice to a
client or frustrate the ends of justice (Orcino v. Gaspar, 279 SCRA 479
[1997]).

9
 VII

Atty. Celso Casis’ relationship with Miss Cory Cerrada began when he
represented her in several criminal cases for estafa and violation of B.P. 22. His
expertise and diligence in personally assisting and facilitating her release on bail
and other legal actions saved her from many legal predicaments. Despite her
initial resistance, Miss Cerrada, convinced by Atty. Casis’ sincerity and
representation that he was separated from his wife and was taking necessary
steps for the annulment of his marriage, began to live with him openly as
husband and wife. One day, Atty. Casis’ wife suddenly entered Miss Cerrada’s
home and assaulted her, inflicting injuries. Miss Cerrada then filed a complaint
with the IBP charging Atty. Casis with gross immorality and gross misconduct.
However, shortly afterwards, upon Atty. Casis’ pleas, Miss Cerrada filed a
motion to withdraw the complaint. The IBP had required Atty. Casis to file an
answer but he did not do so, relying on Miss Cerrada’s withdrawal of the
complaint against him. Can the IBP continue to investigate Atty. Casis and
recommend the imposition of sanctions against him, and for the Court to impose
sanctions, if warranted, notwithstanding Miss Cerrada’s filing of the motion to
withdraw the complaint against him? (2.5%)

SUGGESTED ANSWER:

Yes. The IBP can continue to investigate Atty. Casis. A disbarment

proceeding is sui generis, neither a civil or a criminal action. Not being a
civil action, the complainant is not a plaintiff nor the respondent a
defendant. It involves no private interest and affords no redress for private
grievances. A disciplinary action is in reality an investigation by the court
into the misconduct of its officer or an examination into his character.
Desistance or withdrawal of the disbarment case does not exonerate the
respondent. If the evidence on record warrants, the respondent may be
suspended or disbarred despite the deistance of the complainant or his
withdrawal of the charges (Rayos-Ombac v. Rayos, 285 SCRA 93[1998]).

VIII

Judge Celso Camarin posted in the bulletin board of his sala for two
weeks, an advertisement which says: “Wanted attractive waitresses, personable
waiters and cooks who may be interested in applying for employment in my
family’s restaurant business. Interested applicants may submit applications to
Branch XXX, RTC of Camarines Sur.” The screening of some applicants was
also conducted in the Judge’s office. What provisions, if any, of the Code of
Judicial Conduct did Judge Camarin violate? (2.5%)

10
SUGGESTED ANSWER:

In the case of Dionisio vs. Escano, 302 SCRA 411, February 1, 1999,
involving the same facts, the Supreme Court found the erring judge to have
violated the following rules of the Code of Judicial Ethics.
Canon 11, Rule 2.00 – A Judge should avoid impropriety and the
appearance of impropriety in all activities.
Canon 5, Rule 5.02 – A judge refrain from financial and business
dealings that tend to reflect adversely on the court’s impartiality, interfere
with the proper performance of judicial activities, or increase involvement
with lawyers or persons likely to come before the court. A Judge should so
manage investments and other financial interest to minimize the number of
case giving grounds for disqualification, and if necessary divest such
investment and interests. Divestment shall be made within one year from
the effectivity of this Code or from appointment, as the case may be.
Rule 5.03 – Subject to the provisions of the preceding rule, a judge
may hold and manage investment but should not serve as an office, director,
advisor, or employee of any business except as director, or non-legal
consultant of a family business.
The corresponding provisions of the New Code of Judicial Conduct
for the Philippine Judiciary would be:
Canon 4, Section 1 – Judges shall avoid impropriety and the
appearance of impropriety in all their activities.
Section 7 – Judges shall inform themselves about their personal
fiduciary financial interests and shall make reasonable efforts to be
informed about the financial interest of the members of their family.
Section 8 – Judges shall not use or lend the prestige of the judicial
office to advance their private interest, or of those of any member of their
family or of anyone else, no shall they convey or permit others to convey the
impression that anyone is in special position to influence them in the
performance of their judicial duties.

11
 IX

In a case pending before the Sandiganbayan, the Sandiganbayan justices

themselves actually took part in the questioning of a defense witness and the
accused. The records show that, while a witness was asked 16 questions on
direct examination by the defense counsel and six (6) questions by the prosecutor
on cross-examination, one justice interjected a total of 27 questions. After the
defense opted not to conduct any re-direct examination, another justice asked 10
more questions. With respect to one of the accused, both justices asked a total of
67 questions after cross-examination, and with respect to the other accused, a
total of 41 questions after cross-examination. More importantly, the questions of
the justices were in the nature of cross-examinations characteristic of
confrontation, probing, and insinuation.

Is this manner of questioning proper? (5%)

SUGGESTED ANSWER:

“This Court has acknowledged the right of a trial judge to question

witnesses with a view to satisfying his mind upon any material point which
presents itself during the trial of a case over which he presides. But not only
should his examination be limited to asking “clarificatory” questions, the
right should be sparingly and judiciously used, for the rule is that the court
should stay out of it as much as possible, neither interfering nor intervening
in the conduct of the trial. Here, these limitations were not observed. Hardly
in fact can one avoid the impression that the Sandiganbayan had allied itself
with, or to be more precise, had taken the cudgels for the prosecution in
proving the case against Tabuena and Peralta when the Justices cross-
examined the witnesses, their cross-examination supplementing those made
by Prosecutor Viernes and far exceeding the latter’s questions in length.
The “cold neutrality of an impartial judge” requirement of due process was
certainly denied Tabuena and Peralta when the court, with its
overzealousness, assumed the dual rule of magistrate and advocate”
(Tabuena v. Sandiganbayan, 268 SCRA 332 [1997]).

X
In a complaint for disbarment, Connie alleged that she engaged the
services of Atty. Cesar Corpuz in the preparation and execution in her favor of a
Deed of Sale over a parcel of land from her common-law husband.
Subsequently, Atty. Corpuz filed a civil case on behalf of Constancia, the legal
wife of Connie’s common-law husband, for the annulment of the Deed of Sale,
impleading Connie as defendant.

In his defense, Atty. Corpuz asserted that, with the permission of

Constancia, he wrote a letter to Connie informing the latter of Constancia’s
adverse claim and urging her to settle the same, but Connie ignored his letter.
He also said that Connie did not object to his handling of the case on behalf of
Constancia; and therefore, he felt free to file the complaint against her. Is Atty.
Corpuz guilty of misconduct for representing conflicting interests? (5%)

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SUGGESTED ANSWER:

Canon 15 of the Code of Professional Responsibility provides that a

lawyer shall not represent conflicting interests except by written consent of
all concerned given after a full disclosure of the facts. Atty. Corpuz was
clearly guilty of misconduct for representing conflicting interests. Not only
did Atty. Corpuz agree to represent one client against another client in the
same action, he also accepted a new engagement that required him to
oppose the interest of his other client in a property in which his legal service
had been previously retained. Atty. Corpuz did not qualify for the exception
under Canon 15. He did not make a full disclosure of facts to Connie and
Constancia before he accepted the new engagement from Constancia. He
failed to obtain the written consent of his two clients as required under
Canon 15 (Josefina M. Aniñon v. Atty. Clemencio Sabitsana, Jr., A.C. No.
5098, April 11, 2012).

XI

Atty. Claire Cortez, a member of the Philippine Bar who was also
admitted to the New York Bar, was disbarred from the practice of law in New
York for violation of Anti-Money Laundering laws of that State. She returned to
the Philippines in order to resume her Philippine law practice.

Can she also be disbarred from practicing law in the Philippines for the
same infraction committed in the foreign jurisdiction? (5%)

SUGGESTED ANSWER:

Yes, she can, if the ground for which she was disbarred in New York
is also a ground for disbarment in the Philippines. But she is entitled to due
process and she can be disbarred here only after notice and hearing. The
disbarment decision in New York will only constitute prima facie evidence of
her guilt (In re: Maquera 435 SCRA 417 [2004]).

XII

From February to November 2004, Atty. Calumpang, in fraudulent

connivance with brokers, convinced Corinna to deliver to him advance money
for the titling of a beachfront property in Caramoan. Six months had elapsed and

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Atty. Calumpang had made absolutely no progress in the titling of the land. He
also could not return the advance money paid by Corinna because he had
converted the money to his personal use. After almost a decade, and the property
could still not be titled in Corinna’s name, she filed an action with the

Commission on Bar Discipline (CBD) in 2014 for deceit, malpractice, and

conduct unbecoming of a member of the Bar. In his defense, Atty. Calumpang
asserted that, since the acts complained of took place more than 10 years ago, the
case had already prescribed.

Rule on the defense of Atty. Calumpang. (5%)

SUGGESTED ANSWER:

A disbarment proceeding is imprescriptible. Unlike other proceedings,

it is not subject to the defense of prescription. The ordinary statutes of
limitations have no application to disbarment proceedings (Calo v. Degamo,
20 SCRA 1162 [1967], Frias v. Bautista-Lozada, 489 SCRA 349 [2006], Heck
v. Santos, 423 SCRA 329 [2004]). However, an unexplained long delay in
the filing of an administrative case creates suspicion on the motives of the
complainant (Salamanca v. Bautista, 8 SCRA 459 [1963], Valdez v. Valera, 81
SCRA 246 [2015]).

XIII

Dr. Cielo is a well-known medical doctor specializing in cosmetic surgery.

Dr. Cielo, together with a team of doctors, performed a surgical buttocks
enhancement procedure in her clinic on Ms. Cossette Concio (Concio).
Unfortunately, after a couple of years, the implant introduced during the
enhancement procedure caused infection and Concio became seriously ill.

Concio filed a criminal action for medical malpractice against Dr. Cielo
which was eventually dismissed for failure to prove that Dr. Cielo was negligent.
Concio was represented in this action by Atty. Cogie Ciguerra (Ciguerra). After
they lost the medical malpractice case, Ciguerra started writing a series of posts
on his Facebook (FB) account containing insulting and verbally abuse language
against Dr. Cielo. Among others, Ciguerra called Dr. Cielo a quack doctor,
“reyna ng kaplastikan at kapalpakan”, and accused her of maintaining a payola
or extra-legal budget to pay off prosecutors and judges in order to win her cases.
He also called on patients to boycott the clinic of Dr. Cielo.

Dr. Cielo filed a disbarment case against Ciguerra for posting on his FB
account, sexist, vulgar, and obscene comments, and language disrespectful of
women in his FB posts. Ciguerra’s defense is that his FB posts were private
remarks on his private FB account and only meant to be shared among his FB
friends, and Dr. Cielo was not part of them. He also claimed that the disbarment

14
case was filed in violation of his constitutionally-guaranteed right to privacy. The
Court, however, found that Ciguerra’s FB account did not have privacy settings.

Can Ciguerra be disbarred for the series of posts in his FB account against
Dr. Cielo? (5%)

SUGGESTED ANSWER:

Yes. In the case of Ma. Victoria G. Belo-Henares v. Atty. Roberto

“Argee” C. Guevarra, A.C. No. 1394, December 1, 2016, involving the same
facts, the Supreme Court, the Supreme Court, first of all debunked the
respondent lawyer’s defense of privacy by pointing out that he failed to
prove that he used the privacy tools of Facebook to limit his messages to his
“friend”. Even if he did so there is no guarantee that his friends will not
pass on his messages to their friends.
With regard to the defense of freedom of speech, the Supreme Court
ruled:
“Time and again, it has been held that the freedom of
speech and of expression, like all constitutional freedoms, is not
absolute. While the freedom of expression and the right of
speech and of the press are among the most zealously protected
rights in the Constitution, every person exercising them, as the
Civil Code stresses, is obliged to act with justice, give everyone
his due, and observe honesty and good faith. As such, the
constitutional right of freedom of expression may not be availed
of to broadcast lies, half-truths, insult others, destroy their
names, reputation of bring them into disrepute”.

XIV

Cacai, a law student, filed an administrative complaint against RTC Judge

Casimiro Conde, her professor in law school, based on the following allegations:

(a) In a school convocation where Judge Conde was the guest speaker,
Judge Conde openly disagreed and criticized a recently-decided
Supreme Court decision and even stressed that the decision of the
Supreme Court in that case was a serious violation of the
Constitution.

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 (b) In his class discussions, Judge Conde named Cacai’s mother, an
MTC judge, as one of the judges involved in a marriage scam. At
that time, the case against her mother was still pending. Judge
Conde also included in his class discussion Cacai’s brother whom
he referred to as a “court-noted drug addict.”

Cacai asserted that the acts of Judge Conde were open displays of
insensitivity, impropriety, and lack of delicadeza bordering on oppressive and
abusive conduct. She also alleged that Judge Conde acted with absolute
disrespect for the Court and violated the “subjudice rule” when he discussed the
marriage scam involving her mother because, at that time, the case was still
pending.

In his defense, Judge Conde argued that the case he discussed in the
school convocation was already of public knowledge and had been published
after it had become final. He also said it was part of his academic freedom to
openly discuss and criticize a decision of the Court since it was already decided
with finality, was patently erroneous, and clearly a violation of the Constitution.
With respect to discussions in class about Cacai’s mother, he said that the
marriage scam where her mother was charged scandalized the Judiciary and
became public knowledge when the Office of the Court Administrator held a
press conference on the matter and, that as a citizen, he could comment thereon
in the exercise of his rights to freedom of speech and expression. He also
asserted that his discussions in both fora could not be the subject of an
administrative complaint because they were not done in the performance of his
judicial duties.

Rule on each of the charges raised by Cacai, and the corresponding

defenses raised by Judge Conde. (2.5% each)

SUGGESTED ANSWERS:

(a) The New Code of Judicial Conduct provides that judges, like
any other citizens, are entitled to freedom of expressions, belief,
association and assembly, but in exercising such right, they shall
always conduct themselves in such a manner as to preserve the
dignity of the judicial office and the impartiality of the
judiciary. Judge Conde, however, should not have criticized in
public the Supreme Court decision as a serious violation of the
Constitution. He should have avoided any discussion in order to
preserve the traditional non-involvement of the judiciary in
public discussion of controversial issues (In re: Query of the
MTC Lawyers of Zamboanga del Norte, A.M. No. 86-11-3690).

16
 (b) Judge Conde is guilty of conduct unbecoming of a judge in
using intemperate language and unnecessary comments tending
to project Cacai’s mother as a corrupt and ignorant judge and
her brother as a drug addict (in his class discussion). While the
Code of Judicial Conduct recognizes the right of judges to
freedom of expression, this freedom should be exercised in a
manner that would preserve the dignity, independence and
respect for himself and judiciary as a whole. A magistrate
should not descend to the level of a sharp-tongued, ill-mannered
petty tyrant by uttering harsh words, snide remarks and
sarcastic comments. Judge Conde can be held administratively
liable even though his improper comments were made in his
class discussions because ethical conduct is expected of him as a
judge not only in the performance of his judicial duties, but in
his professional and private activities as well. A judge, in order
to promote public confidence in the integrity and impartiality of
the judiciary, must behave with propriety at all times. A judge’s
official life cannot be detached or separated from his personal
existence. Judge Conde also violated the subjudice rule which
restricts comments and disclosures pertaining to judicial
proceedings in order to avoid obstructing the administration of
justice. At the time Judge Conde discussed the marriage scam,
the case was still pending (Tormis v Paredes, A.M. No. RTJ-13-
2366, February 4, 2015).

XV

Charo Conti engaged the services of Atty. Cesar Compostela for the
registration of a property located in Cebu, and which property she had inherited
together with her siblings. It was agreed in writing that Charo would pay Atty.
Compostela PhP 20,000 as acceptance fee and PhP 2,000 as appearance fee.
During the last hearing of the case, Atty. Compostela demanded an additional
amount of PhP 20,000 for the preparation of a memorandum, which he said
would further strengthen Charo’s position, plus 20% of the total area of the
property as additional fees for his services. Charo did not agree to Atty.
Compostela’s demands since they were contrary to their agreement. Besides, the
property was co-owned with her siblings and she could not agree to Atty.
Compostela’s demands without the consent of her co-heirs.

17
 Four (4) years later, the petition for registration was approved and the
Land Registration Authority notified Charo that the decree of registration and the
original of the owner’s duplicate copy of the title had already been transmitted to
the Register of Deeds (RD). When Charo went to the RD, she was surprised to
discover that the owner’s duplicate copy of the title had already been claimed by,
and released to, Atty. Compostela. Despite demand, Atty. Compostela refused to
deliver the title to Charo until she paid the additional attorneys’ fees that he was
demanding. Charo then instituted a complaint for disbarment against him. In his
defense, Atty. Compostela claimed that:

(a) he had a right to retain the owner’s duplicate of the title as his
retaining lien; and

(b) he was entitled to the payment of additional professional fees on the

basis of the principle of quantum meruit.

Rule on Atty. Compostela’s defenses. (2.5% each)

SUGGESTED ANSWER:

(a) A lawyer has a right to retaining lien only of there is an

agreement as to the amount his fees. In this case, there is no
agreement as to Atty. Copmpostela’s claim for additional fees.
In fact, the client is opposed to the lawyer’s proposal for such
additional fees.
(b) A lawyer is entitled to fees on the basis of quantum meruit only
in the following cases:
1. There is no agreement between the lawyer and the client as
to the former’s fees;
2. There is an agreement but it is void;
3. There is an agreement but it has been set aside by the
parties themselves;
4. There is an agreement but the court has set it aside because
it found the fees to be unconscionable;
5. There is an agreement but the services of the lawyer were
terminated by the client for just cause.
None of these instances exist in this case. Atty. Compostela is
not entitled to additional fees on the basis of quantum meruit.

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 XVI

On March 1, 2017, sisters and business partners Carmina and Celeste

Corominas borrowed PhP 500,000 from Carmen Carunungan. It was agreed that
the amount will be paid in full one year after, or on March 1, 2018, with interest
at the rate of 10% per annum, without necessity of a demand. They also agreed
to be bound jointly and severally. For this purpose, they executed a promissory
note, secured by a postdated check in the amount of PhP 550,000 drawn from
their joint account, which check was dated March 1, 2018.

When the debt became due, Carmen deposited the check but it was
dishonored for insufficient funds. Carmen then sued Carmina and Celeste for
estafa through falsification of a commercial document. After finding probable
cause, the prosecutor filed a criminal case in court, where the sisters were
required to file their joint Judicial Affidavit. In their affidavit, they raised the
defense that they could not be guilty of estafa because: (i) the check was issued
only as a form of security; (ii) even if issued as payment, it was for a pre-existing
debt; and (iii) it was only upon Carmen’s insistence that they issued the check.

Before the case could be decided, the sisters offered to settle their debt
through a dacion en pago. They offered a Honda CRV which they jointly owned
in full settlement of the loan. Carmen agreed.

Prepare the following documents in legally acceptable and enforceable

forms, based on the above facts:

(a) The Promissory Note (5%);

SUGGESTED ANSWER:

(a) Promissory Note

“ For value received, We jointly and severally promise to

pay Carmen Carunungan or order the sum of Five Hundred
Thousand Pesos (P500,000.00), with interest thereon at 10% per
annum, on or before March 1, 2018, without necessity of
demand.
To secure payment, we attach herewith ____ Bank Check
No. __________ in the amount of P550,000.00, postdated March
1, 2018, and payable to Carmen Carunungan.

Manila, March 1, 2017.

(Sgd.) Carmina Corominas (Sgd.) Celeste Corominas

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 (b) The Judicial Affidavit (10%); and

SUGGESTED ANSWER:

Republic of the Philippines )

Metropolitan Manila ) s.s
City of ______________ )

JOINT JUDICIAL AFFIDAVIT

OF CARMINA COROMINAS and CELESTE COROMINAS

WE, CARMINA COROMINAS and CELESTE

COROMINAS, of legal age and residents of
___________________, after having been duly sworn, hereby
depose and state:

PRELIMINARY STATEMENT

We are being examined by Atty. “A” with address at

__________________. The examination is being held at
_________________ in the presence of ABC. WE are answering
the questions fully conscious that WE do so under oath and may
face criminal liability for false testimony.

Questions and Answers

Q1. Please state your name and other personal circumstances.

A1. WE are CARMINA COROMINAS and CELESTE
COROMINAS both of legal age, single and residents of
_________________________.
Q2. Why are you executing this Judicial Affidavit?
A2. We are executing this Judicial Affidavit to support our
defenses in the criminal case of estafa filed against us.
Q3. Why were you charged with such case?
A3. We were charged with estafa because we issued a check in
favor of Carmen Carunungan which eventually bounced
for insufficient funds.

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Q4. In answer to Q2, you mentioned that you are executing
this Judicial Affidavit to support your defenses in the
criminal case of estafa filed against you. Why do you
believe you are not guilty?
A4. We are not guilty because of the following reasons:
i the check was issued only as a form of security;
ii Even if issued as payment, it was for a pre-existing
debt, and
iii It was only upon the Carmen Carunungan’s
insistence that We issued the check.
Q5. Is there anything else you want to add to the above?
A5. No more sir.

AFFIANTS FURTHER SAYETH NAUGHT.

Manila, November ____, 2018.

CARMINA COROMINAS CELESTE COROMINAS

Affiant Affiant

Witnesses:

___________________________
ABC

ATTESTATION

I, Atty. “A” with office address at ____________ do

hereby attest as follows:
1. I personally conducted the examination of Carmina
Corominas and Celeste Corominas in question and answer
form.
2. I faithfully recorded the questions asked Carmina
Corominas and Celeste Corominas and the corresponding
answers they gave, and

21
 3. Neither I nor any other person then present coached
Carmina Corominas and Celeste Corominas regarding their
answers.
IN WITNESS WHEREOF, I hereunto affixed my
signature this ___ day of November 2018 at ________________.

Atty. “A”
Address
IBP OR No. place and date of issuance
PTR OR No. place and date of payment
MCLE Exemption ____________
Date of Issue _______________
Valid until _________________

JURAT

SUBSCRIBED AND SWORN TO BEFORE ME this ____

day of November 2018 at ________________, affiants Carmina
Corominas, Celeste Corominas exhibiting to me their
competent evidence of identity, consisting of a Driver’s License
No. _______________ expiring on _________, and a Driver’s
License No. ___________ expiring on ___________, respectively,
and affiant Atty. “A”, with Voter’s ID issued by the
Commission on Elections on ____________.
WITNESS MY HAND AND SEAL.

Notary Public

Doc. No. _____;

Page No. _____;
Book No. _____;
Series of 2018.

22
 (c) The Dacion en Pago (10%).

SUGGESTED ANSWER:

KNOW ALL MEN BY THESE PRESENTS:

This instrument, executed by CARMINA COROMINAS,

of legal age and a resident of ____________________, and
CELESTE COROMINAS, of legal age and a resident of
____________________, hereafter referred to as the DEBTORS,
and CARMEN CARUNUNGAN, of legal age, and a resident of
_______________, hereafter to be referred to as the
CREDITOR,

WITNESSETH:

WHEREAS, the DEBTORS are indebted to the

CREDITOR in the amount of FIVE HUNDRED FIFTY
THOUSAND PESOS (P550,000.00);
WHEREAS, the DEBTORS are the owners of a motor
vehicle located in __________________, and more specifically
described as follows:
Make : Honda CRV
Model : 2018
Motor No. : 12345
Chassis No. : 56789
CR No. : ___________

WHEREAS, the DEBTORS are willing to give the said

motor vehicle to the CREDITOR as full payment of their
aforesaid indebtedness to the latter; and
WHEREAS, the CREDITOR is willing to accept the said
motor vehicle as full payment of the indebtedness of the
DEBTORS;
NOW, THEREFORE, premises considered, the
DEBTORS have transferred and conveyed, as they hereby
transfer and convey, the aforesaid motor vehicle to the
CREDITOR as payment in full of their indebtedness to her, and

23
the CREDITOR hereby accepts the said vehicle as full payment
of the said indebtedness to her,

IN WITNESS WHEREOF, the parties hereto have signed

these presents, at the City of Manila, on ____________, 2018.

CARMINA COROMINAS CELESTE COROMINAS

Debtor Debtor

CARMEN CARUNUNGAN
Creditor

WITNESSES:

____________________ ____________________

ACKNOWLEDGMENT

In the City of Manila, this ___ day of ________, 2018,

before me personally appeared:
CARMINA COROMINAS, with Philippine Passport No.
_______ issued at __________________ on
___________________ and expiring on ___________________;
CELESTE COROMINAS, with Philippine Passport No.
________ issued at __________________ on
____________________, and expiring on
____________________, and

CARMEN CARUNUNGAN, with Senior Citizen’s Card

No. ____________ Issued at _______________ on
______________;
personally known to me to be the same persons who executed

24
 the foregoing instrument, and they acknowledged to me that the
same is their free and voluntary act and deed.

WITNESS MY HAND AND SEAL.

NOTARY PUBLIC
Until December 31, 2018
Doc. No. ____
Page No,____
Book No. ____
Series of 2018.

*NOTE: No Dacion en Pago in bar syllabus. This item should be given as

bonus.

-NOTHING FOLLOWS-

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