2013 Remedial Law Exam Essay Questions

on October 27, 2013 I. Alfie Bravo filed with the Regional Trial Court of Caloocan, a complaint for a sum of money against Charlie Delta. The claim is for Php1.5Million. The complaint alleges that Charlie borrowed the amount from Alfie and duly executed a promissory note as evidence of the loan. Charlies office secretary, Esther, received the summons at Charlies office. Charlie failed to file an answer within the required period, and Alfie moved to declare Charlie in default and to be allowed to present evidence ex parte. Ten days later, Charlie filed his verified answer, raising the defense of full payment with interest. 1. 2. II. Yvonne, a young and lonely OFW, had an intimate relationship abroad with a friend, Percy. Although Yvonne comes home to Manila every six months, her foreign posting still left her husband Dario lonely so that healso engaged in his own extramarital activities. In one particularlyexhilarating session with his girlfriend, Dario died. Within 180 days from Darios death, Yvonne gives birth in Manila to a baby boy. Irate relatives of Dario contemplate criminally charging Yvonne for adultery and they hire your law firm to handle the case. 1. 2. Is the contemplated criminal action a viable option to bring?(3%) Is a civil action to impugn the paternity of the baby boy feasible, and if so, in what proceeding may such issue be determined? (5%) III. While in his Nissan Patrol and hurrying home to Quezon City from his work in Makati, Gary figured in a vehicular mishap along that portion of EDSA within the City of Mandaluyong. He was bumped from behind by a Ford Expedition SUV driven by Horace who was observed using his cellular phone at the time of the collision. Both vehicles - more than 5 years old no longer carried insurance other than the compulsory third party liability insurance. Gary suffered physical injuries while his Nissan Patrol sustained damage in excess of Php500,000. 1. As counsel for Gary, describe the process you need to undertake starting from the point of the incident if Gary would proceed criminally against Horace, and identify the court with jurisdiction over the case. (3%) 2. If Gary chooses to file an independent civil action for damages, explain briefly this type of action: its legal basis; the different approaches in pursuing this type of action; the evidence you would need; and types of defenses you could expect. (5%) Was there proper and valid service of summons on Charlie?(3%) If declared in default, what can Charlie do to obtain relief?(4%)

IV. At the Public Attorneys Office station in Taguig where you are assigned, your work requires you to act as public defender at the local Regional Trial Court and to handle cases involving indigents. 1. In one criminal action for qualified theft where you are the defense attorney, you learned that the woman accused has been in detention for six months, yet she has not been to a courtroom nor seen a judge. What remedy would you undertake to address the situation and what forum would you use to invoke this relief? (3%) 2. In another case, also for qualified theft, the detained young domestic helper has been brought to court five times in the last six months, but the prosecution has yet to commence the presentation of its evidence. You find that the reason for this is the continued absence of the employer-complainant who is working overseas. What remedy is appropriate and before which forum would you invoke this relief? (3%) 3. Still in another case, this time for illegal possession of dangerous drugs, the prosecution has rested but you saw from the records that the illegal substance allegedly involved has not been identified by any of the prosecution witnesses nor has it been the subject of any stipulation. Should you now proceed posthaste to the presentation of defense evidence or consider some other remedy? Explain the remedial steps you propose to undertake. (3%) 4. In one other case, an indigent mother seeks assistance for her 14-year old son who has been arrested and detained for malicious mischief. Would an application for bail be the appropriate remedy or is there another

remedy available? Justify your chosen remedy and outline the appropriate steps to take. (3%) V. The spouses Juan reside in Quezon City. With their lottery winnings, they purchased a parcel of land in Tagaytay City for P100,000.00. In a recent trip to their Tagaytay property, they were surprised to see hastily assembled shelters of light materials occupied by several families of informal settlers who were not there when they last visited the property three(3) months ago. To rid the spouses Tagaytay property of these informal settlers, briefly discuss the legal remedy you, as their counsel, would use; the steps you would take; the court where you would file your remedy if the need arises; and the reason/s for your actions. (7%)

VI. While leisurely walking along the street near her house in Marikina, Patty unknowingly stepped on a garden tool left behind by CCC, a construction company based in Makati. She lost her balance as a consequence and fell into an open manhole. Fortunately, Patty suffered no major injuries except for contusions, bruises and scratches that did not require any hospitalization. However, she lost self-esteem, suffered embarrassment and ridicule, and had bouts of anxiety and bad dreams about the accident. She wants vindication for her uncalled for experience and hires you to act as counsel for her and to do whatever is necessary to recover at least Php100,000 for what she suffered. What action or actions may Patty pursue, against whom, where (court and venue), and under what legal basis? (7%)

VII. You are the defense counsel of Angela Bituin who has been charged under RA 3019 (Anti-Graft and Corrupt Practices Act) before the Sandiganbayan. While Angela has posted bail, she has yet to be arraigned. Angela revealed to you that she has not been investigated for any offense and that it was only when police officers showed up at her residence with a warrant of arrest that she learned of the pending case against her. She wonders why she has been charged before the Sandiganbayan when she is not in government service. 1. 2. What before-trial remedy would you invoke in Angelas behalf to address the fact that she had not been investigated at all, and how would you avail of this remedy? (4%) What during-trial remedy can you use to allow an early evaluation of the prosecution evidence without the need of presenting defense evidence; when and how can you avail of this remedy? (4%) VIII. On his way to the PNP Academy in Silang, Cavite on board a public transport bus as a passenger, Police Inspector Masigasig of the Valenzuela Police witnessed an on-going armed robbery while the bus was traversing Makati. His alertness and training enabled him to foil the robbery and to subdue the malefactor. He disarmed the felon and while frisking him, discovered another handgun tucked in his waist. He seized both handguns and the malefactor was later charged with the separate crimes of robbery and illegal possession of firearm. 1. Where should Police Inspector Masigasig bring the felon for criminal processing? To Silang, Cavite where he is bound; to Makati where the bus actually was when the felonies took place; or back to Valenzuela where he is stationed? Which court has jurisdiction over the criminal cases?(3%) 2. May the charges of robbery and illegal possession of firearm be filed directly by the investigating prosecutor with the appropriate court without a preliminary investigation? (4%)

IX. For over a year, Nenita had been estranged from her husband Walter because of the latters suspicion that she was having an affair with Vladimir, a barangay kagawad who lived in nearby Mandaluyong. Nenita lived in the meantime with her sister in Makati. One day, the house of Nenitas sister inexplicably burned almost to the ground. Nenita and her sister were caught inside the house but Nenita survived as she fled in time, while her sister tried to save belongings and was caught inside when the house collapsed. As she was running away from the burning house, Nenita was surprised to see her husband also running away from the scene. Dr. Carlos, Walters psychiatrist who lived near the burned house and whom Walter medically consulted after the fire, also saw Walter in the vicinity some minutes before the fire. Coincidentally, Fr. Platino, the parish priest who regularly hears Walters confession and who heard it after the fire, also encountered him not too far away from the burned house. Walter was charged with arson and at his trial, the prosecution moved to introduce the testimonies of Nenita, the doctor and the priest-confessor, who all saw Walter at the vicinity of the fire at about the time of the fire. 1. 2. 3. May the testimony of Nenita be allowed over the objection of Walter? (3%) May the testimony of Dr. Carlos, Walters psychiatrist, be allowed over Walters objection? (3%) May the testimony of Fr. Platino, the priest-confessor, be allowed over Walters objection? (3%) X. As a new lawyer, Attorney Novato limited his practice to small claims cases, legal counseling and the notarization of documents. He put up a solo practice law office and was assisted by his wife who served as his secretary/helper. He used a makeshift hut in a vacant lot near the local courts and a local transport regulatory agency. With this practice and location, he did not have big-time clients but enjoyed heavy patronage assisting walk-in clients. 1. 2. What role can Attorney Novato play in small claims cases when lawyers are not allowed to appear as counsel in these cases? (3%) What legal remedy, if any, may Attorney Novato pursue for a client who loses in a small claims case and before which tribunal or court may this be pursued? (4%)

2013 Legal Ethics Exam Essay Questions

on October 27, 2013 I. Atty. Bravo represents Carlos Negar (an insurance agent for Dormir Insurance Co.) in a suit filed by insurance claimant Andy Limot who also sued Dormir Insurance. The insurance policy requires the insured/claimant to give a written notice to the insurance company or its agent within 60 days from the occurrence of the loss. Limot testified during the trial that he had mailed the notice of the loss to the insurance agent, but admitted that he lost the registry receipt so that he did not have any documentary evidence of the fact of mailing and of the timeliness of the mailed notice. Dormir Insurance denied liability, contending that timely notice had not been given either to the company or its agent. Atty. Bravos client, agent Negar, testified and confirmed that he never received any notice. A few days after Negar testified, he admitted to Atty. Bravo that he had lied when he denied receipt of Limots notice; he did receive the notice by mail but immediately shredded it to defeat Limots claim. If you were Atty. Bravo, what would you do in light of your clients(Carlos Negars) disclosure that he perjured himself when he testified? (8%) II. Atty. Serafin Roto is the Corporate Secretary of a construction corporation that has secured a multi-million infrastructure project from the government. In the course of his duties as corporate secretary, he learned from the company president that the corporation had resorted to bribery to secure the project and had falsified records to cut implementing costs after the award of the project. The government filed a civil action to annul the infrastructure contract and has subpoenaed Atty. Roto to testify against the company president and the corporation regarding the bribery. Atty. Roto moved to quash the subpoena, asserting that lawyer-client privilege prevents him from testifying against the president and the corporation. Resolve the motion to quash. (8%) III. Miguel Jactar, a fourth year law student, drove his vehicle recklessly and hit the rear bumper of Simplicio Medrosos vehicle. Instead of stopping, Jactar accelerated and sped away. Medroso pursued Jactar and caught up with him at an intersection. In their confrontation, Jactar dared Medroso to sue, bragged about his connections with the courts, and even uttered veiled threats against Medroso. During the police investigation that followed, Medroso learned that Jactar was reviewing for the Bar examinations.

Under these facts, list and justify the potential objections that can be made against Jactars admission to the practice of law. (8%) IV. Atty. Doblar represents Eva in a contract suit against Olga. He is also defending Marla in a substantially identical contract suit filed by Emma. In behalf of Eva, Atty. Doblar claims that the statute of limitations runs from the time of the breach of the contract. In the action against Marla, Atty. Doblar now argues the reverse position i.e., that the statute of limitation does not run until one year after discovery of the breach. Both cases are assigned to Judge Elrey. Although not the sole issue in the two cases, the statute of limitations issue is critical in both. Is there an ethical/professional responsibility problem in this situation? If a problem exists, what are its implications or potential consequences? (8%) V. Atty. Repatriar, a law school classmate, approached you on your 25th Class Reunion, with questions on how he can resume the practice of law in the Philippines. He left the country in 1977 after two (2) years of initial law practice, and migrated to the United States where he was admitted to the practice of law in the State of New York. He asks that you give him a formal legal opinion on his query. Outline briefly the steps and the supporting legal reasons you would state in your legal opinion on what Atty. Repatriar should do to resume his Philippine practice. (8%) VI. An audit team from the Office of the Court Administrator found that Judge Contaminada committed serious infractions through the indiscriminate grant of petitions for annulment of marriage and legal separation. In one year, the judge granted 300 of such petitions when the average number of petitions of similar nature granted by an individual judge in his region was only 24 petitions per annum. The audit revealed many different defects in the granted petitions: many petitions had not been verified; the required copies of some petitions were not furnished to the Office of the Solicitor General and the Office of the Provincial Prosecutor; docket fees had not been fully paid; the parties were not actual residents within the territorial jurisdiction of the court; and, in some cases, there was no record of the cross-examinations conducted by the public prosecutor or any documentary evidence marked and formally offered. All these, viewed in their totality, supported the improvident and indiscriminate grant that the OCA found. If you were the counsel for Andy Malasuerte and other litigants whose marriages had been improperly and finally annulled, discuss your options in administratively proceeding against Judge Contaminada, and state where and how you would exercise these options. (8%)

VII. In an action to prevent the condominium developer from building beyond ten (10) floors, Judge Cerdo rendered judgment in favor of the defendant developer. The judgment became final after the plaintiffs failed to appeal on time. Judge Cerdo and Atty. Cocodrilo, counsel for the developer, thereafter separately purchased a condominium unit each from the developer. Did Judge Cerdo and Atty. Cocodrilo commit any act of impropriety or violate any law for which they should be held liable or sanctioned? (8%) VIII. The criminal case arising from the P10-Billion Peso pork barrel scandal was raffled to Sandiganbayan Justice Marciano Cobarde. Afraid that he would antagonize the parties, his political patrons and, ultimately, his judicial career, he decided to inhibit from participating in the case, giving personal reasons as his justification. If you were to question the inhibition of SB Justice Cobarde, on what legal basis, and where and how will you do this? (8%) IX. Atty. Hermano requested his fraternity brother, Judge Patron, to introduce him to Judge Apestado, before whom he has a case that had been pending for some time. Judge Patron, a close friend of Judge Apestado, acceded to the request, telling the latter that Atty. Hermano is his fraternity brod and that Atty. Hermano simply wanted to ask for advice on how to expedite the resolution of his case. They met, as arranged, in the fine dining restaurant of a five-star hotel. Atty. Hermano hosted the dinner. Did Atty. Hermano, Judge Patron and Judge Apestado commit any ethical/administrative violation for which they can be held liable? (8%) X. As a new lawyer, Attorney Novato started with a practice limited to small claims cases, legal counseling, and notarization of documents. He put up a solo practice law office and was assisted by his wife who served as his secretary/helper. He used a makeshift hut in a vacant lot near the local courts and a local transport regulatory agency. With this strategic location, he enjoyed heavy patronage assisting walk-in clients in the preparation and filing of pleadings and in the preparation and notarization of contracts and documents. He had the foresight of investing in a good heavy duty copier machine that reproduces quality documents, and charges a reasonable fee for this service. He draws electric power from an extension wire connected to an adjoining small restaurant. He put up a shingle that reads: Atty. Novato, Specialist in Small Claims, Fastest in Notarization; the Best and Cheapest in Copier Services.

Is Attorney Novatos manner of carrying out his professional practice i.e., mixing business with the practice of law, announcing his activities via a shingle and locating his office as abovedescribed in keeping with appropriate ethical and professional practice? (8%)

2013 Political Law Exam MCQs

on October 21, 2013 [Below are the Multiple Choice Questions asked in the 2013 Bar Exams in Political Law. 1. The equal protection clause is violated by __________. (1%) (A) a law prohibiting motorcycles from plying on limited access highways. (B) a law granting Value Added Tax exemption to electric cooperatives that sells electricity to the homeless poor. (C) a law providing that a policeman shall be preventively suspended until the termination of a criminal case against him. (D) a law providing higher salaries to teachers in public schools who are foreign hires. (E) a law that grants rights to local Filipino workers but denies the same rights to overseas Filipino workers. 2. Offended by the Presidents remarks that the Bureau of Customs is a pit of misfits and the corrupt, the Bureau of Customs Employees Association composed of 3,000 workers seeks your legal advice on how best to protest what it views to be the Presidents baseless remarks. A prudent legal advice is that __________. (1%) (A) employees can go on mass leave of absence for one week (B) employees can march and rally at Mendiola every Monday (C) employees can barricade the gates of the Port of Manila at South Harbor and call for the resignation of the incumbent Commissioner of Customs (D) employees can wear black arm bands and pins with the word UNFAIR inscribed (E) None of the above can legally be done. 3. Congress enacted Republic Act No. 1234 requiring all candidates for public offices to post an election bond equivalent to the one (1) year salary for the position for which they are candidates. The bond shall be forfeited if the candidates fail to obtain at least 10% of the votes cast. Is Republic Act No. 1234 valid? (1%) (A) It is valid as the bond is a means of ensuring fair, honest, peaceful and orderly elections. (B) It is valid as the bond requirement ensures that only candidates with sufficient means and who cannot be corrupted, can runfor public office. (C) It is invalid as the requirement effectively imposes a property qualification to run for public office. (D) It is invalid as the amount of the surety bond is excessive and unconscionable. (E) It is valid because it is a reasonable requirement; the Constitution itself expressly supports the accountability of public officers.

4. What is the legal effect of decisions of the International Court of Justice in cases submitted to it for resolution? (1%) (A) The decision is binding on other countries in similar situations. (B) The decision is not binding on any country, even the countries that are parties to the case. (C) The decision is binding only on the parties but only with respect to that particular case. (D) The decision is not binding on the parties and is only advisory. (E) The binding effect on the parties depends on their submission agreement. 5. Under the UN Convention on the Law of the Sea, the exclusive economic zone refers to an area. (1%) (A) that is at least 100 miles from the baselines from which the outer limit of the territorial sea is measured (B) that is at least 200 miles but not to exceed 300 miles from the baselines from which the outer limit of the territorial sea is measured (C) beyond and adjacent to a countrys territorial sea which cannot go beyond 200 nautical miles from the baselines from which the outer limit of the territorial sea is measured (D) that can go beyond 3 nautical miles but cannot extend 300 nautical miles from the baselines from which the outer limit of the territorial sea is measured (E) None of the above. 6. A child born under either the 1973 or the 1987 Constitution, whose father or mother is a Filipino citizen at the time of his birth, is __________. (1%) (A) not a Filipino citizen as his father and mother must both be Filipino citizens at the time of his birth (B) not a Filipino citizen if his mother is a Filipino citizen but his father is not, at the time of his birth (C) a Filipino citizen no matter where he or she may be born (D) a Filipino citizen provided the child is born in the Philippines (E) a Filipino citizen if he or she so elects upon reaching the age of 21 7. Who has control of the expenditure of public funds? (1%) (A) The Office of the President through the Department of Budget and Management. (B) The House of Representatives from where all appropriation bills emanate. (C) The Senate through its Committee on Finance. (D) The Congress of the Republic of the Philippines. (E) Both the members of Congress and the President acting jointly, if so provided by the General Appropriations Act.

8. May the power of cities to raise revenues be limited by an executive order of the President? (1%) (A) Yes, because local government units are under the administrative control of the President through the Department of Interior and Local Government. (B) No, because local government units now enjoy full local fiscal autonomy. (C) No, because only limitations established by Congress can define and limit the powers of local governments. (D) Yes, because the President has the power and authority to impose reasonable restrictions on the power of cities to raise revenues. (E) Yes, if so provided in a citys charter. 9. The provision under the Constitution -that any member who took no part, dissented, or inhibited from a decision or resolution must state the reason for his dissent or nonparticipation applies __________. (1%) (A) only to the Supreme Court (B) to both the Supreme Court and the Court of Appeals (C) to the Supreme Court, Court of Appeals and the Sandiganbayan (D) to the Supreme Court, the Court of Appeals, the Sandiganbayan and the Court of Tax Appeals (E) to all collegial judicial and quasi-judicial adjudicatory bodies 10. Choose the least accurate statement about the independence guaranteed by the 1987 Constitution to the following constitutional bodies: (1%) (A) The Constitution guarantees the COMELEC decisional and institutional independence similar to that granted to theJudiciary. (B) All bodies labeled as independent by the Constitution enjoyfiscal autonomy as an attribute of their independence. (C) Not all bodies labeled as independent by the Constitution were intended to be independent from the Executive branch of government. (D) The Constitution guarantees various degrees of independence from the other branches of government when it labels bodies as independent. (E) The COMELEC, the COA, and the CSC enjoy the same degree of independence. 11. At the Senate impeachment trial of Justice Pablo P. San Quintin, Hon. Emilio A. Tan, Congressman and Impeachment Panel Manager, wrote the Supreme Court requesting that the prosecutors be allowed to examine thecourt records of Stewards Association of the Philippines, Inc. (SAP!) v. Filipinas Air, et al., G.R. No. 987654, a case that is still pending. The High Court __________. (1%) (A) may grant the request by reason of inter-departmental courtesy (B) may grant the request as the records of the Filipinas Air case are public records

(C) should deny the request since records of cases that are pending for decision are privileged except only for pleadings, orders and resolutions that are available to the public (D) should deny the request because it violates the Courts independence and the doctrine of separation of powers (E) should grant the request because of the sui generis nature of the power of impeachment, provided that the Bill of Rights is not violated 12. Mr. Sinco sued the government for damages. After trial, the court ruled in his favor and awarded damages amounting to P50 million against the government. To satisfy the judgment against the government, which valid option is available to Mr. Sinco? ( 1%) (A) Garnish the government funds deposited at the Land Bank. (B) File a claim with the Commission on Audit (COA) pursuant to Commonwealth Act 327, as amended by Presidential Decree1445. (C) Make representations with the Congress to appropriate the amount to satisfy the judgment. (D) File a petition for mandamus in court to compel Congress to appropriate P50 million to satisfy the judgment. (E) Proceed to execute the judgment as provided by the Rules of Court because the State allowed itself to be sued. 13. Which of the following provisions of the Constitution does not confer rights that can be enforced in the courts but only provides guidelines for legislative or executive action? (l%) (A) The maintenance of peace and order, the protection of life, liberty, and property, and promotion of the general welfare are essential for the enjoyment by all the people of the blessings of democracy. (B) The State shall give priority to education, science and technology, arts, culture, and sports to foster patriotism and nationalism, accelerate social progress, and promote total human liberation and development. (C) The natural and primary right and duty of parents in the rearing of the youth for civic efficiency and the development of moral character shall receive the support of the Government. (D) The right of the people to information on matters. of public concern shall be recognized. Access to official records, and to documents and papers pertaining to official acts, transactions, or decisions, as well as to government research data used as basis for policy development, shall be afforded the citizen, subject to such limitations as may be provided by law. (E) All the above only provide guidelines and are not self-executing. 14. The President entered into an executive agreement with Vietnam for the supply to the Philippines of animal feeds not to exceed 40,000 tons in any one year. The Association of Animal Feed Sellers of the Philippines questioned the executive agreement for being contrary to R.A. 462 which prohibits the importation of animal feeds from Asian countries. Is the challenge correct? (1%) (A) Yes, the executive agreement is contrary to an existing domestic law.

(B) No, the President is solely in charge of foreign relations and all his actions in this role form part of the law of the land. (C) No, international agreements are sui generis and stand independently of our domestic laws. (D) Yes, the executive agreement is actually a treaty which does not take effect without ratification by the Senate. (E) Yes, the challenge is correct because there is no law empowering the President to undertake the importation. 15. The separation of Church and State is most clearly violated when __________. (1%) (A) the State funds a road project whose effect is to make a church more accessible to its adherents (B) the State declares the birthplace of a founder of a religious sect as a national historical site (C) the State expropriates church property in order to construct an expressway that, among others, provides easy access to the Churchs main cathedral (D) the State gives vehicles to bishops to assist them in church-related charitable projects (E) the State allows prayers in schools for minor children without securing the prior consent of their parents 16. Patricio was elected member of the House of Representative in the May 2010 Elections. His opponent Jose questioned Patricios victory before the House of Representatives Electoral Tribunal and later with the Supreme Court. In a decision promulgated in November 2011, the Court ruled in Joses favor; thus, Patricio was ousted from his seat in Congress. Within a year from that decision, the President can appoint Patricio __________. (1%) (A) only as a member of the board of directors of any government owned and controlled corporation (B) only as a deputy Ombudsman (C) only as a Commissioner of the Civil Service Commission (D) only as Chairman of the Commission on Elections (E) to any position as no prohibition applies to Patricio 17. Senator GSC proposed a bill increasing excise taxes on tobacco and alcohol products. The generated incremental revenues shall be used for the universal health care program for all Filipinos and for tobacco farmers livelihood. After the Senate passed the bill on third reading, it was transmitted to the House of Representatives which approved the bill in toto. The President eventually signed it into law. Atty. JFC filed a petition before the Supreme Court, questioning the constitutionality of the new law. Is the law constitutional? (1%) (A) The law is constitutional because it is for a public purpose and has duly satisfied the threereadings-on-separate-days rule in both Houses.

(B) The law is unconstitutional because it violates the equal protection clause of the Constitution; it is limited only to alcohol and liquor products. (C) It is constitutional because of the Enrolled Bill Theory. (D) It is constitutional because it is valid in form and substance and complied with the required lawmaking procedures.(E) None of the above is correct. 18. Which of the following statements is correct? (1%) (A) The President, with the concurrence of the Monetary Board, can guarantee a foreign loan on behalf of the Republic of the Philippines. (B) Congress may, by law, provide limitations on the Presidents power to contract or guarantee foreign loans on behalf of the Republic of the Philippines. (C) In order to be valid and effective, treaties and executive agreements must be concurred in by at least two-thirds of all the Members of the Senate. (D) The President shall, at the end of every quarter of the calendar year, submit to Congress a complete report of the loans contracted or guaranteed by the Government or governmentowned and controlled corporations. (E) All the above choices are defective in some respects. 19. Candida has been administratively charged of immorality for openly living with Manuel, a married man. Candida argues that her conjugal arrangement with Manuel fully conforms with their religious beliefs and with the teachings of their church. In resolving whether Candida should be administratively penalized, which is the best test to apply? (1%) (A) Clear and Present Danger Test (B) Compelling State Interest Test (C) Balancing of interests Test (D) Conscientious Objector Test (E) Dangerous Tendency Test 20. Rafael questioned the qualifications of Carlos as congressman of the Third District of Manila on the ground that Carlos is a citizen of the USA. The decision disqualifying Carlos for being a US citizen came only in March 2010, i.e., after the adjournment of the session of Congress on the 3d year of the positions three-year term. What was Carlos status during his incumbency as congressman? (1%) (A) He was a de jure officer, having been duly elected and proclaimed. (B) He was not a public officer because he effectively was not entitled to be a congressman. (C) He was a de jure officer since he completed the service of his term before he was disqualified. (D) He was a de facto officer since he had served and was only disqualified later. (E) He neither possesses de jure nor de facto status as such determination is pointless.

2013 Civil Law Exam MCQs

on October 21, 2013

[Below are the Multiple Choice Questions asked in the 2013 Bar Exams in Labor Law. Answers are highlighted.] 1. Armand died intestate. His full-blood brothers, Bobby and Conrad, and halfblood brothers, Danny, Edward and Floro, all predeceased him. The following are the surviving relatives: 1. Benny and Bonnie, legitimate children of Bobby; 2. Cesar, legitimate child of Conrad; 3. Dante, illegitimate child of Danny; 4. Ernie, adopted child of Edward; and 5. Felix, grandson of Floro. The net value of Armands estate is P1,200,000. 1.a. How much do Benny and Bonnie stand to inherit by right of representation? (1%) (A) P200,000 (B) P300,000 (C) P400,000 (D) P150,000 (E) None of the above. 1.b. How much is Dantes share in the net estate? (1%) (A) P150,000. (B) P200,000. (C) P300,000. (D) P400,000. (E) None of the above. 1.c. How much is Ernies share in the net estate . (1%) (A) P 0. (B) P400,000. (C) P150,000. (D) P200,000. (E) None of the above. 1.d. How much is Felixs share in the net estate? (1%) (A) P400,000. (B) P150,000. (C) P300,000. (D) P0

(E) None of the above. 2. A, B, C and D are the solidary debtors of X for P40,000. X released D from the payment of his share of PI 0,000. When the obligation became due and demandable, C turned out to be insolvent. Should the share of insolvent debtor C be divided only between the two other remaining debtors, A and B? (1%) (A) Yes. Remission of Ds share carries with it total extinguishment of his obligation to the benefit of the solidary debtors. (B) Yes. The Civil Code recognizes remission as a mode of extinguishing an obligation. This clearly applies to D. (C) No. The rule is that gratuitous acts should be restrictively construed, allowing only the least transmission of rights. (D) No, as the release of the share of one debtor would then increase the burden of the other debtors without their consent. 3. Amador obtained a loan of P300,000 from Basilio payable on March25, 2012. As security for the payment of his loan, Amador constituted a mortgage on his residential house and lot in Basilios favor. Cacho, a good friend of Amador, guaranteed and obligated himself to pay Basilio, in case Amador fails to pay his loan at maturity. 3.a. If Amador fails to pay Basilio his loan on March 25, 2012, can Basilio compel Cacho to pay? (1%) (A) No, Basilio cannot compel Cacho to pay because as guarantor, Cacho can invoke the principle of excussion, i.e., all the assets of Basilio must first be exhausted. (B) No, Basilio cannot compel Cacho to pay because Basilio has not exhausted the available remedies against Amador. (C) Yes, Basilio can compel Cacho to pay because the nature of Cachos undertaking indicates that he has bound himself solidarily with Amador. (D) Yes, Basilio can compel Cacho who bound himself to unconditionally pay in case Amador fails to pay; thus the benefit of excussion will not apply. 3.b. If Amador sells his residential house and lot to Diego, can Basilio foreclose the real estate mortgage? (1%) (A) Yes, Basilio can foreclose the real estate mortgage because real estate mortgage creates a real right that attaches to the property. (B) Yes, Basilio can foreclose the real estate mortgage. It is binding upon Diego as the mortgage is embodied in a public instrument.

(C) No, Basilio cannot foreclose the real estate mortgage. The sale confers ownership on the buyer, Diego, who must therefore consent. (D) No, Basilio cannot foreclose the real estate mortgage. To deprive the new owner of ownership and possession is unjustand inequitable. 4. Cruz lent Jose his car until Jose finished his Bar exams. Soon after Cruz delivered the car, Jose brought it to Mitsubishi Cubao for maintenance check up and incurred costs of P8,000. Seeing the cars peeling and faded paint, Jose also had the car repainted for P10,000. Answer the two questions below based on these common facts. 4.a. After the bar exams, Cruz asked for the return of his car. Jose said he would return it as soon as Cruz has reimbursed him for the car maintenance and repainting costs of P 18,000. Is Joses refusal justified? (1%) (A) No, Joses refusal is not justified. In this kind of contract, Jose is obliged to pay for all the expenses incurred for the preservation of the thing loaned. (B) Yes, Joses refusal is justified. He is obliged to pay forall the ordinary and extraordinary expenses, but subject to reimbursement from Cruz. (C) Yes, Joses refusal is justified. The principle of unjust enrichment warrants the reimbursement of Joses expenses. (D) No, Joses refusal is not justified. The expenses he incurred are useful for the preservation of the thing loaned. It is Joses obligation to shoulder these useful expenses. 4.b. During the bar exam month, Jose lent the car to his girlfriend, Jolie, who parked the car at the Mall of Asias open parking lot, with the ignition key inside the car. Car thieves broke into and took the car. Is Jose liable to Cruz for the loss of the car due to Jolies negligence? (1%) (A) No, Jose is not liable to Cruz as the loss was not due to his fault or negligence. (B) No, Jose is not liable to Cruz. In the absence of any prohibition, Jose could lend the car to Jolie. Since the loss was due to force majeure, neither Jose nor Jolie is liable. (C) Yes, Jose is liable to Cruz. Since Jose lent the car to Jolie without Cruzs consent, Jose must bear the consequent loss of the car. (D) Yes, Jose is liable to Cruz. The contract between them is personal in nature. Jose can neither lend nor lease the car to a third person. 5. In 2005, L, M, N, 0 and P formed a partnership. L, M and N were capitalist partners who contributed P500,000 each, while 0, a limited partner,

contributed P1 ,000,000. P joined as an industrial partner, contributing only his

services. The Articles of Partnership, registered with the Securities and Exchange Commission, designated L and 0 as managing partners; L was liable only to the extent of his capital contribution; and P was not liable for losses. In 2006, the partnership earned a net profit of P800,000. In the same year, P engaged in a different business with the consent of all the partners. However, in 2007, the partnership incurred a net loss of P500,000. In 2008,the partners dissolved the partnership. The proceeds of the sale of partnership assets were insufficient to settle its obligation. After liquidation, the partnership had an unpaid liability ofP300,000. 5.a. Assuming that the just and equitable share of the industrial partner, P, in the profit in 2006 amounted to P1 00,000, how much is the share of 0, a limited partner, in the P800,000 net profit? (1%) (A) P160,000. (B) P175,000. (C) P280,000. (D) P200,000. (E) None of the above. 5.b. In 2007, how much is the share of 0, a limited partner, in the net loss of P500,000? (1%) (A) P 0. (B) P1 00,000. (C) P125,000. (D) P200,000. (E) None of the above. 5.c. Can the partnership creditors hold L, 0 and Pliable after all the assets of the partnership are exhausted? (1%) (A) Yes. The stipulation exempting P from losses is valid only among the partners. L is liable because the agreement limiting his liability to his capital contribution is not valid insofar as the creditors are concerned. Having taken part in the management of the partnership, 0 is liable as capitalist partner. (B) No. P is not liable because there is a valid stipulation exempting him from losses. Since the other partners allowed him to engage in an outside business activity, the stipulation absolving P from liability is valid. For 0, it is basic that a limited partner is liable only up to the extent of his capital contribution. (C) Yes. The stipulations exempting P and L from losses are not binding upon the creditors. 0 is likewise liable because the partnership was not formed in accordance with the requirements of a limited partnership.

(D) No. The Civil Code allows the partners to stipulate that a partner shall not be liable for losses. The registration of the Articles of Partnership embodying such stipulations serves as constructive notice to the partnership creditors.(E) None of the above is completely accurate. 6. Gary is a tobacco trader and also a lending investor. He sold tobacco leaves to Homer for delivery within a month, although the period for delivery was not guaranteed. Despite Garys efforts to deliver on time, transportation problems and government red tape hindered his efforts and he could only deliver after 30 days. Homer refused to accept the late delivery and to pay on the ground that the agreed term had not been complied with. As lending investor, Gary granted a Pl,000,000 loan to Isaac to be paid within two years from execution of the contract. As security for the loan, Isaac promised to deliver to Gary his Toyota Innova within seven (7) days, but Isaac failed to do so. Gary was thus compelled to demand payment for the loan before the end of the agreed two-year term. 6.a. Was Homer justified in refusing to accept the tobacco leaves? (1%) (A) Yes. Homer was justified in refusing to accept the tobacco leaves. The delivery was to be made within a month. Garys promise of delivery on a best effort basis made the delivery uncertain. The term, therefore, was ambiguous. (B) No. Homer was not justified in refusing to accept the tobacco leaves. He consented to the terms and conditions of the sale and must abide by it. Obligations arising from contract have the force of law between the contracting parties. (C) Yes. Homer was justified in his refusal to accept the delivery. The contract contemplates an obligation with a term. Since the delivery was made after 30 days, contrary to the terms agreed upon, Gary could not insist that Homer accept the tobacco leaves. (D) No. Homer was not justified in refusing to accept the tobacco leaves. There was no term in the contract but a mixed condition. The fulfillment of the condition did not depend purely on Garys will but on other factors, e.g., the shipping company and the government. Homer should comply with his obligation. 6.b. Can Gary compel Isaac to pay his loan even before the end of the two-year period? (1%) (A) Yes, Gary can compel Isaac to immediately pay the loan. Non-compliance with the promised guaranty or security renders the obligation immediately demandable. Isaac lost his right to make use of the period. (B) Yes, Gary can compel Isaac to immediately pay the loan. The delivery of the Toyota Innova is a condition for the loan. Isaacs failure to deliver the car violated the condition upon which the loan was granted. It is but fair for Gary to demand immediate payment.

(C) No, Gary cannot compel Isaac to immediately pay the loan. The delivery of the car as security for the loan is an accessory contract; the principal contract is still the P 1,000,000 loan. Thus, Isaac can still make use of the period. (D) No, Gary cannot compel Isaac to immediately pay the loan. Equity dictates that Gary should have granted a reasonable extension of time for Isaac to deliver his Toyota Innova. It would be unfair and burdensome for Isaac to pay the P1,000,000 simply because the promised security was not delivered. 7. Lito was a commercial pilot who flew for Pacific-Micronesian Air. In 1998, he was the co-pilot of the airlines Flight MA916 that mysteriously disappeared two hours after take-off from Agana, Guam, presumably over the Pacific Ocean. No trace of the plane and its 105 passengers and crew was ever found despite diligent search; Lito himself was never heard of again. Lito left behind his wife, Lita, and their two children. In 2008, Lita met and and married Jaime. They now have a child of their own. While on a tour with her former high school classmates in a remote province of China in 2010, Lita was surprised to see Lito or somebody who looked exactly like him, but she was sure it was Lito because of the extreme surprise that registered in his face when he also saw her. Shocked, she immediately fled to her hotel and post haste returned to the country the next day. Lita now comes to you for legal advice. She asks you the following questions: 7.a. If Lito is alive, what is the status of his marriage to Lita? (1%) (A) The marriage subsists because the marital bond has not been terminated by death. (B) The marriage was terminated when Lita married Jaime. (C) The marriage subsists because Litas marriage to Jaime is void. (D) The marriage is terminated because Lito is presumed dead after his plane has been missing for more than 4 years. (E) The marriage can be formally declared terminated if Lito would not resurface. 7.b. If Lito is alive, what is the status of Litas marriage to Jaime? (1%) (A) The marriage is valid because Litas marriage to Lito was terminated upon Litos disappearance for more than seven years. (B) The marriage is valid. After an absence of more than 10 years, Lito is already presumed dead for all purposes. (C) The marriage is void. Litos mere absence, however lengthy, is insufficient to authorize Lita to contract a subsequent marriage.

(D) The marriage is void. If Lito is indeed alive, his marriage to Lita was never dissolved and they can resume their marital relations at any time. 8. Which of the following actions or defenses are meritorious: (1%) (A) An action for recovery of downpayment paid under a rescinded oral sale of real property. (B) A defense in an action for ejectment that the lessor verbally promised to extend or renew the lease. (C) An action for payment of sum of money filed against one who orally promised to answer anothers debt in case the latter defaults. (D) A defense in an action for damages that the debtor has sufficient, but unliquidated assets to satisfy the credit acquired when it becomes due. (E) None of the above. 9. Betty entrusted to her agent, Aida, several pieces of jewelry to be sold on commission with the express obligation to turn over to Betty the proceeds of the sale, or to return the jewelries if not sold in a months time. Instead of selling the jewelries, Aida pawned them with the Tambunting Pawnshop, and used the money for herself. Aida failed to redeem the pawned jewelries and after a month, Betty discovered what Aida had done. Betty brought criminal charges which resulted in Aidas conviction for estafa. Betty thereafter filed an action against Tambunting Pawnshop for the recovery of the jewelries. Tambunting raised the defense of ownership, additionally arguing that it is duly licensed to engage in the pawnshop and lending business, and that it accepted the mortgage of the jewelry in good faith and in the regular course of its business. If you were the judge, how will you decide the case? (1%) (A) I will rule in favor of Betty. My ruling is based on the Civil Code provision that one who has lost any movable or has been unlawfully deprived thereof may recover it from the person in possession of the same. Tam buntings claim of good faith is inconsequential. (B) I will rule in favor of Betty. Tambuntings claim of good faith pales into insignificance in light of the unlawful deprivation of the jewelries. However, equity dictates that Tambunting must be reimbursed for the pawn value of the jewelries. (C) I will rule in favor of Tambunting. Its good faith takes precedence over the right of Betty to recover the jewelries. (D) I will rule in favor of Tambunting. Good faith is always presumed. Tambuntings lawful acquisition in the ordinary course of business coupled with good faith gives it legal right over the jewelries.

10. Arlene owns a row of apartment houses in Kamuning, Quezon City. She agreed to lease Apartment No. 1 to Janet for a period of 18 months at the rate of P10,000 per month. The lease was not covered by any contract. Janet promptly gave Arlene two (2) months deposit and 18 checks covering the rental payment for 18 months. This show of good faith prompted Arlene to promise Janet that should Arlene decide to sell the property, she would give Janet the right of first refusal. 10.a. Not long after Janet moved in, she received news that her application for a Master of Laws scholarship at Kings College in London had been approved. Since her acceptance of the scholarship entailed a transfer of residence, Janet asked Arlene to return the advance rental payments she made. Arlene refused, prompting Janet to file an action to recover the payments. Arlene filed a motion to dismiss, claiming that the lease on which the action is based, is unenforceable. If you were the judge, would you grant Arlenes motion? (1%) (A) Yes, I will grant the motion because the lease contract between Arlene and Janet was not in writing, hence, Janet may not enforce any right arising from the same contract. (B) No, I will not grant the motion because to allow Arlene to retain the advance payments would amount to unjust enrichment. (C) Yes, I will grant the motion because the action for recovery is premature; Janet should first secure a judicial rescission of the contract of lease. (D) No. I will not grant the motion because the cause of action does not seek to enforce any right under the contract of lease. 10.b. Assume that Janet decided not to accept the scholarship and continued leasing Apartment No. 1. Midway through the lease period, Arlene decided to sell Apartment No. 1 to Jun in breach of her promise to Janet to grant her the right of first refusal. Thus, Janet filed an action seeking the recognition of her right of first refusal, the payment of damages for the violation of this right, and the rescission of the sale between Arlene and Jun. Is Janets action meritorious? (1%) (A) Yes, under the Civil Code, a promise to buy and sell a determinate thing is reciprocally demandable. (B) No, the promise to buy and sell a determinate thing was not supported by a consideration. (C) Yes, Janets right of first refusal was clearly violated when the property was not offered for sale to her before it was sold to Jun. (D) No, a right of first refusal involves an interest over real property that must be embodied in a written contract to be enforceable.

(E) None of the above.

2013 Labor Law Exam MCQs

on October 21, 2013

[Below are the Multiple Choice Questions asked in the 2013 Bar Exams in Labor Law. Answers are highlighted.] 1. The parties to a labor dispute can validly submit to voluntary arbitration _________. (1%) (A) any disputed issue they may agree to voluntarily arbitrate (B) only matters that do not fall within the exclusive jurisdiction of the Labor Arbiter (C) any disputed issue but only after conciliation at the National Conciliation and Mediation Board fails (D) any disputed issue provided that the Labor Arbiter has not assumed jurisdiction over the case on compulsory arbitration (E) only matters relating to the interpretation or implementation of a collective bargaining agreement 2. When there is no recognized collective bargaining agent, can a legitimate labor organization validly declare a strike against the employer? (1%)

(A) Yes, because the right to strike is guaranteed by the Constitution and cannot be denied to any group of employees. (B) No, because only an exclusive bargaining agent may declare a strike against the employer. (C) Yes, because the right to strike is a basic human right that the countrys international agreements and the International Labor Organization recognize. (D) Yes, but only in case of unfair labor practice. (E) No, in the absence of a recognized bargaining agent, the workers recourse is to file a case before the Department of Labor and Employment. 3. Mr. Del Carmen, unsure if his foray into business (messengerial service catering purely to law firms) would succeed but intending to go long-term if he hurdles the first y

2013 Taxation Law Exam MCQs

on October 21, 2013

[Below are the Multiple Choice Questions asked in the 2013 Bar Exams in Labor Law.

1. ABC Corp. was dissolved and liquidating dividends were declared and paid to the stockholders. What tax consequence follows? (1%) (A) ABC Corp. should deduct a final tax of 10% from the dividends. (B) The stockholders should declare their gain from their investment and pay income tax at the ordinary rates. (C) The dividends are exempt from tax. (D) ABC Corp. should withhold a 10% creditable tax.

2. MGC Corp. secured an income tax holiday for 5 years as a pioneer industry. On the fourth year of the tax holiday, MGC Corp. declared and paid cash dividends to its stockholders, all of whom are individuals. Are the dividends taxable? (1%) (A) The dividends are taxable; the tax exemption of MGC Corp. does not extend to its stockholders. (B) The dividends are tax exempt because of MGC Corp.s income tax holiday. (C) The dividends are taxable if they exceed 50% of MGC Corp.s retained earnings. (D) The dividends are exempt if paid before the end of MGC Corp.s fiscal year. 3. Mr. Alas sells shoes in Makati through a retail store. He pays the VAT on his gross sales to the BIR and the municipal license tax based on the same gross sales to the City of Makati. He comes to you for advice because he thinks he is being subjected to double taxation. What advice will you give him? (1%) (A) Yes, there is double taxation and it is oppressive. (B) The City of Makati does not have this power. (C) Yes, there is double taxation and this is illegal m the Philippines. (D) Double taxation is allowed where one tax is imposed by the national government and the other by the local government.

4. Congress passed a sin tax law that increased the tax rates on cigarettes by 1,000%. The law was thought to be sufficient to drive many cigarette companies out of business, and was questioned in court by a cigarette company that would go out of business because it would not be able to pay the increased tax. The cigarette company is __________ (1%) (A) wrong because taxes are the lifeblood of the government (B) wrong because the law recognizes that the power to tax is the power to destroy (C) correct because no government can deprive a person of his livelihood (D) correct because Congress, in this case, exceeded its power to tax 5. Mr. Alvarez is in the retail business. He received a deficiency tax assessment from the BIR containing only the computation of the deficiency tax and the

penalties, without any explanation of the factual and legal bases for the assessment. Is the assessment valid? (1%) (A) The assessment is valid; all that Mr. Alvarez has to know is the amount of the tax. (B) The assessment is invalid; the law requires a statement of the facts and the law upon which the assessment is based. (C) The assessment is valid but Mr. Alvarez can still contest it. (D) The assessment is invalid because Mr. Alvarez has no way to determine if the computation is erroneous. 6. In 2010, Mr. Platon sent his sister Helen $1 ,000 via a telegraphic transfer through the Bank of PI. The banks remittance clerk made a mistake and credited Helen with $1,000,000 which she promptly withdrew. The bank demanded the return of the mistakenly credited excess, but Helen refused. The BIR entered the picture and investigated Helen. Would the BIR be correct if it determines that Helen earned taxable income under these facts? (1%) (A) No, she had no income because she had no right to the mistakenly credited funds. (B) Yes, income is income regardless of the source. (C) No, it was not her fault that the funds in excess of $1,000 were credited to her. (D) No, the funds in excess of$1,000 were in effect donated to her. 7. The municipality of San Isidro passed an ordinance imposing a tax on installation managers. At that time, there was only one installation manager in the municipality; thus, only he would be liable for the tax. Is the law constitutional? (1%) (A) It is unconstitutional because it clearly discriminates against this person. (B) It is unconstitutional for lack of legal basis. (C) It is constitutional as it applies to all persons in that class. (D) It is constitutional because the power to tax is the power to destroy. 8. XYZ Corporation manufactures glass panels and is almost at the point of insolvency. It has no more cash and all it has are unsold glass panels. It received an assessment from the BIR for deficiency income taxes. It wants to pay but due to lack of cash, it seeks permission to pay in kind with glass panels. Should the BIR grant the requested permission? (1%)

(A) It should grant permission to make payment convenient to taxpayers. (B) It should not grant permission because a tax is generally a pecuniary burden. (C) It should grant permission; otherwise, XYZ Corporation would not be able to pay. (D) It should not grant permission because the government does not have the storage facilities for glass panels. 9. Prior to the VAT law, sales of cars were subject to a sales tax but the tax applied only to the original or the first sale; the second and subsequent sales were not subject to tax. Deltoid Motors, Inc. (Deltoid) hit on the idea of setting up a wholly-owned subsidiary, Gonmad Motors, Inc. (Gonmad), and of selling its assembled cars to Gonmad at a low price so it would pay a lower tax on the first sale. Gonmad would then sell the cars to the public at a higher price without paying any sales tax on this subsequent sale. Characterize the arrangement. (1%) A. The plan is a legitimate exercise of tax planning and merely takes advantage of a loophole in the law. B. The plan is legal because the government collects taxes anyway. C. The plan is improper; the veil of corporate fiction can be pierced so that the second sale will be considered the taxable sale. D. The government must respect Gonmads separate juridical personality and Deltoids taxable sale to it. 10. PRT Corp. purchased a residential house and lot with a swimming pool in an upscale subdivision and required the company president to stay there without paying rent; it reasoned out that the company president must maintain a certain image and be able to entertain guests at the house to promote the companys business. The company president declared that because they are childless, he and his wife could very well live in a smaller house. Was there a taxable fringe benefit? (1%) (A) There was no taxable fringe benefit since it was for the convenience of the employer and was necessary for its business. (B) There was a taxable fringe benefit since the stay at the house was for free. (C) There was a taxable fringe benefit because the house was very luxurious. (D) There was no taxable fringe benefit because the company president was only required to stay there and did not demand free housing.

11. Taxpayer A was required by the BIR to sign and submit a waiver of the statute of limitations on the assessment period, to give the BIR more time to complete its investigation. The BIR accepted the waiver but failed to indicate the date of its acceptance. What is the legal status of the waiver? (1%) (A) The waiver is valid because the date of acceptance is immaterial and unimportant. (B) The waiver is invalid; the taxpayer cannot be required to waive the statute of limitations. (C) The waiver is invalid; the date of acceptance is crucial in counting the start of the period of suspension of the prescriptive period. (D) The waiver is valid, having been accepted by the BIR. 12. Taxpayer Andy received on January 3, 2010 a preliminary assessment notice (PAN) from the BIR, stating that he had fifteen (15) days from its receipt to comment or to file a protest. Eight (8) days later (or on January11, 2010), before he could comment or file a protest, Andy received the final assessment notice (FAN). Decide on the validity of the FAN. (1%) (A) The FAN is invalid; Andy was not given the chance to respond to the PAN, in violation of his due process rights. (B) The FAN is invalid for being premature. (C) The FAN is valid since it was issued before the right to assess prescribed. (D) The FAN is valid. There is no legal requirement that the FAN should await the protest to the PAN because protest to the PAN is not mandatory. 13. MSI Corp. imports orange and lemon concentrates as raw materials for the fruit drinks it sells locally. The Bureau of Customs (BOC) imposed a 1% duty rate on the concentrates. Subsequently, the BOC changed its position and held that the concentrates should be taxed at 7% duty rate. MSI disagreed with the ruling and questioned it in the CTA which upheld MSIs position. The Commissioner of Customs appealed to the CTA en bane without filing a motion for reconsideration. Resolve the appeal. (1%) (A) The appeal should be dismissed because a motion for reconsideration is mandatory. (B) The appeal should be dismissed for having been filed out of time. (C) The appeal should be given due course since a motion for reconsideration is a useless exercise. (D) The appeal should be upheld to be fair to the government which needs taxes.

14. The spouses Jun and Elvira Sandoval purchased a piece of land for P5,000,000 and included their two (2) minor children as co-purchasers in the Deed of Absolute Sale. The Commissioner of Internal Revenue (CIR) ruled that there was an implied donation and assessed donors taxes against the spouses. Rule on the CIRs action. (1%) (A) The CIR is wrong; a donation must be express. (B) The CIR is wrong; financial capacity is not a requirement for a valid sale. (C) The CIR is correct; the amount involved is huge and ultimately ends up with the children. (D) The CIR is correct; there was animus donandi since the children had no financial capacity to be co-purchasers. 15. Pheleco is a power generation and distribution company operating mainly from the City of Taguig. It owns electric poles which it also rents out to other companies that use poles such as telephone and cable companies. Taguig passed an ordinance imposing a fee equivalent to 1% of the annual rental for these poles. Pheleco questioned the legality of the ordinance on the ground that it imposes an income tax which local government units (LGUs) are prohibited from imposing. Rule on the validity of the ordinance. (1%) (A) The ordinance is void; the fee is based on rental income and is therefore a tax on income. (B) The ordinance is valid as a legitimate exercise of police power to regulate electric poles. (C) The ordinance is void; 1% of annual rental is excessive and oppressive. (D) The ordinance is valid; an LGU may impose a tax on income. 16. Aleta sued Boboy for breach of promise to marry. Boboy lost the case and duly paid the courts award that included, among others, Pl00,000 as moral damages for the mental anguish Aleta suffered. Did Aleta earn a taxable income? (1%) (A) She had a taxable income of P100,000 since income is income from whatever source. (B) She had no taxable income because it was a donation. (C) She had taxable income since she made a profit. (D) She had no taxable income since moral damages are compensatory. 17. Mr. Mayuga donated his residential house and lot to his son and duly paid the donors tax. In the Deed of Donation, Mr. Mayuga expressly reserved for himself the usufruct over the property for as long as he lived. Describe the donated property from the taxation perspective. (1%)

(A) The property will form part of Mr. Mayugas gross estate when he dies. (B) The property will not fom1 part of Mr. Mayugas gross estate when he dies because he paid the donors tax. (C) The property will form part of Mr. Mayugas gross estate because he died soon after the donation. (D) The property will not form part of Mr. Mayugas gross estate because it is no longer his. 18. Mr. Z made an importation which he declared at the Bureau of Customs (BOC) as Used Truck Replacement Parts. Upon investigation, the container vans contained 15 units of Porsche and Ferrari cars. Characterize Mr. Zs action. (1%) (A) Mr. Z committed smuggling. (B) Mr. Z did not commit smuggling because he submitted his shipment to BOC examination. (C) Mr. Z only made a misdeclaration, but did not commit smuggling. (D) Mr. Z did not commit smuggling because the shipment has not left the customs area. 19. Mr. A was preparing his income tax return and had some doubt on whether a commission he earned should be declared for the current year or for the succeeding year. He sought the opinion of his lawyer who advised him to report the commission in the succeeding year. He heeded his lawyers advice and reported the commission in the succeeding year. The lawyers advice turned out to be wrong; in Mr. As petition against the BIR assessment, the court ruled against Mr. A. Is Mr. A guilty of fraud? (1%) (A) Mr. A is not guilty of fraud as he simply followed the advice of his lawyer. (B) Mr. A is guilty of fraud; he deliberately did not report the commission in the current year when he should have done so. (C) Mr. As lawyer should pay the tax for giving the wrong advice. (D) Mr. A is guilty for failing to consult his accountant. 20. The BIR, through the Commissioner, instituted a system requiring taxpayers to submit to the BIR a summary list of their sales and purchases during the year, indicating the name of the seller or the buyer and the amount. Based on these lists, the BIR discovered that in 2004 ABC Corp. purchased from XYZ Corp. goods worthP5,000,000. XYZ Corp. did not declare these for income tax purposes as its reported gross sales for 2004was only Pl,000,000.

Which of the following defenses may XYZ Corp. interpose in an assessment against it by the BIR? (1%) (A) The BIR has no authority to obtain third party information to assess taxpayers. (B) The third party information is inadmissible as hearsay evidence. (C) The system of requiring taxpayers to submit third party information is illegal for violating the right to privacy. (D) None of the above.