UP LAW CENTER – BAR 2015 Q & A

2015 Bar Exam Suggested Answers in Political Law

I.

The Philippines and the Republic of Kroi Sha established diplomatic relations and immediately their
respective Presidents signed the following: – (1) Executive Agreement allowing the Republic of Kroi Sha to
establish its embassy and consular offices within Metro Manila; and (2) Executive Agreement allowing the
Republic of Kroi Sha to bring to the Philippines.its : military complement, warships, and armaments from
time to time for a period not exceeding one month for the purpose of training exercises with the Philippine
military forces and exempting from Philippine criminal jurisdiction acts committed in the line of duty by
foreign military personnel, and from paying custom duties on all the goods brought by said foreign forces
into Philippine territory in connection with the holding of the activities authorized under the said Executive
Agreement.

Senator Maagap questioned the constitutionality of the said Executive : Agreements and demanded that the
Executive Agreements be submitted to the Senate for ratification pursuant to the Philippine Constitution. Is
Senator Maagap correct? Explain. (4%)

SUGGESTED ANSWER

The Executive Agreement allowing the Republic of Kroi Sha to establish its embassy and consular offices
within Metro Manila is valid without need of submitting it to the Senate for ratification, Executive
Agreements are not treaties and are valid without the need of concurrence by the Senate in its ratification
(Commission of Customs v. Eastern Sea Trading, G.R. No. L-14279, October 31, 1961, 35 SCRA 345).

The Executive Agreement with the Republic of Kroi Sha allowing it to bring to the Philippines its military
complement, warships and armaments from time to time for training exercises with the Philippine military
forces : must be submitted to the Senate for concurrence in its ratification. Under Section 25, Article XVIll of
the Constitution, a treaty düly concurred in by the Senate is required even for the temporary presence of
foreign troops (Bayan.v. Zamora, G.R. No. 138570, October 10, 2000, 342 SCRA 449).

II.

(A) A bill was introduced in the House of Representatives in order to

implement faithfully the provisions of the United Nations Convention on the Law of the Sea (UNCLOS) to
which the Philippines is a signatory. Congressman Pat Rio Tek questioned the constitutionality of the bill on
the ground that the provisions of UNCLOS are violative of the provisions of the Constitution defining the
Philippine internal waters and territorial sea. Do you agree or not with the said objection? Explain. (3%)

(B) Describe the following maritime regimes under UNCLOS (4%)

(a) Territorial sea

(b). Contiguous.zone
UP LAW CENTER – BAR 2015 Q & A

(c) Exclusive economic zone

(d) Continental shelf

SUGGESTED ANSWER

(A) The vast expanse of internal waters described by the Constitution as separating the islands of the
Philippine Archipelago, without regard to breadth or dimension is part of state territory and is subject to state
sovereignty. It is not open to international navigation except with the express consent of the coastal state. On
the other hand, the UNCLOS transforms constitutional internal waters into archipelagic waters which under
Article 52 “ships of all. States enjoy the right of innocent passage”, on the part of archipelagic states such as
the Philippines.

As to territorial sea, the expanse of the Philippine territorial sea extends by 200 nautical miles up to the
International Treaty Limits (ITL) surrounding the Philippines Archipelago as drawn pursuant to Article Ill of
the Treaty of Paris of 10 December 1898 and as constitutionalized under Article l of the 1935 Constitution.

Under the UNCLOS, such expanse of territorial sea collapsed and the IRL as boundaries of the Philippines
disappeared, and under the UNCLOS; the new boundaries are drawn by the outer limit of the new territorial
seas of not exceeding 12 nautical miles from the baseline. Thus, sovereignty indicated by the ITL also
collapsed.

ALTERNATIVE ANSWER

(A) The objection of Congressman Pat Rio Tek is not valid. The UNCLOS has nothing to do with the
acquisition or loss of territory. It is a multi-‘. läteral treaty regulating sea use rights and maritime zones,
contiguous .zones, exclusive economic zones, and continental shelves. Whether referred to as internal waters
or archipelagic wafers, the Philippines exercises sovereignty over the body of water lying landward of the
baselines. (Magallona v. Ermita, G.R. No.187167, August 16, 2011, 655 SCRA 476).

ANOTHER ALTERNATIVE ANSWER

(A) I do not agree…..

“The UNCLOS is a product of international negotiation that seeks to balance State sovereignty (mare
clausum) and the principle of freedom of the high seas (mare liberum). The freedom to use the world’s marine
waters is one of the oldest .customary principles of international law. The UNCLOS gives to the coastal State
sovereign rights in varying degrees over the different zones of the sea which are: 1) internal waters, 2)
territorial sea, 3) contiguous zone, 4) exclusive economic zone, and 5) the high.seas. It also gives coastal States
more or less jurisdiction over foreign vessels depending on where the vessel is located. Insofar as the internal
waters and territorial sea is concerned, the Coasta! State exercises sovereignty, subject to the UNCLOS and
UP LAW CENTER – BAR 2015 Q & A

other rules of international law. Such sovereignty extends to the air space over the territorial sea as well as to
its bed and subsoil” (Arigo v. Swift, G.R. No. 206510, September 16, 2014).

UNCLOS III does not define the internal and territorial waters of states but merely “prescribes the water-
land ratio, length, and contour of baselines of archipelagic States like the Philippines.”

“UNCLOS III has nothing to do with the acquisition (or loss) of territory.” It is a multilateral treaty
regulating, among others, : sea-use rights over maritime zones.(i.e., the territorial waters [12 nautical miles
from the baselines], contiguous zone [24 nautical miles from the baselines), exclusive economic zone
[200.nautical miles from the baselines]), and continental shelves that UNCLOS III delimits.” “UNCLOS III
and its ancillary baselines laws play no role in the acquisition, enlargement or, as petitioners claim, diminution
of territory. Under traditional international law typology, States acquire (or conversely, lose) territory through
occupation, accretion, cession and prescription, not by executing multilateral treaties on the regulations of
sea-use rights or enacting statutes to comply with the treaty’s terms to delimit maritime zones and continental
shelves. Territorial claims to land features are outside UNCLOS III, and are instead governed by the rules on
general international law” (Magallona v. Ermita, G.R. No. 187167, August 16, 2011, 655 SCRA 476).

(B)

(a) The territorial Sea is 12 nautical miles from the baselines. An

archipelagic state may draw straight archipelagic baselines joining the outerrnost islands and drying reefs of
the archipelago; but the drawing of the baselines should not depart to any appréciable extent from the general
configuration of the archipelago šave for 3 percent of the total number of the baselines (Magallona v. Ermita,
G.R. No. 187167, August 16, 2017, 655 SCRA 476).

(b) The contiguous zone is a zone contiguous to the territorial sea.

The maximum limit is 24 nautical miles from the baselines of the territorial sea. It confers functional
jurisdiction to prevent infringements of customs, fiscal, immigration and sanitary regulations. (Crawford,
Brownlie’s Principle of Public International

Law, 8th ed., pp. 265-268).

(c). The economic zone extends no farther than 200 nautical miles from the baselines of the territorial sea.
The coastal state has sovereign rights for the purpose of exploiting, conserving and managing the natural
resources of the waters superjacent to the sea-bed and its sub-soil, and economic exploitation and
exploration, such as the production of energy, (Crawford, Brownlie’s Principles of Public International Law,
8th ed., p. 276).

(d) The continental shelf gives the coastal state rights to explore and exploit the resources of the shelf by
operation of law. (Crawford, Brownlie’s Principles of Public International Law, 8th ed., p. 276).

III
UP LAW CENTER – BAR 2015 Q & A

Professor Masipag who holds a plantilla or regular item in the University of the Philippines (UP) is appointed
as an Executive Assistant in the Court of Appeals (CA). The professor is considered only on leave of absence
in Up while he reports for work at the CA which shall pay him the salary of the Executive Assistant. The
appointment to the CA position was questioned, but Professor Masipag countered that he will not collect the
salary for both positions; hence, he can not be accused of receiving double compensation. Is the argument of
the professor valid?

SUGGESTED ANSWER

Although Professor Masipag is correct in saying that “he can not be accused of receiving double
compensation” as he would not actually be receiving additional or double compensation, it is submitted that
he may nevertheless not be allowed to accept the position of Executive Assistant of the Court of Appeals
during his incumbency as a regular employee of · the University of the Philippines, as the former would be an
incompatible office not allowed to be concurrently held by him ‘under the provisions of Article IX-B, Section
7 of the Constitution, the second paragraph of which specifies that “unless otherwise allowed by law or by
the primary functions of his position, no appointive official shall hold any other office in the Government.”

IV

When is a facial challenge to the constitutionality of a law on the ground of violation of the Bill of Rights
traditionally allowed? Explain your answer.(3%)

SUGGESTED ANSWER

“In United States (US) constitutional law, a facial challenge, also known as a First Amendment Challenge, is
one that is launched to assail the validity of statutes concerning not only protected speech, but also all other
rights in the First Amendment. These include religious freedom, freedom of the press, and the right of the
people to.peaceably assemble, and to petition the Government for a redress of grievances. After all the
fundamental right to religious freedom, freedom of the press and peaceful assembly are but component rights
of the right to one’s freedom of expression, as they are modes which one’s thoughts are externalized.

“In this jurisdiction, the application of doctrines originating from the U.S. has been generally maintained,
albeit with some modifications. While this Court has withheld the application of facial challenges to strictly
penal statutes, it has expanded its scope to cover statutes not only regulating free speech, but also those
involving religious freedom, and other fundamental rights. The underlying reason for this modification is
simple. For unlike its counterpart in the U.S., this Court, under its expanded jurisdiction, is mandated by the
Fundamental Law not only to settle actual controversies involving rights which are legally demand able and
enforceable, but also to determine whether or not there has been a grave abuse of discretion amounting to
lack or excess of jurisdiction on the part of any branch or instrumentality of the Government” (Imbong v.
Ochoa, G.R. No. 204819, April 8, 2014, 721 SCRA 146).

V.

BD Telecommunications, Inc. (BDTI), a Filipino-owned corporation, sold. its 1,000 common shares of stock
in the Philippine Telecommunications Company (PTC), a public utility, to Australian
Telecommunications (AT), another stockholder of the PTC which also owns 1,000 common shares. A
Filipino stockholder of PTC questions the sale on the ground that it will increase the common shares of AT,
UP LAW CENTER – BAR 2015 Q & A

a foreign company, to more than 40% of the capital (stock) of PTC in violation of the 40% limitation of
foreign ownership of a public utility.

AT argues that the sale does not violate the 60-40 ownership requirement in favor of Filipino citizens decreed
in Section II, Article XII of the .1987 Constitution because Filipinos still own 70% of the capital of the PTC.
AT points to the fact that it owns only 2,000 common voting shares and 1,000 non-voting preferred shares
while Filipino stockholders own 1,000 common shares and 6,000 preferred shares, therefore, Filipino
stockholders still own a majority of the outstanding capital stock of the corporation, and both classes of
shares have a par value of Php 20.00 per share. Decide. (5%)

SUGGESTED ANSWER

“The application of the Grandfather Rule is justified by the circumstances of the case to determine the
nationality of petitioners… the use of the Grandfather Rule as a “supplement” to the Control Test is not
proscribed by the Constitution…” “The Grandfather Rule, standing alone, should not be used to determine
the Filipino ownership and control in a corporation; as it could result in an otherwise foreign corporation
rendered qualified to perform nationalized or partly nationalized activities.

Hence, it is only when the Control Test is first complied with that the Grandfather Rule may be applied. Put
in another manner, if the subject corporation’s Filipino equity falls below the threshold 60%, the corporation
is immediately considered foreign-owned, in which case, the need to resort to the Grandfather Rule
disappears. On the other hand, a corporation that complies with the 60-40 Filipino to foreign equity
requirement can be considered a Filipino corporation if there is no doubt as to who has the “beneficial
ownership” and “control of the corporation. In that instance there is no need for a dissection or further
inquiry on the ownership of the corporate shareholders in both the investing and investee corporation or the
application of the Grandfather Rule. As a corollary rule, even if the 60-40 Filipino to foreign equity ratio is
apparently met by the subject or investee corporation, a resort to the Grandfather Rule is necessary if doubt
exists as to the locus of the “beneficial ownership” and “control” (Narra Nickel Mining and Development
Corporation v. Redmont Consolidated Mines Corporation, G.R. No. 195580, January 28, 2015). “… the “doubt”
that demands the application of the Grandfather Rule in addition to or in tandem with the Control Test is not
confined to, or more bluntly, does not refer to the fact that the apparent Filipino ownership of the
corporation’s equity falls below the 60% threshold. Rather, “doubt” refers to various indicia that the
“beneficial ownership” and “control” of the corporation do not in fact reside in Filipino shareholders but in
foreign stakeholders. As provided in DOJ Opinion No. 165; Series of 1984, which applied the pertinent
provisions of the Anti-Dummy Law in relation to the minimum Filipino equity requirement in the
Constitution, “significant indicators of the dummy status” have been recognized in view of reports “that
some Filipino investors or businessmen are being utilized or Care] allowing themselves to be used as
dummies by foreign investors” specifically in joint ventures for national resource exploitation. These
indicators are:

“1. That the foreign investors provide practically all the funds

for the joint investment undertaken by these Filipino businessmen and their foreign partner;

“2. That the foreign investors undertake to provide practically all the technological support for the joint
venture;
UP LAW CENTER – BAR 2015 Q & A

“3. That the foreign investors, while being minority stockholders,

manage the company and prepare all economic viability studies” (Narra Nickel Mining and Development
Corporation v. Redmont Consolidated Mines Corporation, G.R. No. 195580, January 28, 2015).

(Note: This question should have been asked in Mercantile Law. I respectfully ask that answers featuring the foregoing
discussion should be accepted as correct).

VI

(A) Distinguish the President’s authority to declare a state of rebellion from the authority to proclaim a state
of national emergency. (2%)

(B) What are the limitations, if any, to the pardoning power of the President? (3%)

SUGGESTED ANSWER

(A) The power of the President to declare a state of rebellion is based on the power of the President as chief
executive and commander in-chief of the Armed Forces of the Philippines. It is not necessary for the
President to declare a state of rebellion before calling out the Armed Forces of the Philippines to suppress it.
The proclamation only gives notice to the nation that such a state exists and that the Armed Forces of the
Philippines may be called upon to suppress it (Sanlakas V. Executive Secretary, G.R. No. 159085, February 3,
2004, 421 SCRA 656).

In a proclamation of a state of national emergency, the President is already calling out the Armed Forces of
the Philippines to suppress. not only rebellion but also lawless violence (David v. Arroyo, G.R. No. 171396,
May 3, 2006, 489 SCRA 162).

(B) The following are the limitations to the pardoning power of the

President:

(1) The President cannot pardon impeachment cases.

(2) The President may grant pardons only after conviction by final judgment.

(3) Amnesty requires the concurrence of the majority of all the Members of Congress. (Section 19, Article VII
of Constitution)

(4) The President cannot grant pardon, amnesty, parole or suspension of sentence for violation of election
laws, rules and regulations without the favorable recommendation of the Commission on Elections. (Section
9, Article iX-C of Constitution.)

(5) The President cannot pardon members and employees of the

UP LAW CENTER – BAR 2015 Q & A

Judiciary found guilty by the Supreme Court in administrative cases, because it will encroach upon the
exclusive power of administrative supervision of the Supreme Court over them (in re Petition for judicial
Clemency of Manuel V. Romilo, Jr., G.R. No. 97091, December 9, 1997).

ALTERNATIVE ANSWER

(B) “The 1987 Constitution, specifically Section 19 of Article Vil and

Section 5 of Article IX-C, provides that the President of the Philippines possesses the power to grant
pardons, along with other acts of exec-. utive clemency, to wit:

“Section 19. Except in cases of impeachment, or as otherwise provided in this constitution, the President may
grant reprieves, commutations, and pardons, and remit fines and forfeitures, after conviction by final
judgment. “He shall also have the power to grant amnesty with the concurrence of a majority of all the
Members of the Congress.

“Section 5. No pardon, amnesty, parole, or suspension of sentence for violation of election laws, rules, and
regulations shall be granted by the President without the favorable recommendation of the Commission.

“It is apparent from the foregoing constitutional provisions that the only instances in which the President
may not extend pardon remain to be in: (1) impeachment cases; (2) cases that have not yet resulted in a final
conviction; and (3) cases involving violations of election laws, rules and regulations in which there was no
favorable recommendation coming from the COMELEC” (Risos-Vidal V. COMELEC, G.R. No. 206666,
January 21, 2015).

It may be added that pardons may not be extended to a person convicted of législative contempt, as this
would violate the doctrine of separation of powers, or of civil contempt since this would involve the benefit
not of the State itself but of the private litigant whose rights have been violated by the contemner. Pardon
cannot also be extended for purposes of absolving the pardonee of civil liability, including judicial costs,
since, again, the interest that is remitted does not belong to the State but to the private litigant. (Cruz and
Cruz, Philippine Political Law, 2014 Edition, page 445).

VII.

Senator Fleur De Lis is charged with plunder before the Sandiganbayan. After finding the existence of
probable cause, the court issues a warrant for the Senator’s arrest. The prosecution files a motion to suspend
the Senator relying on Section 5 of the Plunder Law. According to the prosecution, the suspension should last
until the termination of the case. Senator Lis vigorously opposes the motion contending that only the Senate
can discipline its members, and that to allow his suspension by the Court would violate the principle of
separation of powers. Is Senator Lis’s contention tenable? Explain. (4%)

SUGGESTED ANSWER

The contention of Senator Fieur de Lis is not tenable. The suspension contemplated in Subsection 3, Section
16, Article VI of the Constitution. The suspension imposed under Section 5 of the Plunder Law is not a
penalty but a preventive measure. The doctrine of separation of powers cannot be deemed to have excluded
UP LAW CENTER – BAR 2015 Q & A

Members of Congress from the application of the Plunder Law. The law itself does not exclude Members of
Congress from its coverage. The Sandiganbayan did not err in issuing the preventive suspension
order (Santiago v. Sandiganbayan, G.R. No. 128055, April 18, 2001, 756 SCRA 636)

VIII

A law provides that the Secretaries of the Departments of Finance and Trade and Industry, the Governor of
the Central Bank, the Director General of the National Economic Development Authority, and the
Chairperson of the Philippine Overseas Construction Board shall sit as ex-officio members of the Board of
Directors (BOD) of a government owned and controlled corporation (GOCC), The other four (4) members
shall come from the private sector. The BOD issues a resolution to implement a new organizational structure,
staffing pattern, a position classification system, and a new sět of qualification standards. After the
implementation of the Resolution, Atty. Dipasupil questioned the legality of the Resolution alleging that the
BOD has no authority to do so. The BOD claims otherwise arguing that the doctrine of qualified political
agency applies to the case. It contends that since its agency is attached to the Department of Finance, whose
head, the Secretary of Finance, is an alter ego of the President, the BOD’s acts were also the acts of the
President. Is the invocation of the doctrinė by the BOD proper? Explain. (4%)

SUGGESTED ANSWER

The invocation of the qualified political agency doctrine is not correct. Although some members of the Board
of Directors were cabinet members, they did not become members of the Board of Directors because of their
appointment but because of their designation by the law. When they implemented a new organizational plan,
they were not acting as alter egos, of the President but as members of the Board of Directors pursuant to the
law (Manalang-Demigillo v. Trade and Investment Development Corporation of the Philippines, G.R. Nos. 168613,
185571, March 5, 2013,692 SCRA 359).

IX

Several senior officers of the Armed Forces of the Philippines received invitations from the Chairperson of
the Senate Committees on National Defense and Security for them to appear as resource persons iri
scheduled public hearings regarding a wide range of subjects. The invitations state , that these public hearings
were triggered by the privilege speeches of the Senators that there was massive electoral fraud during the last
national elections. The invitees Brigadier General Matapang and Lieutenant Coronel Makatuwiran, who were
among those tasked to maintain peace and order during the last election, refused to attend because of an
Executive Order banning all public officials enumerated in paragraph 3 thereof from appearing before either
house of Congress without prior approval of the President to ensure adherence to the rule of executive
privilege. Among those included in the enumeration are “senior officials of executive departments who, in the
judgment of the department heads, are covered by executive privilege.” Several individuals and groups
challenge the constitutionality of the subject Executive Order because it frustrates the power of the Congress
to conduct inquiries in aid of legislation under Section 21, Article VI of the 1987 Constitution. Decide the
case. (5%)

SUGGESTED ANSWER

Under Section 5, Article XVI of the Constitution, the President is commander-in-chief of the Armed Forces
of the Philippines. By virtue of. this power, the President can prevent Brigadier General Matapang and
UP LAW CENTER – BAR 2015 Q & A

Lieutenant Colonel Makatuwiran from appearing before the Senate to testify before a legislative investigation
(Guidani v. Senga, G.R. No. 170165, August 15, 2006, 498 SCRA 671). The provision in the Executive Order
which authorized Department Secretaries to invoke executive privilege in case senior officials in their
departments are asked to appear in a legislative investigation is not valid. It is upon the President that
executive power is vested. Only the President can make use of Executive Privilege (Senate v. Ermita, G.R. No.
169777, July 14, 2006, 488 SCRA 1).

The Secretary of the Department of Environment and Natural Resources (DENR), issued Memorandum
Circular No. 123-15 prescribing the administrative requirements for the conversion of a Timber License
Agreement (TLA) into an Integrated Forestry Management Agreement (IFMA). ABC Corporation, a holder
of a TLA which is about to expire, claims that the conditions for conversion imposed by the said circular are
unreasonable and arbitrary and a patent nullity because it violates the non-impairment clause under the Bill of
Rights of the 1987 Constitution. ABC Corporation goes to court seeking the nullification of the subject
circular. The DENR moves to dismiss the case on the ground that ABC Corporation has failed to exhaust
administrative remedies which is fatal to its cause of action, If you were the judge; will you grant the motion?
Explain: (4%)

SUGGESTED ANSWER

The motion to dismiss should be denied. The doctrine of exhaustion of administrative remedies applies only
to judicial review of decisions of administrative agencies in the exercise of their quasi-judicial power. It has no
application to their exercise of rule-making power (Holy Spirit Homeowners Association, Inc. v. Defensor, G.R. No.
163980, August 3, 2006, 497 SCRA 581).

XI

(A) What is the concept of expanded judicial review under the 1987

Constitution? (3%)

(B) Differentiate the rule-making power or the power of the Supreme Court to promulgate rules under
Section 5, Article VIll of the 1987 Constitution, and judicial legislation. (2%)

SUGGESTED ANSWER

(A) Because of the expanded power of judicial review of the Supreme Court, the facial challenge to the
constitutionality of laws is no longer limited to laws which violate freedom of speech but applies to all
violations of fundamental rights under the Bill of Rights (Imbong y. Ochoa, Jr., G.R. No. 204819, April 8,
2014,721 SCRA 140).

In addition, the remedies of certiorari and prohibition in the Supreme Court are broader in scope and may be
issued to correct errors of jurisdiction of judicial, quasi-judicial or ministerial actions and may be invoked to
UP LAW CENTER – BAR 2015 Q & A

restrain any act of grave abuse of discretion of any branch of government, even if it does not exercise judicial,
quasi-judicial or ministerial functions (Araullo v. Aquino III, G.R. No. 209287, July 1, 2014,728 SCRA 1).

ALTERNATIVE ANSWER

(A) The concept of “expanded judicial power” is specified in the second paragraph of Section 1 of Article
VIII of the Constitution where it is provided that judicial power includes the duty to determine whether or
not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any
branch or instrumentality of the Government.” (B) judicial legislation refers to the encroachment by the
Judiciary upon the function of the legislature by making law rather than declaring, construing or enforcing the
law. (Ballentine’s Law Dictionary, 3rd ed., p.685). Section 3(5), Article vill of Constitution granted the
Supreme Court power to promulgate rules concerning the protection and enforcement of constitütional
rights. In the exercise of this power, the Supreme Court promulgated the Rule on the Writ of Amparo, the
Rule on the Writ of Habeas Data, and the Rules of Procedure for Environmental Cases.

XII

Discuss the evolution of the principle of jus sanguinis as basis of Filipino citizenship under the 1935, 1973, and
1987 Constitutions. (3%)

SUGGESTED ANSWER

Section 1, Article Ill of the 1935 Constitution adopted the jus sanguinis principle as the basis of Filipino
citizenship if the father is a Filipino citizen. However, Subsection 4, Section 1, Article Ill of the Constitution
provided that if the mother was a Filipino citizen who lost her Philippine citizenship because of her marriage
to a foreign husband, her children could elect Philippine citizenship upon reaching the age of majority.

Subsection 2, Section 1, Article ill of the 1973 Constitution provided that a child born of a father or a mother
who is a citizen of the Philippines is a Filipino citizen.

Section 2, Articie Ill of the 1973 Constitution provided that a child whose father or mother is a Filipino
citizen is a Filipino citizen. Subsection 3, Section 1, Article IV of the 1987 Constitution provided that a child
born before January 17, 1973, of Filipino mothers, who elected Philippine citi zenship upon reaching the age
of majority under the 1973 Constitution is a natural-born Filipino citizen (Tecson v. Commission on Elections,
G.R. No. 161434, March 3, 2004,424 SCRA 277).

(NOTE: The 1935 and the 1973 Constitutions are not included in the coverage of the examinations).

XIII

On August 15, 2015, Congresswoman Dina Tatalo filed and sponsored House Bill No. 5432, entitled “An
Act Providing for the Apportionment of the Lone District of the City of Pangarap.” The bill eventually
became a law, R.A. No. 1234. It mandated that the lone legislative district of the City of Pangarap would now
consist of two (2) districts. For the 2016 elections, the voters of the City of Pangarap would be classified as
belonging to either the first or second district, depending on their place of residence. The constituents of each
district would elect their own representative to Congress. as well as eight (8) members of the Sangguniang
UP LAW CENTER – BAR 2015 Q & A

Panglungsod. R.A. No. 1234. apportioned the City’s barangays. The COMELEC thereafter promulgated
Resolution No. 2170 implementing R.A. No. 1234. Piolo Cruz assails the COMELEC Resolution as
unconstitutional. According to him, R.A. No. 1234 cannot be implemented without conducting a plebiscite
because the apportionment under the law falls within the meaning of . creation, division, merger, abolition or
substantial alteration of boundaries of cities under Section 10, Article X of the 1987 Constitution. Is the claim
correct? Explain. (4%)

SUGGESTED ANSWER

The claim of Piolo Cruz is not correct. The Constitution does not require a plebiscite for the creation of a
new legislative district by a legislative reapportionment. It is required only for the creation of new local
government units (Bagabuyo v. Commission on Elections, G.R. No. 176970, December 8, 2008, 573 SCRA 290).

XIV

Congress enacted R.A. No. 14344 creating the City of Masuwerte which took effect on September 25, 2014,
Section 23 of the law specifically exempts the City of Masuwerte froin the payment of legal fees in the
cases that it would file and/or prosecute in the courts of law. In two (2) cases that it filed, the City of
Masuwerte was assessed legal fees by the clerk of court pursuant to Rule 141 (Legal Fees) of the Rules of
Court. The City of Masuwerte questions the assessment, claiming that it is exempt from paying legal fees
under Section 23 of its charter, is the claim of exemption tenable? Explain. (4%)

SUGGESTED ANSWER

The exemption from payment of legal fees is not valid. The rules promulgated by the Supreme Court for the
payment of legal fees were in the exercise of its rule-making power and cannot be modified by a law granting
an exemption from payment (In Re Exemption from Payment of Court and Sheriff’s Fees of Duly Registered
Cooperatives, A.M. No. 12-2-03-0, March 3, 2012, 668 SCRA 1).

XV

The President appointed Dexter I. Ty as Chairperson of the COMELEC on June 14, 2011 foraterm of seven
(7) years pursuant to the 1987 Constitution.. His term of office started on June 2, 2017 to end on June 2,
2018. Subsequently, the President appointed Ms. Marikit as the third member of the COMELEC koraterm of
seven (7) years starting June 2, 2014 until June 2, 2021. On June 2, 2015, Chairperson Ty retired optionally,
after having served the government for thirty (30) years. The President then appointed Commissioner Marikit
as COMELEC Chairperson. The Commission on Appointments confirmed her appointment. The
appointment papers expressly indicate that Marikit will serve as COMELEC Chairperson “until the expiration
of the original term of her office as COMELEC Commissioner oron June 2, 2021.” Matalino, a tax payer,
files a petition for certiorari before the Supreme Court asserting that the appointment of Marikit as
COMELEC Chairperson is unconstitutional for the following reasons: (1) The appoint ment of Marikit:as
COMELEC Chairperson constituted a reappointment which is proscribed by Section 1 (2), Article IX of the
1987 Constitution; .and (2) the term of office expressly stated in the appointment papers of Marikit likewise
contravenes the aforementioned constitutional provision. Will the constitutional challenge succeed? Explain.
(4%)

SUGGESTED ANSWER
UP LAW CENTER – BAR 2015 Q & A

The argument of Matalino that the appointment of Commissioner Marikit as Chairman constituted a
reappointment, which is prohib ited by the Constitution, is not tenable. When he was appointed as Chairman,
Commissioner Marikit had not yet fully served his term. What the Constitution prohibits was his
reappointment as Commissioner after serving his seven-year term. his appointment as Chairman was a
promotional appointment and was not covered by the prohibition against reappointment. (2) The limitation
of the term of Commissioner Marikit as Chairman until the expiration of the original, term of her office as
Commissioner on June 2, 2021 is valid until 2018, that is, the unexpired portion of the last Chairman’s term
but invalid if until 2021 as it exceeds the limitation. It is in accordance with the principle that a promotional
appointment is allowed provided that the aggregate period of the term of the appointee will not exceed seven
years and that the rotational scheme of staggering the terms of the commission membership is
maintained (Funo v. Villar, G.R. No. 192791, April 24, 2012, 670 SCRA 579).

XVI

(A) Gandang Bai filed her certificate of candidacy (COC) for municipal mayor stating that she is eligible to
run for the said position. Pasyo Maagap, who also filed his COC for the same position, filed a petition to
deny due course or cancel Bai’s COC under Section 78 of the Omnibus Election Code for material
misrepresentation as before Bai filed her COC, she had already been convicted of a crime involving moral
turpitude. Hence, she is disqualified perpetually from holding any public office or from being elected to any
public office. Before the election, the COMELEC cancelled Bai’s COC but her motion for reconsideration
(MR) remained pending even after the election. Bai garnered the highest number of votes followed by
Pasyo Maagap, who took his oath as Acting Mayor. Thereafter, the COMELEC denied Bai’s MR and
declared her disqualified for running for Mayor. Pasyo Maagap asked the Department of interior and Local
Government Secretary to be allowed to take his oath as permanent municipal mayor. This request was
opposed by Vice Mayor Umaasa, invoking the rule on succession to the permanent vacancy in the Mayor’s
office. Who between Pasyo Maagap and Vice Mayor Umaasa has the right to occupy the position of Mayor?
Explain your answer. (5%)

(B) How do you differentiate the petition filed under Section 68 from the petition filed under Section 78,
both of the Omnibus Election Code? (3%)

SUGGESTED ANSWER

(A) Pasyo Maagap would be entitled to occupy the position of Mayor

upon the disqualification of Gandang Bai on the basis of the Petition to deny due course or cancel her
certificate of candidacy under the provisions of Section 78 of the Omnibus Election Code.

The rule is that “(a)n ineligible candidate who receives the highest number of votes. is a wrongful winner. By
express legal mandate, he could not even have been a candidate in the first place, but by virtue of the lack of
material time or any other intervening circumstances, his ineligibility might not have been passed upon prior
to election date. Consequently, he may have had the opportunity to hold himself out to the electorate as a
legitimate and duly qualified candidate. However, notwithstanding the outcome of the elections, his
ineligibility as a candidate remains unchanged. Ineligibility does not only pertain to his qualifications as a
candidate but necessarily affects his right to hold public office. The number of ballots cast in his favor cannot
cure the defect of failure to qualify with the substantive legal requirements of eligibility to run for public
office” (Maquiling v. Commission on Elections, G.R. No. 195649, April 16, 2013).
UP LAW CENTER – BAR 2015 Q & A

Accordingly, Gandang Bai “being a non-candidate, the votes cast in his favor should not have been counted.”
This leaves Pasyo Maagap as “the qualified candidate who obtained the highest number of votes. Therefore,
the rule on succession under the Local Government Code will not apply” (Maquiling v. Commission on
Elections, G.R. No. 195649, April 16, 2013).

(B) In addition to the rule cited above that a certificate of candidacy which is denied or cancelled under
Section 78 of the Omnibus Election Code would make said certificate of candidacy void ab initio (which
would preclude the application of the rules on succession for purposes of replacing him upon his
disqualification because, up to that point of his disqualification, he shall be considered merely as a de facto
officer), unlike in the case of disqualification under Section 68 of the Omnibus Election Code, which would
give rise to the de jure officership of the disqualified candidate up to his point of disqualification, the other
basic distinctions between petitions for the disqualification of candidates and petitions to reject or cancel
certificate of candidacy are as follows – Under Section 68 of the Omnibus Election Code, a candidate may be
disqualified if he commits any of the election offenses or “prohibited acts” specified therein, or if he is a
permanent resident of or an immigrant to a foreign country: On the other hand, under. Section 78 of the
same law, a certificate of candidacy may be denied due course or cancelled if found to be containing material
representations which are false and deliberately made. These would include misrepresentations as to age,
residence, citizenship or non-possession of natural-born status, registration as a voter, and eligibility, as when one, although
precluded from running for a fourth term because of the three-term limit rule, claims to be nonetheless
qualified, or when one claims to be eligible despite his disqualification on the basis of an accessory penalty
imposed upon him in connection with his conviction in a criminal case. A petition for disqualification under
Section 68 may be filed at any time after the last day for filing of the certificate of candidacy but not later than
the candidate’s proclamation should he:win in the elections, while a petition to deny due course to or cancel a
certificate of candidacy under Section 78 must be filed within five days prior to the last day for filing of
certificate of candidacy, but not later than twenty-five days from the time of the filing of the certificate of
candidacy. While a person who is disqualified under Section 68 is merely prohibited to continue as a
candidate, the person whose certificate is cancelled or denied due course under Section 78 is not treated as a
candidate at all. Thus, a candidate disqualified under Section 68 may be validly substituted but only by an
official candidate of his registered or accredited party.

XVII

The Gay, Bisexual and Transgender Youth Association (GBTYA), an organization of gay, bisexual, and
transgender persons, filed for accreditation with the COMELEC to join the forthcoming pariy-list elections.
The COMELEC denied the application for accreditation on the ground that GBTYA espouses immorality
which offends religious dogmas. GBTYA challenges the denial of its application based on moral grounds
because it violates its right to equal protection of the law.”

(A) What are the three (3) levels of test that are applied in equal protection cases? Explain. (3%)

(B) Which of the three (3) levels of test should be applied to the present case? Explain. (3%)

SUGGESTED ANSWER

(A) The three levels of test applied in equal protection cases are the strict scrutiny review, the intermediate
scrutiny review and rationality review.
UP LAW CENTER – BAR 2015 Q & A

If the legislative classification disadvantages a subject class or impinges upon a fundamental right, the statute
must fall unless the government can show that the classification serves a compelling governmental interest.

If the classification, while not facially invidious, gives rise to recurring constitutional difficulties or
disadvantages a quasi-suspect class, it will be treated under intermediate review. The law must not only
further an important government interest and be related to that interest. The justification must be genuine
and must not depend on broad generalizations.

If neither the strict nor the intermediate scrutiny is appropriate, the statute will be tested for mere rationality.
The presumption is in favor of the classification, the reasonableness and fairness of state action and of
legitimate grounds of distinction.

(B) Classification on the basis of sexual orientation is a quasi-subject classification that prompts intermediate
review. Gay and lesbian persons. historically were and continue to be the target of discrimination due to their
sexual orientation, Sexual orientation has no relation to a person’s ability to contribute to society. The
discrimination that distinguish the gays and lesbians persons are beyond their control. The group lacks
sufficient political strength to bring an end to discrimination through political means (Ang Ladlad LGBT Party
v. Commission on Elections, G.R. No. 190582, April 8, 2010, 618 SCRA 32).

ALTERNATIVE ANSWER

(A) The three levels of tests that may be applied in equal protection

cases may be classified as follows: the strict scrutiny test, for laws dealing with freedom of the mind or
restricting the political process, the rational basis standard for the review of economic legislation; and heightened
or intermediate scrutiny for evaluating classifications based on gender and legitimacy.

(B) It is submitted that the strict scrutiny test should be applied in this case because the challenged classification
restricts the political process.

XVIII

Around 12:00 midnight, a team of police officers was on routine patrol in Barangay Makatarungan when it
noticed an open delivery van neatly covered with banana leaves. Believing that the van was loaded with
contraband, the team leader flagged down the vehicle which was driven by Hades. He inquired from Hades
what was loaded on the van. Hades. just gave the police officer a blank stare and started to perspire profusely.
The police officers then told Hades that they will look inside the vehicle. Hades did not make any reply. The
police officers then lifted the banana leaves and saw several boxes. They opened the boxes and discovered
several kilos of shabu inside. Hades was charged with illegal possession of illegal drugs. After due
proceedings, he was convicted by the trial court. On appeal, the Court of Appeals affirmed his conviction. In
his final bid for exoneration, Hades went to the Supreme Court clairring that his constitutional right against
unreasonable searches and seizures was violated when the police officers searched his vehicle without a
warrant; that the shabu confiscated from him is thus inadmissible in evidence; and that there being no
evidence against him, he is entitled to an acquittal. For its part, the People of the Philippines maintains that
the case of Hades involved a consented warrantless search which is legally recognized. The People adverts to
the fact that Hades did not offer any protest when the. police officers asked him if they could look inside the
vehicle. Thus, any evidence obtained in the course thereof is admissible in evidence.
UP LAW CENTER – BAR 2015 Q & A

Whose claim is correct? Explain. (5%)

SUGGESTED ANSWER

The warrantless search was illegal. There was no probable cause to search the van. The shabu was not
immediately apparent. It was discovered only after they opened the boxes. The mere passive silence of Hades
did not constitute consent to the warrantiess search (Caballes v. Court of Appeals, G.R. No. 163108, February
23, 2005, 373 SCRA 221).

XIX

Pursuant to its mandate to manage the orderly sale, disposition and privatization of the National Power
Corporation’s (NPC) generation assets, real estate and other disposable assets, the Power Sector Assets and
Liabilities Management (PSALM) started the bidding process for the privatization of Angat Hydro Electric
Power Plant (AHEPP). After evaluation of the bids, K-Pop. Energy Corporation, a South Korean Company,
was the highest bidder. Consequently, a notice of award was issued to K-Pop. The Citizens’ Party questioned
the sale arguing that it violates the constitutional provisions on the appropriation and utilization of a natural
resource which should be limited to Filipino citizens and corporations which are at least,60% Filipino-owned.
The PSALM countered that only the hydroelectric facility is being sold and not the Angat Dam; and that the
utilization of water by a hydroelectric power plant does not constitute appropriation of water from its natural
source of water that enters the intake gate of the power plant which is an artificial structure. Whose claim is
correct? Explain. (4%)

SUGGESTED ANSWER

The PSALM is correct. Foreign ownership of a hydroelectric power plant is not prohibited by the
Constitution. The PSALM will retain ownership of Angat Dam. Angat Dam will trap the natural flow of
water from the river. The water supplied by PSALM will then be used for power generation. Once the water
is removed from its natural source, it ceases to be part of the natural resources of the Philippines and may be
acquired by foreigners (Initiatives for Dialogue and Empowerment through Alternative Legal Services, Inc. v. Power
Sector Assets and Liabilities Management Corporation, G.R. No. 192088, October 9, 2012, 682 SCRA 602).

XX

Typhoon Bangis devastated the Province of Sinagtala. Roads and bridges were destroyed which impeded the
entry of vehicles into the area. This caused food shortage resulting in massive looting of grocery stores and
malls. There is power outage also in the area. For these reasons, the governor of the province declares a state
of emergency in their province through Proclamation No. 1. He also invoked Section 465 of the Local
Government Code of 1991 (R.A. No. 7160) which vests on the provincial governor the power to carry out
emergency measures during man-made and natural disasters and calamities, and to call upon the appropriate
national law enforcement agencies to suppress disorder and lawless violence. In the same proclamation, the
governor called upon the members of the Philippine National Police, with the assistance of the Armed Forces
of the Philippines, to set up checkpoints and chokepoints, conduct general searches and seizures including
arrests, and other actions necessary to ensure public safety. Was the action of the provincial governor proper?
Explain. (4%)

SUGGESTED ANSWER
UP LAW CENTER – BAR 2015 Q & A

The action of the Provincial Governor is not valid. It is only the President who is authorized to exercise
emergency powers under Section 23, Article VI of the Constitution and to call out the Armed Forces of the
Philippines under Section 1, Article VII of the Constitution. Section 465 of the Local Government Code does
not sanction his actions. It refers to calamities and disasters. Looting is not a calamity or disaster. The power
under Article 465 of the Local Government Code to call upon national law enforcement agencies to suppress
lawless violence is not applicable. The Armed Forces of the Philippines is not a national law enforcement
agency (Kulayan v. Tan, G.R. No. 187298, July 3, 2012, 675 SCRA 482).

XXI

The Partido ng Mapagkakatiwalaang Pilipino (PMP) is a major political party which has participated in every
election since the enactment of the 1987 Constitution. It has fielded candidates mostly for legislative district
elections. In fact, a number of its members were elected, and are actually serving, in the House of
Representatives. In the coming 2016 elections, the PMP leadership intends to join the party-list system. Can
PMP join the party-list system without violating the Constitution and Republic Act No. 7941? (4%)

SUGGESTED ANSWER

Yes, the Partido Ng Mga Mapagkakatiwalaang Pilipino can join the party list system provided it does not field
candidates in the legislative district elections (Atong Paglaum, Inc. v. Commission on Elections, G.R. No. 203766,
April 2, 2013,694 SCRA 477).

XXII

The President appoints Emilio Melchor as Chairperson of the Civil Service Commission. Upon confirmation
of Melchor’s appointment, the President issues an executive order including him as Ex-Officio member of
the Board of Trustees of the Government Service Insurance System (GSIS), Employees Compensation
Commission (ECC), and the Board of Directors of the Philippine Health Insurance Corporation
(PHILHEALTH). Allegedly, this is based on the Administrative Code of 1997 (E.O: No. 292), particularly
Section 14, Chapter 3. Title I-A, Book V. This provision reads: “The chairman of the CSC shall be a member
of the Board of Directors of other governing bodies of government entities whose functions affect the career
development, employment, status, rights, privileges, and welfare of government officials and employees… “A
taxpayer questions the designation of Melchor as ex-officio member of the said corporations before the
Supreme Court based on two (2) grounds, to wit: (1) it violates the constitutional prohibition on members of
the Constitutional Commissions to hold any other office or employment during his tenure; and (2) it impairs
the independence of the CSC. Will the petition prosper? Explain. (4%).

SUGGESTED ANSWER

(1) The Chairperson Emilio Melchor’s holding ex-officio of the other

offices under the Executive Order mentioned in the problem would constitute a clear violation of the special
prohibition in Section 2 of Article IX-A of the Constitution, which strictly provides that he shall, during his
tenure, not hold any other office or employment. Said constitutional provision does not make any distinction
among the offices he may not hold, or as to whether or not the functions attached to said offices would be
primarily related to his duties as Chairperson of the Civil Service Commission and therefore may be held in
an ex officio capacity.
UP LAW CENTER – BAR 2015 Q & A

The GSIS, PHILHEALTH, ECC and HDMF are vested by their respective charters with various powers and
functions to carry out the purposes for which they were created. While powers and functions associated with
appointments, compensation and benefits affect the career development, employment status, rights,
privileges, and welfare of government officials and employees, the GSIS, PHILHEALTH, ECC and HDMF
are also tasked to perform other corporate powers and functions that are not personnel-related. All of these
powers and functions, whether personnel-related or not, are carried out and exercised by the respective
Boards of the GSIS, PHILHEALTH, ECC and HDMF. Hence, when the CSC Chairman sits as a member of
the governing Boards of the GSIS, PHILHEALTH, ECC and HDMF, he may exercise these powers and
functions, which are not anymore derived from his position as CSC Chairman, such as imposing interest on
unpaid or unremitted contributions, issuing guidelines for the accreditation of health care providers, or
approving restructuring proposals in the payment of unpaid loan amortizations. The CSC Chairman’s
designation as member of the governing Boards of the GSIS, PHILHEALTH, ECC and HDMF entities him
to receive per diem, a form of additional compensation that is disallowed by the concept of an ex officio
position by virtue of its clear contravention of the proscription set by Section 2, Article IX-A of the 1987
Constitution. This situation goes against the principle behind an ex officio position, and must, therefore, be
held unconstitutional.

(2) Apart from violating the prohibition against holding multiple offices, Melchor’s designation as member of
the governing Boards of the GSIS, PHILHEALTH, ECC and HDMF impairs the independence of the CSC.
Under Section 17, Article VII of the Constitution, the President exercises control over all government offices
in the Executive Branch, An office that is legally not under the control of the President is not part of the
Executive Branch (Funa v. The Chairman, Civil Service Commission, G.R. No.191672, November 25, 2014, 612
SCRA 308).
UP LAW CENTER – BAR 2015 Q & A

Bar Exam 2015 Suggested Answers in Labor Law

I.

(A) Rocket Corporation is a domestic corporation registered with the SEC, with 30% of its authorized capital
stock owned by foreigners and 70% of its authorized capital stock owned by Filipinos. Is Rocket Corporation
allowed to engage in the recruitment and placement of workers, locally and overseas? Briefly state the basis
for your answer. (2%)

(B) When does the recruitment of workers become an act of economic sabotage? (2%)

SUGGESTED ANSWER

(A) No. Article 27 of the Labor Code mandates that pertinently, for

a Corporation to validly engage in recruitment and placement of workers, locally and overseas, at least
seventy-five percent (75%) of its authorized and voting capital stock must be owned and controlled by
Filipino citizens. Since only 70% of its authorized capital stock is owned by Filipinos, it consequently cannot
validly engage in recruitment and placement of workers, locally and overseas.

(B) Under Section 6(m) of RA 8042, illegal recruitment is considered economic sabotage if it is committed by
a syndicate or is large scale in scope. It is syndicated illegal recruitment if the illegal recruitment is carried out
by three (3) or more conspirators; and it is large scale in scope when it is committed against three (3) more
persons, individually or as a group.

II.

LKG Garments Inc. makes baby clothes for export. As part of its measures to meet its orders, LKG requires
its employees to work beyond eight (8) hours everyday, from Monday to Saturday. It pays its employees an
additional 35% of their regular hourly wage for work rendered in excess of eight (8) hours per day. Because of
additional orders, LKG now requires two (2) shifts of workers with both shifts working beyond eight (8)
hours but only up to a maximum of four (4) hours. Carding is an employee who used to render up to six (6)
hours of overtime work before the change in schedule. He complains that the change adversely affected him
because now he can only earn up to a maximum of four (4) hours’ worth of overtime pay. Does Carding have
a cause of action against the company? (4%)

SUGGESTED ANSWER

No. A change in work schedule is a management prerogative of LKG. Thus, Carding has no cause of action
against LKG if, as a result of its change to two (2) shifts, he now can only expect a maximum of four (4)
hours overtime work. Besides, Art. 97 of the Labor Code does not guarantee Carding a certain number of
hours of overtime work. In Manila Jockey Employees’ Union v. Manila Jockey Club (G.R. No. 167760, March 7,
2007,517 SCRA 707), the Supreme Court held that the basis of overtime claim is an employee’s having been
“permitted to work”. Otherwise, as in this case, such is not demandable.
UP LAW CENTER – BAR 2015 Q & A

III.

Benito is the owner of an eponymous clothing brand that is a top seller. He employs a number of male and
female models who wear Benito’s clothes. in promotional shoots and videos. His deal with the models is that
Benito will pay them with 3 sets of free clothes per week. Is this arrangement allowed? (2%)

SUGGESTED ANSWER

No. the arrangement is not allowed. The models are Benito’s employees. As such, their services require
compensation in legal tender (Art. 102, Labor Code). The three sets of clothes, regardless of value, are in
kind; hence, the former’s compensation is not in the form prescribed by law.

ANOTHER SUGGESTED ANSWER

Under Article 102 of the Labor Code, wages of an employee are to be paid only in legal tender, even when
expressly requested by the employee. Hence, no lawful deal in this regard can be entered into by and between
Benito and his models.

ALTERNATIVE ANSWER

The models are not employees. Therefore, Art. 102 of the Labor Code applies. The payment does not have to
be in legal tender. But even if they are employees, the wage arrangement between Benito and the models is
allowed by Art: 97(f) of the Labor Code which defines wage as the remuneration or earning paid to an
employee, however designated, capable of being expressed in terms of money, whether fixed or ascertained
on a time, task, piece, or commission basis, or other method of calculating the same, which is payable by an
employer to an employee under a written or unwritten contract of employment for work done or to be done,
or for services rendered or to be rendered. It includes the fair and reasonable value, as determined by the
Secretary of Labor, of board, lodging or other facilities customarily furnished by the employer. to the
employee.

IV.

Far East Bank (FEB) is one of the leading banks in the country. Its compensation and bonus packages are
top of the industry. For the last 6 years, FEB had been providing the following bonuses across-the-board to
all its employees:

(a) 13th month pay; (b) 14th to 18th month pay; (c) Christmas basket worth P6,000; (d) Gift check worth
P4,000; and (e) Productivity-based incentive ranging from a 20% to 40% increase in gross monthly salary for
all employees who would receive an evaluation of “Excellent” for 3 straight quarters in the same year.

Because of its poor performance over-all, FEB decided to cut back on the bonuses this year and limited itself
to the following:

(a) 13th month pay; (b) 14th month pay; (c) Christmas basket worth P4,000; and (d) Gift check worth P2,000.
UP LAW CENTER – BAR 2015 Q & A

Katrina, an employee of FEB, who had gotten a rating of “Excellent” for the last 3 quarters was looking
forward to the bonuses plus the productivity incentive bonus. After learning that FEB had modified the
bonus scheme, she objected. Is Katrina’s objection justified? Explain. (3%)

SUGGESTED ANSWER

Katrina’s objection is justified. Having enjoyed the across-the-board bonuses, Katrina has earned a vested
right. Hence, none of them can be withheld or reduced. In the problem, the company has not proven its
alleged losses to be substantial. Permitting reduction of pay at the slightest indication of losses is contrary to
the policy of the State to afford full protection to labor and promote full employment (Linton Commercial Co.
v. Hellera, G.R. No. 163147, October 10, 2007,535 SCRA 434). As to the withheld productivity-based
bonuses, Katrina is deemed to have earned them because of her excellent performance ratings for three
quarters. On this basis, they cannot be withheld without violating the Principle of Non-Diminution of
Benefits.

Moreover, it is evident from the facts of the case that what was withdrawn by FEB was a productivity bonus.
Protected by RA No. 6791 which mandates that the monetary value of the productivity improvement be
shared with the employees, the “productivity-based incentive” scheme of FEB cannot just be withdrawn
without the consent of its affected employees.

V.

Soledad, a widowed school teacher, takes under her wing one of her students, Kiko, 13 years old, who was
abandoned by his parents and has to do odd jobs in order to study. She allows Kiko to live in her house,
provides him with clean clothes, food, and a daily allowance of 200 pesos. In exchange, Kiko does routine
housework, consisting of cleaning the house and doing errands for Soledad. One day, a representative of the
DOLE and the DSWD came to Soledad’s house and charged her with violating the law that prohibits work
by minors. Soledad objects and offers as a defense that she was not requiring Kiko to work as the chores
were not hazardous. Further, she did not give him chores regularly but only intermittently as the need may
arise. Is Soledad’s defense meritorious? (4%)

SUGGESTED ANSWER

Soledad’s defense is meritorious. Sec. 4(d) of the Kasambahay Law (RA No. 10361) provides that the term
“Domestic Worker” shall not include children who are under foster family arrangement, and are provided
access to education and given an allowance incidental to education, i.e. “baon”, transportation, school
projects and school activities.

VI.

Ador is a student working on his master’s degree in horticulture. To make ends meet, he takes on jobs to
come up with flower arrangements for friends. His neighbor, Nico, is about to get married to Lucia and needs
a floral arranger. Ador offers his services and Nico agrees. They shake hands on it, agreeing that Nico will pay
Ador P20,000.00 for his services, but that Ador will take care of everything. As Ador sets about to decorate
the venue, Nico changes all of Ador’s plans and ends up designing the arrangements himself with Ador
simply executing Nico’s instructions.
UP LAW CENTER – BAR 2015 Q & A

(A) Is there an employer-employee relationship between Nico and

Ador? (4%)

(B) Will Nico need to register Ador with the Social Security System

(SSS)? (2%)

SUGGESTED ANSWER

(A) Yes. With Ador’s simply executing Nico’s instruction, Nico, who now has control over Ador’s work, has
become the employer of Ador. In Royale Homes Marketing Corp. v. Fidel Alcantara (G.R. No. 195190, July 28,
2014), the Supreme Court held that control is the most important determinant of employer-employee
relationship.

(B) Yes, as under Section 9 of the Social Security Law (Art. 1161 as

amended), coverage in the SSS shall be compulsory upon all employees not over sixty (60) years of age and
their employers:

ANOTHER SUGGESTED ANSWER

(B) If Ador is a purely casual employee, then, no. Casual employees are not subject to the compulsory
coverage of the SSS by express provision of law (Section 8(5) (3), RA No. 1161, as amended).

ALTERNATIVE ANSWER

(A) There is no employer-employee relationship. The case at hand

pertains to a civil law arrangement. There is no business undertaken by Lucia; what the parties have is a
contract for a specific service.

VII.

Don Don is hired as a contractual employee of CALLHELP, a call center. His contract is expressly for a term
of 4 months. Don Don is hired for 3 straight contracts of 4 months each but at 2-week intervals between
contracts. After the third contract ended, Don Don is told that he will no longer be given another contract
because of “poor performance.” Don Don files a suit for “regularization” and for illegal dismissal, claiming
that he is a regular employee of CALLHELP and that he was dismissed without cause. You are the Labor
Arbiter. How would you decide the case? (4%)

SUGGESTED ANSWER
UP LAW CENTER – BAR 2015 Q & A

As Labor Arbiter, I will decide the case in favor of Don Don. Given the nature of Don Don’s work, which
consist of activities usually or desirable in the usual business of CALLHELP, Don Don should be considered
a regular employee.

CALLHELP’s termination of Don Don’s service in the guise of “poor performance” is not valid. Whether
for a probationary or regular employee, the requisites of dismissal on that ground do not appear to have been
complied with by the employer here.

VIII

Star Crafts is a lantern maker based in Pampanga. It supplies Christmas lanterns to stores in Luzon, Metro
Manila, and parts of Visayas, for the months of August to November being the busiest months. Its factory
employs a workforce of 2,000 workers who make different lanterns daily for the whole year. Because of
increased demand, Star Crafts entered into a contractual arrangement with People Plus, a service contractor,
to supply the former with 100 workers for only 4 months, August to November, at a rate different from what
they pay their regular employees. The contract with People Plus stipulates that all equipment and raw
materials will be supplied by Star Crafts with the express condition that the workers cannot take any of the
designs home and must complete their tasks within the premises of Star Crafts.

Is there an employer-employee relationship between Star Crafts and the 100 workers from People Plus?
Explain. (4%)

Yes. People Plus is a labor-only-contractor because it is not substantially capitalized. Neither does it carry on
an independent business in which it uses its own investment in the form of tools, equipment, machineries or
work premises. Hence, it is just an agent or recruiter of workers who perform work directly related to the
trade of Star Crafts. Since both the essential element and the conforming element of labor-only contracting
are present, Star Crafts becomes the employer of the supplied worker.. As principal; Star Crafts will always be
an employer in relation to the workers supplied by its contractor. Its status as employer is either direct or
indirect depending on whether the contractor is legitimate or not. Thus even if People Plus were a legitimate
job contractor, still Star Crafts will be treated as a statutory employer for purposes of paying the workers’
unpaid wages and benefits.

IX

Din Din is a single mother with one child. She is employed as a sales executive at a prominent supermarket.
She and her child live in Quezon City and her residence and workplace are a 15-minute drive apart. One day,
Din Din is informed by her boss that she is being promoted to a managerial position but she is now being
transferred to the Visayas. Din Din does not want to uproot her family and refuses the offer. Her boss is so
humiliated by Din Din’s refusal of the offer that she gives Din Din successive unsatisfactory evaluations that
result in Din Din being removed from the supermarket.

Din Din approaches you, as counsel, for legal advice. What would you advise her? (4 %)

SUGGESTED ANSWER
UP LAW CENTER – BAR 2015 Q & A

I will advise Din Din to sue her boss and the supermarket for illegal dismissal. Din Din cannot be compelled
to accept the promotion. Her unsatisfactory evaluations as well as her boss’ insistence that she should agree
to the intended transfer to Visayas are badges of an abuse of management prerogative. In Pfizer Inc. v.
Velasco (G.R. No. 177467, March 9, 2011, 645 SCRA 135), the Supreme Court held that the managerial
prerogative to transfer personnel must be exercised without abuse of discretion, bearing in mind the basic
elements of justice and fair play. Hence, Din Din’s dismissal is illegal.

Karina Santos is a famous news anchor appearing nightly in the country’s most watched newscast. She is
surprised, after one newscast, to receive a notice of hearing before the station’s Vice-President for Human
Resources and calls the VP immediately to ask what was wrong. Karina is told over the phone that one of her
crew filed a complaint against her for verbal abuse and that the management is duty bound to investigate and
give her a chance to air her side. Karina objects and denies that she had ever verbally assaulted her crew. The
VP then informed her that pending the investigation, she will be placed on a 30-day preventive suspension
without pay, and that she will not be allowed to appear in the newscast during this time.

Is the preventive suspension of Karina valid? Discuss the reasons for your answer. (4%)

SUGGESTED ANSWER

No. The preventive suspension of Karina is not valid. The employer may place an employee under preventive
suspension if his/ her continued employment would pose a serious and imminent threat to the life or
property of the employer or of his/her co-employees. These requirements are not present here.

XI

Rico has a temper and, in his work as Division Manager of Matatag Insurance, frequently loses his temper
with his staff. One day, he physically assaults his staff member by slapping him. The staff member sues him
for physical injuries. Matatag Insurance decides to terminate Rico, after notice and hearing, on the ground of
loss of trust and confidence. Rico claims that he is entitled to the presumption of innocence because he has
not yet been convicted. Comment on Matatag’s action in relation to Rico’s argument. (4%)

SUGGESTED ANSWER:

Matatag Insurance does not have to await the result of the criminal case before exercising its prerogative to
dismiss. Dismissal is not affected by a criminal case. Under the Three-fold Liability Rule, a single act may
result in three liabilities, two of which are criminal and administrative. To establish them, the evidence of the
crime must amount to proof beyond reasonable doubt; whereas, the evidence of the ground for dismissal is
substantial evidence only. In this regard, the company has some basis already for withholding the trust it has
reposed on its manager. Hence, Rico’s convic tion need not precede the employee’s dismissal.

XII

Blank Garments, Inc. (BLANK), a clothing manufacturer, employs more than 200 employees in its
manufacturing business. Because of its high overhead, BLANK decided to sell its manufacturing business to
UP LAW CENTER – BAR 2015 Q & A

Bleach Garments, Inc. (BLEACH) lock, stock and barrel which included goodwill, equipment, and personnel.
After taking on BLANK’s business, BLEACH reduces the workforce by not hiring half the workers
specifically the ones with séniority, BLANK and BLEACH are still discerned to be sister companies with
identical incorporators. The laid-off employees sue both BLANK and BLEACH for unlawful termination.

(A). How would you decide this case? (4%)

(B) What is the “successor employer” doctrine? (2%)

SUGGESTED ANSWER

(A) In transfer of ownership, the buyer corporation, as a general rule, is not duty-bound to absorb the
employees of the selling corporation. The buyer corporation becomes liable to the displaced employees only
if the change of ownership is done in bad faith or is used to defeat the rights of labor. In such a case, the
successor employer is duty-bound to absorb the displaced employees (Peñafrancia Tours and Travel Transport,
Inc., v. Sarmiento, G.R. No. 178397, October 20, 2011, 634 SCRA 279).

Since the facts of the case do not show any bad faith in BLEACH’S sale to BLANK, BLEACH,
consequently, is not obliged to absorb the displaced employees of BLANK.

The case at hand involves sales of assets as differentiated from sales of stocks. The ruling in SME Bank v. De
Guzman (G.R. No. 184517, October 8, 2013), which reversed Manlimos v. NLRC (G.R, No. 113337, March 2,
1995, 312 Phil. 178), pointed out that in asset sales, the rule is that the seller. in good faith is authorized to
dismiss the affected employees, but is liable for the payment of separation pay under the law. The buyer in
good faith, on the other hand, is not obliged to absorb the employees affected by the sale, nor is it liable for
the payment of their claims. In contrast with asset sales, in which the assets of the selling corporation are
transferred to another entity, the transaction in stock sales takes place at the shareholder level. Because the
corporation possesses a personality separate and distinct from that of its shareholders, a shift in the
composition of its shareholders will not affect its existence and continuity. Hence the corporation continues
to be the employer and continues to be liable for the payment of their just claims. Absent a just or authorized
cause, the corporation or its new majority shareholders are not entitled to lawfully dismiss corporate
employees.

SUGGESTED ANSWERS

(B) The “successor employer” doctrine refers to a sale or transfer in

ownership of an entity that has been done in bad faith or to defeat the rights of labor. In such a case, it is as if
there have been no changes in employer-employee relationship between the seller and its employees. The
buyer becomes a “successor employer” and is obliged to absorb the displaced employees.

XIII

Luisa is an unwed mother with three (3) children from different fathers. in 2004, she became a member of the
Social Security System (SSS). That same year, she suffered a miscarriage of a baby out of wedlock from the
UP LAW CENTER – BAR 2015 Q & A

father of her third child. She wants to claim maternity benefits under the SSS Act. Is she entitled to claim?
(3%)

SUGGESTED ANSWER

Yes, provided Luisa has reported to her employer her pregnancy and date of expected delivery, and paid at
least three monthly contributions during the 12-month period immediately preceding her miscarriage, then
she is entitled to maternity benefits up to four deliveries. As to the fact that she got pregnant outside wedlock,
as in her past three pregnancies, this will not bar her claim because the SSS is non-discriminatory.

IV

Luis, a PNP officer, was off duty and resting at home when he heard a scuffle outside his house. He saw two
of his neighbors fighting and he rushed out to pacify them. One of the neighbors shot Luis by mistake, which
resulted in Luis’ death. Marian, Luis’ widow, filed a claim with the GSIS seeking death benefits. The GSIS
denied the claim on the ground that the death of Luis was not service related as he was off duty when the
incident happened. Is the GSIS correct? (3 %)

SUGGESTED ANSWER

No. The GSIS is not correct: Luis, a policeman, just like a soldier, is covered by the 24-Hour, Duty Rule. He
is deemed on round-the-clock duty unless on official leave, in which case his death outside performance of
official peace-keeping mission will bar death claim. In this case, Luis was not on official leave and he died in
the performance of a peace-keeping mission. Therefore, his death is compensable.

XV

Victor was hired by a local manning agency as a seafarer cook on board a luxury vessel for an eight-month
cruise. While on board, Victor complained of chronic coughing, intermittent fever, and joint pains. He was
advised by the ship’s doctor to take complete bed rest but was not given any other medication. His condition
persisted but the degree varied from day to day. At the end of the cruise, Victor went home to Iloilo and
there had himself examined. The examination revealed that he had tuberculosis.

(A) Victor sued for medical reimbursement, damages and attorney’s fees, claiming that tuberculosis was a
compensable illness. Do you agree with Victor? Why or why not? (2%)

(B) Due to his prolonged illness, Victor was unable to work for more than 120 days. Will this entitle him to
claim total permanent disability benefits? (2%)

SUGGESTED ANSWER

(A) TB is listed under Sec. 32-A of the POEA-SEC as a work-related disease. It was also either contracted or
aggravated during the effectivity of Victor’s contract. Having shown its manifestations on board, Victor
should have been medically repatriated for further examination and treatment in the Philippines. This
obligation was entirely omitted in bad faith by the company when it waited for his contract to expire on him
UP LAW CENTER – BAR 2015 Q & A

before signing him off. On this basis, Victor is entitled to medical reimbursement, damages and attorney’s
fees.

(B) No. Victor’s TB is work-related and it developed on board, thereby satisfying the twin requisites of
compensability. However, despite , his knowledge of his medical condition, he failed to report to his manning
agent within three days from his arrival as required by Sec. 20-B(3) of the POEA-SEC. Since he already felt
the manifestations of TB before his sign-off, he should have submitted to post-employment medical
examination (Jebsens Maritime Inc. v. Enrique Undag, G.R. No. 191491, December 14, 2011, 662 SCRA 670). The
effect of his omis sion is forfeiture by him of disability benefits (Coastal Safeway Marine Services, Inc. v. Elmer T.
Esguerra, G.R. No. 185352, August 10, 2011, 655 SCRA 300). In effect, the 120-day rule has no application at
all.

XVI

The Alliance of independent Labor Unions (AILU) is a legitimate labor federation which represents a
majority of the appropriate bargaining unit at the Lumens Brewery (LB). While negotiations were ongoing for
a renewal of the collective bargaining agreement (CBA), LB handed down a decision in a disciplinary case that
was pending which resulted in the termination of the AILU’s treasurer and two other members for cause.
AILU protested the decision, claiming that LB acted in bad faith and asked that LB reconsider. LB refused to
reconsider. AILU then walked out of the negotiation and declared a strike without a notice of strike or a
vote.AILU members locked in the LB management panel by barricading the doors and possible exits
(including windows and fire escapes). LB requested the DOLE to assume jurisdiction over the dispute and to
certify it for compulsory arbitration. The Secretary of Labor declined to assume jurisdiction, finding that the
dispute was not one that involved national interest. LB then proceeds to terminate all of the members of the
bargaining agent on the ground that it was unlawful to: (1) barricade the management panel in the building,
and (2) participate in an illegal strike.

(A) Was AILU justified in declaring a strike without a strike vote and a notice of strike? Why or why not?
(3%)

(B) Was the Secretary of Labor correct in declining to assume jurisdiction over the dispute? (2%)

(C) Was LB justified in terminating all those who were members of AILU on the two grounds cited? (3%)

SUGGESTED ANSWER

(A) No. Firstly, a Notice of Strike is always required by Art. 263(c) of

the Labor Code before a strike may be staged-be it grounded on bargaining deadlock or unfair Labor
Practice. Secondiy, the Supreme Court already held in Sukothai that while AILU may not exhaust the 15-day
cooling-off period in case of dismissal from employment of its officers who were duly elected in accordance
with the Union constitution and by-laws and the dismissal constitutes union busting and a threat to AILU’s
existence, still, Art. 263 (f) requires that a strike vote be undertaken through a secret ballot and approved by a
majority of the total union membership in the bargaining unit. Devoid of a notice of strike and a strike vote,
AILU’s strike is therefore illegal.
UP LAW CENTER – BAR 2015 Q & A

(B) The refusal of the Secretary to assume jurisdiction is valid. Par. (g) of Art. 263 (old) of the Labor Code
leaves it to his sound discretion to determine if national interest is involved. Assumption power is full and
complete. It is also plenary and discretionary (Philtranco Service Enterprises, Inc. v. Philtranco Workers Union-
AGLO, G.R. No. 180962, February 26, 2014). Thus, if in his opinion national interest is not involved, then
the company cannot insist that he assume jurisdiction.

(C) If dismissal is based on illegal strike:

The company has to file a complaint for illegal strike first. Once the strike is declared by final judgment to be
illegal, it can dismiss the union officers. As to members, their dismissal must be based on their having
committed illegalities on the occasion of their illegal strike. Since the company prematurely and
indiscriminately dismissed the AILU members then their dismissal is illegal.

If dismissal is based on the unlawful acts of barricading to lock the AILU members: Yes. Article 264 (a) of the Labor
Code authorizes the employer to declare the loss of employment status of “ANY WORKER” or union
officer who knowingly participates in the commission of illegal acts during a strike.

XVII

The Collective Bargaining Agreement (CBA) between Libra Films and its union, Libra Films Employees’
Union (LFEU), contains the following standard clauses:

1. Maintenance of membership;

2. Check off for union dues and agency fees; and

3. No strike, no lock-out.

While Libra Films and LFEU are in re-negotiations for an extension of the CBA, LFEU discovers that some
of its members have resigned from the union, citing their constitutional right to organize (which includes the
right NOT to organize). LFEU demands that Libra Films institute administrative proceedings to terminate
those union members who resigned in violation of the CBA’s maintenance of membership clause. Libra
Films refuses, citing its obligation to remain a neutral party. As a result, LFEU declare’s a strike and after
filing a notice of strike and taking a strike vote, goes on strike. The union claims that Libra Films grossly
violated the terms of the – CBA and engaged in unfair labor practice.

(A) Are LFEU’s claims correct? Explain. (4%)

(B) Distinguish between a “closed shop” clause and a “maintenance of membership” clause. (2%).

(C) Distinguish between “union dues” and “agency fees.” (2%)

SUGGESTED ANSWERS
UP LAW CENTER – BAR 2015 Q & A

(A) LFEU’s claim that Libra Films committed ULP based on its violation of the CBA is not correct. For
violation of a CBA to constitute ULP, the violation must be violation of its economic provisions. Moreover,
said violation must be gross and flagrant. Based on the allegation of the union, what was violated was the
maintenance of membership clause which was a political or representational provision; hence, no ULP was
committed (BPI Employees Union-Davao City v. BPI, G.R. No. 164301, August 10, 2010, 702 SCRA 42).

(B) In a “closed shop” clause, all employees are required to be members of the union at the time of hiring.
They too must remain members of good standing during the period of employment as a condition of
continued employment. Maintenance of membership clause, on the other hand, requires all employees who
are union members at the time of the execution of the CBA to maintain their membership of good standing,
as a condition of continued employment.

(C) Union dues are union funds paid by union members, normally through check-off by the employer on the
basis of an individual written autho rization duly signed by the employees pursuant to Art. 241. (o) of the
Labor Code. Agency fee, on the other hand, is a reasonable fee equi valent to the dues and other fees paid by
members of the recognized collective bargaining agent. Art. 248(e) of the Labor Code mandates that only
non-union members who accept the benefits under the CBĄ may be assessed agency fees. Their check-off
authorization is not required.

XVIII

George is an American who is working as a consultant for a local IT company. The company has a union and
George wants to support the union. How far can George go in terms of his support for the union? (3%)

SUGGESTED ANSWER

George, as a general rule, is prohibited by Art. 270 (a) of the Labor Code from giving any donation, grant or
other form of assistance, in cash or in kind, directly or indirectly to the Union. He can give a support only
upon prior permission from the Secretary of Labor relative to “Trade Union activities” as defined in said law.

George, in addition to his alien employment permit, must first prove that the country whereof he is a national
recognizes the right of Filipinos working therein to organize. Under these conditions, he is allowed to support
the existing union by joining it as to increase its membership.

XIX

What is the rule on the “equity of the incumbent”? (2%)

SUGGESTED ANSWER

The Equity of the Incumbent rule has it that all existing federations or national unions, possessing all
qualifications of an LLO and none of the grounds for CR cancellation, shall continue to maintain their
existing affiliates regardless of their location or industry to which they belong. In case of dissociation,
affiliates are not required to observe the one union-one industry rule.
UP LAW CENTER – BAR 2015 Q & A

XX

(A) XYZ Company and Mr. AB, a terminated employee who also happens to be the President of XYZ
Employees Union, agree in writing to submit Mr. AB’s illegal dismissal case to voluntary arbitration. Is this
agreement a valid one? (3%)

(B) XYZ Company and XYZ Employees Union (XYZEU) reach a deadlock in their negotiation for a new
collective bargaining agreement (CBA).

XYZEU files a notice of strike; XYZ Company proposes to XYZEU that the deadlock be submitted instead
to voluntary arbitration. If you are counsel for XYZEU, what advice would you give the union as to the: (1)
propriety of the request of XYZ Company, and (2) the

relative advantages/disadvantages between voluntary arbitration ‘ and compulsory arbitration? (4%)

SUGGESTED ANSWER

(A) The agreement is valid because the preferred mode of settling labor disputes is through voluntary modes,
like voluntary arbitration. The agreement is consistent with Sec. 3, Art. XIII of the Constitution. Moreover,
Art. 262 of the Labor Code authorizes a voluntary arbitrator to hear and decide by agreement of the parties,
all other labor disputes.

(B) (1) As counsel, I will advise the union to accede to the request of

the company. Besides being the constitutionally preferred mode of dispute settlement, voluntary arbitration is
less adversarial and more expeditious.

(B) (2) The advantages of voluntary arbitration are:

(a) the parties’ dispute is heard and resolved by a person whom both parties have chosen as their judge;
hence, likely to be impartial,

(b) if both parties are willing to submit their dispute, the decision is final and binding on them in general by
reason of their submission agreement; and

(c) in the event of a challenge, the decision is elevated to the CA and then to the SC, i.e., less one layer of
appeal because the NLRC is out of the way.

The disadvantages of voluntary arbitration are:

(a) in case of appeal by the employer to the CA, the monetary award will not be secured with an appeal bond
which Rule 43 of the Rules of Court does not require; and

(b) in case of enforcement of judgment, the Voluntary Arbitrator has no sheriff to enforce it.
UP LAW CENTER – BAR 2015 Q & A

The advantages of compulsory arbitration are:

(a) subject to pre-litigation mediation, a case can be initiated through the filing of a verified complaint by a
union member, unlike in voluntary arbitration where the Voluntary Arbitrator acquires jurisdiction primarily
through a submission agreement. In a case where the company is unwilling, the EBR (and only the EBR) may
serve a notice to arbitrate; hence, a union member may be left out in the process if the EBR does not serve
that notice; (b) a monetary award is secured with the employer’s appeal bond; and (c) there is a system of
restitution in compulsory arbitration.

The disadvantages of compulsory arbitration are: (a). State interference with the affairs of labor and
management is maxi

mized, disregarding the inter-party nature of the relationship; and (b) the system of appeals entails a longer
process.

XXI

Philippine News Network (PNN) engages the services of Anya, a prominent news anchor from a rival
station, National News Network (NNN). NNN objects to the transfer of Anya claiming that she is barred
from working in a competing company for a period of three years from the expiration of her contract. Anya
proceeds to sign with PNN which then asks her to anchor their nightly newscast. NNN sues Anya and PNN
before the National Labor Relations Commission (NLRC), asking for a labor injunction. Anya and PNN
object claiming that it is a matter cognizable by a regular court and not the NLRC.

(A) Is NNN’s remedy correct? Why or why not? (3%).

(B) What are the grounds for a labor injunction to issue? (2%)

(C) Distinguish the jurisdiction of a Labor Arbiter from that of the NLRC. (3%)

SUGGESTED ANSWER

(A) The NLRC has no jurisdiction. As to PNN, there is no employer-employee relationship between itself
and NNN; hence, the NLRC cannot hear and resolve their dispute (Reasonable Causal Connection Rule).
*As to Anya, the injunctive power of the NLRC is ancillary in nature; hence, it requires a principal case, which
is absent. Besides, the dispute between her and PNN is not resolvable solely through the application of the
Labor Code, other labor statutes; CBA or employment contract. (Reference to Labor Law Rule)

(B) The NLRC may issue an injunctive writ to enjoin an illegal activity. under Art.264 (old) of the Labor
Code; as an ancillary remedy to avoid irreparable injury to the rights of a party in an ordinary labor dispute
pursuant to Rule X; 2011 NLRC Rules of Procedure, as amended; and to correct the Labor Arbiter’s grave
abuse of discretion pursuant to Rule XII of the 2011 NLRC Rules of Procedure, as amended.

Moreover, for labor injunction to issue, it must be proven under Art. 218 (e), Labor Code:
UP LAW CENTER – BAR 2015 Q & A

i. that the prohibited or unlawful acts have been threatened and will be committed and will be continued
unless restrained;

ii. that substantial and irreparable injury to the complainant’s property will follow;

iii. that greater injury, will be inflicted upon complainant by the denial of relief than will be inflicted upon
defendants by the granting of relief;

iv. that complainant has no adequate remedy at law; and

v. that public officers charged with the duty to protect complainant’s property are unable or unwilling to
furnish adequate protection.

(C) As to jurisdiction, the LA can hear and resolve cases under Art. 217 (old) of the Labor Code, money
claims under Sec. 7 of RA No. 10022; and referred wage distortion disputes in unorganized establishments, as
well as the enforcement of compromise agreements pursuant to the 2011 NLRC Rules of Procedure, as
amended. ‘On the other hand, the NLRC reviews decisions rendered by the LA; decisions or orders rendered
by the RD under Art. 129 of the Labor Code; and conducts compulsory arbitration in certified cases.

As to the power to issue a labor injunction, the NLRC can issue an injunctive writ. On the other hand, the
Labor Arbiter cannot issue an injunctive writ.

XXII

Mario comes from a family of coffee bean growers. Deciding to incorporate his fledgling coffee venture, he
invites his best friend, Carlo, to join him. Carlo is hesitant because he does not have money to invest but
Mario suggests a scheme where Carlo can be the Chief Marketing Agent of the company, earning a salary and
commissions. Carlo agrees and the venture is formed. After one year, the business is so successful that they
were able to declare dividends. Mario is so happy with Carlo’s work that he assigns 100 shares of stock to
Carlo as part of the latter’s bonus. Much later on, it is discovered that Carlo had engaged in unethical conduct
which caused embarrassment to the company. Mario is forced to terminate Carlo but he does so without
giving Carlo the opportunity to explain. Carlo filed a case against Mario and the company for illegal dismissal.
Mario objected on the ground that the Labor Arbiter had no jurisdiction over the case as it would properly be
considered as an intra-corporate controversy cognizable by the RTC. Further, Mario claimed that because
Carlo’s dismissal was a corporate act, he cannot be held personally liable.

(A) As the Labor Arbiter assigned to this case, how would you resolve the jurisdiction question. (3%)

(B) What is the rule on personal liability of corporate officers for a corporate act declared to be unlawful?
(2%)

SUGGESTED ANSWER

(A) The Labor Arbiter has jurisdiction over Carlo’s illegal dismissal
UP LAW CENTER – BAR 2015 Q & A

complaint as he was hired by Mario on a “salary and commission”. basis. In Grepalife v. Judico (G.R. No.
73887, December 21. 1989, 180 SCRA 445) it was held that a worker who is paid on a salary plus commission
basis is an employee. While regular courts have jurisdiction over Mario’s corporate act of severing ties with
Carlo, the Labor Arbiter, pursuant to Art. 217 A-(2) of the Labor Code, has jurisdiction over Carlo’s illegal
dismissal complaint.

(B) Corporate officers are not, as a general rule; personally liable for the corporate acts they performed in
behalf of the corporation they represent. They are, however, personally liable for their corporate acts if they
acted with malice or bad faith (Girly Ico V. Systems Technology Institute, Inc., G.R. No. 185100, July 9, 2014).

ALTERNATIVE ANSWER

(A) Carlo is party to a joint-venture. Hence, he is not related to Mario as an employee. As a business
organization, the affairs of that joint-venture are not governed by Labor Law, except in relation to its
employees. Any issue arising from that affair, therefore, must be brought to the RTC. Thus, the NLRC has no
jurisdiction because the matter did not arise from employer-employee relationship and the issue between the
disputants is not resolvable solely through the application of Labor Law.
UP LAW CENTER – BAR 2015 Q & A

2015 Bar Exam Suggested Answers in Criminal Law

I. a) How are felonies committed? Explain each. (3%)

b) What is aberratio ictus? (2%)

II. Distinguish between ex post facto law and bill of attainder. (3%)
III. The Regional Trial Court {RTC) found Tiburcio guilty of frustrated homicide and sentenced him to
an indeterminate penalty of four years and one day of prision correccional as minimum, to eight years
of prision mayor as maximum, and ordered him to pay actual damages in the amount of 1125,000.00.
Tiburcio appealed to the Court of Appeals which sustained his conviction as well as the penalty
imposed by the court a quo. After sixty days, the Court of Appeals issued an Entry of Judgment and
remanded the records of the case to the RTC. Three days thereafter, Tiburcio died of heart attack.
Atty. Abdul, Tiburcio's counsel, filed before the RTC a Manifestation with Motion to Dismiss,
informing the court that Tiburcio died already, and claiming that his criminal liability had been
extinguished by his demise.

a) Should the RTC grant the Motion to Dismiss the case? Explain. (2.5%)

b) Assuming that Tiburcio' s death occurred before the Court of Appeals rendered its
decision, will you give a different answer? Explain. (2.5%)

IV. Procopio, a call center agent assigned at a graveyard shift, went home earlier than usual. He
proceeded immediately to their bedroom to change his clothes. To his surprise, he found his wife
Bionci in bed making love to another woman Magna. Enraged, Procopio grabbed a knife nearby and
stabbed Bionci, who died.

a) What crime did Procopio commit, and what circumstance attended the case? Explain.
(3%)

b) Assuming that Procopio and Bionci were common-law spouses, will your answer be the
same? Explain. (2%)

V. Dion and Talia were spouses. Dion always came home drunk since he lost his job a couple of
months ago. Talia had gotten used to the verbal abuse from Dion. One night, in addition to the usual
verbal abuse, Dion beat up Talia. The next morning, Dion saw the injury that he had inflicted upon
Talia and promised her that he would stop drinking and never beat her again. However, Dion did not
make good on his promise. Just after one week, he started drinking again. Talia once more endured
the usual verbal abuse. Afraid that he might beat her up again, Talia stabbed Dion with a kitchen
knife while he was passed out from imbibing too much alcohol. Talia was charged with the crime of
parricide.

a) May Talia invoke the defense of Battered Woman Syndrome to free herself from criminal
liability? Explain. (2.5%)

b) Will your answer be the same, assuming that Talia killed Dion after being beaten up after
a second time? Explain. (2.5%)

VI. Senator Adamos was convicted of plunder. About one year after beginning to serve his sentence, the
President of the Philippines granted him absolute pardon. The signed pardon states: "In view hereof,
UP LAW CENTER – BAR 2015 Q & A

and in pursuance of the authority vested upon me by the Constitution, I hereby grant absolute
pardon unto Adamos, who was convicted of plunder in Criminal Case No. XV32 and upon whom
the penalty of reclusion perpetua was imposed." He now comes to you for advice. He wants to know if
he could run for senator in the next election.

a) What advice will you give Adamos? Explain. (2.5%)

b) Assuming that what Adamos committed was heading a rebellion for which he was
imposed the same penalty of reclusion perpetua, and what he received was amnesty from the
government, will your answer be the same? Explain. (2.5%)

VII. Taylor was convicted of a violation of the Election Code, and was sentenced to suffer imprisonment
of one year as minimum, to three years as maximum. The decision of the trial court was affirmed on
appeal and became final and executory. Taylor failed to appear when summoned for execution of
judgment, prompting the judge to issue an order for his arrest. Taylor was able to use the backdoor
and left for the United States. Fifteen years later, Taylor returned to the Philippines and filed a
Motion to Quash the warrant of arrest against him, on the ground that the penalty imposed against
him had already prescribed.

a) If you were the judge, would you grant Taylor's Motion to Quash? Explain. (2.5%)

b) Assuming that instead of the United States, Taylor was able to go to another country with
which the Philippines had no extradition treaty, will your answer be the same? Explain.
(2.5%)

VIII. A typhoon destroyed the houses of many of the inhabitants of X Municipality. Thereafter, X
Municipality operated a shelter assistance program whereby construction materials were provided to
the calamity victims, and the beneficiaries provided the labor. The construction was partially done
when the beneficiaries stopped helping with the construction for the reason that they needed to earn
income to provide food for their families. When informed of the situation, Mayor Maawain approved
the withdrawal of ten boxes of food from X Municipality's feeding program, which were given to the
families of the beneficiaries of the shelter assistance program. The appropriations for the funds
pertaining to the shelter assistance program and those for the feeding program were separate items
on X Municipality's annual budget.

a) What crime did Mayor Maawain commit? Explain. (2.5%)

b) May Mayor Maawain invoke the defense of good faith and that he had no evil intent when
he approved the transfer of the boxes of food from the feeding program to the shelter
assistance program? Explain. (2.5%)

IX. The Philippine Drug Enforcement Agency (PDEA) had intelligence reports about the drug pushing
activities of Rado, but could not arrest him for lack of concrete evidence. SP03 Relio, a PDEA team
leader, approached Emilo and requested him to act as poseur-buyer of shabu and transact with Rado.
Emilo refused, saying that he had completely been rehabilitated and did not want to have anything to
do with drugs anymore. But he was prevailed upon to help when SP03 Relio explained that only he
could help capture Rado because he used to be his customer. SP03 Relio then gave Emilo the
marked money to be used in buying shabu from Rado. The operation proceeded. After Emilo handed
the marked money to Rado in exchange for the sachets of shabu weighing 50 grams, and upon
receiving the pre-arranged signal from Ernilo, SP03 Relio and his team members barged in and
UP LAW CENTER – BAR 2015 Q & A

arrested Rado and Ernilo, who were both charged with violation of R.A. 9165, otherwise known as
the Comprehensive Dangerous Drugs Act of 2002.

a) What defense, if any, may Ernilo invoke to free himself from criminal liability? Explain.
(2.5%)

b) May Rado adopt as his own Ernilo's defense? Explain. (2.5%)

X. Honesto and Wilma were married but had been living separately due to irreconcilable differences.
Honesto later met Celia and fell in love with her. Thinking that he could marry Celia if Wilma were
to die, Honesto decided to kill Wilma. He secretly followed Wilma for weeks to learn her daily
routine. He decided to kill her at night on her way home. On the night he was to kill Wilma, Honesto
wore dark clothes so that he would not be easily seen. He waited in the dark alley for Wilma to pass
by. He saw someone whom he thought looked like Wilma and shot her with a revolver. The bullet
passed through the person's head and grazed another passerby's arm. Some bystanders who heard
the shot were able to stop Honesto.

It turned out that Wilma did not report for work on that day, and the one who was shot in the head
was Melba, who died. The passerby whose arm was grazed by the bullet required medical attendance
for two days.

a) What crime(s) did Honesto commit? Explain. (2.5%)

b) Will your answer be the same, assuming that the other passerby was hit in the left eye
which caused his/her blindness? Explain. (2.5%)

XI. Nel learned that Elgar, the owner of the biggest house in the place, would be out of town for three
days with no one left to watch the house. He called his friends Ben, Ardo and Gorio and they
planned to take the valuables in the house while Elgar was away. Nel and Ben would go inside the
house, Ardo would serve as the lookout, while Gorio would stay in the getaway car. When Elgar left,
they carried out their plan to the letter. Nel and Ben went inside the house through the backdoor
which was left unlocked. None of the rooms and drawers inside were locked. They took the money,
jewelry and other valuables therefrom and immediately left using the getaway car.

After driving for about one kilometer, Nel realized he left his bag and wallet with IDs in the house
and so he instructed Gorio to drive back to the house. Nel just went in thinking that the house was
still empty. But to his surprise, Nel found Fermin seated on a bench with Nel's bag and wallet beside
him and appeared to be texting using his smart phone. Nel took a golf club near him and hit Fermin
with it. Fermin shouted for help, but Nel kept hitting him until he stopped making noise. The noise
alerted the neighbor who called the police. Nel, Ben, Ardo and Gorio were caught. Fermin died.
What is the criminal liability of Nel, Ben, Ardo and Gorio? Explain. (5%)

XII. Ando, an Indonesian national who just visited the Philippines, purchased a ticket for a passenger
vessel bound for Hong Kong. While on board the vessel, he saw his mortal enemy Iason, also an
Indonesian national, seated at the back portion of the cabin and who was busy reading a newspaper.
Ando stealthily approached Iason and when he was near him, Ando stabbed and killed Iason. The
vessel is registered in Malaysia. The killing happened just a few moments after the vessel left the port
of Manila. Operatives from the PNP Maritime Command arrested Ando. Presented for the killing of
Iason, Ando contended that he did not incur criminal liability because both he and the victim were
Indonesians. He likewise argued that he could not be prosecuted in Manila because the vessel is a
Malaysian-registered ship. Discuss the merits of Ando's contentions. (4%)
 UP LAW CENTER – BAR 2015 Q & A

XIII. Dora gave Elen several pieces of jewelry for sale on commission basis. They agreed that Elen would
remit the proceeds of the sale and return the unsold items to Dora within sixty days. The period
expired without Elen remitting the proceeds of the sale or returning the pieces of jewelry. Dora
demanded by phone that Elen turn over the proceeds of the sale and return the unsold pieces of
jewelry. Elen promised to do so the following day. El en still failed to make good on her promise but
instead issued post-dated checks. Thereafter, Dora made several more demands, the last of which
was in writing, but they were all unheeded. When the checks were deposited in Dora's bank account,
the checks were returned unpaid for insufficient funds. Elen was charged with estafa and violation of
Batas Pambansa Big. 22. Will the charges against Elen prosper? Explain. (4%)
XIV. Dela convinced Nita to work in Taiwan, promising Nita that she would take care of the processing of
the necessary documents. Dela collected P120,000.00 from Nita purportedly for the processing of
her papers. Upon receipt of the money, Nita was made to accomplish certain forms and was told that
she would be deployed to Taiwan within one month. After one month, Nita followed up on her
application. Dela made some excuses and told Nita that the deployment would be delayed. Another
month passed and Dela made other excuses which made Nita suspicious. Nita later discovered that
Dela was not licensed to recruit. Nita confronted Dela and demanded the return of her money. Dela
promised to return the same in a week's time.

a) A week later, Dela was nowhere to be found. What crime(s) did Dela commit? Explain.
(2.5%)

b) Will your answer still be the same, assuming that the promise to deploy for employment
abroad was made by Dela to Celia, Digna and Emma, in addition to Nita, and from whom
Dela also collected the same amount of processing fee? Explain. (2.5%)

XV. Dancio, a member of a drug syndicate, was a detention prisoner in the provincial jail of X Province.
Brusco, another member of the syndicate, regularly visited Dancio. Edri, the guard in charge who
had been receiving gifts from Brusco everytime he visited Dancio, became friendly with him and
became relaxed in the inspection of his belongings during his jail visits. In one of Brusco's visits, he
was able to smuggle in a pistol which Dancio used to disarm the guards and destroy the padlock of
the main gate of the jail, enabling Dancio to escape. What crime(s) did Dancio, Brusco and Edri
commit? Explain. (5%)
XVI. Erwin and Bea approached Mayor Abral and requested him to solemnize their marriage. Mayor Abral
agreed. Erwin and Bea went to Mayor Abral's office on the day of the ceremony, but Mayor Abral
was not there. When Erwin and Bea inquired where Mayor Abral was, his chief of staff Donato
informed them that the Mayor was campaigning for the coming elections. Donato told them that the
Mayor authorized him to solemnize the marriage and that Mayor Abral would just sign the
documents when he arrived. Donato thereafter solemnized the marriage and later turned over the
documents to Mayor Abral for his signature. In the marriage contract, it was stated that the marriage
was solemnized by Mayor Abral. What crime(s) did Mayor Abral and Donato commit? Explain. (4%)
XVII. After a heated argument over his philandering, Higino punched on the head his wife Aika, who was
six and a half months pregnant. Because of the impact, Aika lost her balance, fell on the floor with
her head hitting a hard object. Aika died and the child was expelled prematurely. After thirty-six
hours, the child died.

a) What crime(s) did Higino commit? Explain. (2.5%)

b) Assuming that when the incident occurred, Aika was only six months pregnant, and when
she died, the fetus inside her womb also died, will your answer be different? Explain. (2.5%)
 UP LAW CENTER – BAR 2015 Q & A

XVIII. Lito, a minor, was bullied by Brutus, his classmate. Having had enough, Lito got the key to the safe
where his father kept his licensed pistol and took the weapon. Knowing that Brutus usually hung out
at a nearby abandoned building after class, Lito went ahead and hid while waiting for Brutus. When
Lito was convinced that Brutus was alone, he shot Brutus, who died on the spot. Lito then hid the
gun in one of the empty containers. At the time of the shooting, Lito was fifteen years and one
month old. What is Lito's criminal liability? Explain. (4%)
XIX. Bruno, a taxi driver, had an indebtedness in the sum of P10,000.00 which would become due in one
week. He was starting to worry because he still had not raised the amount to pay for his debt. Every
day, he had prayed for divine intervention. One night, while returning the taxi to the garage, he found
a wallet on the back seat. Inspecting it, he learned that it contained exactly Pl 0,000.00 cash, the
amount of his obligation, and IDs. Thinking it was divine intervention, and that his prayers were
answered, he took the money and used it to pay his debt.

a) What crime, if any, did Bruno commit? Explain. (2.5%)

b) Assuming that instead of using the money, Bruno turned over the wallet and its contents
to the nearby police station, and it was the chief of police of that station who appropriated
the money for his own benefit, what crime was committed by the chief of police? Explain.
(2.5%)

XX. Senio planned to burn Bal' s house. One evening, during a drinking spree at his house, Senio told his
friends what he intended to do and even showed them the gasoline in cans that he would use for the
purpose. Carlo, a common friend of Senio and Bal, was present at the drinking spree. He was still
sober when Senio told them his plans. Before going home, Carlo warned Bal that Senio would burn
his house and had already bought gasoline that would be used for the purpose. Bal reported the
matter to the police authorities. Meanwhile, Senio went to Bal' s house and proceeded to pour
gasoline around the walls of the house and it was at that point when he was caught by the police.
What crime did Senio commit, if any? Explain. (3%)
XXI. Filipino citizens Hector and Wendy were married in New York, and have been living happily in
Manila for the last three years. Hector was removing junk from his basement when he came across
an unlabeled recordable cd. He put it in his computer's DVD drive to check its contents. To his
surprise, he saw a video of Wendy and another man Ariel, in the act of sexual intercourse in the
master's bedroom of his house. Angered by what he saw, he filed a complaint for adultery against
Wendy and Ariel. During the course of the trial, and again to the surprise of Hector, it was proved
that Wendy was born male and underwent sex reassignment later in life.

a) May Hector's charge of adultery against Wendy and Ariel prosper? Explain. (3%)

b) What is an impossible crime? Can there be an impossible crime of adultery? (2%)

XXII. Charlie was charged for the qualified rape of AAA. The Information alleged that AAA was 14 years
old at the time the crime was committed and that Charlie was AAA's stepfather. The presentation of
AAA's birth certificate during the trial duly established the following: (1) that AAA was indeed 14
years old at the time of the rape; and (2) that AAA's mother is BBB and her father was the late CCC.
BBB and Charlie only became live-in partners after CCC's death. The RTC found Charlie guilty of
qualified rape. On appeal, the Court of Appeals convicted Charlie of simple rape. Charlie appealed
before the Supreme Court. How will you rule and why? (3%)
UP LAW CENTER – BAR 2015 Q & A
UP LAW CENTER – BAR 2015 Q & A

2015 Bar Exam Suggested Answers in Civil Law

I.

Alden and Stela were both former Filipino citizens. They were married in the Philippines but they later
migrated to the United States where they were naturalized as American citizens. In their union they were able
to accumulate several real properties both in the US and in the Philippines. Unfortunately, they were not
blessed with children. In the US, they executed a joint will instituting as common heirs to divide their
combined estate in equal shares, the five siblings of Alden and the seven siblings of Stela. Alden passed away
in 2013 and a year later, Stela also died. The siblings of Alden who were all citizens of the US instituted
probate proceedings in a US court impleading the siblings of Stela who were all in the Philippines.

(A) Was the joint will executed by Alden and Stela who were both former Filipinos valid? Explain with legal
basis. (3%) (B) Can the joint will produce legal effect in the Philippines with respect to the properties of
Alden and Stela found here? If so, how? (C) is the situation presented in Item I an example of dépeçage?

SUGGESTED ANSWERS

(A) The joint will shall be valid if it was executed in accordance with U.S. law. At the time of the will’s
execution, Alden and Stela were U.S. citizens. The will of an alien who is abroad produces effect in the
Philippines if made with the formalities prescribed by the place of the law in which he resides, or according to
the formalities observed in his country (Art. 816, Civil Code). Art. 819 of the Civil Code does not apply as it
refers specifically to the invalidity of joint wills “executed by Filipinos in a foreign country”.

(B) The joint will may produce legal effect in the Philippines if it was validly executed in accordance with the
laws of the U.S. To be given legal effect in the Philippines, it must be probated in this country. Since the will
was executed abroad by aliens, it must comply with Article 17 or Article 816 of the Civil Code. Under Article
17, the forms and solemnities of contracts, wills, and other public instruments shall be governed by the laws
of the country in which they are executed. Under Article 816, the will of an alien who is abroad produces
effect in the Philippines if made with the formalities prescribed by the place of the law in which he resides, or
according to the formalities observed in his country, or in conformity with those which this Code prescribes.
Since Alden and Stela were both naturalized American citizens at the time of the execution of the will, they
are allowed to execute a will in accordance with the formalities prescribed by the law of their country, where
they reside, or Philippine law. Moreover, Article 16(2) requires a will to be intrinsically in accordance with the
national law of the testator, hence should also be in accordance with US law. However, Alden’s siblings are all
US citizens. Insofar as the real properties situated in the Philippines, the prohibition regarding alien
UP LAW CENTER – BAR 2015 Q & A

ownership of Philippine land found in the Constitution is applicable. Article 17 of the Civil Code provides
that prohibitive laws concerning persons, their acts or property, and those which have for their object public
order, public policy and good customs shall not be rendered ineffective by laws or judgments promulgated, or
by determinations or conventions agreed upon in a foreign country.

(C) No, the situation presented in Item I is not an example of dépeçage. repeçage is a term used where
different aspects of a case involving a foreign element may be governed by different systems of law. In this
case, only one system of laws governs, that of U.S. law. Under Article 16 par. (2) of the Civil Code, intestate
and testamentary succession, with respect to the order of succession and to the amount of successional rights
and to the intrinsic validity of testamentary provisions, shall be regulated by the national law of the person
whose succession is under consideration, whatever may be the nature of the property and regardless of the
country wherein said property may be found. For the will to be probated, it must also comply with US law
under Articles 17 and 816 of the Civil Code, as the US was the place of the will’s execution, the residence of
the spouses, and the country where they are nationals.

Note: It is suggested that the examinees be given full credit for I(C) as the term ‘dépeçage’ is not commonly
taught in this jurisdiction.

II.

Marco and Gina were married in 1989. Ten years later, or in 1999, Gina left Marco and lived with another
man, leaving their two children of school age with Marco. When Marco needed money for their children’s
education he sold a parcel of land registered in his name, without Gina’s consent, which he purchased before
his marriage. Is the sale by Marco valid, void or voidable? Explain with legal basis. (4%)

SUGGESTED ANSWER

The sale is void. The marriage was celebrated during the effectivity of the Family Code. In the absence of a
marriage settlement, the property relations between the spouses is governed by absolute community of
property, whereby all the properties owned by the spouses at the time of the celebration of the marriage, as
well as whatever they may acquire during the marriage, shall form part of the community property, as a rule
(Art. 91, Family Code). The parcel of land sold is part of the community property as Marco owned it before
the marriage. In an absolute community of property regime, the administration and enjoyment shall belong to
both spouses jointly (Art. 96, Family Code). Neither spouse may dispose or encumber common properties
without the authority of the court or the written consent of the other spouse, and in the absence of such
authority or consent, the disposition or encumbrance shall be void (Art. 96, Family Code). Despite separation
UP LAW CENTER – BAR 2015 Q & A

de facto for more than 10 years, Gina remains Marco’s spouse, and her consent is still required for the sale to
be valid. Since Marco sold the lot without Gina’s consent, the sale is void.

III.

Julie had a relationship with a married man who had legitimate children. A son was born out of that illicit
relationship in 1981. Although the putative father did not recognize the child in his certificate of birth, he
nevertheless provided the child with all the support he needed and spent time regularly with the child and his
mother. When the man died in 2000, the child was already 18 years old so he filed a petition to be recognized
as an illegitimate child of the putative father and sought to be given a share in his putative father’s estate. The
legitimate family opposed, saying that under the Family Code his action cannot prosper because he did not
bring the action for recognition during the lifetime of his putative father.

(A) If you were the judge in this case, how would you rule? (4%)

(B) Wishing to keep the peace, the child during the pendency of the case decides to compromise with his
putative father’s family by abandoning his petition in exchange for 1/2 of what he would have received as
inheritance if he were recognized as an illegitimate child. As the judge, would you approve such a
compromise? (2%)

SUGGESTED ANSWER

(A) I would rule against the illegitimate child. The action for recognition as an illegitimate child based on the
open and continuous possession the status of an illegitimate child may be brought during the lifetime of the
alleged parent (Art. 175, Family Code). Since the putative father has already died, the action for recognition
based on such ground, as indicated by the support and regular spending of time with the child and mother,
cannot prosper.

(B) I would not approve the compromise. The compromise involved herein is a compromise of the civil
status of the child, which is prohibited under Art. 2035 of the Civil Code.

ALTERNATIVE ANSWER

(B) I would approve the compromise. The subject matter of the compromise between the parties is
abandonment of the petition or the end of the litigation between the parties, not the child’s civil status; there
would be no ruling as to the civil status of the child. Hence, the prohibition against compromise of the civil
status of persons in Art. 2035 of the Civil Code does not apply.
UP LAW CENTER – BAR 2015 Q & A

IV.

Bert and Joe, both male and single, lived together as common law spouses and agreed to raise a son of Bert’s
living brother as their child without legally adopting him. Bert worked while Joe took care of their home and
the boy. In their 20 years of cohabitation they were able to acquire real estate assets registered in their names
as co-owners. Unfortunately, Bert died of cardiac arrest, leaving no will. Bert was survived by his biological
siblings, Joe, and the boy.

(A) Can Article 147 on co-ownership apply to Bert and Joe, whereby all properties they acquired will be
presumed to have been acquired by their joint industry and shall be owned by them in equal shares? (2%)

(B) What are the successional rights of the boy Bert and Joe raised as their son? (2%)

(C) If Bert and Joe had decided in the early years of their cohabitation to jointly adopt the boy, would they
have been legally allowed to do so? Explain with legal basis? (3%)

SUGGESTED ANSWER

(A) No, Article 147 of the Family Code is not applicable to the case of Bert and Joe. Article 147 applies only
when a “man and a woman, who are capacitated to marry each other, live exclusively with each other as
husband and wife without the benefit of marriage or under a void marriage”. In this case, Bert and Joe are
both men; they ar also incapacitated from marrying each other since in this jurisdiction, marriage may only
take place between a man and a woman (Arts. 1 and 2, Family Code).

(B) The boy has no successional rights. Since Bert died without a will, intestate succession shall apply. While
the boy is the son of Bert’s living brother, and hence is Bert’s nephew, he cannot inherit from Bert as a legal
heir since he is excluded by his father under the proximity rule (Art. 962, Civil Code). Moreover, he cannot
invoke the rights of an adopted child to inherit from Bert since the boy was not legally adopted.

(C) No, Bert and Joe could not have jointly adopted the boy. Under the Domestic Adoption Act, joint
adoption is permitted, and in certain cases mandated, for spouses. In this case, Bert and Joe are not spouses.
UP LAW CENTER – BAR 2015 Q & A

V.

Mrs. L was married to a ship captain who worked for an interna maritime vessel. For her and her family’s
support, she would do monthly allotments from her husband’s company. One day, while en ro from Hong
Kong to Manila, the vessel manned by Captain L encounter a severe typhoon at sea. The captain was able to
send radio messages of distress to the head office until all communications were lost. In the weeks that
followed, the search operations yielded debris of the lost ship but the bodies of the crew and the passengers
were not recovered. The insurance company thereafter paid out the death benefits to all the heirs of the
passengers and crew. Mrs. L filed a complaint demanding that her monthly allotments continue for the next
four years until her husband may be legally presumed dead because of his absence. If you were the magistrate,
how would you rule? (3%)

SUGGESTED ANSWER

I would rule against Mrs. L. When a person disappears under circumstances involving danger of death as
enumerated in Article 391 of the Civil Code, the death of the person is presumed to have taken place at the
beginning of the four year period provided in said article. In this case, Captain L disappeared while on board
a vessel lost during a sea voyage, and thus is presumed dead when the vessel was lost at sea. Hence, Mrs. L is
not entitled to the monthly allotments for the next four years.

ALTERNATIVE ANSWER

I would rule in favor of Mrs. L. A person missing under the circumstances as those of Captain L may not be
legally considered as dead until the lapse of the period fixed by law on presumption of death. To allow the
argument that Captain L’s death should be considered on the very day of the occurrence of the event from
which death is presumed would mean that no claim for death compensation benefits would ever prosper,
since the heirs of a missing seaman have to wait for four years under Art. 391 before the seaman may be
declared legally dead, and after four years, the prescriptive period for filing money claims would lapse
(Pantollano v. Korphil, G.R. 169575, March 30, 2011).

VI
UP LAW CENTER – BAR 2015 Q & A

Kardo as a young lieutenant, met Glenda, and after a whirlwind courtship they were married. In the early part
of his military career, Kardo was assigned to different places all over the country but Glenda refused to
accompany him as she preferred to live in her hometown. They did not live together until the 12th year of
their marriage when Kardo had risen un the ranks and was given his own command. They moved to living
quarters in Fort Gregorio. One day, while Kardo was away on official business, one of his military aides
caught Glenda having sex with the corporal assigned as Kardo’s driver. The aide immediately reported the
matter to Kardo who rushed home to confront his wife. Glenda readily admitted the affair and Kardo sent
her away in anger. Kardo would later come to know the true extent of Glenda’s unfaithfulness from his aides,
his household staff, and former neighbors who informed him that Glenda has had intimate relations with
various men throughout their marriage whenever Kardo was away on assignment.

Kardo filed a petition for declaration of nullity of marriage under Article 36. Based on interviews from
Kardo, his aide, and the housekeeper, a psychologist testified that Glenda’s habitual infidelity was due to her
affliction with Histrionic Personality disorder, an illness characterized by excessive emotionalism and
uncontrollable attention-seeking behavior rooted in Glenda’s abandonment as a child by her father. Kardo
himself, his aide, and his housekeeper also testified in court. The RTC granted the petition, relying on the
liberality espoused by Te v. Te (G.R. No. 161793, February 13, 2009) and Azcueta v. Republic (G.R. No.
180668, May 26, 2009). However, the OSG filed an appeal, arguing that sexual infidelity was only a ground
for legal separation and that the RTC failed to abide by the guidelines laid down in the Molina case. How
would you decide the appeal? (5%)

SUGGESTED ANSWER

I would dismiss the appeal if the incapacity is incurable and so grave as to prevent Glenda from performing
her essential marital obligations. For the Histrionic Personality Disorder to be a ground for declaration of
nullity of marriage under Article 36 of the Family Code, it must be characterized by (1) gravity; (2) juridical
antecedence; and (3) incurability. The sexual infidelity in this case was not the ground for the declaration of
the nullity of the marriage, but merely the manifestation of Glenda’s incapacity to comply with her obligation
to Kardo as a spouse, and her inability to accord respect to the sanctity of their marriage, satisfying the
requisite of gravity. There was juridical antecedence since the psychologist testified that the incapacity already
existed at the time of the marriage, as it was rooted in Glenda’s abandonment as a child by her father. The
fact that Glenda was not personally examined is immaterial. As held by the Supreme Court, “there is no
requirement that the respondent spouse be personally examined by a physician or psychologist as a condition
sine qua non for the declaration of nullity of marriage based on psychological incapacity. What matters is
whether the totality of evidence presented is adequate to sustain a finding of psychological incapacity”
(Marcos v. Marcos, G.R. No. 136490, October 19, 2000). Moreover, it has been held by the Supreme Court
that the Molina doctrine should not be rigidly or strictly applied. Molina is not set in stone and the
interpretation of Article 36 must rely on a case-to-case basis (Antonio v. Reyes, G.R. 155800, March 10,
2006).

ALTERNATIVE ANSWER
UP LAW CENTER – BAR 2015 Q & A

I would grant the appeal. First, there was no showing that the incapacity is incurable or that it was so grave
that she could not perform her essential marital obligations. Also, as held in the case of Ochosa v. Alano
(G.R. No. January 26, 2011), there was insufficient evidence that Glenda’s defects were already present at the
inception of, or prior to the marriage; psychological incapacity did not satisfy the jurisprudential requisite of
juridical antecedence, as laid down in Republic v. CA and Molina (G.R. 108763, February 13, 1997). It was
not shown how the psychologist arrived at the conclusion that Glenda’s habitual infidelity was due to her
affliction with Histrionic Personality Disorder. It is possible that the psychologist evaluated her condition
only indirectly, from information gathered from Kardo and his witnesses, which evokes the possibility that
the information was biased in favor of Kardo’s cause. Although the Supreme Court has held that personal
examination of a party alleged to be psychologically incapacitated is not a mandatory requirement (Marcos v.
Marcos, G.R. 136490, October 19, 2000), it has also ruled that to make conclusions and generalizations on a
spouse’s psychological condition based on the information fed by only one side, similar to the case at bar, is
not different from admitting hearsay evidence as proof of the truthfulness of the content of such evidence
(Padilla-Rumbaua v. Rumbaua, G.R. No. 166738, August 14, 2009, 596 SCRA 157). Mere sexual infidelity is
not itself a ground for dissolution of marriage under Article 36, even if habitual; at most, it can only be a
ground for legal separation.

VII.

Mr. and Mrs. X migrated to the US with all their children. As they had no intention of coming back, they
offered their house and lot for sale to their neighbors, Mr. and Mrs. A (the buyers) who agreed to buy the
property for 8 Million. Because Mr. and Mrs. A needed to obtain a loan from a bank first, and since the
sellers were in a hurry to migrate, the latter told the buyers that they could already occupy the house, renovate
it as it was already in a state of disrepair, and pay only when their loan is approved and released. While waiting
for the loan approval, the buyers spent P1 Million in repairing the house. A month later, a person carrying an
authenticated special power of attorney from the sellers demanding that the buyers either immediately pay for
the property in full now or vacate it and pay damages for having made improvements on the property without
a sale having been perfected.

(A) What are the buyers’ options or legal rights with respect to the expenses they incurred in improving the
property under the circumstances? (3%)

(B) Can the buyers be made to immediately vacate on the ground that the sale was not perfected? Explain
briefly. (3%)

SUGGESTED ANSWER
UP LAW CENTER – BAR 2015 Q & A

(A) The sale was perfected and Spouses A acquired ownership over the house and lot upon delivery. Payment
of the price was subject to an indefinite period, that is, after the approval of the bank loan. As owners, they
have the right to make improvements on the said properties, and to retain the same. Even assuming for the
sake of argument that the sale was not perfected and Spouses A had not acquired ownership over the house
and lot because of a notarized deed of sale, or in case or rescission, they may be considered builders in good
faith since they entered into the property believing in good faith that they were the owners of the property in
question. As builders in good faith, they are entitled to reimbursement for necessary and useful expenses
incurred upon the property, and may retain the property until reimbursement therefore (Art. 448 and 546
Civil Code). The improvements in ques. tion are necessary and useful since the house was already in a state of
disrepair.

(B) No, the buyers may not be made to vacate the properties. A contract of sale is a consensual contract
which is perfected at the moment there is a meeting of the minds upon the thing which is the object of the
contract and upon the price (Art. 1475, Civil Code). In this case, the sale was already perfected since there
was already a meeting of the minds as to the object of the sale, which is the house and lot, and as to the price,
which is P8 Million. The fact that there was no payment yet is immaterial since it is not a requisite for the
perfection of the contract.

Even assuming that the sale was rescinded, the buyers may still not be made to vacate the properties. Since
the buyers made necessary and useful improvements upon the properties, they have the right to retain the
properties in question until the full reimbursement of such expenses (Arts. 448 and 546, Civil Code).

VIII

X, Y, Z are siblings who inherited a 10-storey building from their parents, They agreed in writing to maintain
it as a co-owned property for leasing out and to divide the net profits among themselves equally for a period
of 20 years. On the 8th year, X wanted to get out of the co-ownership so he could get his 1/3 share in the
property. Y and Z refused, saying X is bound by their agreement to keep the co-ownership for 20 years. Are
Y and Z correct? Explain. (3%)

SUGGESTED ANSWER

Y and Z are partly correct. As a general rule, no co-owners shall be obliged to remain in the co-ownership,
and each co-owner may demand at any time the partition of the thing owned in common. However, as one of
the exceptions to the general rule, an agreement to keep the thing undivided for a certain period of time, not
exceeding ten years, shall be valid (Art. 494, CC). In this case, X, Y, and Z stipulated for a period of indivision
of 20 years, which exceeds the maximum allowed by law. The stipulation would be void only as to the period
beyond such maximum of ten years. Hence, X cannot yet ask for the partition, as there remains two more
years for the agreement to remain in force.
UP LAW CENTER – BAR 2015 Q & A

IX.

Jose, single, donated a house and lot to his only niece, Maria, who was of legal age and who accepted the
donation. The donation and acceptance thereof were evidenced by a Deed of Donation. Mana then lived in
the house and lot donated to her, religiously paying resway, a taxes thereon. Twelve years later, when Jose had
already passed away, a woman claiming to be an illegitimate daughter of Jose filed a complaint against Maria.
Claiming rights as an heir, the woman prayed that Maria be ordered to reconvey the house and lot to Jose’s
estate. In her complaint she alleged that the notary public who notarized the Deed of Donation had an
expired notarial commission when the Deed of Donation was executed by Jose. Can Maria be made to
reconvey the property? What can she put up as a defense? (4%)

SUGGESTED ANSWER

Maria cannot be made to reconvey the property. In order for a donation of an immovable to be valid, it must
be made in a public document (Art. 749, Civil Code). Since the notary public before whom the deed of
donation was acknowledged had an expired notarial commission, the deed of donation remained a private
instrument; hence, the donation was void. However, assuming that the donation is not inofficious, Maria can
put up the defense of prescription. Since she possessed the house and lot in the concept of an owner and in
good faith that she had just title to the property by virtue of the donation, she became the owner of the
property by virtue of acquisitive prescription 10 years after she took possession thereof, assuming that the
land on which the house was built was not registered land (Arts. 1117, 1118, 1127 and 1134, Civil Code).

X.

X, a dressmaker, accepted clothing materials from Karla to make two dresses for her. On the day X was
supposed to deliver Karla’s dresses, X called up Karla to say that she had an urgent matter to attend to and
willI deliver them the next day. That night, however, a robber broke into her shop and took everything
including Karla’s two dresses. X claims she is not liable to deliver Karla’s dresses or to pay for the clothing
materials Considering she herself was a victim of the robbery which was a fortuitous event and over which
she had no control. Do you agree? Why? (3%)

SUGGESTED ANSWER
UP LAW CENTER – BAR 2015 Q & A

Yes, I agree that X is not liable. The contract between the parties is a contract for a piece of work wherein the
contractor, X, bound herself to execute a piece of work for the employer, Karla, in consideration of a certain
price or compensation (Art. 1713, Civil Code). Article 1717 of the Civil Code provides that if the contractor
bound himself to furnish the material, he shall suffer the loss if the work should be destroyed before its
delivery, save when there has been delay in receiving it. Since the contractor X did not furnish the material,
she shall not suffer the loss of the work which took place before its delivery. There was no delay in the
receipt of the work since the parties agreed to the delivery of the dresses on the day after the original date of
delivery. Hence, X is not bound to suffer the loss, and is liable for neither the delivery of the dresses nor the
cost of the materials.

ALTERNATIVE ANSWER

No, I do not agree. The obligation involved in this case is an obligation to do, since X’s obligation is to make
dresses for Karla. Under Article 1167 of the Civil Code, if a person obliged to do something fails to do it, the
same shall be executed at his cost. Although X may not be compelled to deliver the dresses to Karla, she may
be held liable for the cost of having another person to make the dresses for Karla, which including the cost of
the materials.

XI.

Jackie, 16, inherited a townhouse. Because she wanted to study in an exclusive school, she sold her
townhouse by signing a Deed of Sale and turning over possession of the same to the buyer. When the buyer
discovered that she was still a minor, she promised to execute another Deed of Sale when she turns 18. When
Jackie turned 25 and was already working, she wanted to annul the sale and return the buyer’s money to
recover her townhouse. Was the sale contract void, voidable or valid? Can Jackie still recover the property?
Explain. (4%)

SUGGESTED ANSWER

The contract of sale is voidable. Where one of the parties is incapable of giving consent to a contract, the
contract is voidable. (Art. 1390, Civil Code.) It appears that only Jackie was incapacitated by virtue of her
minority.

Jackie cannot recover the property. First, since the contract is voidable, Jackie had only 4 years from the time
she attained the age of majority to bring the action for annulment of the contract (Art. 1391, Civil Code). In
this case, Jackie should have brought the action for annulment of the contract within four years after turning
eighteen years old, or up until the age of twenty-two. Since she is already 25 years old, the period for bringing
the action has prescribed. Second, Jackie may be considered to have actively misrepresented as to her age.
Thus, she will be bound to the contract under the principle of estoppel.
UP LAW CENTER – BAR 2015 Q & A

XII

1. Iya and Betty owed Jun P500,000.00 for advancing their equity in a corporation
they joined as incorporators. Iya and Betty bound themselves solidarily liable for
the debt. Later, Iya and Jun became sweethearts so Jun condoned the debt of
P500,000.00. May lya demand from Betty P250,000.00 as her share in the debt?
Explain with legal basis. (2%)

(B) Juancho, Don and Pedro borrowed P150,000.00 from their friend Cita to put up an internet café orally
promising to pay her the full amount after one year. Because of their lack of business know-how, their
business collapsed. Juancho and Don ended up penniless, but Pedro was able to borrow money and put up a
restaurant which did well. Can Cita demand that Pedro pay the entire obligation since he, together with the
two others, promised to pay the amount in full after one year? Defend your answer. (2%)

SUGGESTED ANSWER

(A) No, Iya can not demand reimbursement from Betty. The remission of the whole obligation, obtained by
one of the solidary debtors, does not entitle him or her to reimbursement from his co-debtors (Art. 1220,
Civil Code).

(B) No, Cita can not demand payment of the entire obligation from Pedro.

The concurrence of two or more creditors or of two or more debtors in one and the same obligation does
not imply that each one of the former has a right to demand, or that each one of the latter is bound to render,
entire compliance with the prestation. There is a solidary liability only when the obligation expressly so states,
or when law or the nature of the obligation requires solidarity (Art. 1207, Civil Code). In this case, there is no
indication that they bound themselves solidarily to pay Cita, nor does the law or nature of the obligation
require solidarity. Hence, Juancho, Don and Pedro’s obligation is joint, and Cita can only demand payment of
1/3 of the obligation from Pedro, which is presumed to be his share in the obligation in the absence of
stipulation to the contrary (Art. 1208, Civil Code).

XIII
UP LAW CENTER – BAR 2015 Q & A

(A) X and Y are partners in a shop offering portrait painting. Y provided the capital and the marketing while
X was the portrait artist. They accepted the 50,000.00 payment of Kyia to do her portrait but X passed away
without being able to do it. Can Kyla demand that Y deliver the portrait she had paid for because she was
dealing with the business establishment and not with the artist personally? Why or why not? (3%)

(B) In this jurisdiction, is a joint venture (i.e., a group of corporations contributing resources for a specific
project and sharing the profits therefrom) considered a partnership? (3%)

SUGGESTED ANSWER

(A) No, Kyla cannot validly demand that y deliver the portrait. Although she may be correct that it is the
partnership that she contracted with, Kyla cannot demand that Y deliver the portrait ‘if the intention of the
parties was that the portrait should be done by X and this is precisely why the obligation was constituted.
With the death of X, the obligation was extinguished because it is a purely personal obligation which is
extinguished upon the death of the obligor. Finally, the obligation is an obligation to do. To oblige the
surviving partner, Y, to deliver the painting (do the painting) would be tantamount to an involuntary
servitude, which is against the law.

ALTERNATIVE ANSWER

1. Yes. Art. 1768 states that a partnership has a juridical personality separate and
distinct from that of each of the partners. The facts do not allege that Kyla
contracted for a purely personal service, hence the partnership is the entity
which she contracted with, so even upon the death of X, she can demand that Y
as the remaining partner deliver the portrait in fulfillment of the obligation of
the partnership to her.

SUGGESTED ANSWER

(B) Yes. The Supreme Court has ruled that a joint venture may be considered a species of partnership
(Aurbach v. Sanitary Wares Manufacturing Corp., G.R. No. 75875, December 15, 1989; Philex Mining v.
CIR, G.R. No. 148187, April 16, 2008). It has also ruled that “a joint venture is hardly distinguishable from,
and may be likened to, a partnership since their elements are similar, i.e., community of interests in the
business and sharing profits and losses. Being a form of partnership, a joint venture is generally governed by
the law on partnerships” (Litonjua v. Litonjua, G.R. Nos. 166299-300, December 13, 2005).
UP LAW CENTER – BAR 2015 Q & A

ALTERNATIVE ANSWER

(B) No, a joint venture is not considered a partnership. Although the Supreme Court has recognized that for
certain purposes, a joint venture is a form of partnership and should be governed by the law of partnerships,
it has also recognized a distinction between the two business forms, and has held that although a corporation
cannot ente into a partnership contract, it may however engage in a joint ven with others. (Aurbach v.
Sanitary Wares Manufacturing Corp., G.R. 75875, December 15, 1989).

XIV

A driver of a bus owned by company Z ran over a boy who died instantly. A criminal case for reckless
imprudence resulting in homicide was filed against the driver. He was convicted and was ordered to pay P2
Million in actual and moral damages to the parents of the boy who was an honor student and had a bright
future. Without even trying to find out if the driver had assets or means to pay the award of damages, the
parents of the boy filed a civil action against the bus company to make it directly liable for the damages.

(A) Will their action prosper? (4%)

(B) If the parents of the boy do not wish to file a separate civil action against the bus company, can they still
make the bus company liable if the driver cannot pay the award for damages? If so, what is the nature of the
employer’s liability and how may civil damages be satisfied? (3%)

SUGGESTED ANSWER

(A) Yes, the action will prosper. The cause of action against the company is different from the cause of action
against the driver in the criminal case. The civil action against the employer is rooted on the fact that
employers are vicariously liable for the damage caused by their employees while in the performance of their
functions. The vicarious liability of the employers under Art. 2180 of the Civil Code does not require as a
condition sine qua non that the driver should have been declared insolvent or unable to pay the awards of
damages. The cause of action against the driver, on the other hand, is rooted in Art. 2176, which defines a
quasi-delict. Moreover, if negligence was proven in the criminal case which requires proof beyond reasonable
doubt. then it can likewise be proven in a civil action which requires only preponderance of evidence.

(B) Yes. The employer may still be held subsidiarily liable under Art. 103 of the Revised Penal Code. In order
that an employer may be held subsidiarily liable for the employee’s civil liability in the criminal action, it
should be shown (1) that the employer is engaged in any kind of industry, (2) that the employee committed
the offense in the discharge of his duties and (3) that he is insolvent. The subsidiary liability of the employer,
UP LAW CENTER – BAR 2015 Q & A

however, arises only after conviction of the employee in the criminal action. If all these requisites are present,
the employer becomes ipso facto subsidiarily liable upon the employee’s conviction and upon proof of the
employee’s insolvency, as ruled in Carpio v. Doroja (G.R. No. 84516, December 5, 1989). For these requisites
to be established adequately, however, there must be a hearing which will determine the sufficiency or
insufficiency of the properties of the employee to compensate the plaintiffs, as well as to allow the employer
to present his defenses.

XV

(A) Sara borrowed P50,000.00 from Julia and orally promised to pay it within six months. When Sara tried to
pay her debt on the 8th month, julia demanded the payment of interest of 12% per annum because of Sara’s
delay in payment. Sara paid her debt and the interest claimed by Julia. After rethinking, Sara demanded back
from Julia the amount she had paid as interest. Julia claims she has no obligation to return the interest paid by
Sara because it was a natural obligation which Sara voluntarily performed and can no longer recover. Do you
agree?Explain. (4%)

(B) Distinguish civil and natural obligations. (2%)

SUGGESTED ANSWER

(A) No, I do not agree with Julia. For a creditor to be entitled to compensatory interest, the debtor must be in
delay. As a rule, in order for delay to exist, demand must have been made. In this case, there was no demand
made upon the expiration of the 6-month period; thus, Sara cannot be considered in delay, and is not liable to
pay compensatory interest. There being no obligation to pay compensatory interest, Julia must return the
interest mistakenly paid since she was not entitled thereto, and delivery was made merely through mistake. If
something is received when there is no right to demand it, and it was unduly delivered through mistake, the
obligation to return it arises (Art. 2154, Civil Code).

(B) Civil obligations give a right of action to compel their performance.

Natural obligations, not being based on positive law but on equity and natural law, do not grant a right of
action to enforce their performance, but after voluntary fulfillment by the obligor, they authorize the
retention of what has been delivered or rendered by reason thereof (Art. 1423, Civil Code).
UP LAW CENTER – BAR 2015 Q & A

XVI

Donna pledged a set of diamond ring and earrings to Jane for P200.0 She was made to sign an agreement that
if she cannot pay her debt w six months, Jane could immediately appropriate the jewelry for heren After six
months, Donna failed to pay. Jane then displayed the earring and ring set in her jewelry shop located in a
mall. A buyer, Juana, bou. the jewelry set for P300,000.00.

(A) Was the agreement which Donna signed with Jane valid? Explain with legal basis. (2%)

(B) Can Donna redeem the jewelry set from Juana by paying the amount she owed Jane to Juana? Explain
with legal basis. (2%).

(C) Give an example of a pledge created by operation of law. (2%)

SUGGESTED ANSWER

(A) No, the agreement that if Donna cannot pay her debt within 6 months, Jane could immediately
appropriate the jewelry for herself is void as it constitutes pactum commissorium, which is void under the
law. Under Art. 2088, pactum commissorium is a provision in a pledge or mortgage agreement where the
property pledged or mortgaged by the debtor automatically becomes the property of the creditor in the event
the debtor fails to pay the debt or commits a breach of the loan agreement.

(B) No. Donna cannot redeem the jewelry set from Juana because there is no privity of contract between
Donna and Juana. Moreover, Juana is a third person who purchased the thing in good faith from a merchant
store. Under Art. 1505, even if the seller does not have the right to sell the buyer acquires absolute ownership
over the thing if he bought it in a merchant store in good faith, the owner neither having been unlawfully
deprived thereof, nor was the thing lost (Sun Brothers v. Perez, G.R. No. L-17527, April 30, 1963)

(C) [Any of the following answers should be given full credit] 1. Art. 546 states: “Necessary expenses shall be
refunded to every possessor; but only the possessor in good faith may retain the thing until he has been
reimbursed therefor. Useful expenses shall be refunded only to the possessor in good faith with the same
right of retention, the person who has defeated him in the possession, having the option of refunding the
amount of the expenses or of paying the increase in value which the thing may have acquired by reason
thereof.” 2. Art. 1731 states: “He who has executed work upon a movable has a right to retain it by way of
pledge until he is paid.” 3. Art. 1994 states: “The depositarý may retain the thing in pledge until the full
UP LAW CENTER – BAR 2015 Q & A

payment of what may be due him by reason of the deposit.” 4. Art. 1914 states: “The agent may retain in
pledge the things which are the object of the agency until the principal effects the reimbursement and pays
the indemnity set forth in the two preceding articles.

XVII.

Z, a gambler, wagered and lost P2 Million in baccarat, a card.game. He was pressured into signing a Deed of
Absolute Sale in favor of the winner covering a parcel of land with improvements worth P20 Million. One
month later, the supposed vendee of the property demanded that he and his family vacate the property
subject of the deed of sale. Was the deed of sale valid? What can Z do? (4%)

SUGGESTED ANSWER

No, the Deed of Sale was not valid. Under Article 2014 of the Civil Code, no action can be maintained by the
winner for the collection of what he has won in a game of chance. In this case, the Deed of Sale represents
the winnings in the baccarat game; hence, it was made for illegal consideration, and is void.

XVIII

A lawyer was given an authority by means of a Special Power of Attorney by his client to sell a parcel of land
for the amount of P3 Million. Since the client owed the lawyer P1 Million in attorney’s fees in a prior case he
handled, the client agreed that if the property is sold, the lawyer was entitled to get 5% agent’s fee plus P1
Million as payment for his unpaid attorney’s fees. The client, however, subsequently found a buyer of his own
who was willing to buy the property for a higher amount. Can the client unilaterally rescind the authority he
gave in favor of his lawyer? Why or why not? (4%)

SUGGESTED ANSWER

No, the client cannot unilaterally rescind the authority he gave in favor of , his lawyer because the agency is
coupled with interest, the interest being the attorney’s fees which the client owed the lawyer. Under Art. 1927
of the Civil Code, an agency cannot be revoked if a bilateral contract depends upon it, or if it is the means of
fulfilling the obligation already contracted, or if a partner is appointed manager of a partnership in the
UP LAW CENTER – BAR 2015 Q & A

contract of partnership and his removal from the management is unjustifiable. In this case, if the lawyer could
sell his client’s property, the lawyer will be entitled not only to his commission, but also to his attorney’s fees.
These attorney’s fees were already owed by the client to his lawyer before the SPA was executed. The agency
is a means of fulfilling an obligation already contracted.

XIX

Mr. A, a businessman, put several real estate properties under the name : or his eldest son X because at that
time, X was the only one of legal age among his four children. He told his son he was to hold those assets for
his siblings until they become adults themselves. X then got married. After 5 years, Mr. A asked X to transfer
the titles over three properties to his three siblings, leaving two properties for himself. To A’s surprise, X said
that he can no longer be made to transfer the properties to his siblings because more than 5 years have passed
since the titles were registered in his name. Do you agree? Explain. (4%)

SUGGESTED ANSWER

No, I don’t agree with X. This is a clear case of an implied trust provided in Article 1453 of the Civil Code
which states that “when property is conveyed to a person in reliance upon his declared intention to hold it
for, or transfer it to another or the grantor, there is an implied trust in favor of the person for whose benefit
it is contemplated.” In this case, A is the trustor, X is the trustee, and the three other children of A are the
beneficiaries. A and/or his three children may file an action to compel X to transfer title in favor of his three
siblings within ten (10) years from the time the cause of action accrues upon an obligation created by law –
when the children attains the age of majority (Art. 1144, Civil Code).

XX

(A) Mr. and Mrs. Roman and Mr. and Mrs. Cruz filed an application for registration of a parcel of land which
after due proceedings was granted by the RTC acting as a land registration court. However, before the decree
of registration could be issued, the spouses Roman and the spouses Cruz sold the lot to Juan. In the notarized
deed of sale, the sellers expressly undertook to submit the deed of sale to the land registration court so that
the title to the property would be directly issued in Juan’s name. Is such a stipulation valid? (2%)

(B) Distinguish a direct attack from a collateral attack on a title. (2%)

UP LAW CENTER – BAR 2015 Q & A

(C) If the title in Item XX.(A) is issued in the names of the original sellers, would a motion filed by Juan in
the same case to correct or amend the title in order to reflect as owner be considered a collateral attack? (2%)

SUGGESTED ANSWER

(A) Yes, the stipulation is valid. Section 22 of P.D. No. 1529 expressly provides that “after the filing of the
application and before the issuance of the decree of registration, the land therein described may still be the
subject of dealings in whole or in part, in which case the interested party shall present to the court the
pertinent instruments together with a subdivision plan approved by the Director of Lands in case of transfer
of portions thereof, and the court, after notice to the parties, shall order such land registered subject to the
conveyance or encumbrance created by said instruments, or order that the decree of registration be issued in
the name of the person to whom the property has been conveyed by said instruments”.

(B) An action is deemed an attack on a title when the object of the action is to nullify the title, and thus
challenge the judgment pursuant to which the title was decreed. The attack is direct when the object of the
action is to annui or set aside the judgment, or enjoin its enforcement. The attack is indirect or collateral
when in an action to obtain a different relief, an attack on the judgment is nevertheless made an incident
thereof.

(C) No, it cannot be considered a collateral attack. A collateral attack exists when an attack on an incidental
matter is made on the judgment in an action to obtain a different relief. In this case, Juan’s motion to correct
or amend the title in order to reflect his name would not be attacking the judgment directing the issuance of
the title in the names of the sellers; rather, his motion impliedly admits the validity of the title of the sellers or
his predecessors-in-interest.
UP LAW CENTER – BAR 2015 Q & A

2015 Bar Exam Suggested Answers in Mercantile Law

I.

(A) Nadine has a checking account with Fair & Square Bank. One day, she lost her checkbook and the finder
was able to forge her signature and encash the forged check. Will Nadine be able to recover the amount
debited from her checking account from Fair & Square Bank? Justify your answer. (3%)

(B) is a manager’s check as good as cash? Why or why not? (2%)

(C) When can you treat a bill of exchange as a promissory note? (3%)

SUGGESTED ANSWER

(A) Yes, Nadine should be able to recover the amount debited from her checking account from Fair and
Square Bank. The Bank is supposed to know the signature of its clients. The Bank was thus negligent in not
detecting the forgery of Nadine’s signature, and paying the check. Under the circumstances, there was no
negligence on the part of Nadine which would preclude her from invoking forgery (Philippine National Bank
v. Quimpo, G.R. No. 53194, March 14, 1988, 158 SCRA 582).

(B) Yes, the Supreme Court held in various decisions that a manager’s check is good as cash. A manager’s
check is a check drawn by the bank against itself. It is deemed pre-accepted by the bank from the moment of
issuance. The check becomes the primary obligation of the bank which issues it and constitutes its written
promise to pay. By issuing it, the bank in effect commits its total resources, integrity and honor behind the
check (Tan v. Court of Appeals, G.R. No. 108555, December 20, 1994, 239 SCRA 310; International
Corporate Bank V. Gueco, G.R. No. 141968, February 12, 2001. 351 SCRA 516; Metrobank and Trust
Company v. Chiok, G.R. No. 172652, November 26, 2014).

1. C) A bill of exchange may be treated as a promissory note in the following

instances:

1. the drawee is a fictitious person or a person not having the capacity to contract;

1. the drawer and the drawee are one and the same person;

1. where the instrument is so ambiguous that there is a doubt as to whether the

instrument is a bill or a note, the holder may treat it either as a bill or note, at the
option of the holder (Sections 130 and 17 of the Negotiable Instruments Law).
UP LAW CENTER – BAR 2015 Q & A

ALTERNATIVE ANSWER

(B) Manager’s check is not legal tender because under Article 1249 of the Civil Code, checks do not produce
the effect of payment until encashed, or through the fault of the creditor, their value has been impaired.
Moreover, under the Central Bank Act, the debtor cannot compel the creditor to accept checks in payment of
a debt whether public or private (Article 60 of RA No. 7653).

II

(A) Novette entered into a contract for the purchase of certain office supplies. The goods were shipped.
While in transit, the goods were insured by Novette. Does she have an insurable interest over the goods even
before delivery of the same to her? Explain. (2%)

(B) Will an insurance policy be binding even if the premium is unpaid?

What if it were partially paid? (3%)

SUGGESTED ANSWER

(A) Yes, Novette has an insurable interest in the goods. The contract of sale was already perfected and
Novette acquired interest thereon, although the goods have yet to be delivered.

(B) As a general rule, the insurance policy is not valid and binding, unless the premium thereof has been paid.
This is the cash-and-carry rule under the Insurance Code. Premium is the consideration for the undertaking
of the insurer to indemnify the insured against a specified peril. There are exceptions, however, one of them
is, when there is an agreement allowing the insured to pay the premium in – installments and partial payment
has been made at the time of the loss (Makati Tuscany Condominium Corporation v. Court of Appeals, G.R.
No. 95546, November 6, 1992, 215 SCRA 463).

III.

(A) Discuss the three-fold character of a bill of lading. (3%)

(B) What is a “Jason clause” in a charter party? (2%)

(C) Are common carriers liable for injuries to passengers even if they have observed ordinary diligence and
care? Explain. (2%)
UP LAW CENTER – BAR 2015 Q & A

SUGGESTED ANSWER

(A) A bill of lading is considered a receipt for the goods shipped to the common carrier. It also serves as the
contract by which three parties, namely, the shipper, the carrier, and the consignee undertake specific
responsibilities and assumed stipulated obligations. Third, it is the evidence of the existence of the contract of
carriage providing for the terms and conditions thereof (Keng Hua Paper Products Co., Inc. v. Court of
Appeals, G.R. No. 116863, February 12, 1998, 286 SCRA 257).

(B) The Jason clause derives its name from The Jason (225 US 32 [1912]) decided by the US Supreme Court
under the Harter Act. By the Jason clause, a shipowner (provided he had exercised due diligence to make the
ship seaworthy and properly manned, equipped and supplied) could claim a general average contribution
from cargo, even where the damage was caused by faulty navigation of the vessel, provided that the bill of
lading excluded liability for such faults.

[NB. This is not a familiar principle in Philippine maritime commerce and the question is not consistent with the norm of asking
questions to test the knowledge of entry level lawyers. It is respectfully submitted that the question should be given outright credit in
favor of the examinees regardless of their answer]

(C) Yes, common carriers are liable for injuries to passengers even if the carriers observed ordinary diligence
and care, because the obligation imposed upon them by law, is to exercise extraordinary diligence. Common
carriers are bound to carry the passengers safely as far as human care and foresight can provide, using the
utmost diligence of very cautious persons, with a due regard for all the circumstances (Article 1755 of the
Civil Code).

IV.

(A) Maine Den, Inc. opened an irrevocable letter of credit with Fair Bank, annection with Maine Den, Inc.’s
importation of spare parts for startile mills. The imported parts were released to Maine Den, Inc. after it
executed a trust receipt in favor of fair Bank. When Maine Dan Inc. was unable to pay its obligation under
the trust receipt, Fair Rank sued Maine Den, Inc. for estafa under the Trust Receipts Law. The court,
however, dismissed the suit. Was the dismissal justified? Why or why not? (3%)

(B) Does the rule “res perit domino” apply in trust receipt transactions? Explain. (2%)

SUGGESTED ANSWER

(A) The dismissal of the complaint for estafa is justified. Under recent jurisprudence, the Supreme Court held
that transactions referred to in relation to trust receipts, mainly involved sales, and if the entruster knew even
before the execution of the alleged trust receipt agreement that the goods subject of the trust receipt were
never intended by the entrustee for resale or for the manufacture of items to be sold, the agreement is not a
trust receipt transaction but a simple loan, notwithstanding the label. In this case, the object of the trust
receipt, spare parts for textile mills, were for the use of the entrustee and never intended for sale. As such, the
transaction is a simple loan (Ng v. People of the Philippines, G.R. No. 173905, April 2010, 619 SCRA 291;
UP LAW CENTER – BAR 2015 Q & A

Land Bank v. Perez, G.R. No. 166884, June 2012, 672 SCRA 117: and Hur Ting Yang v. People of the
Philippines, G.R. No. 195117, August 14, 2013, 703 SCRA 606).

(B) No. This is because the loss of the goods, documents or instruments which are the subject of a trust
receipt pending their disposition, irrespective of whether or not it was due to the fault or negligence of the
entrustee, shall not extinguish the entrustee’s obligation to the entruster for the value thereof. Also, while the
entruster is made to appear as owner of the goods covered by the trust receipt, such ownership is only a legal
fiction to enhance the entruster’s security interest over the goods (Section 10 of Pres. Decree No. 115;
Rosario Textile Mills Corp. v. Home Bankers Savings and Trust Company, G.R. No. 137232, June 29, 2005,
462 SCRA 88).

V.

(A) A standby letter of credit was issued by ABC Bank to secure the oblistion of X Company to Y Company.
Under the standby letter of credit, if there is failure on the part of X Company to perform its obligation, then
y Company will submit to ABC Bank a certificate of default (in the form prescribed under the standby letter
of credit) and ABC Bank will have to pay Y Company the defaulted amount. Subsequently, Y Company
submitted to ABC Bank a certificate of default notwithstanding the fact that X Company was not in default.
Can ABC Bank refuse to honor the certificate of default? Explain. (3%)

(B) Is the Uniform Customs and Practice for Documentary Credits of the International Chamber of
Commerce applicable to commercial letters of credit issued by a domestic bank even if not expressly
mentioned in such letters of credit? What is the basis for your answer? (3%)

SUGGESTED ANSWER

(A) No. Under the doctrine of independence in a letter of credit, the obligation of the issuing bank to pay the
beneficiary is distinct and independent from the main and originating contract underlying the letter of credit.
Such obligation to pay does not depend on the fulfillment or non-fulfillment of the originating contract. It
arises upon tender of the stipulated documents under the letter of credit. In the present case, the tender of
the certificate of default entitles Y to payment under the standby letter of credit, notwithstanding the fact that
X Company was not in default. This is without prejudice to the right of X Company to proceed against Y
Company under the law on contracts and damages (Insular Bank of Asia and America v. Intermediate
Appellate Court, G.R. No. 74834, November 17, 1988, 167 SCRA 450).

1. B) Yes, the Supreme Court has held that the observance of the Uniform
Customs and Practice in the Philippines, is justified by Article 2 of the Code of
Commerce, which enunciates that in the absence of any particular provision in
the Code of Commerce, commercial transactions shall be governed by generally-
observed usages and customs (Bank of the Philippine Islands v. De Reny Fabric
Industries, Inc., G.R. No. L-24821, October 16, 1970, 35 SCRA 253).

ALTERNATIVE ANSWER
UP LAW CENTER – BAR 2015 Q & A

(A) Under the fraud exception principle, the beneficiary may be enjoined from collecting on the letter of
credit in case of fraudulent abuse of credit. The issuance of a certificate of default, despite the fact that X
company is not in default, constitutes fraudulent abuse of credit (Transfield Philippines v. Luzon Hydro
Corporation, G.R. No. 146717, November 22, 2004, 443 SCRA 307).

VI

(A) DEF Corporation has retained surplus profits in excess of 100% ofite paid-in capital stock. However, it is
unable to declare dividends, because it had entered into a loan agreement with a certain creditor wherein the
declaration of dividends is not allowed without the consent of such creditor. If DEF Corporation cannot
obtain this consent, will it be justified in not declaring dividends to its stockholders? Explain. (3%)

(B) What is “watered stock” and what is the legal consequence of the issuance of such stock? (3%)

SUGGESTED ANSWER

(A) Yes. Stock corporations are prohibited from retaining surplus profits in excess of 100% of their paid-in
capital stock except among others, when the corporation is prohibited under any loan agreement with any
financial institution or creditor, whether local or foreign, from declaring dividends without the consent of the
creditor, and such consent has not been secured (Section 43 of the Corporation Code).

(B) Watered stocks are stocks issued for a consideration less than its par or issued value or for a consideration
in any form other than cash, valued in excess of its fair value. Any director or officer of a corporation
consenting to the issuance of watered stocks or who, having knowledge thereof, does not forthwith express
his objection in writing and file the same with the corporate secretary, shall be solidarily liable with the
stockholder concerned to the corporation and its creditors for the difference between the fair value received
at the time of issuance of the stock and the par or issued value of the same (Section 65 of the Corporation
Code).

VII

(A) A foreign company has been exporting goods to a Philippine company for several years now. When the Philippine
company failed to pai the latest exportation, the foreign company sued to collect in the Philippines. The
Philippine company interposed the defense thai the foreign company was doing business in the Philippines
without license; hence, could not sue before a Philippine court. Is this defence tenable? Explain your answer.
(3%)

(B) Define:
UP LAW CENTER – BAR 2015 Q & A

1. Doctrine of apparent authority (2%)

2. Trust fund doctrine (2%)

SUGGESTED ANSWER

(A) The defense is not tenable. The mere act of exporting from one’s own country, without doing any specific
commercial act within the territory of the importing country, can not be deemed as doing business in the
importing country. Thus, the foreign company may sue in the Philippines despite lack of license to do
business in the Philippines (B. Van Zuiden Bros Ltd. v. GTVL Manufacturing Industries, G.R. No. 147905,
May 28, 2007, 523 SCRA 233).

(B)1.

By the doctrine of apparent authority, the corporation will be estopped from denying the agent’s authority if
it knowingly permits one of its officers or any other agent to act within the scope of an apparent authority,
and it holds him out to the public as possessing the power to do those acts (Advance Paper Corporation v.
Arma Traders Corporation, G.R. No. 176897, December 11, 2013, 712 SCRA 313).

2. By the trust fund doctrine, subscriptions to the capital stock of a corporation

constitute a fund to which the creditors have the right to look for satisfaction of
their claims. The scope of the doctrine encompasses not only the capital stock,
but also other property and assets generally regarded in equity as a trust fund for
the payment of corporate debts (Halley v. Printwell, Inc., G.R. No. 157549, May
30, 2011, 649 SCRA 116; Ong v. Tiu, G.R. Nos. 144476 & 144629, April 8,
2003, 401 SCRA 1).

VIII

Barn filed an action to enjoin SN Company’s Board of Directors from selling a parcel of land registered in the
corporation’s name, to compel the corporation to recognize Barn as a stockholder with 50 shares, to allow
him to inspect the corporate books, and to claim damages against the corporation and its officers.
Subsequently, the corporation and the individual defendants moved to dismiss the complaint since the
corporation’s certificate of registration was revoked by the SEC during the pendency of Barn’s case on the
ground of non-compliance with reportorial requirements. The special commercial court granted the motion
and reasoned that only an action for liquidation of assets can be maintained when a corporation has been
dissolved and Barn cannot seek reliefs which in effect lead to the continuation of the corporation’s business.
The court also ruled that it lost jurisdiction over the intra-corporate controversy upon the dissolution of the
corporation.

(A) Was the court correct? (3%)

(B) Four years later, SN Company files an action against Barn to recover corporate assets allegedly held by the
latter for liquidation. Will this action prosper? (3%)
UP LAW CENTER – BAR 2015 Q & A

SUGGESTED ANSWER

(A) The court is not correct. An action to be recognized as a stockholder

and to inspect corporate documents, is an intra-corporate dispute which does not constitute a continuation of
business. The dissolution of the corporation simply prohibits it from continuing its business. Moreover,
under Section 145 of the Corporation Code, no right or remedy in favor of or against any corporation, its
stockholders, members, directors and officers shall be removed or impaired by the subsequent dissolution of
the corporation. The dissolution does not automatically convert the parties into strangers or change their intra
corporate relationship. Neither does it terminate existing causes of action which arose because of the
corporate ties of the parties. The cause of action involving an intra-corporate controversy remains and must
be filed as an intra-corporate dispute despite the subsequent dissolution of the corporation (Aguirre v. FQB
+7, Inc., G.R. No. 170770, January 9, 2013, 688 SCRA 242).

(B) The action cannot prosper because the corporation has no more legal capacity to sue after three years from its
dissolution (Alabang Development Corporation v. Alabang Hills Village Association, G.R. No. 187456, June 2, 2014, 724
SCRA 321).

IX

(A) Able Corporation sold securities to 21 non-qualified buyers during a 15 month period, without registering
the securities with the Securities and Exchange Commission. Did Able Corporation violate the Securities
Regulation Code? Explain. (2%)

(B) Securities issued by the Philippine government are “exempt securities”. and, therefore, need not be
registered with the Securities and Exchange Commission prior to their sale or offering to the public in the
Philippines. What is the rationale behind this exemption? (2%)

(C) Why is the Securities Regulation Code called a “truth in securities law”? (2%)

SUGGESTED ANSWER

(A) Yes, because under the Securities Regulation Code (SRC), securities shall not be sold or offered to be sold
to the public within the Philippines unless the securities are registered with and approved by the Securities
and Exchange Commission. Public means twenty (20) or more inventors. The fact that the securities were
sold during a fifteen (15) month period is immaterial. However, the sale of securities to less than 20 investors
if done during a twelve (12) month period is an exempt transaction under the Securities Regulation Code.

(B) The rationale for the exemption is that the public is amply protected

even without the registration of the securities to be issued by the government, since the government is
presumed to be always solvent.
UP LAW CENTER – BAR 2015 Q & A

(C) The Securities Regulation Code is called a “truth in securities law” because it requires the issuer to make
full and fair disclosure of information about securities being sold or offered to be sold within the Philippines,
and penalizes manipulative and fraudulent acts, devices and schemes.

X.

Mr. and Mrs. Reyes invested their hard-earned savings in securities iss by LEAD Bank. After discovering that
the securities sold to them were me registered with the SEC in violation of the Securities Regulation Code. th
spouses Reyes filed a complaint for nullity of contract and for recovery of a sum of money with the RTC.
LEAD Bank moved to dismiss the case on the ground that it is the SEC that has primary jurisdiction over
actions involving violations of the Securities Regulation Code. If you were the judge, how would you rule on
the motion to dismiss? (3%)

SUGGESTED ANSWER

The motion should be denied. Civil suits falling under the SRC (like liability for selling unregistered securities)
are under the exclusive original jurisdiction of the RTC and hence, need not be first filed before the SEC
unlike criminal cases, wherein the latter body exercises primary jurisdiction (Pua v. Citibank, G.R. No.
180064, September 16, 2013, 705 SCRA 677),

XI

(A) Why is the Bangko Sentral ng Pilipinas considered a lender of last resort? (2%)

(B) Distinguish a conservator from a receiver of a bank. (2%)

(C) What is insider trading? (2%)

SUGGESTED ANSWER

(A) It is considered the lender of last resort because it lends to banks and similar institutions under financial
distress when they have no other means to raise funds.

(B) A conservator is appointed if a bank or quasi-bank is in a state of continuing inability or unwillingness to

maintain a condition of liquidity, deemed adequate to protect the interest of creditors and depositors. The
conservator shall take charge of the assets and liabilities of the bank and exercise management and other
powers to restore the bank’s viability. The conservatorship shall not exceed one year. A receiver is appointed
generally, if the realizable value of the bank’s assets as determined by BSP is less than its liabilities. The
receiver shall take charge of the assets and liabilities of the institution and administer the same for the benefit
of its creditors. The receiver shall determine within 90 days whether the bank can be rehabilitated, otherwise,
he shall recommend the closure of the institution,
UP LAW CENTER – BAR 2015 Q & A

(C) Insider trading is the buying or selling by securities by an insider while che possession of a material non-
public information.

XII

(A) Raymond invested his money in securities issued by the Philippine government, through his bank.
Subsequently, the Bureau of Internal Revenue asked his bank to disclose his investments. His bank refused
the request for disclosure on the ground that the investments are confidential under the Secrecy of Bank
Deposits Law (Republic Act No. 1405, as amended). Is the bank’s refusal justified? Defend your answer. (2%)

(B) First Bank received an order of garnishment over a client’s peso and dollar deposits in First Bank. Should
First Bank comply with that order? Explain. (3%)

SUGGESTED ANSWER

(A) It is justified. Under RA No. 1405, investment in bonds issued by the Philippine government are also
absolutely confidential and may not be examined, inquired or looked into by any person, government official,
bureau or office, save for the exceptions provided by law. None of the exceptions apply in the present case.

(B) First Bank should comply with the order of garnishment over a client’s peso deposits, because there is
nothing in RA No. 1405 that places bank deposits beyond the reach of judgment creditor. And the disclosure
of information on bank deposits pursuant to the writ of garnishment, is only incidental to the execution
process (PCIB v. Court of Appeals, G.R. No. 73610, April 19, 1991, 193 SCRA 452). The dollar deposits,
however, are exempt from garnishment or court order under the Foreign Currency Act (RA No. 6426). Thus,
the bank should not comply with this part of the garnishment.

XIII

(A) A commercial bank wants to acquire shares in a cement manufacturing company. Do you think it can do
that? Why or why not? (2%)

(B) A court found the interest charged by a bank as excessive and unconscionable and struck down the
contractual stipulation on interest. If you were the judge, what would you impose as the applicable interest
rate? State your legal basis. (2%)

(C) What is the single borrower’s limit? (2%)

SUGGESTED ANSWER

(A) A commercial bank cannot acquire shares in a cement manufacturing

UP LAW CENTER – BAR 2015 Q & A

company, because a commercial bank can only invest in the equity of allied undertakings, meaning,
undertakings related to banking (Section 30 of RA No. 8791).

(B) I will impose the legal rate of interest which is currently set at 6% per annum.

(C) Under the single borrower’s limit, the total amount of loans, credit accommodations and guarantee that
the bank may extend to any person, shall not exceed 25% of the bank’s net worth. While the law sets the
ceiling at 20% of the bank’s net worth, it also empowers the BSP to modify the ceiling. The current SBL as
set by BSP, is 25% of the Bank’s net worth

XIV

(A) Differentiate trademark, copyright and patent from each other. (6%)

(B) What is the doctrine of equivalents? (2%)

(C) In what ways would a case for infringement of trademark be different from a case for unfair competition?
(3%)

SUGGESTED ANSWER

(A) 1.) As to definition:

1. Trademark is any visible sign capable of distinguishing goods.

2. Copyright is an incorporeal right granted by statute to the author or creator of
original literary and artistic works whereby he is invested for a limited period of
time with the right carry out, authorize and prevent the reproduction,
distribution, transformation, rental, public performance and other forms of
communication of his work to the public.
3. Patent is any technical solution of any problem in any field of human activity
which is new, requires an inventive step and industrially applicable.

2.) As to object:

1. The object of trademark are goods.

2. The object of copyright are original literary and artistic works.
3. The object of patent is invention.

3.) As to term:

1. The term of trademark is ten years.

2. The term of copyright is generally 50 years.
3. The term of patent is 20 years from application.
UP LAW CENTER – BAR 2015 Q & A

4.) As to how acquired:

1. Trademark is acquired through registration and use.

2. Copyright is acquired from the moment of creation.
3. Patent is acquired through application with the IPO.

(B) Under the doctrine of equivalents, infringement of patent occurs when a device appropriates a prior
invention by incorporating its innovative concept and albeit with some modifications and changes which
performs the same function in substantially the same way to achieve the same result (Godines v. Court of
Appeals, G.R. No. 97343, September 13, 1993, 226 SCRA 338).

(C)

1. In infringement of trademark, prior registration of the trademark is a

prerequisite to the action, whereas in unfair competition, trademark registration
is not necessary.
2. Trademark infringement is the unauthorized use of the registered trademark,
while unfair competition is the passing off one’s goods as those of another.
3. In infringement of trademark, fraudulent intent is unnecessary, whereas in unfair
competition, fraudulent intent is essential (Del Monte Corporation v. Court of
Appeals, G.R. No. 78325, January 25, 1990, 181 SCRA 410).

XV

CHEN, Inc., a Taiwanese company, is a manufacturer of tires with the mark Light Year. From 2009 to 2014,
Clark Enterprises, a Philippine registered corporation, imported tires from CHEN, inc. under several sales
contracts and sold them here in the Philippines. In 2015, CHEN, Inc. filed a trade. mark application with the
Intellectual Property Office (IPO) for the mark Light Year to be used for tires. The IPO issued CHEN, Inc. a
certificate of registration (COR) for said mark. Clark Enterprises sought the cancellation of the COR and
claimed it had a better right to register the mark Light Year. CHEN, Inc. asserted that it was the owner of the
mark, and Clark Enterprises was a mere distributor. Clark Enterprises argued that there was no evidence on
record that the tires it imported from CHEN, Inc. bore the mark Light Year, and Clark Enterprises was able
to prove that it was the first to use the mark here in the Philippines. Decide the case. (4%)

SUGGESTED ANSWER

While RA No. 8293 removed the previous requirement of proof of actual use prior to the filing of an
application for registration of a mark, proof of prior and continuous use is necessary to establish ownership
of trademark. Such ownership of the trademark confers the right to register the trademark. Since Chen owns
the trademark as evidenced by its actual and continuous use prior to the Clark Enterprises, then it is the one
entitled to the registration of the trademark. The fact that Clark was the first one to use the mark here in the
Philippines, will not matter. Chen’s prior actual use of the trademark even in another country, bars Clark
from applying for the registration of the same trademark. Also, a mere distributor does not own the
UP LAW CENTER – BAR 2015 Q & A

trademark to the goods he distributes, and his right over the trademark cannot prevail over the owner (E.Y.
Industrial Sales v. Shien Dar Electricity and Machinery, G.R. No. 184850, October 20, 2010, 634 SCRA 363;
Ecole de Cuisine Manille v. Renaud Cointreau, G.R. No. 185830, June 5, 2013, 697 SCRA 345).

XVI

(A) On the anti-money laundering laws:

What is the distinction between a “covered transaction report” and a “suspicious transaction report”? (2%)
Does the Anti-Money Laundering Council have the authority to freeze deposits? Explain. (2%)

(B) On foreign investments:

A foreign company has a distributor in the Philippines. The latter acts in his own name and account. Will this
distributorship be considered as doing business by the foreign company in the Philippines? (3%) 2. ABC
Corporation was organized in Malaysia but has a branch in the Philippines. It is entirely owned by Filipino
citizens. Can you consider ABC Corporation a Philippine national? (2%)

SUGGESTED ANSWER

(A)

1. A covered transaction report involves transaction/s in cash or other equivalent

monetary instrument involving a total amount in excess of P500,000 within one
banking day, while suspicious transaction report involves transactions with
covered institutions regardless of the amounts involved made under any of the
suspicious circumstances enumerated by law.
2. No. The authority to freeze deposits is lodged with and based upon the order of
the Court of Appeals (Section 10 of RA No. 9160 as amended).

(B)

1. The appointment of a distributor in the Philippines is not sufficient to constitute

doing business unless it is under the full control of the foreign corporation. If
the distributor is an independent entity doing business for its own name and
account, the latter cannot be considered as doing business (Steelcase, Inc. v.
Design International Selections, Inc., G.R. No. 171995, April 18, 2012, 670
SCRA 64).
2. Yes, it is considered a Philippine national, as long as it is registered as doing
business in the Philippines under the Corporation Code (Section 1 of RA No.
7042, as amended by Section 1 of RA No. 8179).
UP LAW CENTER – BAR 2015 Q & A

2015 Bar Exam Suggested Answers in Taxation

I.

Explain the principles of a sound tax system. (3%)

SUGGESTED ANSWER

The principles of a sound tax system and their respective explanations, are as follows:

a) Fiscal adequacy which means that the sources of revenue should be sufficient to meet the demands of
public expenditures (Chavez v. Ongpin, G.R. No. 76778, June 6, 1990);

b) Equality or theoretical justice which means that the tax burden should be proportionate to the taxpayer’s
ability to pay (Sec. 28(1), Art. VI, 1987 Constitution); and

c) Administrative feasibility which means that the tax law should be capable of convenient, just and effective
administration, as well as, easy compliance by taxpayer.

II

Mr. A, a citizen and resident of the Philippines, is a professional boxer. In a professional boxing match held
in 2013, he won prize money in United States (US) dollars equivalent to P300,000,000.

(A) Is the prize money paid to and received by Mr. A in the US taxable in the Philippines? Why? (2%)

(B) May Mr. A’s prize money qualify as an exclusion from his gross income? Why? (2%)

(C) The US already imposed and withheld income taxes from Mr. A’s prize money. How may Mr. A use or
apply the income taxes he paid on his prize money to the US when he computes his income tax liability in the
Philippines for 2013? (4%)

SUGGESTED ANSWER

(A) Yes. Under the Tax Code, the income within and without of a resident citizen is taxable. Since Mr. A is a
resident Filipino citizen, his income worldwide is taxable in the Philippines (Sec. 23 A, NIRC).

(B) No. Under the law, all prizes and awards granted to athletes in local and international sports competitions
and tournaments whether held in the Philippines or abroad and sanctioned by their national sports
associations are excluded from gross income. The exclusion find application only to amateur athletes where
the prize was given in an event sanctioned by the appropriate national sports association affiliated with the
UP LAW CENTER – BAR 2015 Q & A

Philippine Olympic Committee and not to professional athletes like Mr. A. Therefore, the prize money would
not qualify as an exclusion from Mr. A’s gross income (Sec. 32 B [7] [d], NIRC).

(C) The income taxes withheld and paid to the U.S. government maybe claimed by Mr. A, either as a
deduction from his gross income or as a tax credit from the income tax due, when he computes his Philippine
income tax liability for taxable year 2013 (Sec. 34(C)(1)(b), NIRC).

SUGGESTED ANSWER

(A) Yes, the income of Ms. B from the sale of ready-to-wear goods to C is taxable. A nonresident citizen is
taxable only on incorne derived from sources within the Philippines (Sec. 23(B), NIRC). In line with the
source rule of income taxation, since the goods are produced and sold within the Philippines, Ms. B’s
Philippine-sourced income is taxable in the Philippines.

(B) Yes, but only a proportionate part of the income. Gains, profits and income from the sale of personal
property produced by the taxpayer without and sold within the Philippines, shall be treated as derived partly
from sources within and partly from sources without the Philippines (Sec. 42E, NIRC).

Note: The problem does not indicate where the sale took place. The suggested answers in a and b above assume that the sale took
place in the Philippines. A non-resident alien is to be taxed by the Philippine government only on her income derived from an
activity conducted in the Philippines such as the sale of goods irrespective where produced.

III.

Ms. C, a resident citizen, bought ready-to-wear goods from Ms. B, a non-resident citizen.

(A) If the goods were produced from Ms. B’s factory in the Philippines, is Ms. B’s income from the sale to
Ms. C taxable in the Philippines? Explain. (2%)

(B) If Ms. B is an alien individual and the goods were produced in her factory in China, is Ms. B’s income
from the sale of the goods to Ms. C taxable in the Philippines? Explain. (2%)

SUGGESTED ANSWER

(A) Yes, the income of Ms. B from the sale of ready-to-wear goods to C is taxable. A nonresident citizen is
taxable only on income derived from sources within the Philippines (Sec. 23(B), NIRC). In line with the
source rule of income taxation, since the goods are produced and sold within the Philippines, Ms. B’s
Philippine-sourced income is taxable in the Philippines.
UP LAW CENTER – BAR 2015 Q & A

(B) Yes, but only a proportionate part of the income. Gains, profits and income from the sale of personal
property produced by the taxpayer without and sold within the Philippines, shall be treated as derived partly
from sources within and partly from sources without the Philippines (Sec. 42E, NIRC).

Note: The problem does not indicate where the sale took place. The suggested answers in a and b above assume that the sale took
place in the Philippines. A non-resident alien is to be taxed by the Philippine government only on her income derived from an
activity conducted in the Philippines such as the sale of goods irrespective where produced.

IV.

Mr. E and Ms. Fare both employees of AAA Corp. They got married on February 14, 2011. On December
29, 2011, the couple gave birth to triplets. On June 25, 2013, they had twins. What were the personal
exemptions or deductions which Mr. E and Ms. F could claim in the following taxable years:

(A) For 2010 (2%)

(B) For 2011 (3%)

(C) For 2013 (2%)

SUGGESTED ANSWER

(A) For 2010, Mr. E and Ms. Fare each entitled to personal exemptions of P50,000.00 (Sec. 35A, NIRC).

(B) For 2011, Mr. E and Ms. Fare each entitled to basic personal exemption of P50,000.00. In addition to his
basic personal exemption, Mr. E could claim additional personal exemptions for three (3) qualified dependent
children in the amount of P25,000.00 for each child (Sec. 35B, NIRC).

(C) For 2013, Mr. E and Ms. Fare each entitled basic personal exemptions of P50,000.00. Mr. E could claim
additional personal exemptions for four (4) qualified dependent children in the amount of P25,000.00 for
each child (Sec. 35B, NIRC).

V.

BBB, Inc., a domestic corporation, enjoyed a particularly profitable year in 2014. In June 2015, its Board of
Directors approved the distribution or cash dividends to its stockholders. BBB, Inc. has individual and
corporate stockholders. What is the tax treatment of the cash dividends received from BBB, Inc. by the
following stockholders:
UP LAW CENTER – BAR 2015 Q & A

(A) A resident citizen (1%)

(B) Non-resident alien engaged in trade or business (1%)

(C) Non-resident alien not engaged in trade or business (1%)

(D) Domestic corporation (1%)

(E) Non-resident foreign corporation (1%)

SUGGESTED ANSWER

(A) A final withholding tax for ten percent (10%) shall be imposed upon the cash dividends actually or
constructively received by a resident citizen from BBB, Inc. (Sec. 24 (b)(2), NIRC).

(B) A final withholding tax of twenty percent (20%) shall be imposed upon the cash dividends actually or
constructively received by a non-resident alien engaged in trade or business from BBB, Inc. (Sec. 25(a)(2),
NIRC).

(C) A final withholding tax equal to twenty-five percent (25%) of the entire income received from all sources
within the Philippines, including the cash dividends received from BBB, Inc. (Sec. 25(b), NIRC).

(D) Dividends received by a domestic corporation from another domestic corporation, such as BBB, Inc.,
shall not be subject to tax (Sec. 27(d) (4), NIRC).

(E) Dividends received by a non-resident foreign corporation from a domestic corporation are generally
subject to an income tax of 30% to be withheld at source (Sec. 28(b)(1), NIRC). However, a final withholding
tax of fifteen percent (15%) is imposed on the amount of cash dividends received from a domestic
corporation like BBB, Inc. if the tax sparing rule applies (Sec. 28(B) (5)(b), NIRC). Pursuant to this rule, the
lower rate of tax would apply if the country in which the non-resident foreign corporation is domiciled would
allow as tax credit against the tax due from it, taxes deemed paid in the Philippines of 15% representing the
difference between the regular income tax rate and the preferential rate.

VI.

Differentiate between double taxation in the strict sense and in a bro sense and give an example of each. (4%)

SUGGESTED ANSWER

Double taxation in the strict sense pertains to the direct double taxation. This means that the taxpayer is taxed
twice by the same taxing authority, within the same taxing jurisdiction, for the same property and same
UP LAW CENTER – BAR 2015 Q & A

purpose., Example: Imposition of final withholding tax on cash dividend and requiring the taxpayer to declare
this tax-paid income in his income tax returns..

On the other hand, double taxation in the broad sense pertains to indirect double taxation. This extends to all
cases in which there is a burden of two or more impositions. It is the double taxation other than those
covered by direct double taxation (CIR v. Solidbank Corp., G.R. No. 148191, November 25, 2003, 436 SCRA
416). Example: Subjecting the interest income of banks on their deposits with other banks to the 5% Gross
Receipts Tax (GRT) despite of the same income having been subjected to 20% Final Withholding Tax
(FWT), is only a case of indirect double taxation. The GRT is a tax on the privilege of engaging in business,
while the FWT is a tax on the privilege of earning income (CIR v. Bank of Commerce, G.R. NO. 149636,
June 8, 2005, 459 SCRA 638).

VII.

On May 15, 2013, CCC, Inc., received the Final Decision on Disputed Assessment issued by the
Commissioner of Internal Revenue (CIR) dismissing the protest of CCC, Inc. and affirming the assessment
against said corporation. On June 10, 2013, CCC, Inc., filed a Petition for Review with the Court of Tax
Appeals (CTA) division. On July 31, 2015, CCC, Inc. received a copy of the Decision dated July 22, 2015 of
the CTA division dismissing its Petition. CCC, Inc. immediately filed a Petition for Review with the CTA en
banc on August 6, 2015. Is the immediate appeal by CCC, Inc. to the CTA en banc of the adverse Decision
of the CTA division the proper remedy? (3%)

SUGGESTED ANSWER

No, CCC, Inc. should first file a motion for reconsideration or motion for new trial with the CTA Division.
Before the CTA en banc could take cognizance of the petition for review concerning a case falling under its
exclusive appellate jurisdiction, the litigant must sufficiently show that it sought prior reconsideration or
moved for a new trial with the concerned CTA Division (Commissioner of Customs v. Marina Sale, G.R. No.
183868, November 22, 2010, 635 SCRA 606; Rule 8, Sec. 1 of the Revised Rules of Court of Tax Appeals).

VIII

In June 2013, DDD Corp., a domestic corporation engaged in the business of leasing real properties in the
Philippines, entered into a lease agreement of a residential house and lot with EEE, Inc., a non-resident
foreign corporation. The residential house and lot will be used by officials of EEE, Inc. during the visit to the
Philippines. The lease agreement was signed by representatives from DDD Corp. and EEE, Inc. in
Singapore. DDD Corp. did not subject the said lease to VAT believing that it was not a domestic service
contract. Was DDD Corp. correct? Explain. (3%)

SUGGESTED ANSWER
UP LAW CENTER – BAR 2015 Q & A

DDD Corp. is not correct. Lease of properties shall be subject to VAT irrespective of the place where the
contract of lease was executed if the property is leased or used in the Philippines (Sec. 108(A), NIRC)

IX

For calendar year 2011, FFF, Inc., a VAT-registered corporation, reported unutilized excess input VAT in the
amount of P1,000,000.00 attributable to its zero-rated sales. Hoping to impress his boss, Mr. G, the
accountant of FFF, Inc., filed with the Bureau of Internal Revenue (BIR) on January 31, 2013 a claim for tax
refund/credit of the P1,000,000.00 unutilized excess input VAT of FFF, Inc. for 2011. Not having received
any communication from the BIR, Mr. G. filed a Petition for Review with the CTA on March 15, 2013,
praying for the tax refund/credit of the P1,000,000.00 unutilized excess input VAT of FFF, Inc. for 2011. –

(A) Did the CTA acquire jurisdiction over the Petition of FFF, Inc.? (2%)

(B) Discuss the proper procedure and applicable time periods for administrative and judicial claims for
refund/credit of unutilized excess input VAT. (4%)

SUGGESTED ANSWER

(A) The CTA has not acquired jurisdiction over the Petition of FFF, Inc. because the judicial claim has been
prematurely filed on March 15, 2013. The Supreme Court ruled that the 30-day period after the expiration of
the 120-day period fixed by law for the Commissioner of Internal Revenue to act on the claim for refund is
jurisdictional and failure to comply would bar the appeal and deprive the Court of Tax Appeals of its
jurisdiction to entertain the appeal (CIR v. Aichi Forging Company of Asia Inc.. G.R. No. 183421, October
22, 2014, 632 SCRA 422). in this case, Mr. G filed the administrative claim on January 31, 2013. The petition
for relief should have been filed on June 30, 2013. Filing the indicial claim on March 15, 2013 is premature,
thus the CTA did not acquire jurisdiction.

(B) The administrative claim must be filed with the Commissioner of Internal Revenue (CIR) within two
years from the close of the taxable quarter when the zero-rated sales were made. The CIR has 120 days from
the date of submission of complete documents in support of the claim to decide. If the CIR decides within
the 120-day period or the 120-day period expires without the CIR rendering a decision, the taxpayer has 30
days to file a petition for review with the CTA reckoned from the receipt of adverse decision or from the
lapse of the 120-day period.

As a general rule, the 30-day period to appeal is both mandatory and jurisdictional. As an exception to the
general rule, premature filing is allowed only if filed between December 10, 2003 and October 5, 2010, when
BIR Ruling No. DA-489-03 was still in force prior to the reversal of the aforesaid ruling by the CTA in the
Aichi case on October 6, 2010 (Mindanao Il Geothermal Partnership v. CIR, G.R. No. 204745, December 8,
2014, 713 SCRA 645).
UP LAW CENTER – BAR 2015 Q & A

X.

Indicate whether each of the following individuals is required or not required to file an income tax return;

(A) Filipino citizen residing outside the Philippines on his income from sources outside the Philippines. (1%)

(B) Resident alien on income derived from sources within the Philippines. (1%)

(C) Resident citizen earning purely compensation income from two employers within the Philippines, whose
income taxes have been correctly withheld. (1%)

(D) Resident citizen who falls under the classification of minimum wage earners. (1%)

(E) An individual whose sole income has been subjected to final with holding tax. (1%)

SUGGESTED ANSWER

(A) Not required. The income of a non-resident Filipino citizen are taxable only on income sourced within
the Philippines. Accordingly, his income from sources outside the Philippines is exempt from income tax
(Sec. 51A (1)(b), NIRC).

(B) Required. A resident alien is taxable only for income derived from sources within the Philippines (Sec.
51A (1)(c), NIRC).

(C) Required. A resident citizen who is earning purely compensation income from two employers should file
income tax return. If the compensation income is received concurrently from two employers during the
taxable year, the employee is not qualified for substituted filing (Sec. 51A (2)(b), NIRC).

(D) Not required. Under the law, all minimum wage earners in the private and public sector shall be exempt
from payment of income tax (Sec. 51A (2)(d), NIRC in relation to Republic Act No. 9504).

(E) Not required. Under the law, an individual whose sole income has been subjected of final withholding tax
pursuant to Sec. 57(A), NIRC, need not file a return. What he received is a tax-paid income (Sec. 51A (2)(c)
NIRC).

XI.

What are de minimis benefits and how are these taxed? Give three (3) examples of de minimis benefits. (4%)

SUGGESTED ANSWER
UP LAW CENTER – BAR 2015 Q & A

De minimis benefits are facilities and privileges furnished or offered by an employer to his employees, which
are not considered as compensation subject to income tax and consequently to withholding tax, if such
facilities or privileges are of relatively small value and are offered or furnished by the employer merely as
means of promoting the health, goodwill, contentment, or efficiency of his employees. If received by rank-
and-file employees, they are exempt from income tax on wages; if received by supervisory or managerial
employees, they are exempt from the fringe benefits tax (RR No. 2-98, as amended by RR No. 8-2000). The
following shall be considered as de minimis benefits: (Note: The examinee may choose any three)

1. Monetized unused vacation leave credits of private employees not

exceeding 10 days during the year;

2. Monetized value of vacation and sick leave credits paid to government officials
and employees;
3. Medical cash allowance to dependents of employees, not exceeding P750 per
employee per semester or P125 per month;
4. Rice subsidy of P1,500 or 1 sack of 50 kg rice per month amounting to not
more than P1,500;

5. Uniform and clothing allowance not exceeding P5,000 per annum;

6. Actual medical assistance not exceeding P10,000 per annum;
7. Laundry allowance not exceeding P300 per month;
8. Employees achievement awards, e.g., for length of service or safety achievement,
which must be in the form of a tangible personal property other than cash or gift
certificate, with an annual monetary value not exceeding P10,000 received by the
employee under an established written plan which does not discriminate in favor
of highly paid employees;
9. Gifts given during Christmas and major anniversary celebrations not exceeding
P5,000 per employee per annum;
10. Daily meal allowance for overtime work and night/graveyard shift not exceeding
25% of the basic minimum wage on a per region basis;
11. Benefits received by an employee by virtue of a collective bargaining agreement
(CBA) and productivity incentive schemes, provided that the total annual
monetary value received from both CBA and productivity incentive schemes
combined do not exceed P10,000 per employee per taxable year (Rev. Regs. 2-
98, as amended).

XII.

Mr. H decided to sell the house and lot wherein he and his family have lived for the past 10 years, hoping to
buy and move to a new house and lot closer to his children’s school. Concerned about the capital gains tax
that will be due on the sale of their house, Mr. H approaches you as a friend for advice, if it is possible for the
sale of their house to be exempted from capital gains tax and the conditions they must comply with to avail
themselves of said exemption. How will you respond?(4%)

SUGGESTED ANSWER
UP LAW CENTER – BAR 2015 Q & A

I would advise Mr. H, that he may be exempted from the payment of the capital gains tax on the sale or
disposition of the house and lot where his family lives because the sale of principal residence by a natural
person is exempt, provided the following conditions are complied with, viz: 1. The proceeds of the sale is
fully utilized in acquiring or constructing new principal residence within 18 calendar months from the date
of sale or disposition;

2. The historical cost or adjusted basis of the real property sold or disposed will be carried over to the new
principal residence built or acquired;

3. The Commissioner has been duly notified, through a prescribed return, within 30 days from the date of
sale or disposition of the person’s intention to avail of the tax exemption; and The exemption was availed
only once every 10 years (Sec. 24(d)(2), NIRC).

XIII

GGG, Inc. offered to sell through competitive bidding its shares in HAH Corp., equivalent to 40% of the
total outstanding capital stock of the latter. JJJ, Inc. acquired the said shares in HHH Corp. as the highest
bidder. Before it could secure a certificate authorizing registration/tax clearance for the transfer of the shares
of stock to JIJ, Inc., GGG, Inc. had to request a ruling from the BIR confirming that its sale of the said
shares was at fair market value and was thus not subject to donor’s tax. In BIR Ruling No. 012-14, the CIR
held that the selling price for the shares of stock of HHH Corp, was lower than their book value, so the
difference between the selling price and the book value of said shares was a taxable donation. GGG, Inc.
requested the Secretary of Finance to review BIR Ruling No. 012-14, but the Secretary affirmed said ruling.
GGG, Inc. filed with the Court of Appeals a Petition for Review under Rule 43 of the Revised Rules of
Court. The Court of Appeals, however, dismissed the Petition for lack of jurisdiction declaring that it is the
CTA which has jurisdiction over the issues raised. Before which Court should GGG, Inc. seek recourse from
the adverse ruling of the Secretary of Finance in the exercise of the latter’s power of review? (3%)

SUGGESTED ANSWER

GGG, Inc., should seek recourse with the Court of Tax Appeals (CTA) which has jurisdiction. There is no
provision in law that expressly provides where exactly the adverse ruling of the Secretary of Finance under
Section 4 of the NIRC is appealable. However, RA No. 1125, as amended, addresses the seeming gap in the
law as it vests upon the CTA, albeit impliedly, with jurisdiction over the case as “other matters” arising under
the NIRC or other laws administered by the BIR. Furthermore, the Supreme Court held that the jurisdiction
to review the rulings of the Secretary of Finance on the issues raised against a ruling of the Commissioner of
Internal Revenue, pertains to the Court of Tax Appeals in the exercise of its appellate jurisdiction (Philamlife
v. The Sec. of Finance and CIR, G.R. No. 210987, November 24, 2014).
UP LAW CENTER – BAR 2015 Q & A

XIV

KKK Corp. secured its Certificate of Incorporation from the Securities and Exchange Commission on June
3, 2013. It commenced business operations on August 12, 2013. In April 2014, Ms. J, an employee of KKK
Corp. in charge of preparing the annual income tax return of the corporation for 2013, got confused on
whether she should prepare payment for the regular corporate income tax or the minimum corporate income
tax.

(A) Ás Ms. J’s supervisor, what will be your advice? (2%),

(B) What are the distinctions between regular corporate income tax and minimum corporate income tax?
(3%)

SUGGESTED ANSWER

(A) As Ms. J’s supervisor, I will advise that KKK Corp. should prepare payment for the regular corporate
income tax and not the minimum corporate income tax. Under the Tax Code, minimum corporate income
tax is only applicable beginning on the fourth taxable year following the commencement of business
operation (Sec. 27(e)(1), NIRC).

(B) The distinctions between regular corporate income tax and the minimum corporate income tax are the
following:

1. As to taxpayer: Regular corporate income tax applies to all corporate taxpayers;

while minimum corporate income tax applies to domestic corporations and
resident foreign corporations.
2. As to tax rate: Regular corporate income tax is 30%; while minimum corporate
income tax is 2%.
3. As to tax base: Regular corporate income tax is based on the net taxable income;
while minimum corporate income tax is based on gross income.
4. As to period of applicability: Regular corporate income tax is applicable once the
corporation commenced its business operation, while minimum corporate
income tax is applicable beginning on the fourth taxable year following the
commencement of business operation.
5. As to imposition: The minimum corporate income tax is imposed whenever it is
greater than the regular corporate income tax of the corporation (Sec. 27(A) and
(E), NIRC; RR No. 9-98).

XV.

In 2012, Dr. K decided to return to his hometown to start his own practice. At the end of 2012, Dr. K found
that he earned gross professional income in the amount P1,000,000.00, while he incurred expenses amounting
to P560,000.00 constituting mostly of his office space rent, utilities, and miscellaneous expenses related to his
medical practice. However, to Dr. K’s dismay, only P320,000.00 of his expenses were duly covered by
UP LAW CENTER – BAR 2015 Q & A

receipts. What are the options available for Dr. K, so he could maximize the deductions from his gross
income? (3%)

SUGGESTED ANSWER

In order to maximize his deductions, Dr. K may avail of the optional standard deduction (OSD) which is an
amount not exceeding forty percent (40%) of his gross sales or gross receipts. The OSD can be claimed
without being required to present proof or evidence of expenses paid or incurred by him (Sec. 34(L), NIRC;
Rev. Regs. 16-08, as amended).

XVI

LLL is a government instrumentality created by Executive Order to be primarily responsible for integrating
and directing all reclamation projects for the National Government. It was not organized as a stock or a non-
stock corporation, nor was it intended to operate commercially and compete in the private market. By virtue
of its mandate, LLL reclaimed several portions of the foreshore and offshore areas of the Manila Bay, some
of which were within the territorial jurisdiction of Q City. Certificates of title to the reclaimed properties in Q
City were issued in the name of LLL in 2008. In 2014, Q City issued Warrants of Levy on said reclaimed
properties of LLL based on the assessment for delinquent property taxes for the years 2010 to 2013.

(A) Are the reclaimed properties registered in the name of LLL subject to real property tax? (4%)

(B) Will your answer be the same in (A) if from 2010 to the present time, LLL is leasing portions of the
reclaimed properties for the establishment and use of popular fastfood restaurants J Burgers, G Pizza, and K
Chicken? (2%)

SUGGESTED ANSWER

(A) The reclaimed properties are not subject to real property tax because LLL is a government
instrumentality. Under the law, real property owned by the Republic of the Philippines is exempt from real
property tax unless the beneficial use thereof has been granted to a taxable person (Sec. 234, Local
Government Code). When the title of the real property is transferred to LLL, the Republic remains the owner
of the real property. Thus, such arrangement does not result in the loss of the tax exemption (Republic of the
Philippines, represented by The Philippine Reclamation Authority (PRA) v. City of Paranaque, G.R. No. 191109, July 8,
2012, 677 SCRA 246):

ALTERNATIVE ANSWER

(A) No. LLL is an instrumentality of the national government which cannot be taxed by local government
units. LLL is not a government-owned or controlled corporation taxable for real property taxes (City of
LapuLapu v. PEZA, G.R. No. 184203, November 26, 2014).
UP LAW CENTER – BAR 2015 Q & A

(B) No. As a rule, properties owned by the Republic of the Philippines are exempt from real property tax
except when the beneficial use thereof has been granted, for consideration or otherwise, to a taxable person.
When LLL leased out portions of the reclaimed properties to taxable entities, such as the popular fast food
restaurants, the reclaimed properties are subject to real property tax (Sec. 234(a), Local Government Code;
GSIS v. City Treasurer and City Assessor of the City of Manila, G.R. No. 186242, December 23, 2009).

XVII

Mr. L owned several parcels of land and he donated a parcel each to his two children. Mr. Lacquired both
parcels of land in 1975 for P200,000.00. At the time of donation, the fair market value of the two parcels of
land, as determined by the CIR, was P2,300,000.00; while the fair market value of the same properties as
shown in the schedule of values prepared by the City Assessors was P2,500,000.00. What is the proper
valuation of Mr. L’s gifts to his children for the purpose of computing donor’s tax? (3%)

SUGGESTED ANSWER

The valuation of Mr. L’s gift to his children is the fair market value (FMV) the property at the time of
donation. The FMV is the higher of the EMV as determined by the Commissioner, or the FMV as shown in
the schedule of values fixed by the provincial and city assessors. In this case, for the purpose of computing
donor’s tax, the proper valuation is the value prepared by the City Assessors amounting to P2,500,000.00,
because it is higher than the FMV determined by the CIR (Sec. 102 in relation to Sec. 88(B), NIRC).

XVIII

Under the Tariff and Customs Code, as amended:

(A) When does importation begin and when is it deemed terminated? (2%)

(B) In what case/s is the decision of the Collector automatically reviewed by the Commissioner of Customs?
In what instance/s is the decision of the Commissioner automatically appealed to the Secretary of Finance?
(4%)

SUGGESTED ANSWER

(A) Importation begins when the carrying vessel or aircraft enters the jurisdiction of the Philippines with
intention to unlade therein. Importation is deemed terminated upon payment of the duties, taxes, and other
charges due upon the articles, or secured to be paid, at a port of entry and the legal permit for withdrawal
shall have been granted, or in case said articles are free of duties, taxes and other charges, until they have
legally left the jurisdiction of Customs (Sec. 1202 of the Tariff and Customs Code).
UP LAW CENTER – BAR 2015 Q & A

(B) Whenever the decision of the Collector of Customs in any seizure proceedings is adverse to the
government, the said decision is automatically elevated to the Commissioner of Customs for review, and if
such decision is affirmed by the Commissioner of Customs, the same shall be automatically elevated to and
be finally reviewed by the Secretary of Finance (Sec. 2315 of the Tariff and Customs Code):

XIX

In 2014, M City approved an ordinance levying customs duties and fees on goods coming into the territorial
jurisdiction of the city. Said city ordinance was duly published on February 15, 2014 with effectivity date on
March 1, 2014.

(A) Is there a ground for opposing said ordinance? (2%)

(B) What is the proper procedural remedy and applicable time periods for challenging the ordinance? (4%)

SUGGESTED ANSWER

(A) Yes, on the ground that the ordinance is ultra vires. The taxing powers of local government units, such as
M City, cannot extend to the levy of taxes, fees and charges already imposed by the national government, and
this includes, among others, the levy of customs duties under the Tariff and Customs Code (Sec. 133(e),
Local Government Code).

(B) Any question on the constitutionality or legality of tax ordinances may be raised on appeal within 30 days
from the effectivity to the Secretary of Justice. The Secretary of Justice shall render a decision within 60 days
from the date of receipt of the appeal. Thereafter. within 20 days after receipt of the decision or the lapse of
the sixty-day period without the Secretary of Justice acting upon the appeal, the aggrieved party may file the
appropriate proceedings with the Red Court (Sec. 187, Local Government Code).

XX

After filing an Information for violation of Section 254 of the National Internal Revenue Code (Attempt to
Evade or Defeat Tax) with the CTA, the Public Prosecutor manifested that the People is reserving the right
to file the corresponding civil action for the recovery of the civil liability for taxes. As counsel for the accused,
comment on the People’s manifestation. (3%)

SUGGESTED ANSWER
UP LAW CENTER – BAR 2015 Q & A

The manifestation is not proper. The criminal action and the corresponding civil action for the recovery of
the civil liability for taxes and penalties shall at all times be simultaneously instituted with, and jointly
determined in the same proceeding before the Court of Tax Appeal (CTA). The filing of the criminal action is
deemed to necessarily carry with it the filing of the civil action, and no right to reserve the filing of such civil
action separately from the criminal action shall be recognized (Sec. 7(b)(1) of Republic Act. No. 9282: Judy
Anne Santos v. People, G.R. No. 173176, August 26, 2008, 563 SCRA 341).

XXI

MMM, Inc., a domestic telecommunications company, handles incoming telecommunications services for
non-resident foreign companies by relaying international calls within the Philippines. To broaden the
coverage of its telecommunications services throughout the country, MMM, Inc. entered into various
interconnection agreements with local carriers. The non-resident foreign corporations pay MMM, Inc. in US
dollars inwardly remitted through Philippine banks, in accordance with the rules and regulations of the
Bangko Sentral ng Pilipinas. MMM, Inc. filed its Quarterly VAT Returns for 2000. Subsequently, MMM, Inc.
timely filed with the BIR an administrative claim for the refund of the amount of P6,321,486.50, representing
excess input VAT attributable to its effectively zero-rated sales in 2000. The BIR ruled to deny the claim for
refund of MMM, Inc. because the VAT official receipts submitted by MMM, Inc. to substantiate said claim
did not bear the words “zero-rated” as required under Section 4.108-1 of Revenue Regulations (RR) No. 7-
95. On appeal, the CTA division and the CTA en banc affirmed the BIR ruling. MMM, Inc. appealed to the
Supreme Court arguing that the NIRC itself did not provide for such a requirement. RR No. 7-95 should not
prevail over a taxpayer’s substantive right to claim tax refund or credit.

(A) Rule on the appeal of MMM, Inc. (3%)

(B) Will your answer in (A) be any different if MMM, Inc. was claiming refund of excess input VAT
attributable to its effectively zero-rated sales in 2012? (2%) ;

SUGGESTED ANSWER

(A) The appeal of MMM, Inc. must be denied. MMM, Inc.’s position that the requirements under RR No. 7-
95 should not prevail over a taxpayer’s substantive right to claim tax refund or credit is unmeritorious. The
Secretary of Finance has the authority to promulgate the necessary rules and regulations for the effective
enforcement of the provisions of the National Internal Revenue Code (NIRC). Such rules and regulations are
given weight and respect by the courts in view of the rule-making authority given to those who formulate
them and their specific expertise in their respective fields. An applicant for a claim for tax refund or tax credit
must not only prove entitlement to the claim, but also compliance with all the documentary and evidentiary
requirements. Consequently, the Court of Tax Appeal (CTA), and the CTA en banc correctly ruled that the
failure to indicate the words “zero-rated” on the invoices and receipts issued by a taxpayer, would result in
the denial of the claim for refund or tax credit (Eastern Telecommunications Philippines, Inc. v. CIR, G.R.
No. 183531, March 25, 2015).
UP LAW CENTER – BAR 2015 Q & A

(B) No, my answer will not be different if the claim for refund is for effectively zero-rated sales in 2012. The
requirement to print the word “zero-rated” is no longer by mere regulations, but is now clearly provided by
law as follows — “If the sale is subject to žero percent (0%) value-added tax, the term “zero-rated sale” shall
be written or printed prominently on the invoice or receipt. Failure to comply with this invoicing requirement
is fatal to a claim for refund of input taxes attributable to the zero-rated sale (Sec. 113(B)(2)(c), NIRC).
Moreover, as recently ruled by the Supreme Court, the subsequent incorporation of Sec. 4.108-1 of RR 7-95
in Sec. 113 of the NIRC as introduced in R.A. No. 9337, actually confirmed the validity of the imprinting
requirement on VAT invoices or official receipts-a case falling under the principle of legislative approval of
administrative interpretation by reenactment (Northern Mindanao Power Corp. v. CIR, G.R. No. 185115,
February 18, 2015).

XXII

State the conditions for allowing allowing the following as deductions from the gross estate of a citizen or
resident alien for the purpose of imposing estate tax:

(A) Claims against the estate (2%) (B) Medical expenses (2%)

SUGGESTED ANSWER

(A) In order that claims against the estate may be allowed as deductions from the gross estate of a citizen or
resident alien for purposes of imposing the estate tax, the law requires that at the time the indebtedness was
incurred, the debt instrument was duly notarized. In addition, if the loan was contracted within three (3) years
before the death of the decedent, the executor or administrator shall submit a statement showing the
disposition of the proceeds of the loan (Sec. 86(a)(1)(c), NIRC).

(B) The conditions for the allowance of medical expenses as deductions from the gross estate of a citizen or
resident alien are: (1) the medical expenses must have been incurred within one (1) year before the death of
the decedent; (2) that the medical expenses are duly substantiated with receipts; and (3) the total amount
thereof, whether paid or unpaid, does not exceed P500,000.00 (Sec. 86A(6), NIRC).
UP LAW CENTER – BAR 2015 Q & A

2015 Bar Exam Suggested Answers in Remedial Law

I.

Lender extended to Borrower a P100,000.00 loan covered by a promissory note. Later, Borrower obtained
another P100,000.00 loan again covered by a promissory note. Still later, Borrower obtained a P300,000.00
loan secured by a real estate mortgage on his land valued at P500,000.00 Borrower defaulted on his payments
when the loans matured. Despite demand to pay the P500,000.00 loan, Borrower refused to pay, Lender,
applying the totality rule, filed against Borrower with the Regional Trial Court (RTC) of Manila, a collection
suit for P500,000.00.

(A) Did Lender correctly apply the totality rule and the rule on joinder of causes of action? (2%)

At the trial, Borrower’s lawyer, while cross-examining Lender, successfully elicited an admission from the
latter that the two promissory notes have been paid. Thereafter, Borrower’s lawyer filed a motion to dismiss
the case on the ground that as proven only P300,000.00 was the amount due to Lender and which claim is
within the exclusive original jurisdiction of the Metropolitan Trial Court. He further argued that lack of
jurisdiction over the subject matter can be raised at any stage of the proceedings.

(B) Should the court dismiss the case?(3%)

SUGGESTED ANSWER

(A) Yes. The Lender correctly applied the totality rule and the rule on joinder of causes of action because
where the claims in all the causes of action are principally for recovery of money, the aggregate amount of the
claim shall be the test of jurisdiction (Section 5 (d), Rule 2, Rules of Court). Here, the total amount of the
claim is P500,000.00. Hence, the Regional Trial Court (RTC) of Manila has jurisdiction over the suit. At any
rate, it is immaterial that one of the loans is secured by a real estate mortgage because the Lender opted to file
a collection of sum of money instead of foreclosure of the said mortgage.

(B) No. The court should not dismiss the case. What determines the jurisdiction of the court is the nature of
the action pleaded as appearing from the allegations in the complaint. The averments therein and the
character of the relief sought are the ones to be consulted (Navida v. Hon. Teodoro A. Dizon, Jr., G.R. No.
125078, May 30, 2011).

Accordingly, even if the defendant is able to prove in the course of the trial that a lesser amount is due, the
court does not lose jurisdiction and a dismissal of the case is not in order (Paadlan v. Dinglasan, G.R. No.
180321, March 20, 2013).

II.
UP LAW CENTER – BAR 2015 Q & A

Circe filed with the RTC a complaint for the foreclosure of real estate mortgage against siblings Scylla and
Charybdis, co-owners of the property and cosignatories to the mortgage deed. The siblings permanently reside
in Athens, Greece. Circe tipped oft Sherilt Pluto that Scylla is on a balikbayan and is billeted at the Century
Plaza Hotel in Pasay City, Sheriff Pluto went to the hotel and personally served Scylla the summons, but the
latter refused to receive summons for Charybdis as she was not authorized to do so. Sheriff Pluto requested
Scylla for the email address and has number of Charybdis which the latter readily zave. Sheriff Pluto, in his
return of the summons, stated that “Summons for Scylla was served personally as shown by her signature on
the receiving copy of the summons, Summons on Charybdis was served pursuant to the amendment of Rule 14,
by facsimile transmittal of the surmons and complaint on defendant’s far number as evidenced by
transmission verification report automatically generated by the fax machine indicating that it was received by
the fax number to which it was sent on the date and time indicated therein.” Circe, sixty (60) days after her
receipt of Sheriff Pluto’s return, filed a Motion to Declare Charybdis in default as Charybdis did not file any
responsive pleading.

1. A) Should the court declare Charybdis in default? (2%)

Scylla seasonably filed her answer setting forth therein as a defense that Charybdis had paid the mortgage
debt.

(B) On the premise that Charybdis was properly declared in default, what is the effect of Scylla’s answer to
the complaint? (2%)

SUGGESTED ANSWER

(A) No, the Court should not declare Charybdis in default because there was no proper service of summons.
Section 12, Rule 14 of the Rules of Court applies only to a foreign private juridical entity that is not
registered in the Philippines and has no resident agent in the country, and not to individuals (A.M. No. 11-3-6-
SC, March 15, 2011). The service of summons by facsimile under said rule is, therefore, defective. A foreclosure of
real estate mortgage is a quasi in rem action, thus, the court can render a judgment as long as it has jurisdiction
over the res and any of the modes of extra-territorial service of summons under Sec. 15 of Rule 14 is
complied with prior leave of court. There is, unfortunately, no showing in the problem that a prior leave of
court was obtained before resorting to extra-territorial service of summons; hence, the service of summons is
defective.

(B) Assuming that Charybdis was properly declared in default, the court shall try the case against all the
defendants upon the Answer filed by: Scylla, and render judgment upon the evidence presented (Section 3 (c),
Rule 9, Rules of Court).

III.

Juliet, invoking the provisions of the Rule on Violence Against Women and their Children filed with the RTC
designated as a Family Court a petition for the Issuance of a Temporary Protection Order (TPO) against her
husband Romeo.

The Family Court issued a 30-day TPO against Romeo. A day before the expiration of the TPO, Juliet filed a
motion for extension. Romeo in his opposition raised, among others, the constitutionality of R.A. No.
1992 (The VAWC LAW) arguing that the law authorizing the issuance of the TPO violates the equal
UP LAW CENTER – BAR 2015 Q & A

protection and due process clauses of the 1987 Constitution. The Family Court judge, in granting the motion
for extension of the TPO, declined to rule on the constitutionality of R.A. No. 9262. The Family Court judge
reasoned that Family Courts are without jurisdiction to pass upon constitutional issues, being a special court
of limited jurisdiction and R.A. No. 8369, the law creating the Family Courts, does not provide for such
jurisdiction. Is the Family Court judge correct when he declined to resolve the constitutionality of R.A. No.
9262? (3%)

SUGGESTED ANSWER

No, the Family Court Judge is not correct when it declined to resolve the constitutionality of R.A. No. 9262.
In Garcia v. Hon. Ray Allan Drilon (G.R. No. 179267, June 25, 2013), the Supreme Court held that the “Family
Courts have authority and jurisdiction to resolve the constitutionality of a statute. Inspite of its designation as
a family court, the RTC remains possessed of authority as a court of general original jurisdiction to pass upon
all kinds of cases whether civil, criminal, special proceedings, land registration, guardianship, naturalization,
admiralty any or insolvency. This authority is embraced in the general definition of the judicial power to
determine the valid and binding laws in conformity with the fundamental law.”

IV

Strauss filed a complaint against Wagner for cancellation of title. Wagner moved to dismiss the complaint
because Grieg, to whom he mortgaged the property as duly annotated in the TCT, was not impleaded as
defendant.

(A) Should the complaint be dismissed? (3%)

(B) If the case should proceed to trial without Grieg being impleaded as a party to the case, what is his
remedy to protect his interest? (2%)

SUGGESTED ANSWER

(A) No. The complaint should not be dismissed because the mere non-joiner of an indispensable party is not
a ground for the dismissal of the action (Section 11, Rule 3, Rules of Court; Republic v. Hon. Mangotara,
G.R. No. 170375, July 7, 2010, 624 SCRA 360, 431).

(B) If the case should proceed to trial without Grieg being impleaded as a party, he may intervene in the
action (Section 1, Rule 19, Rules of Court). He may also file a petition for annulment of judgment under Rule
47 of the Rules of Court. In Metrobank v. Hon. Floro Alejo (G.R. No. 141970, September 10, 2001), the
Supreme Court held that in a suit to nullify an existing Torrens Certificate of Title (TCT) in which a real
estate mortgage is annotate the mortgagee is an indispensable party. In such suit, a decision canceling the
TCT and the mortgage annotation is subject to a per for annulment of judgment, because the non-joinder of
the mor 80% deprived the court of jurisdiction to pass upon the controversy. “
UP LAW CENTER – BAR 2015 Q & A

V.

Ernie filed a petition for guardianship over the person and properties of his father, Ernesto. Upon receipt of the
notice of hearing, Ernesto filed an opposition to the petition. Ernie, before the hearing of the petition, filed a
motion to order Ernesto to submit himself for mental and physical examination which the court
granted. After Ernie’s lawyer completed the presentation of evidence in support of the petition and the court’s
ruling on the formal offer of evidence, Ernesto’s lawyer filed a demurrer to evidence. Ernie’s lawyer objected
on the ground that a demurrer to evidence is not proper in a special proceeding.

(A) Was Ernie’s counsel’s objection correct?

(B) If Ernesto defies the court’s order directing him to submit to physical and mental examinations, can the
court order his arrest? (2%)

SUGGESTED ANSWER

(A) No. The Rule on demurrer to evidence is applicable to Special

proceedings (Matute v. CA, G.R. No. L-26751, January 31, 1969, 26 SCRA 768). Moreover, under Section 2,
Rule 72 of the Rules of Court, in the absence of special rules, the rules provided for in ordinary actions shall
be applicable, as far as practicable, to special proceedings.”

(B) If the order for the conduct of physical and mental examination is issued as a mode of discovery and
Ernesto defies the said order, the court cannot validly order his arrest (Section 3 (d), Rule 29 of the Rules of
Court).

VI.

A law was passed declaring Mt. Karbungko as a protected area since it was a major watershed. The protected
area covered a portion located in Municipality of the Province I and a portion located in the City of Z of
Province II. Maingat is the leader of Samahang Tagapag-ingat ng Karbungko (STK), a people’s organization.
He learned that a portion of the mountain located in the City of Z of Province Il was extremely damaged
when it was bulldozed and leveled to the ground, and several trees and plants were cut down and burned by
workers of World Pleasure Resorts, Inc. (WPRI) for the construction of a hotel and golf course. Upon inquiry
with the project site engineer if they had a permit for the project, Maingat was shown a copy of the
Environmental Compliance Certificate (ECC) issued by the DENR-EMB, Regional Director (RD-DENR-
EMB). Immediately, Maingat and STK filed a petition for the issuance of a writ of continuing mandamus
against RD-DENR-EMB and WPRI with the RTC of Province I, a designated environmental court, as the
RD-DENR-EMB negligently issued the ECC to WPRI. On scrutiny of the Petition, the Court determined
UP LAW CENTER – BAR 2015 Q & A

that the area where the alleged actionable or omission subject of the petition took place in the City of Z of
Province II, and therefore cognizable by the RTC of Province II. Thus, the court dismissed outright the
petition for lack of jurisdiction.

(A) Was the court correct in motu proprio dismissing the petition? (3%)

Assuming that the court did not dismiss the petition, the RD-DENR–EMB in his Comment moved to
dismiss the petition on the ground that petitioners failed to appeal the issuance of the ECC and to exhaust
administrative remedies provided in the DENR Rules and Regulations.

(B) Should the court dismiss the petition? (3%)

SUGGESTED ANSWER

1. A) No. The court was not correct in motu propio dismissing the petition.

While it appears that the alleged actionable neglect or omission took place in the City of Z of Province II and,
therefore cognizable by the RTC of Province II, nonetheless, venue is not jurisdictional, and it can be waived
in a special civil action for continuing mandamus (Dolot v. Paje, G.R. No. 199199, August 27, 2013). Besides,
under Section 1, Rule 9 of the Rules of Court, defenses and objections not pleaded in the answer or in the
motion to dismiss are deemed waived. Hence, the Court cannot motu proprio dismiss the case on the ground of
improper venue.

(B) Yes, the Court should dismiss the petition because the proper procedure to question a defect in an ECC
is to follow the DENR administrative appeal process in accordance with the doctrine of exhaustion of
administrative remedies (Dolot v. Hon. Paje, G.R. No. 199199, August 27, 2013; Paje v. Casiño, G.R.
No, 207257, February 3, 2015).

ALTERNATIVE ANSWER

(B) No, the Court should not dismiss the petition because the doctrine of exhaustion of administrative
remedies finds no application when the matter is of extreme urgency that may cause great and irreparable
damage to the environment involving strong public interest. After all, the Court may suspend the rules of
procedure in order to achieve substantial justice, and to address urgent and paramount State inter ests vital to
the life of our nation (Boracay Foundation, Inc. v. Province of Aklan, G.R. No. 196870, June 26, 2012; Paje v.
Casiño, G.R. No, 207257, February 3, 2015).

VII.
UP LAW CENTER – BAR 2015 Q & A

Plaintiff sued defendant for collection of P1 million based on the la promissory note. The complaint alleges,
among others:

1) Defendant borrowed P1 million from plaintiff as evidenced by a duly executed promissory note;

2) The promissory note reads:

“Makati, Philippines Dec. 30, 2014

For value received from plaintiff, defendant ‘promises to pay plaintiff P1 million, Twelve (12) months from the
above indicated date without necessity of demand.

Signed defendant

A copy of the promissory note is attached as Annex “A.”

Defendant, in his verified answer, alleged among others:

1) Defendant specifically denies the allegation in paragraphs 1 and 2 of the complaint, the truth being
defendant did not execute any promissory note in favor of plaintiff, or 2) Defendant has paid 1 million
claimed in the promissory note (Annex

“A” of the Complaint) as evidenced by an “Acknowledgment Receipt” duly executed by plaintiff on January
30, 2015 in Manila with his spouse signing as witness.

A copy of the “Acknowledgment Receipt” is attached as Annex “1” hereof

Plaintiff filed a motion for judgment on the pleadings on the ground that defendant’s answer failed to tender
an issue as the allegations therein on his defenses are sham for being inconsistent; hence, no defense at all,
Defendant filed an opposition claiming his answer tendered an issue.

(A) Is judgment on the pleadings proper? (3%)

UP LAW CENTER – BAR 2015 Q & A

Defendant filed a motion for summary judgment on the ground that there are no longer any triable genuine
issues of facts.

(B) Should the court grant defendant’s motion for summary judgment?(3%)

SUGGESTED ANSWER

(A) No, the judgment on the pleadings is not proper. Judgment on the pleadings is proper only when the
answer fails to tender an issue, or otherwise admits the material allegation of the adverse party’s pleading
(Section 1, Rule 34, Rules of Court). When it appears, however, that not all the material allegations of the
complaint were admitted in the answer, because some of them were either denied or disputed, and the
defendant has set up certain special defenses which, it proven, would have the effect of nullifying plaintiff’s
main cause of action, judgment on the pleadings cannot be rendered (Philippine National Bank v. Aznar, G.R.
No.171805, May 30. 2011).

Clearly, since the defendant’s verified Answer specifically denied the execution of the promissory note, or
raised the affirmative of payment, judgment on the pleadings is not proper.

(B) No, the court should not grant the motion for summary judgment because the defense of payment is a
genuine issue as to a material fact that must be resolved by the court upon presentation of evidence. For a
summary judgment to be proper, the movant must establish two requisites: (a) there must be no genuine issue
as to any material fact, except for the amount of damages, and (b) the party presenting the motion for
summary judgment must be entitled to a judgment as a matter of law. A genuine issue is an issue of fact which
requires the presentation of evidence as distinguished from an issue which is a sham, fictitious, contrived or a
false claim. Relative thereto, when the facts pleaded by the parties are disputed or contested, proceedings for
a summary judgment cannot take the place of a trial. The evidence on record must be viewed in light most
favorable to the party opposing the motion who must be given the benefit of all favorable inferences as can
reasonably be drawn from the evidence (Smart Communications v. Aldecoa, G.R. No. 166330, September 11,
2013).

VIII

Aldrin entered into a contract to sell with Neil over a parcel of land. The contract stipulated a P500,000.00
down payment upon signing and the balance payable in twelve (12) monthly installments of P100,000.00.
Aldrin paid the down payment and had paid three (3) monthly installments when he found out that Neil had
sold the same property to Yuri for P1.5 million paid in cash. Aldrin sued Neil for specific performance with
damages with the RTC. Yuri, with leave of court, filed an answer-in-intervention as he had already obtained a
TCT in his name. After trial, the court rendered judgment ordering Aldrin to pay all the installments due, the
cancellation of Yuri’s title, and Neil to execute a deed of sale in favor of Aldrin. When the judgment became
final and executory, Aldrin paid Neil all the installments but the latter refused to execute the deed of sale in
favor of the former. Aldrin filed a “Petition for the Issuance of a Writ of Execution with proper notice of
hearing. The petition alleged, among others, that the decision had become final and executory and he is
entitled to the issuance of the writ of execution as a matter of right. Neil filed a motion to dismiss the petition
on the ground that it lacked the required affidavit against forum shopping.
UP LAW CENTER – BAR 2015 Q & A

(A) Should the court grant Neil’s Motion to Dismiss? (3%)

Despite the issuance of the writ of execution directing Neil to execute the deed of sale in favor of Aldrin, the
former obstinately refused to execute the deed.

(B) What is Aldrin’s remedy? (2%)

SUGGESTED ANSWER

(A) No. The motion to dismiss should be denied because certification against forum shopping is only
required in a complaint or other initiatory pleading (Section 5, Rule 7, Rules of Court; Arquiza v. CA, G.R.
NO 160479, June 8, 2005). Since a petition for the issuance of a writ of execution is not an initiatory pleading,
it does not require a certification against forum shopping.

[Note: The Committee respectfully recommends a liberal approach in checking the answer to Question VIII,
should the examinees consider the “Petition for the Issuance of a Writ of Execution” an initiatory pleading or
question the correct ness of the Trial Court’s decision. The contract with Aldrin is a contract to sell with the
purchase price not fully paid, while that of Yuri is a perfected contract of sale, plus delivery of the public
document and issuance of TCT, making Yuri the owner of the land].

(B) Aldrin may move for the issuance of a court order directing the execution of the Deed of Sale by some
other person appointed by it. Under Section 10, Rule 39 of the Rules of Court, if a judgment directs a party to
execute a conveyance of land or personal property, or to deliver deeds or other documents, or to perform,
any other specific act in connection therewith, and the party fails to comply within the time specified, the
court may direct the act to be done at the cost of the disobedient party by some other person appointed by
the court and the act when so done shall have like effect as if done by the party. If real or personal property is
situated v:ithin the Philippines, the court in lieu of directing a conveyance thereof may by an order divest the
title of any party and vest it in others, which shall have the force and effect of a conveyance executed in due
form of law.

The phrase “some other person appointed by the court” may refer to the Branch Clerk of Court, Sheriff or
even the Register of Deeds, and their acts when done under such authority shall have the effect of having
been done by Neil himself.

ALTERNATIVE ANSWER

(B) Aldrin may also move that Neil be cited for contempt because of his obstinate refusal to comply with the
judgment of the court to execute a Deed of Sale.

IX
UP LAW CENTER – BAR 2015 Q & A

Hades, an American citizen, through a dating website, got acquainted with Persephone, a Filipina. Hades
came to the Philippines and proceeded to Baguio City where Persephone resides. Hades and Persephone
contracted marriage, solemnized by the Metropolitan Trial Court judge of Makati City, After the wedding,
Hades flew back to California, United States of America, to wind up his business affairs. On his return to the
Philippines, Hades discovered that Persephone had an illicit affair with Phanes. Immediately, Hades returned
to the United States and was able to obtain a valid divorce decree from the Superior Court of the County of
San Mateo, California, a court of competent jurisdiction against Persephone. Hades desires to marry Hestia,
also a Filipina, whom he met at Baccus Grill in Pasay City.

(A) As Hades’ lawyer, what petition should you file in order that your client can avoid prosecution for bigamy
if he desires to marry Hestia? (%)

(B) In what court should you file the petition? (1%)

(C) What is the essential requisite that you must comply with for the purpose of establishing jurisdictional
facts before the court can hear the petition? (3%)

SUGGESTED ANSWER

(A) As Hades’ lawyer, I would file a petition for recognition of a foreign divorce decree, or at least file a
special proceeding for cancellation or correction of entries in the civil registry under Rule 108 of the Rules of
Court and include therein a prayer for recognition of the aforementioned divorce decree, CruZ v. Sto.
Tomas (G.R. No. 186571, August 11, 2010), the High declared that “[t]he recognition of the foreign divorce
decree made in a Rule 108 proceeding itself, as the object of special proceedings (such as that in Rule 108 of
the Rules of Court) is precisely establish the status or right of a party or a particular fact”(Fujiki v. Marinay,
G.R. No. 196049, June 26, 2013).

(B)

1. Petition for recognition of foreign divorce decree should be filed in the Regional
Trial Court of the place of residence of any of the parties, at the option of the
petitioner; or
2. Petition for cancellation or correction of entries under Rule 108 should be filed
in the Regional Trial Court of Makati City, where the corresponding Local Civil
Registry is located.

(c)

1. In a petition for recognition of foreign judgment, the petitioner only needs to

prove the foreign judgment as a fact under the Rules of Court. To be more
specific, a copy of the foreign judgment may be admitted in evidence and proven
as a fact under Sections 24 and 25 of Rule 132 in relation to Section 48(b), Rule
39 of the Rules of Court (Fujiki v. Marinay G.R. No. 196049, June 26, 2013).
2. Before the court can hear the petition under Rule 108 of the Rules of Court,
Hades must satisfy the following procedural requirements;(a) filing a verified
petition; (b) naming as parties all persons who have or claim any interest which
would be affected; (c) issuance of an order fixing the time and place of hearing;
UP LAW CENTER – BAR 2015 Q & A

(d) giving reasonable notice to the parties named in the petition; and (e)
publication of the order once a week for three consecutive weeks in a newspaper
of general circulation (Rule 108, Rules of Court; Co v. Civil Register of Manila,
G.R. No. 138496, February 23, 2004, 423 SCRA 420; Corpuz v. Tirol, G.R. No.
186571, August 11, 2010).

ALTERNATIVE ANSWER

(A) As Hades’ counsel, I will not file any petition because my client is an American citizen, and only Filipino
citizens are required to file a petition for recognition of a foreign judgment. I will advise Hades, nonetheless,
to secure a certificate of legal capacity to marry in the Philippines if he desires to marry Hestia, in order to
avoid prosecution for bigamy.

X.

An information for murder was filed against Rapido. The RTC judge, after personally evaluating the
prosecutor’s resolution, documents and parties’ affidavits submitted by the prosecutor, found probable cause
and issued a warrant of arrest. Rapido’s lawyer examined the rollo of the case and found that it only contained
the copy of the information, the submissions of the prosecutor and a copy of the warrant of arrest.
Immediately, Rapido’s counsel filed a motion to quash the arrest warrant for being void, citing as grounds:

a). The judge before issuing the warrant did not personally conduct a searching examination of the
prosecution witnesses in violation of his client’s constitutionally-mandated rights;

1. b) There was no prior order finding probable cause before the judge issued the
arrest warrant.

May the warrant of arrest be quashed on the grounds cited by Rapido’s counsel? State your reason for each
ground. (4%)

SUGGESTED ANSWER

No, the warrant of arrest may not be quashed based on the grounds cited by Rapido’s counsel. In the
issuance of a warrant of arrest, the mandate of the constitution is for the judge to personally determine the
existence of probable cause. The words “personal determination,” was interpreted by the Supreme Court in
Soliven v. Makasiar, (G.R. No. 82585, November 14, 1988, 167 SCRA 393, 406), as the exclusive and
personal responsibility of the issuing judge to satisfy himself, as to the existence of probable cause. What the
law requires as personal determination on the part of a judge is that he should not rely solely on the report of
the investigating prosecutor. Thus, personal examination of the complainant and his witnesses is, thus, not
mandatory and indispensable in the determination of probable cause for the issuance of a warrant of arrest
(People v. Joseph “Jojo” Grey, G.R. No. 10109, July 26, 2010). At any rate, there is no law or rule that
requires the Judge to issue a prior Order finding probable cause before the issuance of a warrant of arrest.
UP LAW CENTER – BAR 2015 Q & A

XI.

The Ombudsman found probable cause to charge with plunder d probable cause to charge with plunder the
provincial governor, vice governor, treasurer, budget officer, and accountant. An Information for plunder
was filed with the Sandiganbayan against the provincial officials except for the treasurer who was granted
immunity when he agreed to cooperate with the Ombudsman in the prosecution of the case. Immediately, the
governor filed with the Sandiganbayan a petition for certiorari against the Ombudsman claiming there was
grave abuse of discretion in excluding the treasurer from the Information.

(A) Was the remedy taken by the governor correct? (2%)

(B) Will the writ of mandamus lie to compel the Ombudsman to include the treasurer in the Information?
(3%)

(C) Can the Special Prosecutor move for the discharge of the budget officer to corroborate the testimony of
the treasurer in the course of presenting its evidence. (2%)

SUGGESTED ANSWER

(A) No, the remedy taken by the Governor is not correct. The petition for certiorari is a remedy that is only
available when there is no plain, speedy and adequate remedy under the ordinary course of law; hence, the
Governor should have filed a Motion for Reconsideration. Besides, there is no showing that the Ombudsman
committed grave abuse of discretion in granting immunity to the treasurer who agreed to cooperate in the
prosecution of the case.

(B) No. Mandamus will not lie to compel the Ombudsman to include the treasurer in the Information. In
matters involving the exercise of judgment and discretion, mandamus may only be resorted to in order to
compel respondent tribunal, corporation, board, officer or person to take action, but it cannot be used to
direct the manner or the particular way discretion is to be exercised, or to compel the retraction or reversal of
an action already taken in the exercise of judgment or discretion (Ampatuan, Jr. v. Secretary De Lima, G.R.
No. 197291, April 3, 2013).

Evidently, the Ombudsman’s act of granting the treasurer immunity from prosecution under such terms and
conditions as it may deter mine (Section 17, R.A. 6770) is a discretionary duty that may not be compelled by
the extraordinary writ of mandamus.

(C) No. The special Prosecutor cannot move for the discharge of the budget officer to become a State
witness since his testimony is only corroborative to the testimony of the treasurer. Under Section 17, Rule
119, the Court upon motion of the prosecution before resting its case, may direct one or more of the accused
to be discharged with their consent so that they may be witnesses for the State, provided the following
requisites are satisfied: (a) there is absolute necessity for the testimony of the accused whose discharge is
requested; (b) there is no other direct evidence available for the proper prosecution of the offense committed,
except the testimony of said accused; (c) the testimony of said accused can be substantially corroborated in its
material points; (d) said accused does not appear to be the most guilty; and (e) said accused has not at any
time been convicted of any offense involving moral turpitude. Absolute necessity exists for the testimony of
an accused sought to be discharged when he or she alone has knowledge of the crime. In more concrete
terms, necessity is not present when the testimony would simply corroborate or otherwise strengthen the
UP LAW CENTER – BAR 2015 Q & A

prosecution’s evidence. The requirement of absolute necessity for the testimony of a state witness depends on
the circumstances of each case regardless of the number of the participating conspirators (Manuel J. Jimenez,
Jr., v. People of the Philippines, G.R. No. 209195, September 17, 2014).

ALTERNATIVE ANSWER

(A) The remedy taken by the Governor is correct. A petition for Certiorari under Rule 65 is the appropriate
remedy if the Ombudsman committed grave abuse of discretion in granting immunity to the treasurer who
agreed to cooperate in the prosecution of the case.

(C) No, the special Prosecutor cannot move for the discharge of the budget officer to become a State witness.
The Office of the Special Prosecutor is merely a component of the Office of the Ombudsman and may only
act under the supervision and control, and upon authority of the Ombudsman (Uy v. Sandiganbayan, G.R.
No 105965 70, March 20, 2001). Accordingly, in the absence of any express delegation and authority from the
Ombudsman, the Special Prosecutor does not have the power to move for the discharge of the budget officer
to corroborate the testimony of the treasurer in the course of presenting its evidence (Section 11 (3), R.A.
6770).

XII

Paz was awakened by a commotion coming from a condo unit next to hers. Alarmed, she called up the
nearby police station. PO1 Remus and PO2 Romulus proceeded to the condo unit identified by Paz. PO1
Remus knocked at the door and when a man opened the door, PO1 Remus and his companions introduced
themselves as police officers. The man readily identified himself as Oasis Jung and gestured to them to come
in. Inside, the police officers saw a young lady with her nose bleeding and face swollen. Asked by PO2
Romulus what happened, the lady responded that she was beaten up by Oasis Jung. The police officers
arrested Oasis Jung and brought him and the young lady back to the police station. PO1 Remus took the
young lady’s statement who identified herself as AA. She narrated that she is a sixteen-year-old high school
student; that previous to the incident, she had sexual intercourse with Oasis Jung at least five times on
different occasions and she was paid P5,000.00 each time and it was the first time that Oasis Jung physically
hurt her. PO2 Romulus detained Oasis Jung at the station’s jail. After the inquest proceeding, the public
prosecutor filed an information for Violation of R.A. No. 9262 (The VAWC Law) for physical violence and
five separate informations for violation of R.A. No. 7610 (The Child Abuse Law). Oasis Jung’s lawyer filed a
motion to be admitted to bail but the court issued an order that approval of his bail bond shall be made only
after his arraignment.

(A) Did the court properly impose that bail condition? (3%)

Before arraignment, Oasis Jung’s lawyer moved to quash the other four separate informations for violation of
the child abuse law invoking the single larceny rule.
UP LAW CENTER – BAR 2015 Q & A

(B) Should the motion to quash be granted? (2%) (C) After his release from detention on bail, can Oasis Jung
still question the validity of his arrest? (2%)

SUGGESTED ANSWER

(A) No. The court Revised Rules of Court court did not properly impose that bail condition. The Rules of
Criminal Procedure do not require the arraignment he accused as a prerequisite to the conduct of hearings in
the bail on. A person is allowed to file a petition for bail as soon as he is inrived of his liberty by virtue of his
arrest or voluntary surrender. An accused need not wait for his arraignment before filing the bail petition
(Serapio v. Sandiganbayan, G.R. No. 149116, January 28, 2003).

Moreover, the condition that the approval of bail bonds shall be made only after arraignment would place the
accused in a position where he has to choose between: (1) filing a motion to quash (the Information) and thus
delay his released on bail because until his motion to quash can be resolved, his arraignment cannot be held;
and (2) foregoing the filing of a motion to quash (the Information) so that he can be arraigned at once and
thereafter be released on bail (Lavides v. Court of Appeals, G.R. No. 129670, February 1, 2000).

(B) No. The Court should not grant the motion to quash, because the “single larceny rule” does not find
application where the charges involve violations of R.A. 9262 (The VAWC Law) and R.A. No. 7610 (The
Child Abuse Law), considering that each criminal act is based on a different criminal impulse and intent.

In Santiago v. Garchitorena (G.R. No. 109266 December 2, 1993), the Supreme Court explained that the
“Single Larceny doctrine” applies only to crimes committed delito continuado, which exists if there should be
a plurality of acts performed during a period of time; unity of penal provision violated; and unity of criminal
intent or purpose, which means that two or more violations of the same penal provisions are united in one
and same instant or resolution leading to the perpetration of the same criminal purpose or aim. The said rule
applies in theft cases, where the taking of several things, whether belonging to the same or different owners,
at the same time and place constitutes but one larceny (Santiago v. Garchitorena, G.R. No. 109266,
December 2, 1993).

[Note: The Committee respectfully recommends that the examinees be given full credit to any answer
provided to the question because the single larceny rule is not included in the 2015 BAR Examination
Syllabus in Remedial Law).

(C) Yes. Oasis Jung can still question the validity of his arrest even after his release from detention on bail.
Under Section 26, Rule 114 of the Rules of Court, an application for or admission to bail shall not bar the
accused from challenging the validity of his arrest or the legality of the warrant issued therefor, or from
assailing the regularity or questioning the absence of a preliminary investigation of the charge against him,
provided that he raises them before entering his plea.

XIII.
UP LAW CENTER – BAR 2015 Q & A

Jaime was convicted for murder by the Regional Trial Court of Davao City. In a decision promulgated on
September 30, 2015. On October 5, 2015, Jaime filed a Motion for New Trial on the ground that errors of
law and irregularities prejudicial to his rights were committed during his trial. On October 7, 2015, the private
prosecutor, with the conformity of the public prosecutor, filed an Opposition to Jaime’s motion. On October
9, 2015, the court granted Jaime’s motion. On October 12, 2015, the public prosecutor filed a motion for
reconsideration. The court issued an Order dated October 16, 2015 denying the public prosecutor’s motion
for reconsideration. The public prosecutor received his copy of the order of denial on October 20, 2015,
while the private prosecutor received his copy on October 26, 2015.

(A) What is the remedy available to the prosecution from the court’s order granting Jaime’s motion for new
trial? (3%)

(B) In what court and within what period should a remedy be availed of? (1%) (C) Who should pursue the
remedy? (2%)

SUGGESTED ANSWER

The remedy of the prosecution is to file a petition for certiorari under Rule 65 of the Rules of Court, because
the denial of a motion for reconsideration is merely an interlocutory order and there is no plain, speedy and
adequate remedy under the course of law. Be that as it may, it may be argued that appeal is the appropriate
remedy from an order denying a motion for reconsideration of an order granting a motion for new trial
because an order denying a motion for reconsideration was already removed in the enumeration of matters
that cannot be a subject of an appeal under Section 1, Rule 41 of the Rules of Court.

(B) Following the principle of judicial hierarchy, the petition for certiorari should be filed before the Court of
Appeals within sixty (60) days from receipt of the copy of the order of denial of the public prosecutor’s
motion for reconsideration, or on October 20, 2015.

(C) The office of the Solicitor General should pursue the remedy. In criminal proceedings on appeal in the
Court of Appeals or in the Supreme Court, the authority to represent the people is vested solely in the
Solicitor General. Under Presidential Decree No. 478, among the specific powers and functions of the OSG
is to “represent the government in the Supreme Court and the Court of Appeals in all criminal proceedings.”
This provision has been carried over to the Revised Administrative Code particularly in Book IV, Title III,
Chapter 12 thereof. Without doubt, the OSG is the appellate counsel of the People of the Philippines in all
criminal cases (Cariño v. de Castro, G.R. No. 176084, April 30, 2008).

XIV.

Pedro was charged with theft for stealing Juan’s cellphone worth 0000.00. Prosecutor Marilag at the pre-trial
submitted the judicial affidavit of Juan attaching the receipt for the purchase of the cellphone to prove civil
liability. She also submitted the judicial affidavit of Mario, an eyewitness who narrated therein how Pedro
stole Juan’s cellphone. At the trial, Pedro’s lawyer objected to the prosecution’s use of judicial affidavits of
her witnesses considering the imposable penalty on the offense with which his client was charged.
UP LAW CENTER – BAR 2015 Q & A

(A) Is Pedro’s lawyer correct in objecting to the judicial affidavit of Mario? (2%)

(B) Is Pedro’s lawyer correct in objecting to the judicial affidavit of Juan? (2%)

At the conclusion of the prosecution’s presentation of evidence, Prosecutor Marilag orally offered the receipt
attached to Juan’s judicial affidavit, which the court admitted over the objection of Pedro’s lawyer. After
Pedro’s presentation of his evidence, the court rendered judg. ment finding him guilty as charged and holding
him civilly liable for P20,000.00 Pedro’s lawyer seasonably filed a motion for reconsideration of the decision
asserting that the court erred in awarding the civil liability on the basis of Juan’s judicial affidavit, a
documentary evidence which Prosecutor Marilag failed to orally offer.

(C) is the motion for reconsideration meritorious? (2%)

SUGGESTED ANSWER

(A) Yes, Pedro’s lawyer is correct in objecting to the judicial affidavit of Mario. The Judicial Affidavit Rules
shall apply only to criminal actions where the maximum of the imposable penalty does not exceed six
years (Section 9 (a) (1) of A.M. No. 12-8-8-SC or the Judicial Affidavit Rule). Here, the maximum impossible
penalty for the crime of theft of a cell phone worth P20,000.00 is prision mayor in its minimum to medium
periods, or six years and one day to eight years and one day. Thus, Pedro’s lawyer is correct in objecting to the
judicial affidavit of Mario.

[Note: The Committee respectfully recommends that the examinees be given full credit to any answer given to the question,
because the specific imposable penalties for crimes or offenses charged are not included in the 2015 BAR Examination Syllabus
in Remedial Law).

(B) No, Pedro’s lawyer is not correct in objecting to the judicial affidavit of

Juan because the Judicial Affidavit Rules apply with respect to the civil aspect of the actions, regardless of the
penalties involved (Section 9 of A.M. No. 12-8-8-SC or the Judicial Affidavit Rule). Here, the judicial affidavit
of Juan was offered to prove the civil liability of Pedro. Thus, the objection of Pedro’s lawyer to the judicial
affidavit of Juan is not correct.

(C) No. The motion for reconsideration is not meritorious. The judicial

affidavit is not required to be orally offered as separate documentary evidence, because it is filed in lieu of the
direct testimony of the witness. It is offered, at the time the witness is called to testify, and any objection to it
should have been made at the time the witness was presented (Sections 6 and 8, A.M. No. 12-8-8-SC or the
Judicial Affidavit Rule). Since the receipt attached to the judicial affidavit was orally offered, there was enough
basis for the court to award civil liability.
UP LAW CENTER – BAR 2015 Q & A

ALTERNATIVE ANSWER (C) Yes the motion for reconsideration is meritorious The Judicial Affidavit Rules
require an oral offer of evidence upon the termination of the testimony of the last witness (Section 8, AMNO, 12-
8-8-SCO the Judicial Affidavit Rule).

XV.

Water Builders, a construction company based in Makati City, entered into a construction agreement with
Super Powers, Inc., an enero company based in Manila, for the construction of a mini hydro electric plant.
Water Builders failed to complete the project within the stipulated duration. Super Powers cancelled the
contract. Water Builders filed a request for arbitration with the Construction Industry Arbitration Commission
(CIAC). After due proceedings, CIAC rendered judgment in favor of Super Powers, Inc. ordering Water
Builders to pay the former P10 million, the full amount of the down payment paid, and P2 million by way of
liquidated damages. Dissatisfied with the CIAC’s judgment, Water Builders, pursuant to the Special Rules of
Court on Alternative Dispute Resolution (ADR Rules) filed with the RTC of Pasay City a petition to vacate
the arbitral award. Super Powers, Inc., in its opposition, moved to dismiss the petition, invoking the ADR
Rules, on the ground of improper venue as neither of the parties were doing business in Pasay City.

Should Water Builders’ petition be dismissed? (3%)

SUGGESTED ANSWER

Yes, the petition should be dismissed on the ground of improper venue. Under the Special Rules of Court on
Alternative Dispute Resolution (ADR), the petition shall be filed with the Regional Trial Court having
jurisdiction over the place where one of the parties is doing business, where any of the parties reside or where
the arbitration proceedings were conducted (Rule 11.3 – A.M. No. 07-11-08-SC); hence, the venue of the
petition to vacate the arbitral award of Water Builders is improperly laid.

ANOTHER SUGGESTED ANSWER

Ves, the petition should be dismissed because venue is not included among the valid grounds to vacate an
arbitral award. The grounds to vacate an arbitral award are: a) The arbitrai award was procured through
corruption, fraud or other undue means; b) There was evident partiality or corruption in the arbitral tribunal
or any of its members; c) The arbitral tribunal was guilty of misconduct or any form of misbehavior that has
materially prejudiced the rights of any party such as refusing to postpone a hearing upon sufficient cause
shown or to hear evidence pertinent and material to the controversy; d) One or more of the arbitrators was
disqualified to act as such under the law and willfully refrained from disclosing such disqualification; or

1. e) The arbitral tribunal exceeded its powers, or so imperfectly executed them,

such that a complete, final and definite award upon the subject matter submitted
to them was not made.

The award may also be vacated on any or all of the following grounds: a) The arbitration agreement did not
exist, or is invalid for any ground for the revocation of a contract or is otherwise unenforceable; or b) A party
to arbitration is a minor or a person judicially declared to be incompetent.
UP LAW CENTER – BAR 2015 Q & A

ALTERNATIVE ANSWER

Yes, the petition should be dismissed. Water Builders should have filed a petition for review under Rule 43 of
the Rules of Court before the Court of Appeals because R.A. 9285, or the Alternative Dispute Resolution Act
of 2004, did not divest the Court of Appeals of jurisdiction to review the decisions or award of the CIAC (
Plus Asia Development Corporation v. Utility Assurance Corporation, G.R. No. 199650, June 26, 2013).

XVI

AA, a twelve-year old girl, while walking alone met BB, a teenage boy who befriended her. Later, BB brought
AA to a nearby shanty where he raped her. The Information for rape filed against BB states:

“On or about October 30, 2015, in the City of S.P. and within the jurisdiction of this Honorable Court, the
accused, a minor, fifteen (15) years old with lewd design and by means of force, violence and intimidation, did
then and there, willfully, unlawfully and feloniously had sexual intercourse with AA, A minor, twelve (12) years
old, against the latter’s will and consent.”

At the trial, the prosecutor called to the witness stand AA as his first witness and manifested that he be
allowed to ask leading questions in conducting his direct examination pursuant to the Rule on the
Examination of a Child Witness. BB’s counsel objected on the ground that the prosecutor has not conducted
a competency examination on the witness, a requirement before the rule cited can be applied in the case.

(A) Is BB’s counsel correct? (3%)

In order to obviate the counsel’s argument on the competency of AA as prosecution witness, the judge motu
proprio conducted his voir dire examination on AA.

(B) Was the action taken by the judge proper? (2%)

After the prosecution has rested its case, BB’s counsel filed with leave a demurrer to evidence, seeking the
dismissal of the case on the ground that the prosecutor failed to present any evidence on BB’s minority as
alleged in the Information.

(C) Should the court grant the demurrer? (3%)

SUGGESTED ANSWER

(A) No. BB’s counsel is not correct. Every child is presumed qualified to be a witness (Sec. 6, Rule on
Examination of Child Witness [RECW]). To rebut the presumption of competence enjoyed by a child, the
burden of proof lies on the party challenging his competence (Sec. 6 of A.M. No. 005-07-SC or the Rules on
UP LAW CENTER – BAR 2015 Q & A

Examination of Child Witness). Here, AA, a 12-year old child witness who is presumed to be competent, may
be asked leading questions by the prosecutor in conducting his direct examination pursuant to the RECW and
the Revised Rules on Criminal Procedure (People v. Santos, G.R. No. 171452, October 17, 2008).

(B) Yes, the judge may motu proprio conduct his voir dire examination on AA. Under the Rules on Examination
of Child Witness, the court shall conduct a competency examination of a child, motu proprio or on motion of
a party, when it finds that substantial doubt exists regarding the ability of the child to perceive, remember,
communicate, distinguish truth from falsehood, or appreciate the duty to tell the truth in court (Sec. 6 of
A.M. No. 005-07-SC or the Rules on Examination of Child Witness).

[Note: The Committee respectfully recommends that the examiner be more liberal in checking the answers to the question
because the term voir dire examination is not normally used under the rules on evidence in the Philippines).

(C) No, the court should not grant the demurrer. While it was alleged in the information that BB was a minor
at the time of the commission of the offense, the failure of the prosecutor to present evidence to prove his
minority is not a basis for the granting of the demurrer, because minority of the accused is not an element of
the crime of rape. Be that as it may, the Court should not consider minority in rendering the decision. After
all, the failure of the prosecutor to prove the minority of AA may only affect the imposable penalty but may
not absolve him from criminal liability.

XVII

Hercules was walking near a police station when a police officer signaled him to approach. As soon as
Hercules came near, the police officer frisked him but the latter found no contraband. The police officer told
Hercules to get inside the police station. Inside the police station, Hercules asked the police officer, “Sir, may
problema po ba?” Instead of replying, the police officer locked up Hercules inside the police station jail.

(A) What is the remedy available to Hercules to secure his immediate release from detention? (2%)

(B) If Hercules filed with the Ombudsman a complaint for warrantless search, as counsel for the police
officer, what defense will you raise for the dismissal of the complaint? (3%)

(C) If Hercules opts to file a civil action against the police officer, will he have a cause of action? (3%)

SUGGESTED ANSWER

(A) The remedy available to Hercules is to file a petition for habeas corpus questioning the illegality of his
warrantless arrest. The writ of habeas corpus shall extend to all cases of illegal confinement or detention by
which any person is deprived of his liberty (Section 1, Rule 102, Rules of Court).
UP LAW CENTER – BAR 2015 Q & A

(B) As counsel of the policemen, I will raise the defense of presumption of regularity in the performance of
duty. I can also raise the defense that the police officer has the duty to search Hercules under the “Stop and
Frisk” rule. A stop-and-frisk situation must precede a warrantless arrest, be limited to the person’s outer
clothing, and should be grounded upon a genuine reason, in the light of the police office and surrounding
conditions, to warrant the belief that detained has weapons concealed about him. (Valdez v. People, G.R.
No. 170180, November 23, 2007).

The “stop and frisk” search should be used “[wJhen dealing rapidly unfolding and potentially criminal
situation in the city streets where unarguably there is no time to secure a search warrant. “Stop and frisk”
searches (sometimes referred to as Terry searches) necessary for law enforcement, that is, law enforcers
should be given the legal arsenal to prevent the commission of offenses. This should be balanced, however,
with the need to protect the privacy of citizens in accordance with Article III, Section 2 of the
Constitution (People of the Philippines v. Victor Cogaed, G.R. No. 200334, July 30, 2014). In addition, I may also
assert the defense that the complaint for warrantless search charges no criminal offense. The conduct of a
warrantless search is not a criminal act, for it is not penalized under the Revised Penal Code or any other
special laws.

(C) Yes. Hercules has a cause of action to file a civil action against the police officer under Article 32 (4) in
relation to Article 2219 (6) and (10) of the New Civil Code, which provides that a public officer may be liable
for damages when the right to be secure in one’s person, house, papers and effects against unreasonable
searches and seizures is impaired. The indemnity includes moral damages. Exemplary damages may also be
adjudicated (Galvante v. Casimiro, G.R. No. 162808, April 22, 2008).

ALTERNATIVE ANSWER

(A) Hercules may also apply for bail. Under Section 17 (c), Rule 114 of the Rules of Court, any person in
custody who is not yet charged in court may apply for bail with any court in the province, city or municipality
where he is held.

(B) As counsel for the police officer, I will argue that the Ombudsman has no jurisdiction over the complaint
filed by Hercules. While the Ombudsman has disciplinary authority over officials and members of the PNP
concurrently with NAPOLCOM and PNP, the Memorandum of Agreement executed by and among the
Ombudsman, PNP and NAPOLCOM on September 12, 2012 specifies the administrative cases that are
within the primary jurisdiction of the Ombudsman. Since the complaint filed against my client is not among
those administrative cases under the primary jurisdiction of the Ombudsman, the complaint should
necessarily be dismissed.

XVIII

The residents of Mt. Ahohoy, headed by Masigasig, formed a non-governmental organization – Alyansa
Laban sa Minahansa Ahohoy (AMLA) to protest the mining operations of Oro Negro Mining in the
mountain. ALMA members picketed daily at the entrance of the mining site blocking the ingress and egress of
trucks and equipment of Oro Negro her its operations.
UP LAW CENTER – BAR 2015 Q & A

Masigasig had an altercation with Mapusok arising from the complaints the mining engineer of Oro Negro that
one of their trucks was destroyed by ALMA members. Mapusok is the leader of the Association of Peace
Keepers of Ahohoy (APKA), a civilian volunteer organization serving as auxiliary force of the local police to
maintain peace and order in the area. Subsequently, Masigasig disappeared. Mayumi, the wife of Masigasig, and
the members of ALMA searched for Masigasig, but all their efforts proved futile. Mapagmatyag, a member
of ALMA, learned from Maingay, a member of APKA, during their binge drinking
that Masigasig was abducted by other members of APKA, on order of Mapusok. Mayumi and ALMA sought
the assistance of the local police to search for Masigasig, but they refused to extend their cooperation.

Immediately, Mayumi filed with the RTC, a petition for the issuance of the writ of amparo against Mapusok
and APKA.ALMA also filed a petition for the issuance of the writ of amparo with the Court of Appeals
against Mapusok and APKA. Respondents Mapusok and APKA, in their Return filed with the RTC, raised
among their defenses that they are not agents of the State; hence, cannot be impleaded as respondents in
an amparo petition.

(A) Is their defense tenable? (3%)

Respondents Mapusok and APKA, in their Return filed with the Court of Appeals, raised as their defense that
the petition should be dismissed on the ground that ALMA cannot file the petition because of the earlier
petition filed by Mayumi with the RTC.

1. B) Are respondents correct in raising their defense? (3%)

(c) Mayumi later filed separate criminal and civil actions against

Mapusok. How will the cases affect the amparo petition she earlier filed? (1%)

SUGGESTED ANSWER

(A) No. The defense is not tenable. The writ of amparo is a remedy avail

able to any person whose right to life, liberty and security has been violated or is threatened with violation by
an unlawful act or omission of a public officer or employee or of a private individual or entity. The writ
covers extralegal killing and enforced disappearances or threats thereof (Section 1, Rules on the Writ of
Amparo). Moreover, the rules do not require that the respondents should be agents of the State in order to be
impleaded as respondents in an amparo petition (Secretary of National Defense v. Manalo, G.R. No. 180906,
October 7, 2008).

(B) Yes. The respondents are correct in raising the defense. Under Section 2(c) of the Rules on the Writ of
Amparo, the filing of a petition by Mayumi who is an immediate member of the family of the aggrieved party
already suspends the right of all other authorized parties to file similar petitions. Hence, ALMA cannot file
the petition because of the earlier petition filed by Mayumi with the RTC.
UP LAW CENTER – BAR 2015 Q & A

(C) When a criminal action and a separate civil action are filed subsequent to a petition for a writ of amparo,
the latter shall be consolidated with the criminal action. After consolidation, the procedure under the Rules
shall continue to apply to the disposition of the reliefs in the petition (Sec. 23, Rule on the Writ of Amparo).
UP LAW CENTER – BAR 2015 Q & A

2015 Bar Exam Suggested Answers in Legal Ethics

I.

Define the following terms: (4%)

(A) counsel de oficio
(B) counsel de parte
(C) amicus curiae
(D) attorney of record
SUGGESTED ANSWER

(A) counsel de officio – a lawyer appointed by the court to represent a

party who cannot afford to secure a lawyer to represent him in a case.

(B) counsel de parte – a lawyer chosen by a party to represent him in a case.

(C) amicus curiae – literally, a friend of the court; a lawyer appointed by the court, not to represent a party to
the case, but to advise the court on intricate questions of law in a case that the lawyer may have some
expertise in

(D) counsel of record – a lawyer whose name and address appears in the or a case as representing a party;
same as a counsel de parte.

II.

In open court, accused Marla manifested that she had already settled in full the civil aspect of the criminal
case filed against her in the total amount of P58,000.00. Marla further alleged that she paid directly to private
complainant Jasmine the amount of P25,000.00. The balance of P33,000.00 was delivered to Atty. Jeremiah,
Jasmine’s lawyer, evidenced by a receipt signed by Atty. Jeremiah himself.
However, Jasmine manifested that she did not receive the amount of P33,000.00 which Marla turned over to
Atty. Jeremiah. Despite Jasmine’s requests to turn over the money, Atty. Jeremiah failed to do so. It was only
after Jasmine already filed an administrative complaint against Atty. Jeremiah that the latter finally paid the
P33,000.00 to the former, but in three installment payments of P11,000.00 each. Atty. Jeremiah claimed that
he decided to hold on to the P33,000.00 at first because Jasmine had not yet paid his attorney’s fees.

Is Atty. Jeremiah administratively liable? Explain. (3%)

SUGGESTED ANSWER

Atty. Jeremiah is administratively liable for violating Rule 16.01 of the Code of Professional Responsibility
(CPR) which provides that “a lawyer shall account for all money and property collected or received by him
for or from the client.” His claim that he held on to the P33,000.00 because his client Jasmine had not yet
paid his attorney’s fees, is lame. Rule 16.03 of the CPR provides that “a lawyer shall have a lien over the funds
(of the client) and may apply as much thereof as may be necessary to satisfy his lawful fees and
disbursements, giving notice promptly thereafter to his client”. But the Supreme Court has held that this can
be availed of by a lawyer only if there is an agreement between him and the client as to the amount of his
UP LAW CENTER – BAR 2015 Q & A

attorney’s fees. There is no evidence of such agreement in this case. In fact, Atty. Jeremiah claimed his
exercise of a retaining lien only after an administrative case was already filed against him; moreover, it is
belied by the fact that Atty. Jeremiah paid the P33,000.00 to his client Jasmine, albeit in installments.

III.

Maria and Atty. Evangeline met each other and became good friends at zumba class. One day, Maria
approached Atty. Evangeline for legal advice. It turned out that Maria, a nurse, previously worked in the
Middle East. So she could more easily leave for work abroad, she declared in all her documents that she was
still single. However, Maria was already married with two children. Maria again had plans to apply for work
abroad but this time. wished to have all her papers in order. Atty. Evangeline, claiming that she was already
overloaded with other cases, referred Maria’s case to another lawyer. Maria found it appalling that after Atty.
Evangeline had learned of her secrets, the latter refused to handle her case. Maria’s friendship with Atty.
Evangeline permanently turned sour after Maria filed an administrative case against the latter for failing to
return borrowed jewelry. Atty. Evangeline, on the other hand, threatened to charge Maria with a criminal case
for falsification of public documents, based on the disclosures Maria had earlier made to Atty. Evangeline.

(A) Was the consultation of Maria with Atty. Evangeline considered privileged? (1%)

(B) What are the factors to establish the existence of attorney-client privilege? (3%)

SUGGESTED ANSWER

(A) The consultation of Maria with Atty. Evangeline is considered privileged. In the case of Hadjula v.
Madianda (A.C. No. 6711, July 3, 2007), which involves basically the same facts, the Supreme Court held as
follows:

“As it were, complainant went to respondent, a lawyer who incidentally was also then a friend, to bare what
she considered personal secrets and sensitive documents for the purpose of obtaining legal advice and
assistance. The moment complainant approached the then recep tive respondent to seek legal advice, a
veritable lawyerclient relationship evolved between the two. Such relationship, imposes upon the lawyer
certain restrictions circumscribed by the ethics of the profession. Among the burdens of the relationship is
that which enjoins the lawyer, respondent in this instance, to keep inviolate confidential information acquired
or revealed during legal consultations. The fact that one is, at the end of the day not inclined to handle the
client’s case is hardly of consequence. Of little moment too, is the fact that no formal professional
engagement follows the consultation. Nor will it make any difference, that no contract whatsoever was
executed by the parties to memorialize the relationship.”
(B) In the same case, the Supreme Court cited Wigmore on the factors essential to establish the attorney-
client privilege as follows:

(1) Where legal advise of any kind is sought (2) from a professional legal adviser in his capacity as such, (3)
the communication relating to that purpose, (4) made in confidence (5) by the client (6) are at his instance
permanently protected (7) from disclosure by himself or by the legal advisor, (8) except the protection be
waived.”
UP LAW CENTER – BAR 2015 Q & A

IV.

The Lawyer’s Oath is a source of obligation and its violation is a ground for suspension, disbarment, or other
disciplinary action. State in substance the Lawyer’s Oath. (3%)

SUGGESTED ANSWER

I, ________, having been permitted to continue in the practice of law in the Philippines, do solemnly swear
that I recognize the supreme authority of the Republic of the Philippines; I will support its Constitution and
obey the law 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, nor 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 ! impose upon myself this voluntary obligation without any mental reservation or
purpose of evasion. So help me God.”

V.

Judge Ana P. Sevillano had an issue with the billings for the per cellular phone services of her 16-year-old
daughter for the last three consecutive months. Although Judge Sevillano had been repeatedly came the
Customer Service Hotline of Universal Telecoms, the billings issuem never fully settled to Judge Sevillano’s
satisfaction. Finally, Judge Sevillante wrote the National Telecommunications Commission a letter of compra
against Universal Telecoms, using her official court stationery and signing the letter as “Judge Ana P.
Sevillano.” Did Judge Sevillano violate any professional or ethical standard for judges? Justify your answer.
(3%)

SUGGESTED ANSWER

Judge Sevillano violated Section 8, Canon 4, of the New Code of Judicial Conduct for the Philippine
Judiciary, which provides that “judges shall not use or lend the prestige of the judicial office to advance their
private interests, or those of a member of their family or of anyone else, nor shall they convey or permit
others to convey the impression that anyone is in a special position improperly to influence them in the
performance of judicial duties”, as well as Rule 6.02 of the Code of Professional Responsibility which
provides that “a lawyer in the government service shall not use his public position to promote or advance his
private interests, nor allow the latter to interfere with his public duties”.

In the case of Ladigon v. Garong (A.M. MTJ-08-1712, August 20, 2008), where a Municipal Trial Court Judge
wrote a letter to a religious organization abroad, about the complaint of one of its members, using the
stationary of his court and signing with his title of “Judge”, the Supreme Court held with regard to the use of
the stationary, that “In the present case, the respondent Judge crossed the line of propriety when he used his
letterhead to report a complaint involving an alleged violation of church rules and, possibly, of
UP LAW CENTER – BAR 2015 Q & A

Philippine laws. Coming from a judge with the letter addressed to a foreign reader, such report could indeed
have conveyed the impression of official recognition or notice of the reported violation.”

With regard to the use of the judge’s title in signing the letter, the Supreme Court held that:

“The same problem that the use of letterhead poses, occurs in the use of the title of judge or Justice in the
correspondence of a member of the Judiciary. While the use of the title is an official designation as well as an
honor that an incumbent has earned, a line still has to be drawn based on the circumstances of the use of the
appellation. While the title can be used for social and other identification purposes, it cannot be used with the
intent to use the prestige of his judicial office to gainfully advance his personal, family or other pecuniary
interests. Nor can the prestige of a judicial office be used or lent to advance the private interests of others, or
to convey or permit others to convey the impression that they are in a special position to influence the judge.
To do any of these is to cross into the prohibited field of impropriety.”

VI.

Casper Solis graduated with a Bachelor of Laws degree from Achieve University in 2000 and took and passed
the bar examinations given that same year. Casper passed the bar examinations and took the Attorney’s Oath
together with other successful bar examinees on March 19, 2001 at the Philippine International Convention
Center (PICC). He was scheduled to sign the Roll of Attorneys on May 24, 2001 but he misplaced the Notice
to Sign the Roll of Attorneys sent by the Office of the Bar Confidant after he went home to the province for
a vacation. Since taking his oath in 2001, Casper had been employed by several law firms and private
corporations, mainly doing corporate and taxation work. When attending a seminar as part of his Mandatory
Continuing Legal Education in 2003, Casper was unable to provide his roll number. Seven years later in 2010,
Casper filed a Petition praying that he be allowed to sign the Roll of Attorneys. Casper alleged good faith,
initially believing that he had already signed the Roll before entering PICC for his oath-taking on March 19,
2001.

a. Can Casper already be considered a member of the Bar and be allowed to use the title of “attorney”?
Explain. (1%)

b. Did Casper commit any professional or ethical transgression for which he could be held administratively
liable? (2%)

c. Will you grant Casper’s Petition to belatedly sign the Roll of Attorneys? Why? (2%)

SUGGESTED ANSWER

(A) Casper cannot already be considered a member of the Bar and be allowed to use the title of attorney. In
the case of In Re: Petition to Sign on the Roll of Attorneys, Michael A. Medado, Petitioner (B.M. No. 2540,
September 24, 2013), and Aguirre v. Rana (B.M. No. 1036, June 10, 2003, 451 SCRA 428), involving the same
facts, the Supreme Court held that it is the act of signing the Roll of Attorneys that makes a successful Bar
examinee a full-fledged member of the Philippine Bar.

(B) He can be held liable for unauthorized practice of law. Canon 9 of the Code of Professional
Responsibility provides that a lawyer shall not directly or indirectly assist in the unauthorized practice of law.”
UP LAW CENTER – BAR 2015 Q & A

In the Medado case, the Supreme Court held that “while a reading of Canon 9 appears to merely prohibit
lawyers from assisting in the unauthorized practice of law, the unauthorized practice of law by the lawyer
himself is subsumed under this provision, because at the heart of Canon 9 is the lawyer’s duty to prevent the
unauthorized practice of law”.

(C) I will grant Casper’s petition to belatedly sign the Roll of Attorneys.
He demonstrated good faith and moral character in voluntarily filing his petition. He did not wait for a third
party to file a complaint against him for his transgression. However, he should be allowed to sign the Roll
only one year afterwards, which is tantamount to a suspension, as was done in the Medado case.

VII

Cite some of the characteristics of the legal profession which distinguish it from business. (4%)

SUGGESTED ANSWER

The primary characteristics which distinguish the legal profession from a business are:
(1) a duty of public service of which emolument is a by-product, and in which one may attain the highest
eminence without making much money;
(2) a relation as officer of the court to the administration of justice involving thorough sincerity, integrity and
reliability;
(3) a relation to client in the highest degree fiduciary;
(4) a relation to colleagues characterized by candor, fairness and unwillingness to resort to current business
methods of advertising and encroachment on their practice, or dealing directly with their clients (In Re Sycip,
92 SCRA 1).

VIII

Engr. Gilbert referred his friends, spouses Richard and Cindy Maylupa, to Atty. Jane for the institution of an
action for partition of the estate of Richard’s deceased father. In a letter, Atty. Jane promised to give Engr.
Gilbert a commission equivalent to 15% of the attorney’s fees she would receive from the spouses Maylupa.
Atty. Jane, however, failed to pay Engr. Gilbert the promised commission despite already terminating the
action for partition and receiving attorney’s fees amounting to about P600,000.00. Engr. Gilbert repeatedly
demanded payment of his commission but Atty. Jane ignored him. May Atty. Jane professionally or ethically
promise a commission to Engr. Gilbert? Explain. (3%)

SUGGESTED ANSWER
Atty. Jane may not professionally or ethically promise a commission to Engr. Gilbert. Rule 9.02 of the Code
of Professional Responsibility (CPR) provides that “a lawyer shall not divide or stipulate to divide a fee for
legal services with persons not authorized to practice law”.
UP LAW CENTER – BAR 2015 Q & A

IX.

(A) Explain the doctrine of quantum meruit in determining the amount of attorney’s fees. (2%)

(B) Identify the factors to be considered in determining attorney’s fees on a quantum meruit basis. (2%)

SUGGESTED ANSWER

(A) Quantum meruit means as much as the services of a lawyer are worth.
Recovery of attorney’s fees on the basis of quantum meruit is authorized when (1) there is no express
contract for the payment of attorney’s fees; (2) although there is a contract for attorney’s fees, the fees
stipulated are found unconscionable by the court; (3) the contract for attorney’s fees is void due to formal
defects of execution; (4) the lawyer was not able to finish the case for justifiable cause; (5) the lawyer and the
client disregard the contract for attorney’s fees; and (6) the client dismissed his counsel or the latter withdrew
therefrom, for valid reasons.

(B) The factors are those set in Rule 20.01 of the Code of Professional
Responsibility (CPR), as follows:

a) the time spent and the extent of the services rendered or required;

b) the novelty and difficulty of the questions involved;

c) the importance of the subject matter;

d) the skill demanded;

e) the probability of losing other employment as a result of acceptance of the proffered case;
f) the customary charges for similar services and the schedule of fees of the IBP chapter to which he belongs;
g) the amount involved in the controversy and the benefits resulting to the client from the service;
h) the contingency or certainty of compensation;
i) the character of the employment, whether occasional or established; and
j) the professional standing of the lawyer.”

The spouses Manuel were the registered owners owners of a parcel of land measuring about 200,000 square
meters. On May 4, 2000, Manuel sold the land for P3,500,000.00 to the spouses Rivera who were issued a
certificate of title of the said lands. Because the Spouses Rivera falled to pay the balance of the purchase price
for the land, the spouses Manuel, through Atty. Enriquez, instituted an action on March 18, 2010 before the
Regional Trial Court (RTC) for sum of money and/or annulment of sale, docketed as Civil Case No. 1111.
The complaint in Civil Case No. 1111 specifically alleged that Atty. Enriquez would be paid P200,000.00 as
attorney’s fees on a contingency basis. The RIC subsequently promulgated its decision upholding the sale of
the land to the spouses Rivera. Atty. Enriquez timely filed an appeal on behalf of the spouses Manuel before
the Court of Appeals. The appellate court found for the spouses Manuel, declared the sale of the land to the
UP LAW CENTER – BAR 2015 Q & A

spouses Rivera null and void, and ordered the cancellation of the spouses Rivera’s certificate of title for the
land. The Supreme Court dismissed the spouses Rivera’s appeal for lack of merit. With the finality of
judgment in Civil Case No. 1111 on October 20, 2014, Atty. Enriquez filed a motion for the issuance of a
writ of execution.

Meanwhile, the spouses Rivera filed on November 10, 2014 before the RTC a case for quieting of title against
the spouses Manuel, docketed as Civil Case No. 2222. The spouses Manuel, again through Atty. Enriquez,
filed a motion to dismiss Civil Case No. 2222 on the ground of res judicata given the final judgment in Civil
Case No. 1111. Pending the resolution of the motion to dismiss in Civil Case No. 2222, the RTC granted on
February 9, 2015 the motion for issuance of a writ of execution in Civil Case No. 1111 and placed the
spouses Manuel in possession of the land. Atty. Enriquez, based on a purported oral agreement with the
spouses Manuel, laid claim to 1/2 of the land, measuring 100,000.00 Square meters with market value of
P1,750,000.00, as his attorney’s fees.

Atty. Enriquez caused the subdivision of the land in two equal portions and entered into the half the
appropriated for himself. Based on the professional and ethical standards for lawyers, may Atty. Enriquez
claim 1/2 of the land as his contingency fee? Why? (4%)

SUGGESTED ANSWER

Atty. Enriquez may not claim 1/2 of the land as his contingency fee. In the first place, a lawyer cannot charge
his client a contingent fee or a percentage of the amount recovered as his fees in the absence of an express
contract to that effect (Corpus v. Court of Appeals, G.R. No. L-40424, June 30, 1980, 98 SCRA 424). There
is no such contract in this case. As a matter of fact, the claim of a purported oral agreement for a contingency
fee of 1/2 of the land is contradicted by the allegation in the Complaint in Civil Case No. 1111 for a
contingency fee of P200,000.00 only. Moreover, the amount claimed as contingent fee appears to be excessive
and unreasonable. The issue involved in the case was simple and did not require extensive skill, effort and
research on the part of Atty. Enriquez. Furthermore, Atty. Enriquez caused the division of the land and
appropriated one half thereof, pending resolution of the motion to dismiss in Civil Case No. 2222. This
constitutes a violation of Article 1491 of the New Civil Code, because the case in which the property is
involved has not yet been terminated (The Conjugal Partnership of the Spouse Cadavedo v. Victorino T.
Lacaya, G.R. No. 173188, January 15, 2014).

XI

Atty. Belinda appeared as counsel for accused Popoy in a case being heard before Judge Tadhana. After
Popoy was arraigned, Atty. Belinda movcu a resetting of the pre-trial conference. This visibly irked Juage and
and so before Atty. Belinda could finish her statement, Judge Tadhana cut her off by saying that if she was
not prepared to handle the case, then he could easily assign a counsel de oficio for Popoy. Judge Tadhana also
uttered that Atty. Belinda was wasting the precious time of the court. Atty. Belinda tried to explain that she
was capable of handling the case but before she could finish her explanation, Judge Tadhana again cut her off
and accused her of always making excuses for her incompetence. Judge Tadhana even declared that he did
not care if Atty. Belinda filed a thousand administrative cases against him. According to Atty. Belinda, Judge
Tadhana had also humiliated her like that in the past for the flimsiest of reasons. Even Atty. Belinda’s clients
were not spared from Judge Tadhana’s wrath as he often scolded witnesses who failed to respond
immediately to questions asked of them on the witness stand. Atty. Belinda filed an administrative case
UP LAW CENTER – BAR 2015 Q & A

against Judge Tadhana. Do the acts of Judge Tadhana as described above constitute a violation of the Code
of Judicial Conduct? Explain. (3%)

SUGGESTED ANSWER

Judge Tadhana has violated Section 6, Canon 6 of the New Code of Judicial Conduct for the Philippine
Judiciary which provides that:”Sec. 6. Judges shall maintain order and decorum in all proceedings before the
court, and be patient, dignified and courteous in relation to litigants, witnesses, lawyers and others
with whom the judge deals in an official capacity. Judges shall require similar conduct of legal representatives,
court staff and others subject to their influence, direction or control”
The Supreme Court has held as follows:
“The duty to maintain respect for the dignity of the court applies to members of the bench and bar alike. A
judge should be courteous both in his conduct and in his language especially to those appearing before him.
He can hold counsels to a proper appreciation of their duties to the court, their clients and the public in
general without being petty, arbitrary, overbearing, or tyrannical.. He should refrain from conduct that
demeans his office and remember that courtesy begets courtesy. Above all, he must conduct himself in such a
manner that he gives no reason for reproach” (Ruiz v. Bringas, A. H. No. MTJ-00-1266, April 6, 2000, 330
SCRA 62).

XII

(A) What is the best form of advertising possible for a lawyer (27)
(B) What are the allowable or permissible forms of advertising by a lawyer? (3%)

SUGGESTED ANSWER

(A) The best form of advertising is a well-merited reputation for professional capacity and fidelity to trust,
which must be earned as an outcome of character and conduct (Ulep v. Legal Clinic, Inc., Bar Matter No.553,
June 17, 1993, 223 SCRA 378 [2012]).

(B)
1. Publication in reputable law lists of brief biographical and honest informative data; 2. Use of an ordinary
professional business card;
3. Announcements of specialization and availability of service in a legal journal for lawyers; 4. Seeking of
appointment to a public office requiring lawyers;
5. Advertising to seek full-time position as counsel for a corporation;
6. Offering free legal service to indigents through radio broadcasts or printed matter;
7. Announcement of opening of a law firm, changes ofpersonnel, firm name or office address;
8. Listings in a telephone directory.

XIII

In a land registration case before Judge Lucio, the petitioner is represented by the second cousin of Judge
Lucio’s wife.
(A) Differentiate between compulsory and voluntary disqualification and determine if Judge Lucio should
disqualify himself under either circumstance. (3%)
(B) If none of the parties move for his disqualification, may Judge Lucio proceed with the case? (2%)
UP LAW CENTER – BAR 2015 Q & A

SUGGESTED ANSWER

(A) In compulsory disqualification, the judge is compelled to inhibit himself from presiding over a case when
any of the ground provided by the law or the rules exist. Under Section 1, Rule 137 of the Revised Rules of
Court, no judge or judicial officer shall sit in any case (1) in which he, or his wife or child, is pecuniarily
interested as heir, legatee, creditor or otherwise, or (2) in which he is related to either party within the sixth
degree of consanguinity or affinity or to counsel within the fourth degree computed according to the rules of
the civil law, or (3) in which he has been executor, administrator, trustee or counsel, or (4) in which he has
presided in any inferior court when his ruling or decision is the subject of review, without the written consent
of all parties in interest and entered upon the record.

Section 5, Canon 3 of the New Code of Judicial Conduct for the Philippine Judiciary adds the following
grounds:
a) the judge has actual bias or prejudice concerning a party or personal knowledge of dispute the proceedings;

b) knowledge of disputed evidentiary facts concerning the judge has previously served as a lawyer or was
witness in the matter under controversy.

In voluntary disqualification, a judge may inhibit himself in the exercise of his discretion. Paragraph 2. Rule
137 of the Revised Rules of court provides that “a judge may, in the exercise of his sound discretion,
disqualify himself from sitting in a case, for just and valid reasons other than those mentioned above”. The
New Code of Professional Conduct for the Philippine Judiciary adds that “judges shall disquality themselves
from participating in any proceedings in which they are unable to decide the matter impartially or in which it
may appear to a reasonable observer that they are unable to decide the matter impartially.” There is no
mandatory ground for Judge Lucio to disqualify himself. The second cousin of his wife, a sixth degree
relative, is appearing not as a party but as a counsel.

(B) If none of the parties moves for his disqualification, Judge Lucio may
proceed with the case. All the more so if, without the participation of the judge, the parties and their lawyers
execute a written agreement that Judge Lucio may proceed with the same, and such agreement is signed by
them and made a part of the records of the case.

XIV

Identify and briefly explain three of the canons under the New Code of Judicial Conduct for the Philippine
judiciary. (6%)

SUGGESTED ANSWER

(Any three of the following:)

Canon No. 1 – Independence. Judicial independence is a pre-reguisite to the rule of law and a fundamental
guarantee of a fair trial. A judge shall therefore uphold and exemplify the judicial function independently on
the basis of their assessment of the facts and in accordance a conscientious understanding of the law, free
from any extraneous influence, inducement, pressure, threat or interference, direct or indirect, from any
quarter or for any reason.
UP LAW CENTER – BAR 2015 Q & A

Canon No. 2 – Integrity. Integrity is essential not only to the proper discharge of the judicial office but also to
the personal demeanor of judges. The behavior and conduct of judges must reaffirm the people’s faith in the
integrity of the judiciary. Justice must not be merely done but must also be seen to be done.

Canon No. 3. – Impartiality. Impartiality is essential to the proper discharge of the judicial office. It applies
not only to the decision itself but also to the process by which the decision is made. Judges shall perform
their judicial functions without favor, bias or prejudice.

Canon No. 4. – Propriety. Propriety and the appearance of propriety are essential to the performance of all
the activities of a judge. Judges shall avoid impropriety and the appearance of impropriety in all their
activities.

Canon No. 5. – Equality. Ensuring equality of treatment to all before the courts is essential to the
performance of the judicial office. Judges shall be aware of, and understand, diversity in society and
differences arising from various sources, including, but not limited to, race, color, sex, religion, national
origin, caste, disability, age, marital status, sexual orientation, social and economic status and other like causes.

Canon No. 6. – Competence and Diligence. Competence and diligence are prerequisites for the due
performance of judicial office. Judges shall take reasonable steps to maintain and enhance their knowledge,
skills and personal qualities necessary for the proper performance of judicial duties.

XV

Jon served as Chief Executive Officer (CEO) of PBB Cars, Inc. (PRR) family-owned corporation engaged in
the buying and selling of second hand cars. Atty. Teresa renders legal services to PBB on a retainer basis In
2010, Jon engaged Atty. Teresa’s services for a personal case. Attu Teresa represented Jon in a BP. Big. 22
case filed against him by the spouses Yuki, Jon paid a separate legal fee for Atty. Teresa’s services, Jon
subsequently resigned as CEO of PBB in 2011. In 2012, Atty. Teresa filed on behalf of PBB a complaint for
replevin and damages against Jon to recover the car PBB had assigned to him as a service vehicle. Atty.
Teresa, however, had not yet withdrawn as Jon’s counsel of record in the BP Big. 22 case, which was still then
pending. jon filed an administrative case for disbarment against Atty. Teresa for representing conflicting
interests and violating the Code of Professional Responsibility. Atty. Teresa countered that since the BP Big.
22 case and the replevin case are unrelated and involved different issues, parties, and subject matters, there
was no conflict of interest and she acted within the bounds of legal ethics.
Is Atty. Teresa’s contention tenable? Explain. (3%)

SUGGESTED ANSWER

The Supreme Court has adopted the following tests for determining conflict of interest.
(1) Whether a lawyer is duty bound to fight for an issue or claim in behalf of one client, and at the same time,
to oppose that claim for another client.

(2) Whether the acceptance of a new relation would prevent the full discharge of his duty of undivided loyalty
to his client.
(3) Whether the acceptance of a new relation would invite suspicion of unfaithfulness or double-dealing in
the performance of his duty of fidelity and loyalty.
(4) Whether in the acceptance of the new relation, he would be called upon to injure his former client on a
UP LAW CENTER – BAR 2015 Q & A

matter that he has handled for him, or require him to reveal information that his former client has given to
him.

Although the case for replevin filed by Atty. Teresa against Jon is different from the BP Big. 22 case she was
handling for him, the pendency of the two cases at the same time is likely to invite suspicion of unfaithfulness
or double-dealing in the performance of her duty and fidelity to Jon Teresa’s contention is, therefore, not
tenable.

XVI

Atty. Luna Tek maintains an account in the social media network calls Twitter and has 1,000 followers there,
including fellow lawyers and some clients. Her Twitter account is public so even her non-followers could see
and read her posts, which are called tweets. She oftentimes takes to Twitter to vent about her daily sources of
stress like traffic or to comment about current events. She also tweets her disagreement and disgust with the
decisions of the Supreme Court by insulting and blatantly cursing the individual Justices and the Court as an
institution.

(A) Does Atty. Luna Tek act in a manner consistent with the Code of Professional Responsibility? Explain
the reasons for your answer. (3%)

(B) Describe the relationship between a lawyer and the courts. (3%)

SUGGESTED ANSWER

(A) Atty. Luna Tek did not act in a manner consistent with the Code of Professional Responsibility (CPR).
Canon 11 of the Code provides that “a lawyer shall observe and maintain the respect due to the courts and to
judicial officers and should insist on similar conduct with others”. As an officer of the court, a lawyer should
set the example in maintaining a respectful attitude towards the court. Moreover, he should abstain from
offensive language in criticizing the courts. Atty. Luna Tek violated this rule in insulting and blatantly cursing
the individual Justices and the Supreme Court in her tweets. Lawyers are expected to carry their ethical
responsibilities with them in cyberspace (Lorenzana V. Judge Ma. Cecilia L. Austria, A.M. No. RTJ-09-2200,
April 2, 2014).

(B) A lawyer is an officer of the court. As such, he is as much a part of the machinery of justice as a judge is.
The judge depends on the lawyer for the proper performance of his judicial duties. Thus, Canon 10 enjoins a
lawyer to be candid with the courts; Canon 11 requires him to show respect to judicial officers; and Canon 12
urges him to exert every effort and consider it his duty to assist in the speedy and efficient administration of
justice.”

XVII

Give three instances when a lawyer is allowed to withdraw bis/her services. (3%)

SUGGESTED ANSWER
UP LAW CENTER – BAR 2015 Q & A

(Any three of the following)

1. When the client pursues an illegal or immoral course of conduct in connection with the matter he is
handling;
2. When the client insists that the lawyer pursue conduct violative of these canons and rules;
3. When his inability to work with co-counsel will not promote the best interest of the client;
4. When the mental or physical condition of the lawyer renders it difficult for him to carry out the
employment effectively;
5. When the client deliberately fails to pay the fees for the services or fails to comply with the retainer
agreement;
6. When the lawyer is elected or appointed to a public office.
7. Other similar cases.

XVIII

Atty. Javier sold a piece of land in favor of Gregorio for P 2,000,000.00. Atty. Javier drafted the Deed of Sale
with Right to Repurchase which he and Gregorio signed on August 12, 2002. Under said Deed, Atty. Javier
represented that he had”the perfect right to dispose as owner in fee simple” the land and that the land is “free
from all liens and encumbrances. The Dec also stated that Atty. Javier had two years within which to
repurchase is property. Atty. Javier turned over the owner’s copy of his certificate of title, TCT No. 12121, to
Gregorio. Gregorio then immediately took possession of the land.

Atty. Javier failed to exercise his right to repurchase within two years. Gregorio sent Atty. Javier a letter dated
April 8, 2005 demanding that the latter already repurchase the property. Despite receipt of Gregorio’s letter,
Atty. Javier still failed to repurchase the property. Gregorio remained in peaceful possession of the land until
July 25, 2013, when he received notice from Trustworthy Bank informing him that the land was mortgaged to
said bank, that the bank already foreclosed on the land, and that Gregorio should therefore vacate the land.
Upon investigation, Gregorio discovered that Atty. Javier’s TCT No. 12121 had already been cancelled when
another bank foreclosed on a previous mortgage on the land, but after a series of transactions, Atty. Javier
was able to reacquire the land and secure TCT No 34343 for the same. With TCT No. 34343, Atty. Javier
constituted another mortgage on the land in favor of Trustworthy Bank on February 22, 2002. Gregorio was
subsequently dispossessed of the property. Gregorio filed an administrative complaint against Atty. Javier. In
his defense, Atty. Javier argued that he could not be held administratively liable as there was no attorney-
client relationship between him and Gregorio. Moreover, the transaction was not actually one of sale with
right to repurchase, but one of equitable mortgage, wherein he still had the legal right to mortgage the land to
other persons.

(A) If you are tasked to investigate and report on Gregorio’s administrative complaint against Atty. Javier,
what will be your recommendation and finding? (3%)

(B) in the same administrative case, may Atty. Javier be ordered to return the P2,000,000.00 purchase price to
Gregorio? Explain. (3%)

SUGGESTED ANSWER

(A) In the case of Saladagay. Atty. Arturo Astorga (A.C. No. 4697, November 25, 2014), involving the same
facts, the Supreme Court found that:
UP LAW CENTER – BAR 2015 Q & A

“Respondent dealt with complainant with bad faith, falsehood, and deceit when he entered into the “Deed of
Sale with Right to Repurchase” dated December 2, 1981 with the latter. He made it appear that the property
was covered by TCT No. T-662 under his name, even giving complainant the owner’s copy of the said
certificate of title, when the truth is that the said TCT had already been cancelled some nine years earlier by
TCT No. T-3211 in the name of PNB. He did not even care to correct the wrong statement in the deed when
he was subsequently issued a new copy of TCT No. T-7235 on January 4, 1982, 21 days or barely a month
after the execution of the said deed. All told, respondent clearly committed an act of gross dishonesty and
deceit against complainant (Canon 1 and Rule 1.01 of the Code of Professional Responsibility)”.

Consequently, the Court held that:

“The actions of respondent in connection with the execution of the “Deed of Sale with Right to Repurchase”
clearly fall within the concept of unlawful, dishonest, and deceitful conduct. They violate Article 19 of the
Civil Code. They show a disregard for Section 63 of the Land Registration Act. They also reflect bad faith,
dishonesty, and deceit on respondent’s part. Thus, respondent deserves to be sanctioned.”
Following the said precedent, I will recommend that Atty. Javier be likewise sanctioned.
(B) However, Atty. Javier may not be ordered to return the P2,000,000.00 to Gregorio in the administrative
case. This is a civil liability which is best determined in a civil case. The sole issue in an administrative
proceeding is whether or not the respondent deserves to remain a member of the Bar (Concepcion and
Blesilda S. Concepcion v. Atty. Elmer A. Dela Rosa, A.C. No. 10681, February 3, 2015).

XIX

(A) What are the grounds for disbarment or suspension from office of an attorney? ( 4%)

(B) If Atty. Babala is also admitted as an attorney in a foreign jurisdiction, what is the effect of his disbarment
or suspension by a competent court or other disciplinary authority in said foreign jurisdiction to his
membership in the Philippine Bar? (2%)

SUGGESTED ANSWER

(A) Under Sec. 27, Rule 138, the grounds for suspension or disbarment of a lawyer are “any deceit,
malpractice or other gross misconduct in such office, grossly immoral conduct, or by reason of conviction of
a crime involving moral turpitude, or for any violation of the oath which he is required to take before
admission to practice, or for a willful disobedience appearing as an attorney for a party or to a cause without
authority to do so”. The practice of soliciting cases for the purposes of gain, either personally or through paid
agents or brokers constitutes malpractice.

(B) He may also be disbarred or suspended in the Philippines, if the

ground for his suspension or disbarment in a foreign jurisdiction is also a ground for suspension or
disbarment here. He is, however, still entitled to notice and hearing, and the decision of the foreign tribunal
will only be prima facie evidence of his guilt.

XX
UP LAW CENTER – BAR 2015 Q & A

Cecilio is one of the 12 heirs of his father Vicente, who owned an tural land located in Bohol. Cecilio filed a
complaint charging Judge Love Koto with abuse of discretion and authority for preparing and not a
document entitled “Extra-judicial Partition with Simultaneous Sale” executed by Cecilio’s mother Divina and
brother Jose. Jose signed on Deed on his own behalf and purportedly also on behalf of his brothers and
sisters, including Cecilio. Cecilio though alleged that in his Special Power of Attorney, he merely granted Jose
the authority to mortgage sald agricultural land but not to partition, much less to sell the same. Judge Koto
contended that in a municipality where a notary public is unavailable, a municipal judge is allowed to notarize
documents or deeds as ex officio notary public. He claimed that he acted in good faith and only wanted to
help. Did Judge Koto violate any rules? Discuss. (3%)

SUGGESTED ANSWER

Municipal Trial Court judges are notaries public ex oficio; however, they may notarize only such documents
as are related to their functions. The exception to this is that, in remote municipalities where there is no
notary public available, an MTC judge may notarize a private document provided that he shall state in his
certification the absence of a notary public in the municipality, and that the notarial fees should be paid to the
Municipal Treasurer. Assuming, nevertheless, that the exception applies in this case, Judge Koto should not
have notarized the “Extra-Judicial Partition with Simultaneous Deed of Sale” submitted to him for
notarization. This is because not all of the parties concerned signed and appeared before him. In the
particular case of Cecilio, his brother Jose signed for him purportedly on the basis of a Special Power of
Attorney. Judge Koto should have asked for the production of the Special Power of Attorney and determined
whether or not Cecilio indeed authorized Jose to sign the deed of partition and sale on his behalf.

XXI

Judge Junior attended the 50th birthday party of his fraternity brother, Atty. Vera. Also present at the party
was Atty. Rico who was Atty. Vera’s classmate way back in high school and who was handling Civil Case No.
5555 currently pending before Judge Junior’s court. Well-aware that Atty. Rico had a case before his sala,
Judge Junior still sat next to Atty. Rico at a table, and the two conversed with each other, and ate and drank
together throughout the night. Since Atty. Vera was a well-known personality, his birthday party was featured
in a magazine. The opposing party to Atty. Rico’s client in Civil Case No. 5555, while flipping through the
pages of the magazine, came upon the pictures of Judge Junior and Atty. Rico together at the party and used
said pictures as bases for instituting an administrative case against Judge Junior. Judge Junior, in his answer,
reasoned that he attended Atty. Vera’s party in his private capacity, that he had no control over who Atty.
Vera invited to the party, and that he and Atty. Rico never discussed Civil Case No. 5555 during the party.
Did Judge Junior commit an administrative infraction? Explain. (3%)

SUGGESTED ANSWER

Section 3, Canon 4 of the New Code of Conduct for the Philippine Judiciary provides that “judges shall, in
their personal relations with individual members of the legal profession who practice regularly in their court,
avoid situations which might reasonably give rise to the suspicion of favouritism or partiality.” The act of
Judge Junior in sitting next to Atty. Rico, a lawyer whom he knew had a case before his sala, and dining and
conversing with him throughout the night, violates the foregoing rule. It tends to give rise to suspicion of
partiality. It is improper conduct for which he may be reprimanded.
UP LAW CENTER – BAR 2015 Q & A

XXII

(A) Describe briefly the Mandatory Continuing Legal Education for a member of the Integrated Bar of the
Philippines and the purpose of the same. (2%)

(B) Name three parties exempted from the MCLE. (3%)

SUGGESTED ANSWER

(A) Mandatory Continuing Legal Education (MCLE) is a rule promulgated by the Supreme Court requiring all
lawyers, with a few exceptions, to earn 36 units of legal education every three (3) years. Its purpose is to
ensure that members of the bar keep abreast with law and juris: prudence, maintain the ethics of the
profession, and enhance the standards of the practice of law.

(B) Select three from the following:

a. President and Vice-President, Secretaries and Undersecretaries of Executive Departments;

b. Senators and Members of the House of Representatives;
c. Chief Justice and Associate Justices of the Supreme Court, incumbent and retired members of the judiciary,
incumbent members of the Judicial and Bar Council, incumbent court
lawyers covered by the Philippine Judicial Academy:
d. Chief State Counsel, Chief State Prosecutor, and Assistant Secretaries of the Department of Justice;
e. Solicitor General and Assistant Solicitor General;
f. Government Corporate Counsel, Deputy and Assistant Government Corporate Counsel;
g. Chairmen and Members of Constitutional Commissions;
h. The Ombudsman, over-all Deputy Ombudsman, Deputy Ombudsman and Special Prosecutor of the
Office of the Ombudsman;
I. Heads of government agencies exercising quasi-judicial functions;
j. Incumbent deans, bar reviewers and professors of law who have teaching experience for at least ten years in
accredited law schools;
K. The Chancellor, Vice-Chancellor and members of the Corps of Professors and Professorial Lecturers of
the Philippine Judicial Academy.

XXIII

Atty. Billy, a young associate in a medium-sized law firm, was in a rush to meet the deadline for filing his
appellant’s brief. He used the internet for legal research by typing keywords on his favorite search engine,
which led him to many websites containing text of Philippine jurisprudence. None on these sites was owned
or maintained by the Supreme Court. He found a case he believed to be directly applicable to his client’s
cause, so he copied the text of the decision from the blog of another law firm, and pasted the text to the
document he was working on. The formatting of the text he had copied was lost when he pasted it to the
document, and he could not distinguish anymore which portions were the actual findings or rulings of the
Supreme Court, and which were quoted portions from the other sources that were used in the body of the
decision. Since his deadline was fast approaching, he decided to just make it appear as if every word he
quoted was part of the ruling of the Court, thinking that it would not be discovered. Atty. Billy’s opponent,
UP LAW CENTER – BAR 2015 Q & A

Atty. Ally, a very conscientious former editor of her school’s law journal, noticed many discrepancies in Atty.
Billy’s supposed quotations from the Supreme Court decision when she read the text of the case from her
copy of the Philippine Reports. Atty. Billy failed to reproduce the punctuation marks and font sizes used by
the Court. Worse, he quoted the arguments of one party as presented in the case, which arguments happened
to be favorable to his position, and not the ruling or reasoning of the Court, but this distinction was not
apparent in his brief. Appalled, she filed a complaint against him.

(A) Did Atty. Billy fail in his duty as a lawyer? What rules did he violate, if any? (2%)

(B) How should lawyers quote a Supreme Court decision? (2%)

SUGGESTED ANSWER

(A) Atty. Billy has violated Canon 10, Rules 10.01 and 10.02 of the Code of Professional Responsibility (CPR)
which provide as follows:
CANON 10. A LAWYER OWES CANDOR, FAIRNESS AND GOOD FAITH TO THE COURT. Rule
10.01. A lawyer shall not do any falsehood, nor consent to the doing of any in court; nor shall he mislead or
allow the Court to be misled by any artifice. Rule 10.02. A lawyer shall not knowingly misquote or
misrepresent the contents of a paper, the language or the argument of opposing counsel, or the text of a
decision or authority, or knowingly cite a law a provision already rendered inoperative by repeal or
amendment, or assert as a fact that which has not been proved.

(B) They should be verbatim reproductions of the Supreme Court’s decisions, down to the last word and
punctuation mark (Insular Life Assurance Co., Ltd., Employees Association v. Insular Life Assurance Co.,
Ltd., G.R. No. L-25291, January 30, 1971, 37 SCRA 244).

XXIV

An anonymous letter addressed to the the Supreme Court was sent by one concerned citizen, complaining
against Judge Hambog, ing Judge of the RTC of Mahangin City, Branch 7. Malcolm X reported that Judge
Hambog is acting arrogantly in cours and inappropriate language; and embarrassing and insulting parties,
witnesses, and even lawyers appearing before him. Attached to the letter were pages from transcripts of
records in several cases heard before Judge Hambog, with Judge Hambog’s arrogant, abusive, inappropriate,
embarrassing and/or insulting remarks or comments highlighted.

(A) Will the Court take cognizance of the letter-complaint even coming from an anonymous source? Explain.
(2%)

(B) Describe briefly the procedure followed when giving due course to a complaint against an RTC judge.
(3%)

SUGGESTED ANSWER

(A) Yes. Section 1, Rule 140 of the Revised Rules of Court provides that proceedings for the discipline of
judges of regular and special courts, and Justices of the Court of Appeals and the Sandiganbayan, may be
instituted “upon an anonymous complaint, ‘supported by public records of indubitable integrity”.
UP LAW CENTER – BAR 2015 Q & A

(B) If the complaint is sufficient in form and substance, a copy thereof shall be sent to the respondent, and he
shall be required to comment within 10 days from date of service. Upon the filing of the respondent’s
comment, the Supreme Court shall refer the matter to the Office of the Court Administrator for evaluation,
report and recommendation, or assign the case to a Justice of the Court of Appeals, for investigation, report
and recommendation. The investigating Justice shall set a date for the hearing and notify the parties thereof,
and they may present evidence, oral or documentary, at such hearing. The investigating Justice shall terminate
the investigation within 90 days from its commencement, and submit his report and recommendation to the
Supreme Court within 30 days from the termination of the investigation. The Supreme Court shall take action
on the report as the facts and the law may warrant (Rule 140).