2012 Bar Exam in Mercantile Law

2012 BAR EXAMINATIONS MERCANTILE LAW 21 October 2012 8:00 A.M. - 10 A.M. Set A MULTIPLE CHOICE QUESTIONS (MCQs) INSTRUCTIONS The following questionnaire consists of one hundred (100) MCQs numbered 1 up to 100 contained in TWENTY FOUR (24) pages. Answer each question on the MCQ Answer Sheet by shading completely the appropriate circle corresponding to the letter you have chosen. (Read the Marking Instructions on the Answer Sheet) A void erasures on the Answer Sheet. If you need to make corrections, erase completely the answer you want to change. Do not explain your answers in the MCQ portion of the exam. You will not earn any credit for that. Keep the Answer Sheet clean. Do not make unnecessary marks on it. Do not fold, roll, scratch, crumple or tear it. You may write on the questionnaire and use it as scratch paper but make sure to transfer your answer to the Answer Sheet. Provide ample time to transfer the answers if you choose to do this. Answer first the MCQs completely before going to the essay-type questions. HAND IN YOUR ANSWER SHEET. THERE IS NO NEED TO RETURN THIS QUESTIONNAIRE TO THE HEAD WATCHER. GOODLUCK!!! _____________________________________ MARTIN S. VILLARAMA, JR. Chairperson 2012 Bar Examinations Committee PLEASE CHECK THAT THIS SET CONTAINS TWENTY FIVE (25) PAGES (INCLUDING THIS PAGE). WARNING: NOT FOR SALE OR UNAUTHORIZED USE

MERCANTILE LAW
1. Letters of Credit are financial devices in commercial transactions which will ensure that the seller of the goods is sure to be paid when he parts with the goods and the buyer of the goods gets control of the goods upon payment. Which statement is most accurate? a. The use of the Letter of Credit serves to reduce the risk of nonpayment of the purchase price in a sale transaction. b. The Letters of Credit can only be used exclusively in a sales transaction. c. The Letters of Credit are issued for the benefit of the seller only. d. (a), (b) and (c) are all correct. 2. Letter of Credit which is used in non-sale transaction, where it serves to reduce the risk of non-performance is called a. irrevocable letter of credit; b. standby letter of credit; c. confirmed letter of credit; d. None of the above. 3. At the instance of CCC Corporation, AAA Bank issued an irrevocable Letter of Credit in favor of BBB Corporation. The terms of the irrevocable Letter of Credit state that the beneficiary must presfmt certain documents including a copy of the Bill of Lading of the importation for the bank to release the funds. BBB Corporation could not find the original copy of the Bill of Lading so it instead presented to the bank a xerox copy of the Bill of Lading. Would you advise the bank to allow the drawdown on theLetter of Credit?

a. No, because the rule of strict compliance in commercial transactions involving letters of credit, requiring documents set as conditions for the release of the fund ,has to be strictly corn plied with or else funds will not be released. b. Yes, because an irrevocable letter of credit means that the issuing bank undertakes to release the fund anytime when claimed by the beneficiary, regardless of the kind of document presented. c. Yes, because the issuing bank can always justify to CCC Corporation that xerox copies are considered as faithful reproduction of the original copies. d. Yes, because the issuing bank really has no discretion to determine whether the documents presented by the beneficiary are sufficient or not. 4. AAA Carmakers opened an irrevocable Letter of Credit with BBB Banking Corporation with CCC Cars Corporation as beneficiary. The, irrevocable Letter of Credit was opened to pay for the importation of ten (1 0) units of Mercedes Benz S class. Upon arrival of the cars, AAA Carmakers found out that the cars were all not in running condition and some parts were missing. As a consequence, AAA Carmakers instructed BBB Banking Corporation not to allow drawdown on the Letter of Credit. Is this legally possible? a. No, because under the "Independence Principle", conditions for the drawdown on the Letters of Credit are based only on documents, like shipping documents, and not with the condition of the goods subject of the importation. b. Yes, because the acceptance by the importer of the goods subject of importation is material for the drawdown of the Letter of Credit. c. Yes, because under the "Independence Principle", the seller or the beneficiary is always assured of prompt payment if there is no breach in the contract between the seller and the buyer. d. No, because what was opened was an irrevocable letter of credit and not a confirmed letter of credit. 5. For a fee, X deposited 1,000 sacks of corn in the warehouse owned by Y. Y is in the business of warehousing. Y issued a warehouse receipt as proof of the possession of the 1,000 sacks of corn. The warehouse receipt states as follows: "Deliver to X or bearer 1,000 sacks of corn." X wanted to use the warehouse receipt as payment of his debt in favor of Z. How can the ownership of the goods covered by the warehouse receipt be transferred? a. Negotiate the warehouse receipt by just delivering the warehouse receipt to Z. b. Assign the warehouse receipt to Z to transfer ownership of the goods. c. Negotiate the warehouse receipt by specifically indorsing it to Z. d. The warehouse receipt in this case is non-negotiable. 6. The warehouseman, by issuing the warehouse receipt, acknowledges that the goods are in his possession, but he can refuse to deliver the goods to the holder of the warehouse receipt covering the goods if a. the warehouse receipt covering the goods is not presented. b. the lien of the warehouseman is not satisfied. c. the said holder presents a materially altered warehouse receipt. d. All of the above. 7. The legal remedy of the warehouseman in case of conflicting claims is to --a. file an action for interpleader. b. give the goods to the first one who first presented the warehouse receipt. c. use his discretion as to who he believes has the prior right. d. keep the goods and appropriate them to himself. 8. BBB Banking Corporation issued a Letter of Credit in the amount of P5Million, for the purchase of five (5) tons of corn by X. Upon arrival of the goods, the goods were delivered to the

warehouse of X. Thereafter he was asked to sign a Trust Receipt covering the goods. When the goods were sold, X did not deliver the proceeds to BBB Banking Corporation, arguing that he will need the fund for the subsequent importation. Is there sufficient basis to sue for criminal action? a. Yes, because X's failure to turn over the proceeds to the bank is a violation of the Trust Receipt Law. b. No, because the trust receipt was signed only after the delivery of the goods. When the trust receipt was signed, the ownership of the goods was already with X. c. Yes, because violation of Trust Receipt Law is mala prohibita, intention is irrelevant. d. No, because X has a valid reason not to deliver the proceeds to BBB Banking Corporation. 9. X secured a loan from BBB Bank to pay for the importation of some dried fruits. Upon arrival of the goods consisting of dried fruits imported by X but before delivery to him, a trust receipt was executed by X to cover the transfer of the dried fruits to his possession. The dried fruits were so saleable but instead of turning over the proceeds of the sale, X used the funds to pay for the medical expenses of his mother who was sick of cancer of the bone. Which statement is most accurate? a. X cannot be held criminally liable because although he did not pay the bank he used the proceeds for a good reason. b. Fraud or deceit is a necessary element to hold X criminally liable for non -payment under the Trust Receipts Law. c. X can be held criminally liable under the Trust Receipts Law regardless of the purpose or intention for the use of the proceeds. d. X cannot be held criminally liable because the underlying obligation is one of simple loan. 10. X is the President of AAA Products Corporation. X signs all the Trust Receipts documents for certain importations of the company. In the event of failure to deliver the proceeds of the sale of the goods to the bank, which statement is most accurate? a. The criminal liability will not attach to X as President because of separate juridical personality. b. For violation of Trust Receipts Law, the law specifically provides for the imposition of penalty upon directors I officers of the corporation. c. The officer will not be held criminally accountable because he is just signing the trust receipt for and in behalf of the corporation. d. The officer of the corporation will be held liable provided it is clear that the officer concerned participated in the decision not to pay. 11. Who is the Entrustee in a Trust Receipt arrangement? a. the owner of the goods; b. the one who holds the goods and receives the proceeds from the sale of the goods; c. the person to whom goods are delivered for sale and who bears the risk of the loss; d. the party who acquires security interest in the goods. 12. Which phrase best completes the statement - In accordance with the Trust Receipt Law, purchasers of the goods from the Entrustee will: a. get the goods only as a collateral; b. not get good title to the goods; c. only get security interest over the goods; d. get good title to the goods. 13. X acted as an accommodation party in signing as a maker of a promissory note. Which phrase best completes the sentence - This means that X is liable on the instrument to any holder for value:

a. for as long as the holder does not know that X is only an accommodation party. b. even though the holder knew all along that X is only an accommodation party. c. for as long as X did not receive any consideration for acting as accommodation party. d. provided X received consideration for acting as accommodation party. 14. X issued a promissory note which states, "I promise to pay Y or order Php100,000.00 or one (1) unit Volvo Sedan." Which statement is most accurate? a. The promissory note is negotiable because the forms of payment are clearly stated. b. The promissory note is non-negotiable because the option as to which form of payment is with the maker. c. The promissory note is an invalid instrument because there is more than one form of payment. d. The promissory note can be negotiated by way of delivery. 15. X issued a promissory note which states "I promise to pay Y or bearer the amount of HK$50,000 on or before December 30, 2013." Is the promissory note negotiable? a. No, the promissory note becomes invalid because the amount is in foreign currency. b. Yes, the promissory note is negotiable even though the amount is stated in foreign currency. c. No, the promissory note is not negotiable because the amount is in foreign currency. d. Yes, the promissory note is negotiable because the Hong Kong dollar is a known foreign currency in the Philippines. 16. X delivered a check issued by him and payable to the order of CASH to Y in payment for certain obligations incurred by X in favor of Y. Y then delivered the check to Z in payment for certain obligations. Which statement is most accurate? a. Z can encash the check even though Y did not indorse the check. b. Z cannot encash the check for lacking in proper endorsement. c. Y is the only one liable because he was the one who delivered the check to Z. d. The negotiation is not valid because the check is an instrument payable to order. 17. A stale check is a check a. that cannot anymore be paid although the underlying obligation still exists. b. that cannot anymore be paid and the underlying obligation under the check is also extinguished. c. that can still be negotiated or indorsed so that whoever is the holder can d. which has not been presented for payment within a period of thirty (30) days. 18. In payment for his debt in favor of X, Y gave X a Manager's Check in the amount of Php100,000 dated May 30, 2012. Which phrase best completes the statement - A Manager's Check: a. is a check issued by a manager of a bank for his own account. b. is a check issued by a manager of a bank in the name of the bank against the bank itself for the account of the bank. c. is like any ordinary check that needs to be presented for payment also. d. is better than a cashier's check in terms of use and effect. 19. Which phrase best completes the statement -- A check which is payable to bearer is a bearer instrument and: a. negotiation can be made by delivery only; b. negotiation must be by written indorsement; c. negotiation must be by specific indorsement;

d. negotiation must be by indorsement and delivery. 20. As payment for a debt, X issued a promissory note in favor of Y but the promissory note on its face was marked non-negotiable. Then Y instead of indorsing the promissory note, assigned the same in favor of Z to whom he owed some debt also. Which statement is most accurate? a. Z cannot claim payment from X on the basis of the promissory note because it is marked non-negotiable. b. Z can claim payment from X even though it is marked non-negotiable. c. Z can claim payment from Y because under the Negotiable Instrument Law, negotiation and assignment is one and the same. d. Z can claim payment from Y only because he was the endorser of the promissory note. 21. Negotiable instruments are used as substitutes for money, which means a. that they can be considered legal tender. b. that when negotiated, they can be used to pay indebtedness. c. that at all times the delivery of the instrument is equivalent to delivery of the cash. d. that at all times negotiation of the instruments requires proper indorsement. 22. The signature of X was forged as drawer of a check. The check was deposited in the account of Y and when deposited was accepted by AAA Bank, the drawee bank. Subsequently, AAA Bank found out that the signature of X was actually forged. Which statement is most accurate? a. The drawee bank can recover from Y, because the check was deposited in his account. b. The drawee bank can recover from X, because he is the drawer even though his signature was forged. c. The drawee bank is estopped from denying the genuineness of the signature of the X, the drawer of the check. d. The drawee bank can recover from Y because as endorser he warrants the genuineness of the signature. 23. A issued a check in the amount of Php20,000 payable to B. B endorsed the check but only to the extent of Php1 0,000. Which statement is most accurate? a. The partial indorsement is not a valid indorsement, although will result in the assignment of that part. b. The partial indorsement will invalidate the whole instrument. c. The endorsee will be considered as a holder in due course. d. The partial indorsement is valid indorsement up to the extent of the Php10,000. 24. A promissory note which does not have the words "or order" or "or bearer" will render the promissory note non-negotiable, and therefore a. it will render the maker not liable; b. the note can still be assigned and the maker made liable; c. the holder can become holder in due course; d. the promissory note can just be delivered and the maker will still be liable. 25. A check is a. a bill of exchange; b. the same as a promissory note; c. is drawn by a maker; d. a non-negotiable instrument. 26. A check was issued to Tiger Woods. But what was written as payee is the word "Tiger Woods". To validly endorse the check -

a. Tiger Woods must sign his real name. b. Tiger Woods must sign both his real name and assumed name. c. Tiger Woods can sign his assumed name. d. the check has become non-negotiable. 27. Y, as President of and in behalf of AAA Corporation, as a way to accommodate X, one of its stockholders, endorsed the check issued by X. Which statement is most acurate? a. It is an ultra vires act. b. It is a valid indorsement. c. The corporation will be held liable to any holder in due course. d. It is an invalid indorsement. 28. In a negotiable instrument, when the sum is expressed both in numbers and in words and there is discrepancy between the words and the numbers a. the sum expressed in words will prevail over the one expressed in numbers. b. the sum expressed in numbers will prevail over the one expressed in words. c. the instrument becomes void because of the discrepancy. d. this will render the instrument invalid. 29. A promissory note which is undated is presumed to be a. dated as of the date of issue; b. dated as of the date of the first indorsement; c. promissory note is invalid because there is no date; d. dated on due date. 30. An insurance contract is an aleatory contract, which means that a. the insurer will pay the insured equivalent to the amount of the premium paid. b. the obligation of the insurer is to pay depending upon the happening of an uncertain future event. c. the insured pays a fixed premium for the duration of the policy period and the amount of the premiums paid to the insurer is not necessarily the same amount as what the insured will get upon the happening of an uncertain future event. d. the obligation of the insurer is to pay depending upon the happening of an event that is certain to happen. 31. An Insurance Contract is a contract of adhesion, which means that in resolving ambiguities in the provision of the insurance contract, a. the general rule is that, the insurance contract is to be interpreted strictly in accordance with what is written in the contract. b. are to be construed liberally in favor of the insured and strictly against the insurer who drafted the insurance policy. c. are to be construed strictly against the insured and liberally in favor of the insurer. d. if there is an ambiguity in the insurance contract, this will invalidate the contract. 32. X is the common law wife of Y. Y loves X so much that he took out a life insurance on his own life and made her the sole beneficiary. Y did this to ensure that X will be financially comfortable when he is gone. Upon the death of Y, a. X as sole beneficiary under the life insurance policy on the life of Y will be entitled to the proceeds of the life insurance. b. despite the designation of X as the sole beneficiary, the proceeds of the life insurance will go to the estate of Y. c. the proceeds of the life insurance will go to the compulsory heirs of Y.

d. the proceeds of the life insurance will be divided equally amongst X and the compulsory heirs of Y. 33. X, in January 30, 2009, or two (2) years before reaching the age of 65, insured his life for Php20Million. For reason unknown to his family, he took his own life two (2) days after his 65th birthday. The policy contains no excepted risk. Which statement is most accurate? a. The insurer will be liable. b. The insurer will not be liable. c. The state of sanity of the insured is relevant in cases of suicide in order to hold the insurer liable. d. The state of sanity of the insured is irrelevant in cases of suicide in order to hold the insurer liable. 34. X, a minor, contracted an insurance on his own life. Which statement is most accurate? a. The life insurance policy is void ab initio. b. The life insurance is valid provided it is with the consent of the beneficiary. c. The life insurance policy is valid provided the beneficiary is his estate or his parents, or spouse or child. d. The life insurance is valid provided the disposition of the proceeds will be subject to the approval of the legal guardian of the minor. 35. The "incontestability clause" in a Life Insurance Policy means --a. that life insurance proceeds cannot be claimed two (2) years after the death of the insured. b. that two (2) years after date of issuance or reinstatement of the life insurance policy, the insurer cannot anymore prove that the policy is void ab initio or rescindable by reason of fraudulent concealment or misrepresentation of the insured. c. that the insured can still claim from the insurance policy after two (2) years even though premium is not paid. d. that the insured can only claim proceeds in a life insurance policy two (2) years after death. 36. For both the Life Insurance and Property Insurance, the insurable interest is required to be a. existing at the time of perfection of the contract and at the time of loss. b. existing at the time of perfection and at the time of loss for property insurance but only at the time of perfection for life insurance. c. existing at the time of perfection for property insurance but for life insurance both at the time of perfection and at the time of loss. d. existing at the time of perfection only. 37. A house and lot is covered by a real estate mortgage (REM) in favor of ZZZ Bank. The bank required that the house be insured. The owner of the policy failed to endorse nor assign the policy to the bank. However, the Deed of Real Estate Mortgage has an express provision which says that the insurance policy is also endorsed with the signing of the REM. Will this be sufficient? a. . No, insurance policy must be expressly endorsed to the bank so that the bank will have a right in the proceeds of such insurance in the event of loss. b. The express provision contained in the Deed of Real Estate Mortgage to the effect that the policy is also endorsed is sufficient. c. Endorsement of Insurance Policy in any form is not legally allowed. d. Endorsement of the Insurance Policy must be in a formal document to be valid. 38. X is a passenger of a jeepney for hire being driven by Y. The jeepney collided with another passenger jeepney being driven by Z who was driving recklessly. As a result of the collision, X suffered injuries. Both passenger jeepneys are covered by Comprehensive Motor Vehicular Insurance Coverage. If X wants to claim under the "no fault indemnity clause", his claim will lie -

a. against the insurer of the jeepney being driven by Z who was the one at fault. b. the claim shall lie against the insurer of the passenger jeepney driven by Y because X was his passenger. c. X has a choice against whom he wants to make his claim. d. None of the above. 39. X insured the building she owns with two (2) insurance companies for the same amount. In case of damage, a. X can not claim from any of the two (2) insurers because with the double insurance, the insurance coverage becomes automatically void. b. the two (2) insurers will be solidarily liable to the extent of the loss. c. the two (2) insurers will be proportionately liable. d. X can choose who he wants to claim against. 40. When X insured his building, X indicated in the application that it is a residential building, but actually the building was being used as a warehouse for some hazardous materials. What is the effect on the insurance policy, i f any? a. The insurance policy can be cancelled because of the change in the use. b. The insurance policy will automatically be changed. c. The insurance policy need not be changed. d. The insurance policy is fixed regardless of the change in the use. 41. X owned a house and lot. X insured the house. The house got burned. Then he sold the partially burnt house and the lot to Y. Which statement is most accurate? a. X is not anymore entitled to the proceeds of the insurance policy because he already sold the partially burnt house and lot. b. X is still entitled to the proceeds of the insurance policy because what is material is that at the time of the loss, X is the owner of the house and lot. c. No one is entitled to the proceeds because ownership over the house and lot was already transferred. d. Y will be the one entitled to the proceeds because he now owns the partially burnt house and lot. 42. X, while driving his Toyota Altis, tried to cross the railway tract of Philippine (xxx line 2 unread text xxx) approached Blumentritt Avenida Ext., applied its horn as a warning to all the vehicles that might be crossing the railway tract, but there was really nobody manning the crossing. X was listening to his lpod touch, hence, he did not hear the sound of the horn of the train and so his car was hit by the train. As a result of the accident, X suffered some injuries and his car was totally destroyed as a result of the impact. Is PNR liable? a. PNR is not liable because X should have known that he was crossing a place designated as crossing for train, and therefore should have been more careful. b. PNR is liable because Railroad companies owe to the public a duty of exercising a reasonable degree of care to avoid injury to person and property at railroad crossings which means a flagman or a watchman should have been posted to warn the public at all times. c. PNR is not liable because it blew its horn when it was about to cross the railway along Blumentritt Avenida Ext. d. PNR is not liable because X was negligent, for listening to his lpod touch while driving. 43. The AAA Bus Company picks up passengers along EDSA. X, the conductor, while on board the bus, drew his gun and randomly shot the passengers inside. As a result, Y, a passenger, was shot and died instantly. Is AAA Bus Company liable? a. The bus company is not liable for as long as the bus company can show that when they hired X, they did the right selection process.

b. The bus company cannot be held liable because what X did is not part of his responsrbility. c. The bus company is liable because common carriers are liable for the negligence or willful act of its employees even though they acted beyond the scope of their responsibility. d. The bus company is not liable because there is no way that the bus company can anticipate the act of X. 44. X is a trader of school supplies in Calapan, Oriental Mindoro. To bring the school supplies to Calapan, it has to be transported by a vessel. Because there were so many passengers, the two (2) boxes of school supplies were loaded but the shipping company was not able to issue the Bill of Lading. So, on board, the Ship Captain issued instead a "shipping receipt" to X indicating the two (2) boxes of school supplies being part of the cargo of the vessel. Which phrase therefore, is the most accurate? a. the owner of the vessel is not liable because no bill of lading was issued to X hence, no contract of carriage was perfected. b. it is possible to have a contract of carriage of cargo even without a bill of lading, and the "shipping receipt" would be sufficient. c. the only acceptable document of title is a Bill of Lading. d. None of the above. 45. X took Philippine Airlines Flight PR 102 to Los Angeles, USA. She had two (2) luggage checked-in and was issued two (2) baggage checks. When X reached Los Angeles one (1) of the two (2) checked in luggage could not be found. Which statement is most accurate? a. PAL is liable for the loss of the checked- in luggage under the provisions of the Warsaw Convention on Air Transport. b. PAL is liable for the loss only if the baggage check expressly states that the airline shall be liable in case of loss. c. PAL cannot be held liable because that is the risk that a passenger takes when she checks- in her baggage. d. PAL can only be held liable if it can be proven that PAL was negligent. 46. X owns a passenger jeepney covered by Certificate of Public Convenience. He allowed Y to use its Certificate of Convenience for a consideration. Y therefore was operating the passenger jeepney under the same Certificate of Public Convenience (Kabit System) under the name of X. The passenger jeepney met an accident. Who will be liable? a. Y, the one actually operating the jeepney, will be liable to the injured party. b. X will be the one liable to the injured party despite the fact that it is Y who is actually operating the jeepney, because while the Kabit System is tolerated, the public should not be inconvenienced by the arrangement. c. X will not be held liable if he can prove that he is not the owner anymore. d. Public Policy dictates that the real owner, even not the registered one, will be held liable. 47. X owns a fleet of taxicabs. He operates it through what is known as boundary system. Y drives one of such taxicabs and pays X a fixed amount of Php1 ,000 daily under the boundary system. This means that anything above Php1 ,000 would be the earnings of Y. Y, driving recklessly, hit an old lady crossing the street. Which statement is most accurate? a. X as the owner is exempt from liability because he was not the one driving. b. X as the owner is exempt from liability because precisely the arrangement is one under the "boundary system". c. X will not be exempt from liability because he remains to be the registered owner and the boundary system will not allow the circumvention of the law to avoid liability. d. Y is the only one liable because he drove recklessly.

48. The Articles of Incorporation of AAA Corporation was approved by the Securities and Exchange Commission (SEC). After the receipt of the Certificate of Approval from the SEC, AAA Corporation decided to immediately start the operation of its business despite the fact that it has no approved By-Laws. What is the legal status of the AAA Corporation? a. A de jure corporation; b. A de facto corporation; c. A corporation by estoppel; d. An unregistered corporation. 49. X, the President of ZZZ Corporation, was authorized by the Board of Directors of ZZZ Corporation to obtain a loan from YYY Bank and to sign documents in behalf of the corporation. X personally negotiated for the loan and got tile loan at very low interest rates. Upon maturity of the loan, ZZZ Corporation was unable to pay. Which statement is most accurate? a. Because X was personally acting in behalf of the Corporation, he can be held personally liable. b. X, as President, cannot be personally held liable for the obligation of the corporation even though he signed all the loan documents, because the loan was authorized by the Board. c. YYY Bank can choose as to who it wants to hold liable for the loan. d. If ZZZ Corporation cannot pay, X can be held subsidiarity liable. 50. X owns 99% of the capital stock of SSS Corporation. X also owns 99% of TTT Corporation. SSS Corporation obtained a loan from VW Bank. On due date, SSS Corporation defaulted. TTT Corporation is financiallyhealthy. Which statement is most accurate? a. X being a controlling owner of SSS Corporation can automatically be held personally liable for the loan of SSS Corporation. b. TTT Corporation, owned 99% by X, can automatically be held liable. c. SSS Corporation and TTT Corporation, although both are owned by X, are two (2) distinct corporations with separate juridical personalities hence, the TTT Corporation cannot automatically be held liable for the loan of SSS Corporation. d. The principle of piercing the veil of corporate fiction can be applied in this case. 51. A corporation generally can issue both par value stock and no par value stock. These are all fixed in the Articles of Incorporation of the corporation. Which of the following corporations may not be allowed to issue no par value shares? a. Insurance companies; b. Banks; c. Trust companies; d. All of the above. 52. Father X, an American priest who came from New York, registered the Diocese of Bacolod of the Roman Catholic Church which was incorporated as a corporation sole. There were years when the head of the Diocese was a Filipino, but there were more years when the heads were foreigners. Today, the head is an American again. Y donated a piece of land located in Bacolod City for use as a school. Which statement is most accurate? a. The Register of Deeds of Bacolod City can refuse to register and transfer the title because the present head of the corporation sole is not a Filipino. b. The nationality of a corporation sole depends upon the nationality of the head at any given time. c. A corporation sole, regardless of the nationality of the head, can acquire real property either by sale or donation. d. A corporation sole is not legally allowed to own real property.

53. The number of the Board of Trustees of a non-stock, non-profit educational institution should be --a. five (5) only b. any number for as long as it is not less than five (5) and no more than eleven (11) c. any number in multiples of five (5), for as long as it is not less than five (5) and no more than fifteen (15). d. not less than five (5) nor more than ten (1 0) in multiples of five (5). 54. X subscribed 10,000 shares in the capital stocks of AAA Corporation. He paid 50% of the 10,000 shares. X asked the Corporate Secretary to issue him the corresponding stock certificate representing the 50% of what he already paid. The Corporate Secretary of the corporation refused. Was the Corporate Secretary correct? a. The Corporate Secretary is correct because the Corporation Code provides that no certificate of stock shall be issued to a subscriber until the shares as subscribed have been fully paid. b. The Corporate Secretary cannot refuse because a Stock Certificate can be issued corresponding to the percentage of shares which were paid. c. The Corporate Secretary cannot refuse because a Certificate of Stock can be issued provided it is indicated in the Certificate the actual percentage of what has been paid. d. The Corporate Secretary cannot refuse because it is his legal duty to issue a stock certificate corresponding to the number of shares actually subscribed regardless of the actual payment. 55. XXX Corporation and YYY Corporation have agreed to be merged into one corporation. To facilitate the merger, both corporations agreed that the merger be made effective on May 31,2012. The Securities and Exchange Commission (SEC) approved the Articles of Merger on June 30, 2012. Which statement is most accurate? a. The effective date of the merger is May 31, 2012, the date stipulated by the parties as the effective date. b. The effective date of the merger is always the date of the approval of the Articles of Merger by the SEC. c. The effective date of the merger would be the date approved by the Board of Directors and the stockholders. d. The stockholders and the Board of Directors can set the effective date of the merger anytime after the approval of the SEC. 56. AAA Corporation is a wholly owned subsidiary of BBB Corporation. To support the business of AAA Corporation, BBB Corporation agreed to give its corporate guarantee to the loan of AAA Corporation. What is required so that the corporate guarantee will be valid? a. It only requires the approval of the Board of Directors of BBB Corporation. b. The Articles of Incorporation must provide such power and be approved by the Board of Directors. c. Providing corporate guarantee to another corporation is a necessary exercise of power of a corporation. d. It would require both the approval of the Board of Directors and the stockholders on record. 57. The capital stock of ABC Corporation is divided into common shares and preferred shares. Preferred shares are preferred as to dividends and common shares are those shares which have the regular and ordinary attributes of a share of a corporation. Which statement is most accurate? a. This kind of classification may not be allowed or else it will violate the Doctrine of Equality of shares. b. Classifications of shares may be allowed for as long as it is clearly stated as such in the Articles of Incorporation of the Corporation.

c. Classifications of shares is mainly for business purpose to attract investors. d. Classifications of shares may be allowed with the approval of the stockholders and the Board of Directors. 58. ABC Corporation declared stock dividends to its stockholders. The stock dividends were approved by the Board of Directors of ABC Corporation. In the subsequent year however, the Board again approved the redemption of all stock dividends and to pay the shareholdings in cash. Which statement is most accurate? a. The redemption of the stock dividends can be validly approved by the Board without any conditions. b. The redemption of stock dividends may only be allowed if there are sufficient earnings and should not be violative of the trust fund doctrine. c. The redemption of the shares may be taken from the existing property and other assets of the corporation. d. None of the above. 59. X sold all his shares in AAA Hotel Corporation to Y. X owns 99% of AAA Hotel Corporation. As the new owner, Y wanted a reorganization of the hotel which is to include primarily the separation of all existing employees and the hiring of new employees. Which statement is most accurate? a. With the change in ownership, in effect there is a new juridical entity and therefore all employees are considered separated. b. Despite the change in shareholder, there is actually no change in the juridical entity and therefore existing employees can not automatically be considered separated. c. Y, as the new shareholder, has the right to retain only those employees who in his judgment are qualified. d. For as long as the existing employees are given their separation pay, they can be terminated. 60. South China Airlines is a foreign airline company. South China Airlines tickets are sold in the Philippines though Philippine Airlines as their general agent. South China Airlines is not registered to do business as such with the Philippine Securities and Exchange Commission. Which statement is most accurate? a. Although unlicensed to do business in the Philippines, South China Airlines can sue before the Philippine Courts and can also be sued. b. South China Airlines can sue but cannot be sued. c. South China Airlines cannot sue and cannot be sued also. d. South China Airlines can be sued in Philippine Courts but cannot sue. 61. So that ABC Corporation could venture into more projects, it needed to raise funds by issuing new shares to increase its capitalization. X, Y, Z, J and G are the five existing shareholders of the company. They hold 20% each. How will the additional shares be divided among the existing shareholders? a. The existing shareholders can subscribe to the new shares equivalent to their existing shareholdings because the Corporation Code provides that each of the existing stockholders will have preemptive rights to the extent of their existing shareholdings. b. The existing shareholders' preemptive rights is equivalent to the percentage that they want. c. Each of the existing shareholder can exercise their right of first refusal against each other. d. Preemptive rights and right of first refusal are one and the same. 62. If ABC Corporation will increase its authorized capital stock, the Corporation Code requires a. the approval of the majority of the Board of Directors only.

b. the approval of the majority of the stockholders and the Board of Directors. c. the approval of 2/3 of the shareholders of the outstanding capital stock as well as the approval of the Securities and Exchange Commission. d. the approval of the majority of the Board of Directors and approval of the shareholders holding 2/3 share of the outstanding capital stock. 63. X is a minority stockholder of CCC Corporation. Y is a member of the Board of Directors of CCC Corporation and at the same time he is the President. X believes that Y is mismanaging CCC Corporation hence, as a stockholder and in behalf of the other stockholders, he wanted to sue Y. Which statement is most accurate? a. X can institute a derivative suit in behalf of himself as a stockholder. b. A derivative suit must be instituted in behalf of the corporation. c. Derivative suit is an exclusive remedy that X can institute. d. Derivative suit is not the remedy in this situation. 64. The term GGG Corporation in accordance with its Articles of Incorporation ended last January 30, 2012. The term was not extended. What will happen to the corporation? a. The corporation is dissolved ipso facto. b. There is a need to pass a board resolution to formally dissolve the corporation. c. The Board of Directors must pass a resolution for the corporation to formally go into liquidation. d. The stockholders must pass a resolution to dissolve the corporation. 65. The term of one (1) year of the Board of Directors of AAA Corporation expired last February 15, 2012. No new election of the Board of Directors was called, hence, the existing members of Board continue as Directors in hold over capacity. Which statement is most accurate? a. This is allowed provided there is a valid and justifiable reason for not calling for an election of the new members of the Board. b. This is not allowed because the term of the directors must only be for one (1) year. c. The positions of the members of the Board of Directors will be automatically declared vacant. d. Acting as members of the Board of Directors in a hold over capacity must be ratified by the stockholders. 66. AAA Corporation is a foreign corporation that wants to operate a representative office here in the Philippines. As required by the Corporation Code, there is a need to appoint a Resident Agent as a condition precedent to the issuance of a license to transact business in the Philippines. After two (2) years, AAA Corporation removed its Resident Agent and did not appoint anyone anymore. Which statement is the most accurate? a. This can be a ground for revocation or suspension of its license to do business. b. There is no more effect in the license because anyway at the time of registration, a resident agent was appointed. c. This can be a ground for suspension only. d. This will result in automatic revocation of its license to do business in the Philippines. 67. The By-laws of ABC Corporation is silent as to when a stockholder can be qualified to attend the meeting of the stockholders. The Corporate Secretary sent out the notice of the stockholders meeting two (2) days before the meeting and at that time X was not yet a stockholder. On the day of the meeting, however, X became a shareholder which was duly recorded in the stock and transfer book. Which statement is most accurate? a. X is a stockholder of ABC Corporation as of the time of meeting of the stockholders for the purpose of electing the members of the board. b. X is not qualified to elect members of the board because at the time the notice of the meeting was sent, she was not yet a stockholder.

c. Qualifications as to who are considered as stockholders on record for purposes of being able to elect members of the board are to be determined by the By-laws alone. d. None of the above. 68. X, who is the Executive Vice President of ABC Corporation, a listed company, can be held liable or guilty of insider trading if, he a. bought shares of ABC Corporation when it was planning to acquire another company to improve its asset base, the news of which increased the price of the shares in the Stock Exchange. b. bought shares of XYC Corporation, a sister company of ABC Corporation when he learned that XYC Corporation was about to also list its share in the Philippine Stock Exchange. c. bought shares of ZZZ Corporation when he learned that ABC Corporation would acquire ZZZ Corporation. d. All of the above. 69. The purpose of the "Tender Offer" Rule is to a. ensure an even playing field for all shareholders of a company in terms of opportunity to sell their shareholdings. b. ensure that minority shareholders in a publicly listed company are protected in the sense that they will equally have the same opportunity as the majority shareholders in terms of selling their shares. c. ensure that the shareholders who would also want to sell their shareholdings will have the opportunity for a better price. d. All of the above. 70. Section 38 of The Securities Regulation Code defines an independent director as a person who must not have a relation with the corporation which would interfere with his exercise of independent judgment in carrying out the responsibilities of a director. To ensure independence therefore, he must be a. nominated and elected by the entire shareholders; b. nominated and elected by the minority shareholders; c. nominated and elected by the majority shareholders; d. appointed by the Board. 71. "Securities" issued to the public are required by law to be registered with a. the Bangko Sentral ng Pilipinas; b. the Philippine Stock Exchange; c. the Securities and Exchange Commission; d. the Securities and Exchange Commission and the Philippine Stock Exchange. 72. The government agency granted with the power of supervision and examination over banks and non-bank financial institutions performing quasi-banking functions, to ensure that the conduct of its business is on a sound financial basis that will provide continued solvency and liquidity is a. The Philippine Deposit Insurance Corporation; b. The Bangko Sentral ng Pilipinas; c. The Anti-Money Laundering Council; d. The Securities and Exchange Commission. 73. X maintains a savings deposit in the amount of Php1 Million with ABC Bank Corporation. X also has obtained a loan from ABC Bank Corporation in the amount of Php1 Million. In case of default, a. ABC Bank can set-off the loan from the savings account being maintained by X with ABC Bank.

b. Set-off is not possible because legal compensation is not allowed in banking transaction. c. Deposit accounts are usually earmarked for specific purpose hence offsetting is not legally possible. d. Off -setting is not possible because the obligation of X is a "simple loan". 74. XYZ Corporation is engaged in lending funds to small vendors in various public markets. To fund the lending, XYZ Corporation raised funds through borrowings from friends and investors. Which statement is most accurate? a. XYZ Corporation is a bank. b. XYZ Corporation is a quasi-bank. c. XYZ Corporation is an Investment Company. d. XYZ is none of the above. 75. XXX Bank Corporation and ZZZ Corporation were merged into XX ZZ Bank Corporation. So as not to create any unnecessary conflict, all the former directors of both banks wanted to be appointed /elected as members of the Board of Directors of the merged bank. Each bank used to have eleven (11) members of the board. The maximum number of directors of the merged bank is a. 15; b. 22; c. 21; d. 11. 76. All senior officers of ABC Bank are entitled to obtain a housing loan. X is an Executive Vice President for Operations of ABC Bank. She obtained a housing loan with the ABC Bank. Which statement is most accurate? a. The housing loan of X requires a guarantor from somebody who is not connected with the bank. b. The housing loan of X requires the approval of the Board of Directors of the bank. c. The housing loan of X, being a benefit for employees, does not require (a) but will require (b). d. The housing loan of X, being a benefit for employees, will not require (a) and (b). 77. ABC Holdings Company, a Hong Kong company, owns 10% of XYZ Bank. Because of the peace and order situation in the Philippines, ABC Holding Company wanted to sell its shareholdings in XYZ Bank. Unfortunately, nobody is interested to buy a 1 0% shareholdings in a bank. The board of directors of XYZ Bank thought that it would be a good idea to buy back the shares owned by ABC Holding Company. Which statement is most acurate? a. Buying back the shares by XYZ Bank is absolutely not allowed. b. Buying back the shares may be allowed provided it is with the approval of the Monetary Board and disposed of within six (6) months. c. Buying back the shares may be allowed provided such shares 'will be disposed of within ten (1 0) years. d. Buying back the shares may be done anytime provided the Board of Directors will approve the same. 78. X is being charged for violation of Anti-Graft and Corrupt Practices because he is suspected of having accumulated unexplained wealth. X maintains deposit accounts with ABC Bank. The Ombudsman filed criminal cases against X before the Sandiganbayan. Can the Court issue subpoenas against ABC Bank to produce all documents pertaining to all the deposit accounts of X? a. Yes, because there is already a pending case and provided the subpoena must be specific as to which account. b. Yes, it is enough that the specific bank is identified.

c. No, because the issuance of the subpoena has no real legal basis. d. Even without a subpoena, information about the deposit accounts of X can be submitted to the Sandiganbayan because it will be used in a pending case. 79. X, a private individual, maintains a dollar deposit with ABC Bank. X is suspected to be the leader of a Kidnap for Ransom Gang and he is suspected of depositing all ransom money in said deposit account which are all in US Dollars. The police want to open said account to know if there are really deposits in big amounts. Which statement is most accurate? a. The same rules under Secrecy of Bank Deposit Act will apply. b. An approval from the Monetary Board is necessary to open the account. c. Because the deposit is in US Dollars, it is covered by the Foreign Currency Deposit Act which allows disclosure only upon the written persmission of the depositor. d. Approval from the Court is necessary to order disclosure of the account. 80. X is a depositor of AAA Bank. She has three (3) deposit accounts all under her name. One, in checking account, one in saving account and another one in time deposit account. Each account has a balance of Php250,000. AAA Bank became insolvent. Philippine Deposit Insurance Corporation closed the Bank. X therefore is unable to withdraw from all of the accounts. She then filed her claims with the Philippine Deposit Insurance Corporation. Which statement is most accurate? a. X can claim a total of Php500,000 for all the three (3) accounts. b. X can only claim from one (1) account of Php250,000. c. X can claim a total of Php750,000 from all the three (3) accounts. d. X cannot claim anything from any of the deposit accounts. 81. The Bank Secrecy Law (RA 1405) prohibits disclosing any information about deposit records of an individual without court order except a. in an examination to determine gross estate of a decedent. b. in an investigation for violation of Anti-Graft and Corrupt Practices. c. in an investigation by the Ombudsman. d. in an impeachment proceeding. 82. X works as a research computer engineer with the Institute of Computer Technology, a government agency. When not busy with his work, but during office hours, he developed a software program for law firms that will allow efficient monitoring of the cases, which software program is not at all related to his work. Assuming the program is patentable, who has the right over the patent? a. x; b. Institute of Computer Technology; c. Neither X nor the Institute of Computer Technology can claim patent right over the invention; d. X and the employer of X will jointly have the rights over the patent. 83. The "test of dominancy" in the Law on Trademarks, is a way to determine whether there exists an infringement of a trademark by a. determining if the use of the mark has been dominant in the market. b. focusing on the similarity of the prevalent features of the competing marks which might create confusion. c. looking at the mark whether they are similar in size, form or color. d. looking at the mark whether there is one specific feature that is dominant. 84. X's painting of Madonna and Child was used by her mother to print some personalized gift wrapper. As part of her mother's efforts to raise funds for Bantay Bata, the mother of X sold the

wrapper to friends. Y, an entrepeneur, liked the painting in the wrapper and made many copies and sold the same through National Bookstore. Which statement is most accurate? a. Y can use the painting for his use because this is not a copyrightable material. b. X can sue Y for infringement because artistic works are protected from moment of creation. c. Works of art need to be copyrighted also to get protection under the law. d. Y can use the drawing even though not copyrighted because it is already a public property having been published already. 2. Compulsory Licensing of Inventions which are duly patented may be dispensed with or will be allowed exploitation even without agreement of the patent owner under certain circumstances, like national emergency, for reason of public interest, like national security, etc. The person who can grant such authority is a. the Director General of the Intellectual Property Office; b. the Director of Legal Affairs of the Intellectual Property Office; c. the owner of the Patent right; d. any agent of the owner of the Patent right. 3. The Fair Use Doctrine allows others to utilize copyrighted works under certain conditions. The factors to consider whether use is fair or not would be the purpose and character of the use, nature of the copyrighted work, amount and substantiality of the portions used, and what else? a. effect of the use upon the creator of the work. b. effect of the use upon the potential market of the work. c. effect of the use upon the public in general. d. effect of the use upon the class in which the creator belongs. 4. Which phrase best completes the statement - A chattel mortgage can be constituted to secure: a. obligations both past and future; b. obligations existing at the time the mortgage is constituted; c. future obligations only; d. past obligations only. 5. Which phrase best completes the statement - A chattel mortgage can cover: a. only property described in the deed without exception; b. can also cover substituted property; c. properties described in the deed except in case of stock in trade being a substitute; d. after acquired property. 6. Which phrase best completes the statement - The Deed of Chattel mortgage, if not registered with the Register of Deeds where debtor resides: a. is not valid, hence not binding between the mortgagor and the mortgagee; b. is binding between the mortgagor and the mortgagee but will not affect third party; c. to be valid between the mortgagor and the mortgagee, it must be coupled with the delivery of the subject matter of the chattel mortgage; d. is as if a non-existent chattel mortgage. 7. Which phrase best completes the statement - To bind third parties, a chattel mortgage of shares of stock must be registered: a. with the Register of Deeds where the debtor resides; b. with the Register of Deeds where the principal office of the corporation is; c. in the Stock and Transfer Book of the corporation with the Corporate Secretary; d. with the Register of Deeds where the debtor resides and the principal office of the corporation.

8. Which phrase best completes the statement - The affidavit of good faith in a Deed of Chattel Mortgage is: a. an oath where the parties swear that the mortgage is made for the purpose of securing the obligations specified and that the obligation is just and valid; b. an affidavit, the absence of which will vitiate the mortgage between the parties; c. necessary only if the chattel being mortgaged are growing crops; d. a certification from the mortgagor that he is the mortgagor of the chattel. 9. X defaulted in his loan with Y. Y instituted extra-judicial foreclosure of the property subject of a real estate mortgage that secured the loan. X has one year within which to redeem the property. After the foreclosure, X filed an action questioning the validity of the extra- judicial foreclosure sale. Which statement is most accurate? a. The one (1) year period within which to redeem will be interrupted by the filing of an action questioning the validity of the foreclosure. b. The one (1) year period will not be interrupted by the filing of the action. c. The one (1) year period will be extended for another year because of the filing of an action questioning the validity of the foreclosure sale. d. If the action which questions the validity of the foreclosure prospers, the period will be interrupted. 10. What is the effect if the. proceeds in an extra-judicial foreclosure sale is not sufficient to pay for the obligation? a. the mortgagee can claim for deficiency judgment from the debtor. b. the mortgagee can claim for deficiency judgment from the mortgagor even though it is a third party mortgage. c. the mortgagee has no more recourse or claim against the debtor. d. the mortgagee cannot claim for deficiency judgment from the debtor because its an extrajudicial foreclosure. 11. X mortgaged her residential house and lot in favor of ABC Bank. X defaulted in her loan and so the bank foreclosed the real estate mortgage on the residential house. Y then bought the residential house and lot before the expiration of the redemption period. Can Y now take possession of the property? a. No, because it is still covered by the redemption period and the purchaser is not yet entitled as a matter of right to take possession of the property. b. Yes, the purchaser is now entitled to the possession of the house. c. No, because there is a need to talk to X to leave the house. d. No, because Y was not the one who foreclosed the mortgage on the property. 12. Which phrase best completes the statement - When a debt is secured by a real estate mortgage, upon default of the debtor: a. the only remedy of the creditor is to foreclose the real estate mortgage; b. another remedy is filing an action for collection and then foreclose if collection is not enough; c. the creditor can foreclose the mortgage and demand collection for any deficiency; d. None of the above. 13. XYZ Corporation bought ten (1 0) units of Honda Civic from CCC Corporation. ABC Bank granted a loan to XYC Corporation which executed a financing agreement which provided for the principal amount, the installment payments, the interest rates and the due dates. On due dates of the installment payments, XYZ Corporation was asked to pay for some handling charges and other fees which were not mentioned in the Financing Agreement. Can XYC Corporation refuse to pay the same? a. No, because handling charges and other fees are usual in certain banking transactions.

b. Yes, because ABC Bank is required to provide XYZ Corporation not only the amount of the monthly installments but also the details of the finance charges as required by the Truth in Lending Act. c. No, because the Finance Agreement is a valid document to establish the existence of the obligation. d. Yes, because legally, finance charges are never allowed in any banking transaction. 14. Which of the following is an exception to the secrecy of bank deposits which are in Philippine Pesos, but NOT an exception to the secrecy of foreign currency deposits? a. Upon Bangko Sentral ng Pilipinas (SSP) inquiry into or examination of deposits or investments with any bank, when the inquiry or examination is made in the course of the SSP's periodic special examination of said bank to ensure compliance with the Anti-Money Laundering Act (AMLA); b. Upon Philippine Deposit Insurance Corporation (PDIC) and SSP inquiry into and examination of deposit accounts in case there is a finding of unsafe or unsound banking practice; c. Upon inquiry in cases of impeachment; d. Upon inquiry by the Commissioner of Internal Revenue in the event a taxpayer files an application to compromise his tax liabilities on the ground of financial incapacity. 15. The Anti-Money Laundering Law is a law that seeks to prevent money laundering activities by providing for more transparency in the Philippine Financial System, hence the following institutions are covered by the law, except: a. bank and any financial institutions; b. pawnshops; c. casino operators; d. All of the above. 16. For purposes of determining violation of the prov1s1ons of Anti-Money Laundering Law, a transaction is considered as a "Suspicious Transaction" with "Covered Institutions" regardless of the amount involved, where which the following circumstances exist/s? a. the amount involved is not commensurate with the client's business or financial capacity; b. there is no underlying legal or trade obligation, purpose or economic justification; c. client is not properly identified; d. All of the above. 17. The main feature of the Foreign Investment Act of 1991 is to introduce the concept of "Negative Lists". Under the said law, what is a "Negative List"? a. It is a list of business activities or enterprises in the Philippines that foreigners are disqualified to engage in. b. It is a list of business activities or enterprises in the Philippines that foreigners are qualified to engage in. c. It is a list of business activities or enterprises that are open to foreign investments provided it is with the approval of the Board of Investment. d. It is a list of business activities or enterprises that are open to foreign investments provided it is with the approval of the Securities and Exchange Commission. - NOTHING FOLLOWS HAND IN YOUR ANSWER SHEET. THERE IS NO NEED TO RETURN THIS QUESTIONNAIRE TO THE HEAD WATCHER. 2012 BAR EXAMINATIONS CRIMINAL LAW 21 October 2012 10 A.M. - 12 NN.

Set B ESSAY TYPE QUESTIONS INSTRUCTIONS The following questionnaire consists of ten (10) questions (numbered I to X) contained in FIVE (5) pages. Begin your answer to each numbered question on a separate page; an answer to a sub-question/s under the same number may be written continuously on the same page and succeeding pages until completed. Answer the question directly and concisely. Do not repeat the question. Write legibly. HAND IN YOUR NOTEBOOK. THERE IS NO NEED TO RETURN THIS QUESTIONNAIRE TO THE HEAD WATCHER. GOODLUCK!!! _____________________________________ MARTIN S. VILLARAMA, JR. Chairperson 2012 Bar Examinations Committee PLEASE CHECK THAT THIS SET CONTAINS SIX (6) PAGES (INCLUDING THIS PAGE). WARNING: NOT FOR SALE OR UNAUTHORIZED USE

MERCANTILE LAW
I ABC Company filed a Petition for Rehabilitation with the Court. An Order was issued by the Court, (1) staying enforcement of all claims, whether money or otherwise against ABC Company, its guarantors and sureties not solidarily liable with the company; and (2) prohibiting ABC Company from making payments of its liabilities, outstanding as of the date of the filing of the Petition. XYC Company is a holder of an irrevocable Standby Letter of Credit which was previously procured by ABC Company in favor of XYC Company to secure performance of certain obligations. In the light of the Order issued by the Court. a. Can XYC Company still be able to draw on their irrevocable Standby Letter of Credit when due? Explain your answer. (5%) b. Explain the nature of Letters of Credit as a financial devise. (5%) II CCC Car, Inc. obtained a loan from BBB Bank, which fund was used to import ten (10) units of Mercedes Benz S class vehicles. Upon arrival of the vehicles and before release of said vehicles to CCC Car, Inc., X and Y, the President and Treasurer, respectively, of CCC Car, Inc. signed the Trust Receipt to cover the value of the ten (10) units of Mercedes Benz S class vehicles after which, the vehicles were all delivered to the Car display room of CCC Car, Inc. Sale of the vehicles were slow, and it took a month to dispose of the ten (10) units. CCC Car, Inc. wanted to be in business and to save on various documentations required by the bank, decided that instead of turning over the proceeds of the sales, CCC Car, Inc. used the proceeds to buy another ten (10) units of BMW 3 series. a. Is the action of CCC Car, Inc. legally justified? Explain your answer. (5%) b. Will the corporate officers of CCC Car, Inc. be held liable under the circumstances? Explain your answer. (5%) III X borrowed money from Y in the amount of Php1Million and as payment, issued a check. Y then indorsed the check to his sister Z for no consideration. When Z deposited the check to her account, the check was dishonored for insufficiency of funds. a. Is Z a holder in due course? Explain your answer. (5%) b. Who is liable on the check. The drawer or the indorser? Explain your answer. (5%) IV Indicate and explain whether the promissory note is negotiable or non-negotiable. a. I promise to pay A or bearer Php100,000.00 from my inheritance which I will get after the death of my father. (2%) b. I promise to pay A or bearer Php100,000 plus the interest rate of ninety (90) day treasury bills. (2%) c. I promise to pay A or bearer the sum of Php100,000 if A passes the 2012 bar exams. (2%)

d. I promise to pay A or bearer the sum of Php100.000 on or before December 30, 2012. (2%) e. I promise to pay A or bearer the sum of Php100,000. (2%) V X borrowed from CCC Bank. She mortgaged her house and lot in favor of the bank. X insured her house. Tt1e bank also got the house insured. a. Is this double insurance? Explain your answer. (3%) b. Is this legally valid? Explain your answer. (3%) c. In case of damage, can X and CCC Bank separately claim for the insurance proceeds? (4%) VI X is a Filipino immigrant residing in Sacramento, California. Y is a Filipino residing in Quezon City, Philippines. Z is a resident alien residing in Makati City. GGG Corporation is a domestic corporation - 40% owned by foreigners and 60% owned by Filipinos, with T as authorized representative. CCC Corporation is a foreign corporation registered with the Philippine Securities and Exchange Commission. KKK Corporation is a domestic corporation (100%) Filipino owned. S is a Filipino, 16 years of age, arid the daughter of Y. a. Who can be incorporators? Who can be subscribers? (2%) b. What are the differences between an incorporator and a subscriber, if there are any? (2%) c. Who are qualified to become members of the board of directors of the corporation? (2%) d. Who are qualified to act as Treasurer of the company? (2%) e. Who can be appointed Corporate Secretary? (2%) VII X obtained a loan for Php50Million from SSS Bank. The collateral is his vacation house in Baguio City under a real estate mortgage. X needed more funds for his business so he again borrowed another Php10Million, this time from BBB Bank, another bank, using the same collateral. The loan secured from SSS Bank fell due and X defaulted. a. If SSS Bank forecloses the real estate mortgage, what rights, if any, are left with 888 Bank as mo1igagee also? (2%) b. If the value of the Baguio property is less than the amount of loan, what would be the recourse of SSS Bank? BBB Bank? (2%) c. If the value of the property is more that the amount of the loan, who will benefit from the excess value of the property? (2%) d. If X defaulted with its loan in favor of BBB Bank but fully paid his loan with SSS Bank, can BBB Bank foreclose the real mortgage executed in its favor? (2%) e. Does X have any legal remedy after the foreclosure in the event that later on he has the rnoney to pay for the loan? (1%) f. If SSS Bank and BBB Bank abandon their rights under the real estate mortgage, is there any legal recourse available to them? (1%) VIII X obtained a Php10Million loan from BBB Banking Corporation. The loan is secured by Real Estate Mortgage on his vacation house in Tagaytay City. The original Deed of Real Estate Mortgage for the Php10Million was duly registered. The Deed of Real Estate Mortgage also provides that "The mortgagor also agrees that this mortgage will secure the payment of additional loans or credit accommodations that may be granted by the mortgagee ... " Subsequently, because he needed more funds, he obtained another Php5Million loan. On due dates of both loans, X failed to pay the Php5Million but fully paid the Php10Million. BBB Banking Corporation instituted extrajudicial foreclosure proceedings. a. Will the extrajudicial foreclosure prosper considering that the additional Php5Million was not covered by the registration? (5%) b. What is the meaning of a "dragnet clause" in a Deed of Real Estate Mortgage? Under what circumstances will the "dragnet clause" be applicable? ( 5%) IX A, B, C, D, E are all duly elected members of the Board of Directors of XYZ Corporation. F, the general manager, entered into a supply contract with an American firm. The contract was duly approved by the Board

of Directors. However, with the knowledge and consent of F, no deliveries were made to the American firm. As a result of the non-delivery of the promised supplies, the American firm incurred damages. The American firm would like to file a suit for damages. Can the American firm sue: a. The members of the Board of Directors individually, because they approved the transaction? (2%) b. The corporation? (2%) c. F, the general manager, personally, because the non-delivery was with his knowledge and consent? (2%) d. Explain the rules on liabilities of a corporation for the act of its corporate officers and the liabilities of the corporate officers and Board of Directors of a corporation acting in behalf of the corporation. (4%) X AAA Corporation is a bank. The operations of AAA Corporation as a bank was not doing well. So, to avert any bank run, AAA Corporation, with the approval of the Monetary Board, sold all its assets and liabilities to BBB Banking Corporation which includes all deposit accounts. In effect then, BBB Corporation will service all deposits of all depositors of AAA Corporation. a. Will the sale of all assets and liabilities of AAA Corporation to BBB Banking Corporation automatically dissolve or terminate the corporate existence of AAA Corporation? Explain your answer. (5%) b. What are the legal requirements in order that a corporation may be dissolved? (5%) - NOTHING FOLLOWS HAND IN YOUR NOTEBOOK. THERE IS NO NEED TO RETURN THIS QUESTIONNAIRE TO THE HEAD WATCHER. The Lawphil Project - Arellano Law Foundation
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WEDNESDAY, OCTOBER 24, 2012

2012 Bar Exam in Taxation Law

2012 BAR EXAMINATIONS TAXATION LAW 14 October 2012 2:00 P.M. - 3:30 P.M. Set A MULTIPLE CHOICE QUESTIONS (MCQs) INSTRUCTIONS The following questionnaire consists of seventy-five (75) MCQs numbered 1 up to 75 contained in TWENTY TWO (22) pages. Answer each question on the MCQ Answer Sheet by shading completely the appropriate circle corresponding to the letter you have chosen. (Read the Marking Instruction on the Answer Sheet) Avoid erasures on the Answer Sheet. If you need to make corrections, erase completely the answer you want to change. Do not explain your answer in the MCQ portion of the exam. You will not earn credit for that. Keep the Answer Sheet clean. Do not make unnecessary marks on it. Do not fold, roll, scratch, crumple or tear it. You may write on the questionnaire and use it as scratch paper but make sure to transfer your Answer Sheet. Provide ample time to transfer the answers if you choose to do this. Answer first the MCQs completely before going to the essay-type questions. HAND IN YOUR ANSWER SHEET. THERE IS NO NEED TO RETURN THIS QUESTIONNAIRE TO THE HEAD WATCHER. GOODLUCK!!! _____________________________________ MARTIN S. VILLARAMA, JR.

Chairperson 2012 Bar Examinations Committee PLEASE CHECK THAT THIS SET CONTAINS TWENTY THREE (23) PAGES (INCLUDING THIS PAGE). WARNING: NOT FOR SALE OR UNAUTHORIZED USE 1. Bank A deposit money with Bank B which earns interest that is subjected to the 20% final withholding tax. At the same time, Bank A is subjected to the 5% gross receipts tax on its interest income on loan transactions to customers. Which statement below INCORRECTLY describes the transaction? a) There is double taxation because two taxes income tax and gross receipts tax are imposed on the interest incomes described above and double taxation is prohibited under the 1987 Constitution b) There is no double taxation because the first tax is income tax, while the second tax is business tax; c) There is no double taxation because the income tax is on the interest income of Bank A on its deposits with Bank B (passive income), while the gross receipts tax is on the interest income received by Bank A from loans to its debtor-customers (active income); d) Income tax on interest income of deposits of Bank A is a direct tax, while GRT on interest income on loan transaction is an tax. 2. Which of the following statement is NOT correct? a) In case of doubt, statutes levying taxes are constructed strictly the government; b) The construction of a statute made by his predecessors is not binding upon the successor, if thereafter he becomes satisfied that a different construction should be given; c) The reversal of a ruling shall not generally be given retroactive application, if said reversal will be prejudicial to the taxpayer; d) A memorandum circular promulgated by the CIR that imposes penalty for violations of certain rules need not be published in a newspaper of general circulation or official gazette because it has the force and effect of law. 3. Which statement below expresses the lifeblood theory? a) The assessed taxes must be enforced by the government. b) The underlying basis of taxation is government necessity, for without taxation, a government can neither exist nor endure; c) Taxation is an arbitrary method of exaction by those who are in the seat of power; d) The power of taxation is an inherent power of the sovereign to impose burdens upon subjects and objects within its jurisdiction for the purpose of raising revenues. 4. Which statement is WRONG? a) The power of taxation may be exercised by the government, its political subdivisions, and public utilities; b) Generally, there is no limit on the amount of tax that may be imposed; c) The money contributed as tax becomes part of the public funds; d) The power of tax is subject to certain constitutional limitations. 5. The Philippines adopted the semi-global tax system, which means that: a) All taxable incomes, regardless of the nature of income, are added together to arrive at gross income, and all allowable deductions are deducted from the gross income to arrive at the taxable income; b) All incomes subject to final withholding taxes liable to income tax under the schedular tax system, while all ordinary income as well as income not subject to final withholding tax under the global tax system; c) All taxable incomes are subject to final withholding taxes under the schedular tax system; d) All taxable incomes from sources within and without the Philippines are liable to income tax. 6. Income from the performance of services is treated as income from within the Philippines, if: a) The payment of compensation for the service is made in the Philippines; b) The contract calling for the performance of services is signed in the Philippines; c) The service is actually performed in the Philippines; d) The recipient of service income is a resident of the Philippines. 7. For income tax purposes, the source of the service income is important for the taxpayer, who is a: a) Filipino citizen residing in Makati City; b) Non-resident Filipino citizen working residing in London, United Kingdom;

c) Japanese citizen who is married to a Filipino citizen and residing in their family home located Fort Bonifacio, Taguig City; d) Domestic corporation. 8. Interest income of a domestic commercial bank derived from a peso loan to a domestic corporation in 2010 is : a) Subject to the 30% income tax based on its net taxable income; b) Subject to the 20% final withholding tax; c) Subject to the 7.5% final withholding tax; d) Subject to 10% final withholding tax. 9. A resident corporation is one that is: a) Organized under the laws of the Philippines that does business in another country; b) Organized under the laws of a foreign country that sets up a regional headquarter in the Philippines doing product promotion and information dissemination; c) Organized under the laws of the Philippines that engages business in a special economic zone; d) Organized under the laws of a foreign country that engages in business in Makati City, Pihlippines. 10. A dealer in securities sold unlisted shares of stocks of a domestic corporation in 2010 and derived a gain of P1 Million therefrom. The gain is: a) Taxable at 30% regular corporate income tax based on net taxable income; b) Taxable at 5%/10% capital gains tax based on net capital gain; c) Taxable at of 1% stock transaction tax based on the gross selling price or fair market value, whichever is higher d) Exempt from income tax 11. An individual, who is a real estate dealer, sold a residential lot in Quezon City at a gain of P100,000.00 (selling price of P900,000.00 and cost is P800,00.00). The sale is subject to income tax as follows: a) 6% capital gains tax on the gain; b) 6% capital gains tax on the gross selling price of fair market value, whichever is higher; c) Ordinary income tax at the graduated rates of 5% to 32% of net taxable income; d) 30% income tax on net taxable income. 12. During the audit conducted by the BIR official, it was found that the rental income claimed by the corporation was not subjected to expanded withholding tax. Accordingly, the claimed rental expense: a) Is deductible from the gross income of the corporation, despite non-withholding of income tax by the corporation; b) Is deductible from the gross income of the corporation, provided that the 5% expanded withholding tax is paid by the corporation during the audit; c) Is not deductible from gross income of the corporation due to non-withholding of tax; d) Is deductible, if it can be shown that the lessor has correctly reported the rental income in his tax return. 13. A resident Filipino citizen (not a dealer in securities) sold shares of stocks of a domestic corporation that are listed and traded in the Philippine Stock Exchange. a) The sale is exempt from income tax but subject to the of 1% stock transaction tax; b) The sale is subject to income tax computed at the graduated income tax rates of 5% to 32% on net taxable income; c) The sale is subject to the stock transaction tax and income tax; d) The sale is both exempt from the stock transaction tax and income tax. 14. The appropriate method of accounting for a contractor on his long-term construction contract (i.e., it takes more than a year to finish) is: a) Cash method; b) Accrual method; c) Installment sale method; d) Percentage of completion method. 15. A general professional partnership (GPP) is one: a) That is registered as such with the Securities and Exchange Commission and the Bureau of Internal Revenue; b) That is composed of individuals who exercise a common profession;

c) That exclusively derives income from the practice of the common profession; d) That derives professional income and rental income from property owned by it. 16. The interest expense of a domestic corporation on a bank loan in connection with the purchase of a production equipment: a) Is not deductible from gross income of the borrower-corporation; b) Is deductible from the gross income of the borrower-corporation during the year or it may be capitalized as part of cost of the equipment; c) Is deductible only for a period of five years from date of purchase; d) Is deductible only if the taxpayer uses the cash method of accounting. 17. The "all events test" refers to: a) A person who uses the cash method where all sales have been fully paid by the buyers thereof; b) A person who uses the installment sales method, where the full amount of consideration is paid in full by the buyer thereof within the year of sale; c) A person who uses the accrual method, whereby an expense is deductible for the taxable year in which all the events had occurred which determined the fact of the liability and the amount thereof could be determined with reasonable accuracy; d) A person who uses the completed method, whereby the construction project has been completed during the year the contract was signed. 18. All the items below are excluded from gross income, except: a) Gain from sale of long-term bonds, debentures and indebtedness; b) Value of property received by a person as donation or inheritance; c) Retirement benefits received from the GSIS, SSS, or accredited retirement plan; d) Separation pay received by a retiring employee under a voluntary retirement program of the corporate employer. 19. Which statement is correct? A non-stock, non-profit charitable association that sells its idle agricultural property is: a) Not required to file an income tax return nor pay income tax on the transaction to the BIR, provided the sales proceeds are invested in another real estate during the year; b) Required to pay the 6% capital gains tax on the gross selling price of fair market value, whichever is higher; c) Mandated to pay the 30% regular corporate income tax on the gain from sale; d) Required to withhold the applicable expanded withholding tax rate on the transaction and remit the same to the BIR. 20. ABS Corporation is a PEZA-registered export enterprise which manufactures cameras and sells all its finished products abroad. Which statement is NOTcorrect? a) ABS Corporation is subject to the 5% final tax on gross income earned, in lieu of all national and local taxes; b) ABS Corporation is exempt from the 30% corporate income tax on net income, provided it pays value added tax; c) ABS Corporation is subject to the 30% corporate income tax on net income; d) ABS Corporation is exempt from all national and local taxes, except real property tax. 21. In May 2010, Mr. And Mrs. Melencio Antonio donated a house and lot with a fair market value of P10 Million to their sob, Roberto, who is to be married during the same year to Josefina Angeles. Which statement below is INCORRECT? a) There are four (4) donations made two (2) donations are made by Mr. Melencio Antonio to Roberto and Josefina, and two (2) donations are made by Mrs. Antonio; b) The four (4) donations are made by the Spouses Antonio to members of the family, hence, subject to the graduated donors tax rates (2%-15%); c) Two (2) donations are made by the spouses to members of the family, while two (2) other donations are made to strangers; d) Two (2) donations made by the spouses to Roberto are entitled to deduction from the gross gift as donation proper nuptias. 22. While he was traveling with friends, Mr. Jose Francisco, resident Filipino citizen, died on January 20, 2011 in a California Hospital, USA, leaving personal and real properties with market values as follows: House and Lot in Quezon City P10 Million; Cash in bank in California US$10,000.00; Citibank in New York

US$5,000.00; Cash in BPI Makati P4 Million; Car in Quezon City P1 Million; Shares of stocks of Apple Corporation, US corporation listed in NY Stock Exchange US$1 = Php50. His gross estate for the Philippine estate tax purposes shall be: a) P13 Million; b) P14 Million; c) P15 Million; d) P16 Million. 23. In 2006, Mr. Vicente Tagle, a retiree, bought 10,000 CDA shares that are unlisted in the local stock exchange for P10 per share. In 2010, the said shares had a book value per share of P60 per share. In view of a car accident in 2010, Mr. Vicente Tagle had to sell his CDA shares but he could sell the same only for P50 per share. The sale is subject to tax as follos: a) 5%/10% capital gains tax on the capital gain from sale of P40 per share (P50 selling price less P10 cost); b) 5%/10% capital gains tax on the capital gain of P50 per share, arrived at by deducting the cost (P10 per share) from the book value (P60 per share); c) 5%/10% capital gains tax on the capital gain from sale of P40 per share (P50 selling price less P10 cost) plus donors tax on the excess of the fair market value of the shares over the consideration; d) Graduated income tax rates of 5% to 32% on the net taxable income from the sale of the shares. 24. On January 10, 2011, Maria Reyes, single-mother, donated cash in the amount of P50,000.00 to her daughter Cristina, and on December 20, 2011, she donated another P50,000.00 to Cristina. Which statement is correct? a) Maria Reyes is subject to donors tax in 2011 because gross gift is P100,000.00; b) Maria Reyes is exempt from donors tax in 2011 because gross gift is P100,000.00; c) Maria Reyes is exempt from donors tax in 2011 only to the extent of P50,000.00; d) Maria Reyes is exempt from donors tax in 2011 because the donee is minor. 25. Jose Ramos, single, died of a heart attack on October 10, 2011, leaving a residential house and lot with a market value of P1.8 Million and cash of P100,000.00. Funeral expenses paid amounted to P250,000.00 a) His estate will be exempt from estate tax because the net estate is zero; b) His estate will be subject to estate tax because net estate is P1,650,000.00; c) His estate will be subject to estate tax because net estate is P1,700,00.00; d) His estate will be subject to estate tax because net estate is P800,000.00. 26. Sale of residential house and lot by an official of a domestic corporation to another official in the same corporation for a consideration of P2.5 Million in 2011 is: a) Exempt from VAT because the gross sales do not exceed P2.5 Million; b) Exempt from VAT because the property sold is a capital asset, regardless of the gross selling price; c) Exempt from VAT because the seller is not a person engaged in real estate business; d) Taxable at 12% VAT output tax on the gross selling price of P2.5 Million. 27. An importer of flowers from abroad in 2011: a) Is liable for VAT, if it registers as a VAT person; b) Is exempt from VAT, because the goods are treated as agricultural products; c) Is exempt from VAT, provided that his total importation of flowers does not exceed P1.5 Million; d) Is liable for VAT, despite the fact that it did not register as a VAT person and its total annual sales of flowers do not exceed P1.5 Million. 28. A VAT-registered contractor performed services for his customer in 2010 and billed him P11.2 Million, broken down as follows: P10 Million cost of services, plus P1.2 Million, 12% VAT. Of the contract price of P10 Million, only P8 Million plus VAT thereon was received from the customer in 2010, and the balance of P4 Million plus VAT was received by the contractor in 2011. How much is the taxable gross receipts of the contractor for 2010, for VAT purposes? a) P10 Million, the total cost of services performed in 2010; b) P8 Million, the amount received from the customer in 2010; c) P8 Million plus VAT received from the customer in 2010; d) P11.2 Million, the total cost of services performed plus 12% VAT.

29. MBM Corporation is the owner-operator of movie houses in Cavite. During the year 2010, it received a total gross receipts of P20 Million from the operation of movies. It did not register as a VAT person. Which statement below is correct? a) MBM Corporation is exempt from the 12% VAT, but liable for the 20% amusement tax on admissions under the Local Government Code; b) MBM Corporation is both liable for the 12% VAT and 20% amusement tax on admissions; c) MBM Corporation is both exempt from the 12% VAT and 20% amusement tax on admissions; d) MBM Corporation is liable for the 12% VAT, but exempt from the 20% amusement tax on admissions. 30. A pawnshop shall now be treated, for business tax purposes: a) As a lending investor liable to the 12% VAT on its gross receipts from interest income and from gross selling price from sale of unclaimed properties; b) Not as a lending investor, but liable to the 5% gross receipts tax imposed on a non-bank financial intermediary under Title VI (Other Percentage Taxes); c) As exempt from 12% VAT and 5% gross receipts tax; d) As liable to the 12% VAT and 5% gross receipts tax. 31. Under the VAT system, there is no cascading because the tax itself is not again being taxed. However, in determining the tax base on sale of taxable goods under the VAT system: a) The professional tax paid by the professional is included in gross receipts; b) The other percentage tax (e.g., gross receipts tax) paid by the taxpayer is included in gross selling price; c) The excise tax paid by the taxpayer before withdrawal of the goods from the place of production or from customs custody is included in the gross selling price; d) The documentary stamp tax paid by the taxpayer is included in the gross selling price or gross receipts. 32. Except for one transaction, the rest are exempt from value added tax. Which one is VAT taxable? a) Sales of chicken by a restaurant owner who did not register as a VAT person and whose gross annual sales is P1.2 Million; b) Sales of copra by a copra dealer to a coconut oil manufacturer who did not register as a VAT person and whose gross annual sales is P5 Million; c) Gross receipts of CPA during the year amounted to P1 Million; the CPA registered as a VAT person in January 2011, before practicing his profession; d) Sales of a book store during the year amounted to P10 Million; it did not register as a VAT person with the BIR. 33. A lessor or real property is exempt from value added tax in one of the transactions below. Which one is it? a) Lessor leases commercial stalls located in the Greenhills Commercial Center to VAT-registered sellers of cell phones; lessors gross rental during the year amounted to P12 Million; b) Lessor leases residential apartment units to individual tenants for P10,000.00 per month per unit; his gross rental income during the year amounted to P2 Million; c) Lessor leases commercial stalls at P10,000.00 per stall per month and residential units at P15,000.00 per unit per month; his gross rental income during the year amounted to P3 Million; d) Lessor leases two (2) residential houses and lots at P50,000.00 per month per unit, but he registered as a VAT person. 34. IBP Bank extended loans to debtors during the year, with real properties of the debtors being used as collateral to secure the loans. When the debtors failed to pay the unpaid principal and interests after several demand letters, the bank foreclosed the same and entered into contracts of lease with tenants. The bank is subject to the tax as follows: a) 12% VAT on the rental income, but exempt from the 7% gross receipts tax; b) 7% gross receipts tax on the rental income, but exempt from VAT; c) Liable to both the 12% VAT and 7% gross receipts tax; d) Exempt from both the 12% VAT and 7% gross receipts tax. 35. Which transaction below is subject to VAT? a) Sale of vegetables by a farmer in Baguio City to a vegetable dealer;

b) Sale of vegetables by a vegetable dealer in Baguio City to another vegetable dealer in Quezon City; c) Sale of vegetables by the QC vegetable dealer to a restaurant in Manila; d) Sale of vegetables by the restaurant operator to its customers. 36. Which importation in 2011 is subject to VAT? a) Importation of fuels by a person engaged in international shipping worth P20 Million; b) Importation of raw, unprocessed, refrigerated Kobe beef from Japan by a beef dealer for sale to hotels in Makati City with a fair market value of P10 Million; c) Importation of wines by a wine dealer with a fair market value of P2 million for sale to hotels in Makati City; d) Importation of books worth P5 Million and school supplies worth P1.2 million. 37. Input tax is available to a VAT-registered buyer, provided that: a) The seller is a VAT-registered person; b) The seller issues a VAT invoice or official receipt, which separately indicates the VAT component; c) The goods or service is subject to or exempt from VAT, but the sale is covered by a VAT invoice or receipt issued by VAT-registered person; d) The name and TIN of the buyer is not stated or shown in the VAT invoice or receipt Which statement shown above is NOT correct? 38. Claim for tax credit or refund of excess input tax is available only to: a) A VAT-registered person whose sales are made to embassies of foreign governments and United Nations agencies located in the Philippines without the BIR approval of the application for zero-rating; b) Any person who has excess input tax arising from local purchases of taxable goods and services; c) A VAT-registered person whose sales are made to clients in the Philippines; d) A VAT-registered person whose sales are made to customers outside the Philippines and who issued VAT invoices or receipts with the words "ZERO RATED SALES" imprinted on the sales invoices or receipts. 39. A hotel operator that is a VAT-registered person and who leases luxury vehicles to its hotel customers is: a) Subject to the 3% common carriers tax and 12% VAT; b) Subject to the 3% common carriers tax only; c) Subject to the 12% VAT only; d) Exempt from both the 3% common carriers tax and 12% VAT. 40. Which statement is correct? A bar review center owned and operated by lawyers is: a) Exempt from VAT, regardless of its gross receipts during the year because it is an educational center; b) Exempt from VAT, provided that its annual gross receipts do not exceed P1.5 Million in 2011; c) Subject to VAT, regardless of its gross receipts during the year; d) Subject to VAT, if it is duly accredited by TESDA. 41. For 2012, input tax is not available as a credit against the output tax of the buyer of taxable goods or services during the quarter, if: a) The VAT invoice or receipt of the seller is registered with the BIR; b) The VAT invoice or receipt of the seller does not separately indicate the gross selling price or gross receipts and the VAT component therein; c) The VAT invoice or receipt is issued in the name of the VAT-registered buyer and his TIN is shown in said invoice or receipt; d) The VAT invoice or receipt issued by the seller shows the Taxpayer Identification Number plus the word "VAT" or "VAT registered person". 42. The public market vendor below, who is not a VAT-registered person is liable to VAT in 2010, if: a) She sells raw chicken and meats and her gross sales during the year is P2 Million; b) She sells vegetables and fruits in her stall and her gross sales during the year is P1 Million; c) She sells canned goods, processed coconut oils, and cut flowers in her stall and her gross sales during the year is P2.5 Million; d) She sells live fish, shrimps, and crabs and her gross sales during the year is P5 Million.

43. Which statement is FALSE under the VAT law? a) A VAT-registered person will be subject to VAT for his taxable transactions, regardless of his gross sales or receipts; b) A person engaged in trade or business selling taxable goods or services must register as a VAT person, when his gross sales or receipts for the year 2011 exceed P1.5 Million; c) A person who issued a VAT-registered invoice or receipt for a VAT-exempt transaction is liable to the 12% VAT as a penalty for the wrong issuance thereof; d) Once a doctor of medicine exercises his profession during the year, he needs to register as a VAT person and to issue VAT receipts for professional fees received. 44. The Commissioner of Internal Revenue may NOT inquire into the bank deposits of a taxpayer, except: a) When the taxpayer files a fraudulent return; b) When the taxpayer offers to compromise the assessed tax based on erroneous assessment; c) When the taxpayer offers to compromise the assessed tax based on financial incapacity to pay and he authorizes the Commissioner in writing to look into his bank records; d) When the taxpayer did not file his income tax return for the year. 45. The Commissioner of Internal Revenue issued a BIR ruling to the effect that the transaction is liable to income tax and value added tax. Upon receipt of the ruling, a taxpayer does not agree thereto. What is his proper remedy? a) File a petition for review with the Court of Tax Appeals within thirty (30) days from receipt thereof; b) File a motion for reconsideration with the Commissioner of Internal Revenue; c) File an appeal to the Secretary of Finance within thirty (30) days from receipt thereof; d) File an appeal to the Secretary of Justice within thirty (30) days from receipt thereof. 46. On April 15, 2011, the Commissioner of Internal Revenue mailed by registered mail the final assessment notice and the demand letter covering the calendar year 2007 with the QC Post Office. Which statement is correct? a) The assessment notice is void because it was mailed beyond the prescriptive period; b) The assessment notice is void because it was not received by the taxpayer within the three-year period from the date of filing of the tax return; c) The assessment notice is void if the taxpayer can show that the same was received only after one (1) month from date of mailing; d) The assessment notice is valid even if the taxpayer received the same after the three-year period from the date of filing of the tax return. 47. A preliminary Assessment Notice (PAN) is NOT required to be issued by the BIR before issuing a Final Assessment Notice (FAN) on one of the following cases: a) When a taxpayer does not pay the 2010 deficiency income tax liability on or before July 15 of the year; b) When the finding for any deficiency tax is the result of mathematical error in the computation of the tax as appearing on the face of the return; c) When a discrepancy has been determined between the value added tax paid and the amount due for the year; d) When the amount of discrepancy shown in the Letter Notice is not paid within thirty (30) days from date of receipt. 48. When a protest against the deficiency income tax assessment was denied by the BIR Regional Director of Quezon City, the appeal to the Court of Tax Appeals must be filed by a taxpayer: a) If the amount of basic tax assessed is P100,000.00 or more; b) If the amount of basic tax assessed is P300,000.00 or more; c) If the amount of basic tax assessed is P500,000.00 or more; d) If the amount of basic tax assessed is P1 Million or more; 49. The taxpayer received an assessment notice on April 15, 2011 and filed its request for reinvestigation against the assessment on April 30, 2011. Additional documentary evidence in support of its protest was submitted by it on June 30, 2011. If no denial of the protest was received by the taxpayer, when is the last day for the filing of its appeal to the CTA? a) November 30, 2011; b) December 30, 2011;

c) January 30, 2012; d) February 28, 2012. 50. Using the same facts in the immediately preceding number, but assuming that the final decision on the disputed assessment was received by the taxpayer on July 30, 2011, when is the last day for filing of the appeal to the CTA? a) August 30, 2011; b) September 30, 2011; c) December 30, 2011; d) January 30, 2012. 51. Which court has jurisdiction to determine if the warrant of distraint and levy issued by the BIR is valid and to rule if the waiver of the Statute of Limitations was validly effected? a) City Courts; b) Regional Trial Court; c) Court of Tax Appeals; d) Court of Appeals. 52. Which statement below on compromise of tax liability is correct? a) Compromise of a tax liability is available only at the administrative level; b) Compromise of a tax liability is available only before trial at the CTA; c) Compromise of a tax liability is available even during appeal, provided that prior leave of court is obtained; d) Compromise of a tax liability is still available even after the court decision has become final and executory. 53. In case of full or partial denial of the written claim for refund or excess input tax directly attributable to zero-rated sales, or the failure on the part of the Commissioner to act on the application within 120 days from the date of submission of complete documents, an appeal must be filed with the CTA: a) Within thirty (30) days after filing the administrative claim with the BIR; b) Within sixty (60) days after filing the administrative claim with the BIR; c) Within one hundred twenty (120) days after filing the administrative claim with the BIR; d) Within thirty (30) days from the receipt of the decision denying the claim or after the expiration of the 120-day period. 54. The submission of the required documents within sixty (60) days from the filing of the protest is available only where: a) The taxpayer previously filed a Motion for Reconsideration with the BIR official; b) The taxpayer previously filed a request for reconsideration with the BIR official; c) The taxpayer previously filed a request for reinvestigation with the BIR official; d) The taxpayer previously filed an extension to file a protest with the BIR official. 55. The prescriptive period for the collection of the deficiency tax assessment will be tolled: a) If the taxpayer files a request for reconsideration with the Asst. Commissioner; b) If the taxpayer files a request for reinvestigation that is approved by the Commissioner of Internal Revenue; c) If the taxpayer changes his address in the Philippines that is communicated to the BIR official; d) If a warrant of levy is served upon the taxpayers real property in Manila. 56. Which statement is correct? The collection of a deficiency tax assessment by distraint and levy: a) May be repeated, if necessary, until the full amount due, including all expenses, is collected; b) Must be done successively, first by distraint and then by levy; c) Automatically covers the bank deposits of a delinquent taxpayer; d) May be done only once during the taxable year. 57. The prescriptive period to file a criminal action is: a) Ten (10) years from the date of discovery of the commission of fraud or non-filing of tax return; b) Five (5) years from the date of issuance of the final assessment notice; c) Three (3) years from the filing of the annual tax return; d) Five (5) years from the commission of the violation of the law, and if the same be not known at the time, from the discovery thereof and the institution of judicial proceedings for its investigation and punishment.

58. The accuseds mere reliance on the representations made by his accountant, with deliberate refusal or avoidance to verify the contents of his tax return and to inquire on its authenticity constitutes: a) Simple negligence; b) Gross negligence; c) Willful blindness; d) Excusable negligence. 59. The acquittal of the accused in the criminal action for the failure to file income tax return and failure to supply correct information will have the following consequence: a) The CTA will automatically exempt the accused from any civil liability; b) The CTA will still hold the taxpayer liable for deficiency income tax liability in all cases, since preponderance of evidence is merely required for tax cases; c) The CTA will impose civil or tax liability only if there was a final assessment notice issued by the BIR against the accused in accordance with the prescribed procedures for issuing assessments, which was presented during the trial; d) The CTA will impose civil or tax liability, provided that a computation of the tax liability is presented during the trial. 60. X Corporation had excess income tax payment for the year 2008, which it chose to carry over in 2009. In filing its 2009 corporate income tax return, it signified its intention (by checking the small box "refund" at the bottom of the return) to get a refund of the overpaid amount in 2008. Can the refund be allowed or not, and if disallowed, does X Corporation lose the claimed amount? a) X Corporation may not get the refund because the decision to carry over in 2008 was irrevocable for that year, and it may not change that decision in succeeding years; b) X Corporation may not get the refund in 2009, but the amount being claimed as refund may be utilized in succeeding years until fully exhausted because there is no prescriptive period for carry over of excess income tax payments; c) X Corporation may get the refund, provided that it will no longer carry over such amount or utilize the same against its income tax liability in the future; d) X Corporation may file instead a claim of tax credit, in lieu of refund. 61. Which statement is correct? a) Legislative acts passed by the municipal council in the exercise of its lawmaking authority are denominated as resolutions and ordinances; b) Legislative acts passed by the municipal council in the exercise of its lawmaking authority are denominated as resolutions; c) Legislative acts passed by the municipal council in the exercise of its lawmaking authority are denominated as ordinances; d) Both ordinances and resolutions are solemn and formal acts. 62. Which of the following statements is NOT a test of a valid ordinance? a) It must not contravene the Constitution or any statute; b) It must not be unfair or oppressive; c) It must not be partial or discriminatory; d) It may prohibit or regulate trade. 63. Taxing power of local government units shall NOT extend to the following taxes, except one: a) Income tax on banks and other financial institutions; b) Taxes of any kind on the national government, its agencies and instrumentalities, and local government units; c) Taxes on agricultural and aquatic products when sold by the marginal farmers or fishermen; d) Excise taxes on articles enumerated under the National Internal Revenue Code. 64. Which statement on prescriptive periods is true? a) The prescriptive periods to assess taxes in the National Internal Revenue Code and the Local Government Code are the same; b) Local taxes shall be assessed within five (5) years from the date they became due; c) Action for the collection of local taxes may be instituted after the expiration of the period to assess and to collect the tax; d) Local taxes may be assessed within ten (10) years from discovery of the underpayment of tax which does not constitute fraud.

65. The appraisal, assessment, levy and collection of real property tax shall be guided by the following principles. Which statement does NOT belong here? a) Real property shall be appraised at its current and fair market value; b) Real property shall be classified for assessment purposes on the basis of its actual use; c) Real property shall be assessed on the basis of a uniform classification within each local political subdivision; d) The appraisal and assessment of real property shall be based on audited financial statements of the owner. 66. The Manila International Airport Authority (MIAA) is exempt from real property tax. Which statement below is NOT correct? a) MIAA is not a government-owned or controlled corporation because it is not organized as a stock or non-stock corporation; b) MIAA is a government instrumentality vested with corporate powers and performing essential public services; c) MIAA is not a taxable entity because the real property is owned by the Republic of the Philippines and the beneficial use of such property has not been granted to a private entity; d) MIAA is a government-owned or controlled corporation because it is required to meet the test of economic viability. 67. For purposes of real property taxes, the tax rates are applied on: a) Zonal values; b) Fair market value; c) Assessed values; d) Reproduction values. 68. One of the local government units below does NOT have the power to impose real property tax: a) Bacoor, Cavite; b) Davao City; c) Tarlac Province; d) Malabon, Metro Manila. 69. Where the real property tax assessment is erroneous, the remedy of the property owner is: a) To file a claim for refund in the Court of Tax Appeals if he has paid the tax, within thirty (30) days from date of payment; b) To file an appeal with the Provincial Board of Assessment Appeals within thirty (30) days from receipt of the assessment; c) To file an appeal with the Provincial Board of Assessment Appeals within sixty (60) days from receipt of the assessment; d) To file an appeal with the Provincial Board of Assessment Appeals within sixty (60) days from receipt of the assessment and playing the assessed tax under protest. 70. The City Government of Manila may NOT impose: a) Basic real property tax at 2% of the assessed value of real property; b) Additional levy on real property for the special education fund at 1% of the assessed value of real property; c) Additional ad valorem tax on idle lands at a rate not exceeding 5% of the assessed value; d) Special levy on lands within its territory specially benefited by public works projects or improvements funded by it at 80% of the actual cost of the projects or improvements. 71. Importation of goods is deemed terminated: a) When the customs duties are paid, even if the goods remain within the customs premises; b) When the goods are released or withdrawn from the customs house upon payment of the customs duties or with legal permit to withdraw; c) When the goods enter Philippines territory and remain within the customs house within thirty (30) days from date of entry; d) When there is part payment of duties on the imported goods located in the customs area. 72. A protest against an assessment issued by the Collector of Customs for unpaid customs duties on imported goods shall be filed with: a) The Commissioner of Customs; b) The Regional Trial Court;

c) The Court of Tax Appeals; d) The Collector of Customs. 73. The dutiable value of an imported article subject to an ad valorem rate of duty under existing law shall be: a) The home consumption value; b) The total value; c) The total landed cost; d) The transaction value. 74. The imported articles shall in any case be subject to the regular physical examination when: a) The importer disagrees with the findings as contained in the government surveyors report; b) The number, weight and nature of packages indicated in the customs entry declaration and supporting documents differ from that in the manifest; c) The container is not leaking or damaged; d) The shipment is covered by alert/hold orders issued pursuant to an existing order. 75. Which cases are appealable to the CTA? a) Decisions of the Secretary of Finance in cases involving liability for customs duties, seizure, detention or release of property affected; b) Decisions of the Commissioner of Customs in cases involving liability for customs duties, seizure, detention or release of property affected; c) Decisions of the Collector of Customs in cases involving liability for customs duties, seizure, detention or release of property affected; d) Decisions of the BIR Commissioner in cases involving liability for customs duties, seizure, detention or release of property affected. - NOTHING FOLLOWS HAND IN YOUR ANSWER SHEET. THERE IS NO NEED TO RETURN THIS QUESTIONNAIRE TO HEAD WATCHER. 2012 BAR EXAMINATIONS TAXATION LAW 14 October 2012 3:30 P.M.-5 P.M. Set B ESSAY TYPE QUESTIONS INSTRUCTIONS The following questionnaire consists of ten (10) questions (numbered I to X) contained in SIX (6) pages. Begin your answer to each numbered question on a separate page; an answer to a sub-question/s under the same number maybe written continuously on the same page and succeeding pages until completed. Answer the question directly and concisely. Do not repeat the question. Write legibly. HAND IN YOUR NOTEBOOK. THERE IS NO NEED TO RETURN THIS QUESTIONNAIRE TO THE HEAD WATCHER. GOODLUCK!!! _____________________________________ MARTIN S. VILLARAMA, JR. Chairperson 2012 Bar Examinations Committee PLEASE CHECK THAT THIS SET CONTAINS SEVEN (7) PAGES (INCLUDING THIS PAGE). WARNING: NOT FOR SALE OR UNAUTHORIZED USE

TAXATION LAW
I Anchor Banking Corporation, which was organized in 2000 and existing under the laws of the Philippines and owned by the Sy Family of Makati City, set up in 2010 a branch office in Shanghai City, China, to take advantage of the presence of many Filipino workers in that area and its booming economy. During the year, the bank ,management decided not to include the P20 Million net income of the Shanghai Branch in the annual Philippine income tax return filed with the BIR, which showed a net taxable income of P30 Million , because the Shanghai Branch is treated as a foreign corporation and is taxed only on income from sources

within the Philippines, and since the loan and other business transactions were done in Shanghai, these incomes are not taxable in the Philippines. a) Is the bank correct in excluding the net income of its Shanghai Branch in the computation of its annual corporate income tax for 2010? Explain your answer. (5%) b) Should the Shanghai Branch of Anchor Bank remit profit to its Head Office in the Philippines in 2011, is the branch liable to the 15% branch profit remittance tax imposed under Section 28 (A)(5) of the 1997 Tax Code? Explain your answer (5%) II Foster Corporation (FC) is a Singapore-based foreign corporation engaged in construction and installation projects. In 2010, Global Oil Corporation (GOC), a domestic corpoartion engaged in the refinery of petroleum products, awarded an anti-pollution project to Foster Corporation, whereby FC shall design, supply machinery and equipment, and install an anti-pollution device for GOCs refinery in the Philippines, provided that the installation part of the project may be sub-contracted to a local construction company. Pursuant to the contract, the design and supply contracts were done in Singapore by FC, while the installation works were sub-contracted by the FC with the Philippine Construction Corporation (PCC), a domestic corporation. The project with a total cost of P100 Million was completed in 2011 at the following cost components: (design P20Million; machinery and equipment P50 Million; and installation P30 Million). Assume that the project was 40% complete in 2010 and 100% complete in 2011, based on the certificates issued by the certificates issued by the architects and engineers working on the project. GOC paid FC as follows: P60 Million in 2010 and P40 Million in 2011, and FC paid PCC ion foreign currency through a Philippine bank as follows: P10 Million in 2010 and P20 Million in 2011. a) Is FC liable to Philippines income tax, and if so, how much revenue shall be reported by it in 2010 and in 2011? Explain your answer. (5%) b) Is PCC, which adopted the percentage of completion method of reporting income and expenses, liable to value added tax in 2010 and in 2011. Explain your answer. (5%) III Mr. Jose Castillo is a resident Filipino Citizen. He purchased a parcel of land in Makati City in 1970 at a consideration of P1 Million. In 2011, the land , which remained undeveloped and idle, had a fair market value of P20Million. Mr. Antonio Ayala, another Filipino citizen, is very much interested in the property and he offered to buy the same for P20 Million. The Assessor of Makati City re-assessed in 2011 the property at P10 Million. a) When is Mr. Castillo liable for real property tax on the land beginning 2011 or beginning 2012? Explain your answer. (2%) b) Is Mr. Castillo liable for income tax in 2011 based on the offer to buy by Mr. Ayala? Explain your answer. (3%) c) Should Mr. Castillo agree to sell the land to Mr. Ayala in 2012 for P20 Million, subject to the condition as stated in The Deed of Sale that the buyer shall assume the capital gains tax thereon, how musch is the income tax due on the transaction and when must the tax return be filed and the tax be paid by the taxpayer? Explain your answer. (5%) IV Mr. Pedro Aguirre, a resident citizen, is working for a large real estate development company in the country and in 2010, he was promoted to Vice-President of the company. With more responsibilities comes higher pay. In 2011, he decided to buy a new car worth P2 Million and he traded-in his old car with a market value of P800,000.00 and paid the difference of P1.2 Million to the car company. The old car, which was bought three (3) years ago by the father of Mr. Pedro Aguirre at price of P700,000.00 was donated by him and registered in the name of his son. The corresponding donors tax thereon was duly paid by the father. a) How much is the cost basis of the old car to Mr. Aguirre? Explain your answer (2%) b) What is the nature of the old car capital asset or ordinary asset? Explain your answer. (3%) c) Is Mr. Aguirre liable to pay income tax on the gain from the sale of his old car? Explain your answer. (5%) V Spouses Pablo Gonzales and Teresita Gonzales, both resident citizens acquire during their marriage a residential house and lot located in Makati City, which is being leased to a tenant for a monthly rental of P100,000.00. Mr. Pablo Gonzales is the President of PG Corporation and he receives P50,000.00 salary per month. The spouses have only one (1) minor child. In late June 2010, he was immediately brought to the

hospital because of the heart attack and he was pronounced dead on June 30, 2010.With no liabilities, the estate of the late Pablo Gonzales was settled extra-judicially in early 2011. a) Is Mr. Pablo Gonzales required to file income tax for 2010? If so, how much income must he declare for the year? How much personal and additional exemption is he entitled to? Explain your answer. (5%) b) Is Mrs. Teresita Gonzales required to file income tax return fot 2010? If so, how much income must she declare for the year? How much personal exemption is she entitled to? Explain your answer. (5%) c) Is the Estate of the late Pablo Gonzales required to file income tax return for 2010? If so, how much income must it declare for the year? How much personal exemption is it entitled to? Explain your answer. (5%) VI The BIR issude in 2010 a final assessment notice and demand letter against X Corporation covering deficiency income tas for the year 2008 in the amount of P10 Million. X Corporation earlier requested the advice of a lawyer on whether or not it should file a request for reconsideration or a request for reinvestigation. The lawyer said it does not matter wheteher the protest files against the assessment is a request for reconsideration or a request for reinvestigation, because it has same consequences or implications. a) What are the differences between a request for reconsideration and a request for reinvestigation? (5%) b) Do you agree with the advice of the lawyer? Explain your answer (5%) VII a) May the bank deposits peso and foreign currency of the an individual taxpayer be disclosed by a commercial bank to the Commissioner of Internal Revenue, in connection with a tax investigation being conducted by revenue officials, without violating the relevant bank secrecy laws? Explain your answer. (5%) b) In 2011, the Commissioner of the U.S. Internal Revenue Service (IRS) requested in writing the Commissioner of Internal Reveneu to get the informatrion from a bank in the Philippines, regarding the deposits of a U.S. Citizen residing in the Philippines, who is under examiniation by the officials of the US IRS, pursuant to the US-Philippine Tax Treaty and othert existing laws. Should the BIR Commissioner agree to obtain such informarion from the bank and provide the same to the IRS? Explain your answer. (5%) c) Is the bank secrecy lawq in the Philippines violated when the BIR issues a Warrant of Garnishment directed against a domestic bank, requiring it not to allow any withdrawal from any existing bank deposit of he delinquent taxpayer mentioned in the Warrant and to freeze the same until the tax delinquency of said taxpayer is settled with the BIR? Explain your answer. (5%) VIII In the examination conducted by the revenue officials against the corporate taxpayer in 2010, the BIR issued a final assessment notice and demand letter which states: "It is requested that the above deficiency tax be paid immediately upon receipt hereof, inclusive of penalties incident to delinquency. This is our final decision based on investigation. If you disagree, you may appeal this final decision within thirty (30) days from receipt hereof, otherwise said deficiency tax assessment shall become final, executory and demandable." The assessment was immediately appealed by the taxpayer to the Court of Tax Appeals, without filing its protest against the assessment and without a denial thereof by the BIR. If you were the judge, would your deny the petition for review filed by the taxpayer and consider the case as prematurely filed? Explain your answer (5%) IX On April 16, 2012, the corporation filed its annual corporate income tax return for 2011, showing an overpayment of income tax of P1 Million. Which is to be carried over to the succeeding year(s). On May 15, 2012, the corporation sought advice from you and said that it contemplates to file an amended return for 2011, which shows that instead of carry over of the execss income tax payment, the same shall be considenred as a claim for tax refund and the small box shown as "refund" in the return will be filled up. Withi a year, the corporation will file the formal request for refund for the excess payment. a) Will you recommend to the corporation such a course of action and justify that the amended return is the latest official act of the corporation as to how it may treat such overpayment of tax or should you consider the option granted to taxpayers as irrevocable, once previously exercised by it? Explain your answer. (5%)

b) Should the petition for review filed with the CTA on the basisof the amended tax return be denied by the BIR and the CTA, could the corporationstill carry over such excess payment of income tax in the succeeding years, considering that there is no precriptive period provided for in the income tax law with respect to carry over of excess income tax payments? Explain your answer. (5%) X Explain the following statements: a) The acquittal of the taxpayer in a criminal action under the Tax Code does not necessarily result in a exeoneration of said taxpayer from his civil liability to pay taxes. (3%) b) Should the accused be found guilty beyond reasonable doubt for violation of Section 255 of the Tax Code for failure to file tax return or to to spply correct information), the imposition of the civil liability by the CTA should be automatic and no assessment notice from the BIR is necessary? (2%) - NOTHING FOLLOWS HAND IN YOUR ANSWER SHEET. THERE IS NO NEED TO RETURN THIS QUESTIONNAIRE TO HEAD WATCHER. The Lawphil Project - Arellano Law Foundation

2012 Bar Exam in Taxation Law

2012 BAR EXAMINATIONS TAXATION LAW
14 October 2012 2:00 P.M. - 3:30 P.M.

Set A MULTIPLE CHOICE QUESTIONS (MCQs) INSTRUCTIONS The following questionnaire consists of seventy-five (75) MCQs numbered 1 up to 75 contained in TWENTY TWO (22) pages. Answer each question on the MCQ Answer Sheet by shading completely the appropriate circle corresponding to the letter you have chosen. (Read the Marking Instruction on the Answer Sheet) Avoid erasures on the Answer Sheet. If you need to make corrections, erase completely the answer you want to change. Do not explain your answer in the MCQ portion of the exam. You will not earn credit for that. Keep the Answer Sheet clean. Do not make unnecessary marks on it. Do not fold, roll, scratch, crumple or tear it. You may write on the questionnaire and use it as scratch paper but make sure to transfer your Answer Sheet. Provide ample time to transfer the answers if you choose to do this. Answer first the MCQs completely before going to the essay-type questions. HAND IN YOUR ANSWER SHEET. THERE IS NO NEED TO RETURN THIS QUESTIONNAIRE TO THE HEAD WATCHER. GOODLUCK!!! _____________________________________ MARTIN S. VILLARAMA, JR. Chairperson 2012 Bar Examinations Committee PLEASE CHECK THAT THIS SET CONTAINS TWENTY THREE (23) PAGES (INCLUDING THIS PAGE). WARNING: NOT FOR SALE OR UNAUTHORIZED USE 1. Bank A deposit money with Bank B which earns interest that is subjected to the 20% final withholding tax. At the same time, Bank A is subjected to the 5% gross receipts tax on its interest income on loan transactions to customers. Which statement below INCORRECTLY describes the transaction?

a) There is double taxation because two taxes income tax and gross receipts tax are imposed on the interest incomes described above and double taxation is prohibited under the 1987 Constitution b) There is no double taxation because the first tax is income tax, while the second tax is business tax; c) There is no double taxation because the income tax is on the interest income of Bank A on its deposits with Bank B (passive income), while the gross receipts tax is on the interest income received by Bank A from loans to its debtor-customers (active income); d) Income tax on interest income of deposits of Bank A is a direct tax, while GRT on interest income on loan transaction is an tax. 2. Which of the following statement is NOT correct? a) In case of doubt, statutes levying taxes are constructed strictly the government; b) The construction of a statute made by his predecessors is not binding upon the successor, if thereafter he becomes satisfied that a different construction should be given; c) The reversal of a ruling shall not generally be given retroactive application, if said reversal will be prejudicial to the taxpayer; d) A memorandum circular promulgated by the CIR that imposes penalty for violations of certain rules need not be published in a newspaper of general circulation or official gazette because it has the force and effect of law. 3. Which statement below expresses the lifeblood theory? a) The assessed taxes must be enforced by the government. b) The underlying basis of taxation is government necessity, for without taxation, a government can neither exist nor endure; c) Taxation is an arbitrary method of exaction by those who are in the seat of power; d) The power of taxation is an inherent power of the sovereign to impose burdens upon subjects and objects within its jurisdiction for the purpose of raising revenues. 4. Which statement is WRONG? a) The power of taxation may be exercised by the government, its political subdivisions, and public utilities; b) Generally, there is no limit on the amount of tax that may be imposed; c) The money contributed as tax becomes part of the public funds; d) The power of tax is subject to certain constitutional limitations. 5. The Philippines adopted the semi-global tax system, which means that: a) All taxable incomes, regardless of the nature of income, are added together to arrive at gross income, and all allowable deductions are deducted from the gross income to arrive at the taxable income; b) All incomes subject to final withholding taxes liable to income tax under the schedular tax system, while all ordinary income as well as income not subject to final withholding tax under the global tax system; c) All taxable incomes are subject to final withholding taxes under the schedular tax system; d) All taxable incomes from sources within and without the Philippines are liable to income tax. 6. Income from the performance of services is treated as income from within the Philippines, if: a) The payment of compensation for the service is made in the Philippines; b) The contract calling for the performance of services is signed in the Philippines; c) The service is actually performed in the Philippines; d) The recipient of service income is a resident of the Philippines. 7. For income tax purposes, the source of the service income is important for the taxpayer, who is a: a) Filipino citizen residing in Makati City; b) Non-resident Filipino citizen working residing in London, United Kingdom; c) Japanese citizen who is married to a Filipino citizen and residing in their family home located Fort Bonifacio, Taguig City; d) Domestic corporation. 8. Interest income of a domestic commercial bank derived from a peso loan to a domestic corporation in 2010 is : a) Subject to the 30% income tax based on its net taxable income; b) Subject to the 20% final withholding tax; c) Subject to the 7.5% final withholding tax; d) Subject to 10% final withholding tax. 9. A resident corporation is one that is:

a) Organized under the laws of the Philippines that does business in another country; b) Organized under the laws of a foreign country that sets up a regional headquarter in the Philippines doing product promotion and information dissemination; c) Organized under the laws of the Philippines that engages business in a special economic zone; d) Organized under the laws of a foreign country that engages in business in Makati City, Pihlippines. 10. A dealer in securities sold unlisted shares of stocks of a domestic corporation in 2010 and derived a gain of P1 Million therefrom. The gain is: a) Taxable at 30% regular corporate income tax based on net taxable income; b) Taxable at 5%/10% capital gains tax based on net capital gain; c) Taxable at of 1% stock transaction tax based on the gross selling price or fair market value, whichever is higher d) Exempt from income tax 11. An individual, who is a real estate dealer, sold a residential lot in Quezon City at a gain of P100,000.00 (selling price of P900,000.00 and cost is P800,00.00). The sale is subject to income tax as follows: a) 6% capital gains tax on the gain; b) 6% capital gains tax on the gross selling price of fair market value, whichever is higher; c) Ordinary income tax at the graduated rates of 5% to 32% of net taxable income; d) 30% income tax on net taxable income. 12. During the audit conducted by the BIR official, it was found that the rental income claimed by the corporation was not subjected to expanded withholding tax. Accordingly, the claimed rental expense: a) Is deductible from the gross income of the corporation, despite non-withholding of income tax by the corporation; b) Is deductible from the gross income of the corporation, provided that the 5% expanded withholding tax is paid by the corporation during the audit; c) Is not deductible from gross income of the corporation due to non-withholding of tax; d) Is deductible, if it can be shown that the lessor has correctly reported the rental income in his tax return. 13. A resident Filipino citizen (not a dealer in securities) sold shares of stocks of a domestic corporation that are listed and traded in the Philippine Stock Exchange. a) The sale is exempt from income tax but subject to the of 1% stock transaction tax; b) The sale is subject to income tax computed at the graduated income tax rates of 5% to 32% on net taxable income; c) The sale is subject to the stock transaction tax and income tax; d) The sale is both exempt from the stock transaction tax and income tax. 14. The appropriate method of accounting for a contractor on his long-term construction contract (i.e., it takes more than a year to finish) is: a) Cash method; b) Accrual method; c) Installment sale method; d) Percentage of completion method. 15. A general professional partnership (GPP) is one: a) That is registered as such with the Securities and Exchange Commission and the Bureau of Internal Revenue; b) That is composed of individuals who exercise a common profession; c) That exclusively derives income from the practice of the common profession; d) That derives professional income and rental income from property owned by it. 16. The interest expense of a domestic corporation on a bank loan in connection with the purchase of a production equipment: a) Is not deductible from gross income of the borrower-corporation; b) Is deductible from the gross income of the borrower-corporation during the year or it may be capitalized as part of cost of the equipment; c) Is deductible only for a period of five years from date of purchase; d) Is deductible only if the taxpayer uses the cash method of accounting. 17. The "all events test" refers to: a) A person who uses the cash method where all sales have been fully paid by the buyers thereof;

b) A person who uses the installment sales method, where the full amount of consideration is paid in full by the buyer thereof within the year of sale; c) A person who uses the accrual method, whereby an expense is deductible for the taxable year in which all the events had occurred which determined the fact of the liability and the amount thereof could be determined with reasonable accuracy; d) A person who uses the completed method, whereby the construction project has been completed during the year the contract was signed. 18. All the items below are excluded from gross income, except: a) Gain from sale of long-term bonds, debentures and indebtedness; b) Value of property received by a person as donation or inheritance; c) Retirement benefits received from the GSIS, SSS, or accredited retirement plan; d) Separation pay received by a retiring employee under a voluntary retirement program of the corporate employer. 19. Which statement is correct? A non-stock, non-profit charitable association that sells its idle agricultural property is: a) Not required to file an income tax return nor pay income tax on the transaction to the BIR, provided the sales proceeds are invested in another real estate during the year; b) Required to pay the 6% capital gains tax on the gross selling price of fair market value, whichever is higher; c) Mandated to pay the 30% regular corporate income tax on the gain from sale; d) Required to withhold the applicable expanded withholding tax rate on the transaction and remit the same to the BIR. 20. ABS Corporation is a PEZA-registered export enterprise which manufactures cameras and sells all its finished products abroad. Which statement is NOTcorrect? a) ABS Corporation is subject to the 5% final tax on gross income earned, in lieu of all national and local taxes; b) ABS Corporation is exempt from the 30% corporate income tax on net income, provided it pays value added tax; c) ABS Corporation is subject to the 30% corporate income tax on net income; d) ABS Corporation is exempt from all national and local taxes, except real property tax. 21. In May 2010, Mr. And Mrs. Melencio Antonio donated a house and lot with a fair market value of P10 Million to their sob, Roberto, who is to be married during the same year to Josefina Angeles. Which statement below is INCORRECT? a) There are four (4) donations made two (2) donations are made by Mr. Melencio Antonio to Roberto and Josefina, and two (2) donations are made by Mrs. Antonio; b) The four (4) donations are made by the Spouses Antonio to members of the family, hence, subject to the graduated donors tax rates (2%-15%); c) Two (2) donations are made by the spouses to members of the family, while two (2) other donations are made to strangers; d) Two (2) donations made by the spouses to Roberto are entitled to deduction from the gross gift as donation proper nuptias. 22. While he was traveling with friends, Mr. Jose Francisco, resident Filipino citizen, died on January 20, 2011 in a California Hospital, USA, leaving personal and real properties with market values as follows: House and Lot in Quezon City P10 Million; Cash in bank in California US$10,000.00; Citibank in New York US$5,000.00; Cash in BPI Makati P4 Million; Car in Quezon City P1 Million; Shares of stocks of Apple Corporation, US corporation listed in NY Stock Exchange US$1 = Php50. His gross estate for the Philippine estate tax purposes shall be: a) P13 Million; b) P14 Million; c) P15 Million; d) P16 Million. 23. In 2006, Mr. Vicente Tagle, a retiree, bought 10,000 CDA shares that are unlisted in the local stock exchange for P10 per share. In 2010, the said shares had a book value per share of P60 per share. In view of a car accident in 2010, Mr. Vicente Tagle had to sell his CDA shares but he could sell the same only for P50 per share. The sale is subject to tax as follos:

a) 5%/10% capital gains tax on the capital gain from sale of P40 per share (P50 selling price less P10 cost); b) 5%/10% capital gains tax on the capital gain of P50 per share, arrived at by deducting the cost (P10 per share) from the book value (P60 per share); c) 5%/10% capital gains tax on the capital gain from sale of P40 per share (P50 selling price less P10 cost) plus donors tax on the excess of the fair market value of the shares over the consideration; d) Graduated income tax rates of 5% to 32% on the net taxable income from the sale of the shares. 24. On January 10, 2011, Maria Reyes, single-mother, donated cash in the amount of P50,000.00 to her daughter Cristina, and on December 20, 2011, she donated another P50,000.00 to Cristina. Which statement is correct? a) Maria Reyes is subject to donors tax in 2011 because gross gift is P100,000.00; b) Maria Reyes is exempt from donors tax in 2011 because gross gift is P100,000.00; c) Maria Reyes is exempt from donors tax in 2011 only to the extent of P50,000.00; d) Maria Reyes is exempt from donors tax in 2011 because the donee is minor. 25. Jose Ramos, single, died of a heart attack on October 10, 2011, leaving a residential house and lot with a market value of P1.8 Million and cash of P100,000.00. Funeral expenses paid amounted to P250,000.00 a) His estate will be exempt from estate tax because the net estate is zero; b) His estate will be subject to estate tax because net estate is P1,650,000.00; c) His estate will be subject to estate tax because net estate is P1,700,00.00; d) His estate will be subject to estate tax because net estate is P800,000.00. 26. Sale of residential house and lot by an official of a domestic corporation to another official in the same corporation for a consideration of P2.5 Million in 2011 is: a) Exempt from VAT because the gross sales do not exceed P2.5 Million; b) Exempt from VAT because the property sold is a capital asset, regardless of the gross selling price; c) Exempt from VAT because the seller is not a person engaged in real estate business; d) Taxable at 12% VAT output tax on the gross selling price of P2.5 Million. 27. An importer of flowers from abroad in 2011: a) Is liable for VAT, if it registers as a VAT person; b) Is exempt from VAT, because the goods are treated as agricultural products; c) Is exempt from VAT, provided that his total importation of flowers does not exceed P1.5 Million; d) Is liable for VAT, despite the fact that it did not register as a VAT person and its total annual sales of flowers do not exceed P1.5 Million. 28. A VAT-registered contractor performed services for his customer in 2010 and billed him P11.2 Million, broken down as follows: P10 Million cost of services, plus P1.2 Million, 12% VAT. Of the contract price of P10 Million, only P8 Million plus VAT thereon was received from the customer in 2010, and the balance of P4 Million plus VAT was received by the contractor in 2011. How much is the taxable gross receipts of the contractor for 2010, for VAT purposes? a) P10 Million, the total cost of services performed in 2010; b) P8 Million, the amount received from the customer in 2010; c) P8 Million plus VAT received from the customer in 2010; d) P11.2 Million, the total cost of services performed plus 12% VAT. 29. MBM Corporation is the owner-operator of movie houses in Cavite. During the year 2010, it received a total gross receipts of P20 Million from the operation of movies. It did not register as a VAT person. Which statement below is correct? a) MBM Corporation is exempt from the 12% VAT, but liable for the 20% amusement tax on admissions under the Local Government Code; b) MBM Corporation is both liable for the 12% VAT and 20% amusement tax on admissions; c) MBM Corporation is both exempt from the 12% VAT and 20% amusement tax on admissions; d) MBM Corporation is liable for the 12% VAT, but exempt from the 20% amusement tax on admissions. 30. A pawnshop shall now be treated, for business tax purposes: a) As a lending investor liable to the 12% VAT on its gross receipts from interest income and from gross selling price from sale of unclaimed properties; b) Not as a lending investor, but liable to the 5% gross receipts tax imposed on a non-bank financial intermediary under Title VI (Other Percentage Taxes); c) As exempt from 12% VAT and 5% gross receipts tax;

d) As liable to the 12% VAT and 5% gross receipts tax. 31. Under the VAT system, there is no cascading because the tax itself is not again being taxed. However, in determining the tax base on sale of taxable goods under the VAT system: a) The professional tax paid by the professional is included in gross receipts; b) The other percentage tax (e.g., gross receipts tax) paid by the taxpayer is included in gross selling price; c) The excise tax paid by the taxpayer before withdrawal of the goods from the place of production or from customs custody is included in the gross selling price; d) The documentary stamp tax paid by the taxpayer is included in the gross selling price or gross receipts. 32. Except for one transaction, the rest are exempt from value added tax. Which one is VAT taxable? a) Sales of chicken by a restaurant owner who did not register as a VAT person and whose gross annual sales is P1.2 Million; b) Sales of copra by a copra dealer to a coconut oil manufacturer who did not register as a VAT person and whose gross annual sales is P5 Million; c) Gross receipts of CPA during the year amounted to P1 Million; the CPA registered as a VAT person in January 2011, before practicing his profession; d) Sales of a book store during the year amounted to P10 Million; it did not register as a VAT person with the BIR. 33. A lessor or real property is exempt from value added tax in one of the transactions below. Which one is it? a) Lessor leases commercial stalls located in the Greenhills Commercial Center to VAT-registered sellers of cell phones; lessors gross rental during the year amounted to P12 Million; b) Lessor leases residential apartment units to individual tenants for P10,000.00 per month per unit; his gross rental income during the year amounted to P2 Million; c) Lessor leases commercial stalls at P10,000.00 per stall per month and residential units at P15,000.00 per unit per month; his gross rental income during the year amounted to P3 Million; d) Lessor leases two (2) residential houses and lots at P50,000.00 per month per unit, but he registered as a VAT person. 34. IBP Bank extended loans to debtors during the year, with real properties of the debtors being used as collateral to secure the loans. When the debtors failed to pay the unpaid principal and interests after several demand letters, the bank foreclosed the same and entered into contracts of lease with tenants. The bank is subject to the tax as follows: a) 12% VAT on the rental income, but exempt from the 7% gross receipts tax; b) 7% gross receipts tax on the rental income, but exempt from VAT; c) Liable to both the 12% VAT and 7% gross receipts tax; d) Exempt from both the 12% VAT and 7% gross receipts tax. 35. Which transaction below is subject to VAT? a) Sale of vegetables by a farmer in Baguio City to a vegetable dealer; b) Sale of vegetables by a vegetable dealer in Baguio City to another vegetable dealer in Quezon City; c) Sale of vegetables by the QC vegetable dealer to a restaurant in Manila; d) Sale of vegetables by the restaurant operator to its customers. 36. Which importation in 2011 is subject to VAT? a) Importation of fuels by a person engaged in international shipping worth P20 Million; b) Importation of raw, unprocessed, refrigerated Kobe beef from Japan by a beef dealer for sale to hotels in Makati City with a fair market value of P10 Million; c) Importation of wines by a wine dealer with a fair market value of P2 million for sale to hotels in Makati City; d) Importation of books worth P5 Million and school supplies worth P1.2 million. 37. Input tax is available to a VAT-registered buyer, provided that: a) The seller is a VAT-registered person; b) The seller issues a VAT invoice or official receipt, which separately indicates the VAT component; c) The goods or service is subject to or exempt from VAT, but the sale is covered by a VAT invoice or receipt issued by VAT-registered person; d) The name and TIN of the buyer is not stated or shown in the VAT invoice or receipt Which statement shown above is NOT correct? 38. Claim for tax credit or refund of excess input tax is available only to:

a) A VAT-registered person whose sales are made to embassies of foreign governments and United Nations agencies located in the Philippines without the BIR approval of the application for zerorating; b) Any person who has excess input tax arising from local purchases of taxable goods and services; c) A VAT-registered person whose sales are made to clients in the Philippines; d) A VAT-registered person whose sales are made to customers outside the Philippines and who issued VAT invoices or receipts with the words "ZERO RATED SALES" imprinted on the sales invoices or receipts. 39. A hotel operator that is a VAT-registered person and who leases luxury vehicles to its hotel customers is: a) Subject to the 3% common carriers tax and 12% VAT; b) Subject to the 3% common carriers tax only; c) Subject to the 12% VAT only; d) Exempt from both the 3% common carriers tax and 12% VAT. 40. Which statement is correct? A bar review center owned and operated by lawyers is: a) Exempt from VAT, regardless of its gross receipts during the year because it is an educational center; b) Exempt from VAT, provided that its annual gross receipts do not exceed P1.5 Million in 2011; c) Subject to VAT, regardless of its gross receipts during the year; d) Subject to VAT, if it is duly accredited by TESDA. 41. For 2012, input tax is not available as a credit against the output tax of the buyer of taxable goods or services during the quarter, if: a) The VAT invoice or receipt of the seller is registered with the BIR; b) The VAT invoice or receipt of the seller does not separately indicate the gross selling price or gross receipts and the VAT component therein; c) The VAT invoice or receipt is issued in the name of the VAT-registered buyer and his TIN is shown in said invoice or receipt; d) The VAT invoice or receipt issued by the seller shows the Taxpayer Identification Number plus the word "VAT" or "VAT registered person". 42. The public market vendor below, who is not a VAT-registered person is liable to VAT in 2010, if: a) She sells raw chicken and meats and her gross sales during the year is P2 Million; b) She sells vegetables and fruits in her stall and her gross sales during the year is P1 Million; c) She sells canned goods, processed coconut oils, and cut flowers in her stall and her gross sales during the year is P2.5 Million; d) She sells live fish, shrimps, and crabs and her gross sales during the year is P5 Million. 43. Which statement is FALSE under the VAT law? a) A VAT-registered person will be subject to VAT for his taxable transactions, regardless of his gross sales or receipts; b) A person engaged in trade or business selling taxable goods or services must register as a VAT person, when his gross sales or receipts for the year 2011 exceed P1.5 Million; c) A person who issued a VAT-registered invoice or receipt for a VAT-exempt transaction is liable to the 12% VAT as a penalty for the wrong issuance thereof; d) Once a doctor of medicine exercises his profession during the year, he needs to register as a VAT person and to issue VAT receipts for professional fees received. 44. The Commissioner of Internal Revenue may NOT inquire into the bank deposits of a taxpayer, except: a) When the taxpayer files a fraudulent return; b) When the taxpayer offers to compromise the assessed tax based on erroneous assessment; c) When the taxpayer offers to compromise the assessed tax based on financial incapacity to pay and he authorizes the Commissioner in writing to look into his bank records; d) When the taxpayer did not file his income tax return for the year. 45. The Commissioner of Internal Revenue issued a BIR ruling to the effect that the transaction is liable to income tax and value added tax. Upon receipt of the ruling, a taxpayer does not agree thereto. What is his proper remedy? a) File a petition for review with the Court of Tax Appeals within thirty (30) days from receipt thereof; b) File a motion for reconsideration with the Commissioner of Internal Revenue; c) File an appeal to the Secretary of Finance within thirty (30) days from receipt thereof; d) File an appeal to the Secretary of Justice within thirty (30) days from receipt thereof.

46. On April 15, 2011, the Commissioner of Internal Revenue mailed by registered mail the final assessment notice and the demand letter covering the calendar year 2007 with the QC Post Office. Which statement is correct? a) The assessment notice is void because it was mailed beyond the prescriptive period; b) The assessment notice is void because it was not received by the taxpayer within the three-year period from the date of filing of the tax return; c) The assessment notice is void if the taxpayer can show that the same was received only after one (1) month from date of mailing; d) The assessment notice is valid even if the taxpayer received the same after the three-year period from the date of filing of the tax return. 47. A preliminary Assessment Notice (PAN) is NOT required to be issued by the BIR before issuing a Final Assessment Notice (FAN) on one of the following cases: a) When a taxpayer does not pay the 2010 deficiency income tax liability on or before July 15 of the year; b) When the finding for any deficiency tax is the result of mathematical error in the computation of the tax as appearing on the face of the return; c) When a discrepancy has been determined between the value added tax paid and the amount due for the year; d) When the amount of discrepancy shown in the Letter Notice is not paid within thirty (30) days from date of receipt. 48. When a protest against the deficiency income tax assessment was denied by the BIR Regional Director of Quezon City, the appeal to the Court of Tax Appeals must be filed by a taxpayer: a) If the amount of basic tax assessed is P100,000.00 or more; b) If the amount of basic tax assessed is P300,000.00 or more; c) If the amount of basic tax assessed is P500,000.00 or more; d) If the amount of basic tax assessed is P1 Million or more; 49. The taxpayer received an assessment notice on April 15, 2011 and filed its request for reinvestigation against the assessment on April 30, 2011. Additional documentary evidence in support of its protest was submitted by it on June 30, 2011. If no denial of the protest was received by the taxpayer, when is the last day for the filing of its appeal to the CTA? a) November 30, 2011; b) December 30, 2011; c) January 30, 2012; d) February 28, 2012. 50. Using the same facts in the immediately preceding number, but assuming that the final decision on the disputed assessment was received by the taxpayer on July 30, 2011, when is the last day for filing of the appeal to the CTA? a) August 30, 2011; b) September 30, 2011; c) December 30, 2011; d) January 30, 2012. 51. Which court has jurisdiction to determine if the warrant of distraint and levy issued by the BIR is valid and to rule if the waiver of the Statute of Limitations was validly effected? a) City Courts; b) Regional Trial Court; c) Court of Tax Appeals; d) Court of Appeals. 52. Which statement below on compromise of tax liability is correct? a) Compromise of a tax liability is available only at the administrative level; b) Compromise of a tax liability is available only before trial at the CTA; c) Compromise of a tax liability is available even during appeal, provided that prior leave of court is obtained; d) Compromise of a tax liability is still available even after the court decision has become final and executory.

53. In case of full or partial denial of the written claim for refund or excess input tax directly attributable to zerorated sales, or the failure on the part of the Commissioner to act on the application within 120 days from the date of submission of complete documents, an appeal must be filed with the CTA: a) Within thirty (30) days after filing the administrative claim with the BIR; b) Within sixty (60) days after filing the administrative claim with the BIR; c) Within one hundred twenty (120) days after filing the administrative claim with the BIR; d) Within thirty (30) days from the receipt of the decision denying the claim or after the expiration of the 120-day period. 54. The submission of the required documents within sixty (60) days from the filing of the protest is available only where: a) The taxpayer previously filed a Motion for Reconsideration with the BIR official; b) The taxpayer previously filed a request for reconsideration with the BIR official; c) The taxpayer previously filed a request for reinvestigation with the BIR official; d) The taxpayer previously filed an extension to file a protest with the BIR official. 55. The prescriptive period for the collection of the deficiency tax assessment will be tolled: a) If the taxpayer files a request for reconsideration with the Asst. Commissioner; b) If the taxpayer files a request for reinvestigation that is approved by the Commissioner of Internal Revenue; c) If the taxpayer changes his address in the Philippines that is communicated to the BIR official; d) If a warrant of levy is served upon the taxpayers real property in Manila. 56. Which statement is correct? The collection of a deficiency tax assessment by distraint and levy: a) May be repeated, if necessary, until the full amount due, including all expenses, is collected; b) Must be done successively, first by distraint and then by levy; c) Automatically covers the bank deposits of a delinquent taxpayer; d) May be done only once during the taxable year. 57. The prescriptive period to file a criminal action is: a) Ten (10) years from the date of discovery of the commission of fraud or non-filing of tax return; b) Five (5) years from the date of issuance of the final assessment notice; c) Three (3) years from the filing of the annual tax return; d) Five (5) years from the commission of the violation of the law, and if the same be not known at the time, from the discovery thereof and the institution of judicial proceedings for its investigation and punishment. 58. The accuseds mere reliance on the representations made by his accountant, with deliberate refusal or avoidance to verify the contents of his tax return and to inquire on its authenticity constitutes: a) Simple negligence; b) Gross negligence; c) Willful blindness; d) Excusable negligence. 59. The acquittal of the accused in the criminal action for the failure to file income tax return and failure to supply correct information will have the following consequence: a) The CTA will automatically exempt the accused from any civil liability; b) The CTA will still hold the taxpayer liable for deficiency income tax liability in all cases, since preponderance of evidence is merely required for tax cases; c) The CTA will impose civil or tax liability only if there was a final assessment notice issued by the BIR against the accused in accordance with the prescribed procedures for issuing assessments, which was presented during the trial; d) The CTA will impose civil or tax liability, provided that a computation of the tax liability is presented during the trial. 60. X Corporation had excess income tax payment for the year 2008, which it chose to carry over in 2009. In filing its 2009 corporate income tax return, it signified its intention (by checking the small box "refund" at the bottom of the return) to get a refund of the overpaid amount in 2008. Can the refund be allowed or not, and if disallowed, does X Corporation lose the claimed amount? a) X Corporation may not get the refund because the decision to carry over in 2008 was irrevocable for that year, and it may not change that decision in succeeding years;

b) X Corporation may not get the refund in 2009, but the amount being claimed as refund may be utilized in succeeding years until fully exhausted because there is no prescriptive period for carry over of excess income tax payments; c) X Corporation may get the refund, provided that it will no longer carry over such amount or utilize the same against its income tax liability in the future; d) X Corporation may file instead a claim of tax credit, in lieu of refund. 61. Which statement is correct? a) Legislative acts passed by the municipal council in the exercise of its lawmaking authority are denominated as resolutions and ordinances; b) Legislative acts passed by the municipal council in the exercise of its lawmaking authority are denominated as resolutions; c) Legislative acts passed by the municipal council in the exercise of its lawmaking authority are denominated as ordinances; d) Both ordinances and resolutions are solemn and formal acts. 62. Which of the following statements is NOT a test of a valid ordinance? a) It must not contravene the Constitution or any statute; b) It must not be unfair or oppressive; c) It must not be partial or discriminatory; d) It may prohibit or regulate trade. 63. Taxing power of local government units shall NOT extend to the following taxes, except one: a) Income tax on banks and other financial institutions; b) Taxes of any kind on the national government, its agencies and instrumentalities, and local government units; c) Taxes on agricultural and aquatic products when sold by the marginal farmers or fishermen; d) Excise taxes on articles enumerated under the National Internal Revenue Code. 64. Which statement on prescriptive periods is true? a) The prescriptive periods to assess taxes in the National Internal Revenue Code and the Local Government Code are the same; b) Local taxes shall be assessed within five (5) years from the date they became due; c) Action for the collection of local taxes may be instituted after the expiration of the period to assess and to collect the tax; d) Local taxes may be assessed within ten (10) years from discovery of the underpayment of tax which does not constitute fraud. 65. The appraisal, assessment, levy and collection of real property tax shall be guided by the following principles. Which statement does NOT belong here? a) Real property shall be appraised at its current and fair market value; b) Real property shall be classified for assessment purposes on the basis of its actual use; c) Real property shall be assessed on the basis of a uniform classification within each local political subdivision; d) The appraisal and assessment of real property shall be based on audited financial statements of the owner. 66. The Manila International Airport Authority (MIAA) is exempt from real property tax. Which statement below is NOT correct? a) MIAA is not a government-owned or controlled corporation because it is not organized as a stock or non-stock corporation; b) MIAA is a government instrumentality vested with corporate powers and performing essential public services; c) MIAA is not a taxable entity because the real property is owned by the Republic of the Philippines and the beneficial use of such property has not been granted to a private entity; d) MIAA is a government-owned or controlled corporation because it is required to meet the test of economic viability. 67. For purposes of real property taxes, the tax rates are applied on: a) Zonal values; b) Fair market value; c) Assessed values;

d) Reproduction values. 68. One of the local government units below does NOT have the power to impose real property tax: a) Bacoor, Cavite; b) Davao City; c) Tarlac Province; d) Malabon, Metro Manila. 69. Where the real property tax assessment is erroneous, the remedy of the property owner is: a) To file a claim for refund in the Court of Tax Appeals if he has paid the tax, within thirty (30) days from date of payment; b) To file an appeal with the Provincial Board of Assessment Appeals within thirty (30) days from receipt of the assessment; c) To file an appeal with the Provincial Board of Assessment Appeals within sixty (60) days from receipt of the assessment; d) To file an appeal with the Provincial Board of Assessment Appeals within sixty (60) days from receipt of the assessment and playing the assessed tax under protest. 70. The City Government of Manila may NOT impose: a) Basic real property tax at 2% of the assessed value of real property; b) Additional levy on real property for the special education fund at 1% of the assessed value of real property; c) Additional ad valorem tax on idle lands at a rate not exceeding 5% of the assessed value; d) Special levy on lands within its territory specially benefited by public works projects or improvements funded by it at 80% of the actual cost of the projects or improvements. 71. Importation of goods is deemed terminated: a) When the customs duties are paid, even if the goods remain within the customs premises; b) When the goods are released or withdrawn from the customs house upon payment of the customs duties or with legal permit to withdraw; c) When the goods enter Philippines territory and remain within the customs house within thirty (30) days from date of entry; d) When there is part payment of duties on the imported goods located in the customs area. 72. A protest against an assessment issued by the Collector of Customs for unpaid customs duties on imported goods shall be filed with: a) The Commissioner of Customs; b) The Regional Trial Court; c) The Court of Tax Appeals; d) The Collector of Customs. 73. The dutiable value of an imported article subject to an ad valorem rate of duty under existing law shall be: a) The home consumption value; b) The total value; c) The total landed cost; d) The transaction value. 74. The imported articles shall in any case be subject to the regular physical examination when: a) The importer disagrees with the findings as contained in the government surveyors report; b) The number, weight and nature of packages indicated in the customs entry declaration and supporting documents differ from that in the manifest; c) The container is not leaking or damaged; d) The shipment is covered by alert/hold orders issued pursuant to an existing order. 75. Which cases are appealable to the CTA? a) Decisions of the Secretary of Finance in cases involving liability for customs duties, seizure, detention or release of property affected; b) Decisions of the Commissioner of Customs in cases involving liability for customs duties, seizure, detention or release of property affected; c) Decisions of the Collector of Customs in cases involving liability for customs duties, seizure, detention or release of property affected; d) Decisions of the BIR Commissioner in cases involving liability for customs duties, seizure, detention or release of property affected.

- NOTHING FOLLOWS HAND IN YOUR ANSWER SHEET. THERE IS NO NEED TO RETURN THIS QUESTIONNAIRE TO HEAD WATCHER. 2012 BAR EXAMINATIONS TAXATION LAW
14 October 2012 3:30 P.M.-5 P.M.

Set B ESSAY TYPE QUESTIONS INSTRUCTIONS The following questionnaire consists of ten (10) questions (numbered I to X) contained in SIX (6) pages. Begin your answer to each numbered question on a separate page; an answer to a sub-question/s under the same number maybe written continuously on the same page and succeeding pages until completed. Answer the question directly and concisely. Do not repeat the question. Write legibly. HAND IN YOUR NOTEBOOK. THERE IS NO NEED TO RETURN THIS QUESTIONNAIRE TO THE HEAD WATCHER. GOODLUCK!!! _____________________________________ MARTIN S. VILLARAMA, JR. Chairperson 2012 Bar Examinations Committee PLEASE CHECK THAT THIS SET CONTAINS SEVEN (7) PAGES (INCLUDING THIS PAGE). WARNING: NOT FOR SALE OR UNAUTHORIZED USE
TAXATION LAW

I Anchor Banking Corporation, which was organized in 2000 and existing under the laws of the Philippines and owned by the Sy Family of Makati City, set up in 2010 a branch office in Shanghai City, China, to take advantage of the presence of many Filipino workers in that area and its booming economy. During the year, the bank ,management decided not to include the P20 Million net income of the Shanghai Branch in the annual Philippine income tax return filed with the BIR, which showed a net taxable income of P30 Million , because the Shanghai Branch is treated as a foreign corporation and is taxed only on income from sources within the Philippines, and since the loan and other business transactions were done in Shanghai, these incomes are not taxable in the Philippines. a) Is the bank correct in excluding the net income of its Shanghai Branch in the computation of its annual corporate income tax for 2010? Explain your answer. (5%) b) Should the Shanghai Branch of Anchor Bank remit profit to its Head Office in the Philippines in 2011, is the branch liable to the 15% branch profit remittance tax imposed under Section 28 (A)(5) of the 1997 Tax Code? Explain your answer (5%) II Foster Corporation (FC) is a Singapore-based foreign corporation engaged in construction and installation projects. In 2010, Global Oil Corporation (GOC), a domestic corpoartion engaged in the refinery of petroleum products, awarded an anti-pollution project to Foster Corporation, whereby FC shall design, supply machinery and equipment, and install an anti-pollution device for GOCs refinery in the Philippines, provided that the installation part of the project may be sub-contracted to a local construction company. Pursuant to the contract, the design and supply contracts were done in Singapore by FC, while the installation works were sub-contracted by the FC with the Philippine Construction Corporation (PCC), a domestic corporation. The project with a total cost of P100 Million was completed in 2011 at the following cost components: (design P20Million; machinery and equipment P50 Million; and installation P30 Million). Assume that the project was 40% complete in 2010 and 100% complete in 2011, based on the certificates issued by the certificates issued by the architects and engineers working on the project. GOC paid FC as follows: P60 Million in 2010 and P40 Million in 2011, and FC paid PCC ion foreign currency through a Philippine bank as follows: P10 Million in 2010 and P20 Million in 2011.

a) Is FC liable to Philippines income tax, and if so, how much revenue shall be reported by it in 2010 and in 2011? Explain your answer. (5%) b) Is PCC, which adopted the percentage of completion method of reporting income and expenses, liable to value added tax in 2010 and in 2011. Explain your answer. (5%) III Mr. Jose Castillo is a resident Filipino Citizen. He purchased a parcel of land in Makati City in 1970 at a consideration of P1 Million. In 2011, the land , which remained undeveloped and idle, had a fair market value of P20Million. Mr. Antonio Ayala, another Filipino citizen, is very much interested in the property and he offered to buy the same for P20 Million. The Assessor of Makati City reassessed in 2011 the property at P10 Million. a) When is Mr. Castillo liable for real property tax on the land beginning 2011 or beginning 2012? Explain your answer. (2%) b) Is Mr. Castillo liable for income tax in 2011 based on the offer to buy by Mr. Ayala? Explain your answer. (3%) c) Should Mr. Castillo agree to sell the land to Mr. Ayala in 2012 for P20 Million, subject to the condition as stated in The Deed of Sale that the buyer shall assume the capital gains tax thereon, how musch is the income tax due on the transaction and when must the tax return be filed and the tax be paid by the taxpayer? Explain your answer. (5%) IV Mr. Pedro Aguirre, a resident citizen, is working for a large real estate development company in the country and in 2010, he was promoted to Vice-President of the company. With more responsibilities comes higher pay. In 2011, he decided to buy a new car worth P2 Million and he traded-in his old car with a market value of P800,000.00 and paid the difference of P1.2 Million to the car company. The old car, which was bought three (3) years ago by the father of Mr. Pedro Aguirre at price of P700,000.00 was donated by him and registered in the name of his son. The corresponding donors tax thereon was duly paid by the father. a) How much is the cost basis of the old car to Mr. Aguirre? Explain your answer (2%) b) What is the nature of the old car capital asset or ordinary asset? Explain your answer. (3%) c) Is Mr. Aguirre liable to pay income tax on the gain from the sale of his old car? Explain your answer. (5%) V Spouses Pablo Gonzales and Teresita Gonzales, both resident citizens acquire during their marriage a residential house and lot located in Makati City, which is being leased to a tenant for a monthly rental of P100,000.00. Mr. Pablo Gonzales is the President of PG Corporation and he receives P50,000.00 salary per month. The spouses have only one (1) minor child. In late June 2010, he was immediately brought to the hospital because of the heart attack and he was pronounced dead on June 30, 2010.With no liabilities, the estate of the late Pablo Gonzales was settled extrajudicially in early 2011. a) Is Mr. Pablo Gonzales required to file income tax for 2010? If so, how much income must he declare for the year? How much personal and additional exemption is he entitled to? Explain your answer. (5%) b) Is Mrs. Teresita Gonzales required to file income tax return fot 2010? If so, how much income must she declare for the year? How much personal exemption is she entitled to? Explain your answer. (5%) c) Is the Estate of the late Pablo Gonzales required to file income tax return for 2010? If so, how much income must it declare for the year? How much personal exemption is it entitled to? Explain your answer. (5%) VI The BIR issude in 2010 a final assessment notice and demand letter against X Corporation covering deficiency income tas for the year 2008 in the amount of P10 Million. X Corporation earlier requested the advice of a lawyer on whether or not it should file a request for reconsideration or a request for reinvestigation. The lawyer said it does not matter wheteher the protest files against the assessment is a request for reconsideration or a request for reinvestigation, because it has same consequences or implications. a) What are the differences between a request for reconsideration and a request for reinvestigation? (5%) b) Do you agree with the advice of the lawyer? Explain your answer (5%)

VII a) May the bank deposits peso and foreign currency of the an individual taxpayer be disclosed by a commercial bank to the Commissioner of Internal Revenue, in connection with a tax investigation being conducted by revenue officials, without violating the relevant bank secrecy laws? Explain your answer. (5%) b) In 2011, the Commissioner of the U.S. Internal Revenue Service (IRS) requested in writing the Commissioner of Internal Reveneu to get the informatrion from a bank in the Philippines, regarding the deposits of a U.S. Citizen residing in the Philippines, who is under examiniation by the officials of the US IRS, pursuant to the US-Philippine Tax Treaty and othert existing laws. Should the BIR Commissioner agree to obtain such informarion from the bank and provide the same to the IRS? Explain your answer. (5%) c) Is the bank secrecy lawq in the Philippines violated when the BIR issues a Warrant of Garnishment directed against a domestic bank, requiring it not to allow any withdrawal from any existing bank deposit of he delinquent taxpayer mentioned in the Warrant and to freeze the same until the tax delinquency of said taxpayer is settled with the BIR? Explain your answer. (5%) VIII In the examination conducted by the revenue officials against the corporate taxpayer in 2010, the BIR issued a final assessment notice and demand letter which states: "It is requested that the above deficiency tax be paid immediately upon receipt hereof, inclusive of penalties incident to delinquency. This is our final decision based on investigation. If you disagree, you may appeal this final decision within thirty (30) days from receipt hereof, otherwise said deficiency tax assessment shall become final, executory and demandable." The assessment was immediately appealed by the taxpayer to the Court of Tax Appeals, without filing its protest against the assessment and without a denial thereof by the BIR. If you were the judge, would your deny the petition for review filed by the taxpayer and consider the case as prematurely filed? Explain your answer (5%) IX On April 16, 2012, the corporation filed its annual corporate income tax return for 2011, showing an overpayment of income tax of P1 Million. Which is to be carried over to the succeeding year(s). On May 15, 2012, the corporation sought advice from you and said that it contemplates to file an amended return for 2011, which shows that instead of carry over of the execss income tax payment, the same shall be considenred as a claim for tax refund and the small box shown as "refund" in the return will be filled up. Withi a year, the corporation will file the formal request for refund for the excess payment. a) Will you recommend to the corporation such a course of action and justify that the amended return is the latest official act of the corporation as to how it may treat such overpayment of tax or should you consider the option granted to taxpayers as irrevocable, once previously exercised by it? Explain your answer. (5%) b) Should the petition for review filed with the CTA on the basisof the amended tax return be denied by the BIR and the CTA, could the corporationstill carry over such excess payment of income tax in the succeeding years, considering that there is no precriptive period provided for in the income tax law with respect to carry over of excess income tax payments? Explain your answer. (5%) X Explain the following statements: a) The acquittal of the taxpayer in a criminal action under the Tax Code does not necessarily result in a exeoneration of said taxpayer from his civil liability to pay taxes. (3%) b) Should the accused be found guilty beyond reasonable doubt for violation of Section 255 of the Tax Code for failure to file tax return or to to spply correct information), the imposition of the civil liability by the CTA should be automatic and no assessment notice from the BIR is necessary? (2%) - NOTHING FOLLOWS HAND IN YOUR ANSWER SHEET. THERE IS NO NEED TO RETURN THIS QUESTIONNAIRE TO HEAD WATCHER. The Lawphil Project - Arellano Law Foundation

2012 Bar Exam in Civil Law

2012 BAR EXAMINATIONS CIVIL LAW
14 October 2012 8:00 A.M. - 10 A.M.

Set A MULTIPLE CHOICE QUESTIONS (MCQs) INSTRUCTIONS The following questionnaire consists of one hundred (100) MCQs numbered 1 up to 100 contained in TWENTY TWO (22) pages. Answer each question on the MCQ Answer Sheet by shading completely the appropriate circle corresponding to the letter you have chosen. (Read the Marking Instructions on the Answer Sheet) Avoid erasures on the Answer Sheet. If you need to make corrections, erase completely the answer you want to change. Keep the Answer Sheet clean. Do not make unnecessary marks on it. Do not fold, roll, scratch, crumple or tear it. You may write on the on the questionnaire and use it as scratch paper but make sure to transfer your answer to the Answer Sheet. Provide ample time to transfer the answers if you choose to do this. Answer first the MCQs completely before going to the essay-type questions. HAND IN YOUR ANSWER SHEET. THERE IS NO NEED TO RETURN THIS QUESTIONNAIRE TO THE HEAD WATCHER. GOODLUCK!!! _____________________________________ MARTIN S. VILLARAMA, JR. Chairperson 2012 Bar Examinations Committee PLEASE CHECK THAT THIS SET CONTAINS TWENTY THREE (23) PAGES (INCLUDING THIS PAGE). WARNING: NOT FOR SALE OR UNAUTHORIZED USE
CIVIL LAW

1. Which of the following is NOT included in the attributes of juridical capacity? a) Juridical capacity is inherent in every natural person, and therefore it is not acquired. b) Juridical capacity is lost only through death. c) Juridical capacity is the fitness to be the subject of legal relations. d) Juridical capacity cannot exist without capacity to act. 2. Which of the following is NOT a restriction on ones capacity to act? a) Minority b) Marriage c) Deaf-mute d) Civil Interdiction 3. This attribute or incident of a case determine whether it is a conflict-of-laws case or one covered by domestic law. a) Cause of action b) Foreign element c) Jurisdiction d) Forum non conveniens 4. The capacity of an heir to succeed shall be governed by the: a) national law of the decedents heirs b) law of the country where the decedent was a resident at the time of his death c) national law of the person who died d) law of the country where the properties of the decedent are located. 5. Atty. BUKO, a Filipino, executed a will while he was in Spain. The attestation clause of the said will does not contain Bukos signature. It is valid under Spanish law. At its probate in Manila, it is being opposed on the ground that the attestation clause does not contain BUKOs signature. Is the opposition correct? Choose the best answer..

a) Yes, because it is a fatal defect. b) Yes, the will is not valid under Philippine law. c) No, attestation clause is not an act of the testator. d) No, the governing law is Spanish law. 6. Ramon, a Filipino, executed a will in Manila, where he left his house and located in BP Homes Paraaque in favor of his Filipino son, Ramgen. Ramons other children RJ and Ramona, both Turkish nationals, are disputing the bequest to Ramgen. They plotted to kill Ramgen. Ramon learned of the plot, so he tore his will in two pieces out of anger. Which statement is most accurate? a) The mere act of Ramon Sr. is immaterial because the will is still readable. b) The mere act of tearing the will amounts to revocation. c) The tearing of the will may amount to revocation if coupled with intent of revoking it. d) The act of tearing the will is material. 7. Even if the applicable law is a foreign law, a count in the Philippines may be constrained to apply Philippine law under any of the following instances, except: a) when the foreign law, judgment or contract is contrary to a sound and important public policy of the forum; b) when the property subject of the case is located outside of the Philippines; c) when the foreign law or judgment is penal in nature; d) when the foreign law is procedural in nature. 8. If a will is executed by a testator who was born a Filipino citizen but became naturalized Japanese citizen at the time of his death, what law will govern its testamentary provisions if the will is executed in China and the property being disposed is located in Indonesia? a) Chinese law b) Philippine law c) Indonesia law d) Japanese law 9. A Japanese national and a Filipino national entered into a contract for services in Thailand. The services will be rendered in Singapore. In case of breach, what law will govern? a) Thailand law b) Philippine law c) Singapore law d) Japanese law 10. Pedro (Filipino) and his wife Jane (American) executed a joint will in Canada, where such joint will is valid. In case the joint will is probated in Japan, what law will govern the formalities of the joint will? a) American law b) Philippine law c) Canadian law d) Japanese law 11. A French national revokes his will in Japan where he is domiciled. He then changed his domicile to the Philippines where he died. The revocation of his will in Japan is valid under Japanese law but invalid under Philippine law. The affected heir is a Malaysian national residing in the Philippines. What law will apply? a) Japanese law b) Philippine law c) French law d) Malaysian law 12. In the absence of contrary stipulation in a marriage settlement, property relations of Filipino spouses shall be governed by --a) Philippines laws b) Law of the place where the spouses reside c) Law of the place where the properties are situated d) Law of the place where they were married. 13. The will of a Filipino executed in a foreign country --a) cannot be probated in the Philippines; b) may be probated in the Philippines provided that properties in the estate are located in the Philippines;

c) cannot be probated before the death of the testator; d) may be probated in the Philippines provided it was executed in accordance with the laws of the place where the will was executed. 14. Pedro (Filipino and Bill (American) entered into a contract in Australia, whereby it was agreed that Pedro will build a commercial building for Bill in the Philippines, and in payment for the construction, Bill will transfer and convey his cattle ranch located in Japan in favor of Pedro. In case Pedro performs his obligation, but Bill fails or refuses to pay, what law will govern? a) American law b) Philippine law c) Australian law d) Japanese law (Facts for item numbers 15-18) In 1989, Charice (Filipina) and Justine (American), were married in the Philippines. In 1990, they separated and Justine went to Las Vegas where he obtained a divorce in the same year. He then married another Filipina, Lea, in Canada on January 1, 1992. They had two (2) sons, James and John (who were both born in 1992). In 1993, after failing to hear from Justine, Charice married Bugoy (a Filipino), by whom she had a daughter, Regine. In 2009, Regine married James (son of Justine with Lea) in California, where such marriage is valid. 15. What is the current status of the marriage of Charice and Justine under Philippine laws? a) Valid b) Void c) Voidable d) Dissolved 16. What id the status of the marriage between Charice and Bugoy under Philippine laws? a) Valid b) Void c) Voidable d) Unenforceable 17. What is the status of the marriage between Charice and Bugoy under Philippine laws? a) Valid b) Void c) Voidable d) Unenforceable 18. What is the status of the marriage between Regine and James under Philippine laws? a) Valid b) Void c) Voidable d) Unenforceable 19. Ricky and Princess were sweethearts. Princess became pregnant. Knowing that Ricky is preparing for the examinations, Marforth, a lawyer and cousin of Princess, threatened Ricky with the filing of a complaint for immorality in the Supreme Court, thus preventing him from taking examinations unless he marries Princess. As a consequence of the threat, Ricky married Princess. Can the marriage be annulled on the ground of intimidation under Article 45 of the Family Code? Choose the best answer. a) Yes, because without the threat, Ricky would not have married Princess. b) Yes, because the threat to enforce the claim of Princess vitiates the consent of Ricky in contracting the marriage. c) No, because the threat made by Marforth is just and legal. d) No, because Marforth is not a party to the contract of marriage between Princess and Ricky. 20. Audrey, single, bought a parcel of land in Malolos City from Franco for P1Million. A contract was executed between them which already vested upon Audrey full ownership of the property, although payable in monthly installments for a period of four (4) years. One (1) year after the execution of the contract, Audrey got married to Arnel. They executed a marriage settlement whereby they agreed that their properties shall be governed by the regime of conjugal partnership of gains. Thereafter, subsequent installments were paid from the conjugal partnership funds. Is the land conjugal or paraphernal? a) The land is conjugal because the installments were paid from the conjugal partnership funds.

b) The land is paraphernal because ownership thereof was acquired before the marriage. c) The land is both conjugal and paraphernal funds of installments were paid from both the personal funds of Audrey and the conjugal partnership funds. d) The land is paraphernal because it was Audrey who purchased the same. 21. Ernesto donated a mobile phone worth P 32,000 to Hubert orally and delivered the unit to Hubert who accepted. Which statement is most accurate? a) The donation is void and Ernesto may get mobile phone back. b) The donation is void but Ernesto cannot get the mobile phone back. c) The donation is voidable and may be anulled. d) The donation is valid. 22. Agay, a Filipino citizen and Topacio, an Australian citizen, got married in the consular office of the Philippines in Australia. According to the laws of Australia, a marriage solemnized by a consular official is valid, provided that such marriage is celebrated in accordance with the laws of such consular official. Under Philippine law, what is the status of the marriage of Agay and Topacio? Choose the best answer. a) Void, because the consular official only has authority to solemnize marriages between Filipinos. b) Valid, because according to the laws of Australia, such consular official has authority to celebrate the marriage. c) Voidable, because there is an irregularity in the authority of the consular official to solemnize marriages. d) Valid, because such marriage is recognized as valid in the place where it was celebrated. 23. Separation of property between spouses during the marriage may take place only: a) by agreement of the spouses. b) If one of the spouses has given ground for legal separation. c) Upon order of the court. d) If one spouse has abandoned the other. 24. The husband may impugn the legitimacy of his child but not on the ground that: a) the wife is suspected of infidelity. b) the husband had a serious illness that prevented him from engaging in sexual intercourse. c) they were living apart. d) he is physically incapable of sexual intercourse. 25. A marriage is void if: a) solemnized with a marriage license issued without complying with the required 10-day posting. b) solemnized by a minister whom the parties believe to have the authority. c) between parties both 23 years of age but without parental advice. d) none of the above 26. In legal separation, which is not correct? a) The aggrieved spouse may file the action within five (5) years from the time of the occurrence of the cause. b) No trial shall be held without the 6-month cooling off period being observed. c) The spouses will be entitled to live separately upon the start of the trial. d) The prosecuting attorney has to conduct his own investigation. 27. A husband by chance discovered hidden treasure on the paraphernal property of his wife. Who owns the discovered treasure? a) The half pertaining to the husband (finder) belongs to the conjugal partnership. b) The half pertaining to the wife (as owner) belongs to the conjugal partnership. c) One half shall belong to the husband as finder and the other half shall belong to the wife as owner of the property. d) a and b 28. Which of the following marriages is void for reasons of public policy? a) Between brothers and sisters, whether of the full or half blood. b) Between step-parents and step children. c) Between parents-in-law and children-in-law. d) b and c 29. The following constitute the different circumstances or case of fraud which will serves as ground for the annulment of a marriage, except?

a) Non-disclosure of the previous conviction by final judgment of the other party of a crime involving moral turpitude. b) Concealment of a sexually-transmissible disease, regardless of its nature, existing at the time of the marriage. c) Concealment of drug addiction, habitual alcoholism, homosexuality or lesbianism existing at the time of marriage. d) Concealment by the wife or the husband of the fact of sexual relations prior to the marriage. 30. Which of the following is not a requisite for a valid donation propter nuptias? a) The donation must be made before the celebration of the marriage. b) The donation shall be automatically revoked in case of non-celebration of the marriage. c) The donation must be made in consideration of the marriage. d) The donation must be made in favor of one or both of the future spouses. 31. Who are illegitimate children? a) Children conceived or born outside a valid marriage. b) Children born under a valid marriage, which was later declared void because of the psychological incapacity of either or both of the spouses. c) Children conceived and born outside a valid marriage. d) Children born under a valid marriage, but the parents later obtained a legal separation. 32. An illegitimate child may use the surname of his father when his filiation is established in any of the following instances, except: a) Filiation has been recognized by the father through the record of birth appearing in the civil register b) Admission of filiation by the father in a public document. c) Private handwritten instrument is made by the father acknowledging his filiation. d) Affidavit by the mother stating the name of his true father. 33. Under RA 8043, an adopter is required to be at least ____ years old and ____ years older than the child to be adopted at the time of the application unless the adopter is the parent by nature of the child. a) 30 and 15 b) 27 and 16 c) 50 and 10 d) 18 and 15 34. Under RA 8043, a child qualified to be adopted is any person below _____ years old. a) 18 b) 21 c) 15 d) 16 35. Which of the following DOES NOT result in permanent termination of parental authority? a) Death of the parents. b) Death of the child. c) Emancipation of the child. d) Conviction of the parents of a crime which carries with it the penalty of civil interdiction. 36. The court, in an action filed for the purpose, may suspend parental authority if the parent or the person exercising parental authority commits any of the following acts, except: a) Treats the child with excessive harshness or cruelty. b) Gives the child corrupting orders, counsel or example. c) Compels the child to take up a course in college against his/her will. d) Subjects the child or allows him to be subjected to acts of lasciviousness. 37. Which of the following statements is wrong? a) The possessor in bad faith shall reimburse the fruits received and those which the legitimate possessor could have received. b) The possessor in bad faith has right of reimbursement for necessary expenses and those for the production, gathering and preservation of the fruits. c) The possessor in bad faith is not entitled to a refund of ornamental expenses. d) The possessor in bad faith is entitled to a refund of useful expenses. 38. Which phrase most accurately completes the statement The expenses incurred in improvements for the luxury or mere pleasure shall not be refunded to thew possessor in bad faith:

a) but he may remove the objects for which such expenses have been incurred, provided that the thing suffers no injury thereby, and that the lawful possessor does not prefer to retain them. b) and he may not remove the objects for which such expenses have been incurred. c) and he may not remove the objects for which such expenses have been incurred, unless he pays the value they may have at the time he entered into possession. d) but he may remove the objects for which such expenses have been incurred. 39. The following are the limitations on the right of ownership imposed by the owner himself, except: a) Will/Succession b) Mortgage c) Pledge d) Lease 40. A plenary action for the recovery of the possession of real estate, upon mere allegation and proof of a better right thereto, and without allegation of proof of title. This action can only be brought after the expiration of one (1) year. What action is being referred to? a) Accion publiciana b) Accion reinvindicatoria c) Accion interdictal d) Quieting of Title 41. Action to recover real property based on ownership. Here, the object is the recovery of the dominion over the property as owner. What action is being referred to? a) Accion publiciana b) Accion reinvindicatoria c) Accion interdictal d) Quieting of Title 42. A summary action to recover physical or material possession only and must be brought within one (1) year from the time the cause of action arises. What action is being referred to? a) Accion publiciana b) Accion reinvindicatoria c) Accion interdictal d) Quieting of Title 43. The following things are property of public dominion, except: a) ports and bridges constructed by the State. b) vehicles and weapons of the Armed Forces of the Philippines. c) rivers. d) lands reclaimed by the state from the sea. 44. Which of the following statements is wrong? a) patrimonial property of the state, when no longer intended for public use or for public service, shall become property of public dominion. b) all property of the State, which is not of public dominion, is patrimonial property. c) The property of provinces, cities and municipalities is divided into property for public use and patrimonial property. d) Property is either of public dominion or of private ownership. 45. The following cannot ask for the reduction of inofficious donation, except: a) Creditors of the deceased b) Devisees or legatees c) Compulsory heirs of the donor d) The surviving spouse of the donee. 46. Donation is perfected from the moment --a) the donee accepts the donation. b) the donor executes the deed of donation. c) the donor knows of the donees acceptance even if the latter has not received the copy of the deed of donation. d) the donee confirms that the donor has learned the formers acceptance. 47. The following are the elements of an obligation, except: a) Juridical/Legal Tie

b) Active subject c) Passive subject d) Consideration 48. It is a conduct that may consist of giving, doing, or not doing something. a) Obligation b) Juridical necessity c) Prestation d) Contract 49. It is a juridical relation arising from lawful, voluntary and unilateral acts based on the principle that no one should unjustly enrich himself at the expense of another. a) Quasi-contract b) Quasi-delict c) Cotract d) Delict 50. The following are the elements of quasi-delict, except: a) Act or omission b) Fault/negligence c) Damage/injury d) Pre-existing contract 51. A debtor is liable for damages in case of delay if he is guilty of any of the following, except: a) default (mora) b) mistake c) negligence (culpa) d) breach through contravention of the tenor thereof 52. This term refers to a delay on the part of both the debtor and creditor in reciprocal obligations. a) Mora accipiendi b) Mora solvendi c) Compensation morae d) Solution indibiti 53. The following are the requisites of mora solvendi, except: a) Obligation pertains to the debtor and is determinate, due, demandable, and liquidated. b) Obligation was performed on its maturity date. c) There is judicial or extrajudicial demand by the creditor. d) Failure of the debtor to comply with such demand. 54. It is an international evasion of the faithful performance of the obligation. a) Negligence b) Fraud c) Delay d) Mistake 55. The following are the requisites of fortuitous event, except: a) Cause is independent of the will of the debtor. b) The event is unforeseeable/unavoidable. c) Occurrence renders it absolutely impossible for the debtor to fulfill his obligation in a normal manner; impossibility must be absolute not partial, otherwise not force majeure. d) Debtor contributed to the aggravation of the injury to the creditor. 56. A debtor may still be held liable for loss or damages even if it was caused by a fortuitous event in any of the following instances, except: a) The debtor is guilty of dolo, malice or bad faith, has promised the same thing to two or more persons who do not have the same interest. b) The debtor contributed to the loss. c) The thing to be delivered is generic. d) The creditor is guilty of fraud, negligence or delay or if he contravened the tenor of the obligation. 57. Buko, Fermin and Toti bound themselves solidarily to pay Ayee the amount ofP 5,000.00. Suppose Buko paid the obligation, what is his right as against his co-debtors? a) Buko cas ask for reimbursement from Fermin and Toti.

b) Buko can sue Fermin and Toti for damages. c) Buko can sue for rescission. d) Buko can claim a refund from Ayee. 58. Buko, Fermin and Toti bound themselves solidarily to pay Ayee the sum of P10,000.00. When the obligation became due and demandable, Ayee sued Buko for the payment of the P 10,000.00. Buko moved to dismiss on the ground that there was failure to implead Fermin and Toti who are indispensable parties. Will the motion to dismiss prosper? Why? a) Yes, because Fermin and Toti should have been impleaded as their obligation is solidary. b) No, because the creditor may proceed against any one of the solidary debtors or some or all of them simultaneously. c) No, because a motion to dismiss is a prohibited pleading. d) Yes, because Fermin and Toti should also pay their share of the obligation. 59. Buko, Fermin and Toti are solidarily debtors of Ayee. Twelve (12) years after the obligation became due and demandable, Buko paid Ayee and later on asked for reimbursement of Fermins and Totis shares. Is Buko correct? Why? a) No, because the obligation has already prescribed. b) Yes, because the obligation is solidary. c) No, because in solidary obligation any one of the solidary debtors can pay the entire debt. d) Yes, because Fermin and Toti will be unduly enriched at the expense of Buko. 60. Buko, Fermin and Toti are solidary debtors under a loan obligation of P300,000.00 which has fallen due. The creditor has, however, condoned Fermins entire share in the debt. Since Toti has become insolvent, the creditor makes a demand on Buko to pay the debt. How much, if any, may Buko be compelled to pay? a) P 200.000.00 b) P 300,000.00 c) P 100,000.00 d) P 150,000.00 61. Dina bought a car from Jai and delivered a check in payment of the same. Has Dina paid the obligation? Why? a) No, not yet. The delivery of promissory notes payable to order, or bills of exchange or other mercantile documents shall produce the effect of payment only when they have been cashed, or when through the fault of the creditor they have been impaired. b) Yes, because a check is a valid legal tender of payment. c) It depends. If the check is a managers check or cashiers check it will produce the effect of payment. If its an ordinary check, no payment. d) Yes, because a check is as good as cash. 62. The following are the requisites of legal compensation, except: a) That each of the obligors is bound principally and that he be the same time a principal creditor of the other. b) That both debts consist in a sum of money, or if the things due are consumable, they be the same kind, and also of the same quality if the latter has been stated. c) That the two (2) debts are not yet due. d) That they be liquidated and demandable. 63. Which of the following statements is correct? a) All contracts are perfected by mere consent. b) All contracts are perfected by delivery of the object. c) All contracts are required to be in writing. d) All contracts are required to have a valid consideration. 64. It is a principle which holds that parties are bound not only by what has been expressly provided for in the contract but also to the natural consequences that flow out of such agreement. a) Obligatory force of contracts b) Mutuality of contracts c) Autonomy of contracts d) Relativity of contracts 65. It is a principle which holds that contracts must be binding to both parties and its validity and effectivity can never be left to the will of one of the parties.

a) Obligatory force of contracts b) Mutuality of contracts c) Autonomy of contracts d) Relativity of contracts 66. It refers to the rule that a contract is binding not only between parties butextends to the heirs, successors in interest, and assignees of the parties,provided that the contract involved transmissible rights by their nature, or by stipulation or by law. a) Obligatory force of contracts b) Mutuality of contracts c) Autonomy of contracts d) Relativity of contracts 67. It is rule which holds that the freedom of the parties to contract includes the freedom to stipulate, provided the stipulations are not contrary to law, morals, good customs, public order or public policy. a) Obligatory force of contracts b) Mutuality of contracts c) Autonomy of contracts d) Relativity of contracts 68. The following are the ways by which innominate contracts are regulated, except: a) By the stipulation of the parties. b) By the general principles of quasi-contracts and delicts c) By the rules governing the most analogous nominate contracts. d) By the customs of the place. 69. An offer becomes ineffective on any of the following grounds, except: a) Death, civil interdiction, insanity/insolvency of either party before acceptance is conveyed. b) Acceptance of the offer by the offeree. c) Qualified/conditional acceptance of the offer, which becomes counter-offer. d) Subject matter becomes illegal/impossible before acceptance is communicated. 70. Which of the following statements is correct? a) Offers in interrelated contracts are perfected upon consent. b) Offers in interrelated contracts require a single acceptance. c) Business advertisements are definite offers that require specific acceptance. d) Advertisements for Bidders are only invitations to make proposals and the advertiser is not bound to accept the highest/lowest bidder, unless it appears otherwise. 71. The following are solemn contracts (Contracts which must appear in writing),except: a) Donations of real estate or of movables if the value exceeds P 5,000.00. b) Stipulation to pay interest in loans. c) Sale of land through an agent (authority must be in writing). d) Construction contract of a building. 72. The following are rescissible contracts, except: a) Entered into by guardian whenever ward suffers damage more than of value of property. b) Agreed upon in representation of absentees, if absentee suffers lesion by more than of value of property. c) Contracts where fraud is committed on creditor (accion pauliana). d) Contracts entered into by minors. 73. The following are the requisites before a contract entered into in fraud of creditors may be rescinded, except: a) There must be credited existing prior to the celebration of the contract. b) There must be fraud, or at least, the intent to commit fraud to the prejudice of the creditor seeking rescission. c) The creditor cannot in any legal manner collect his credit (subsidiary character of rescission) d) The object of the contract must be legally in the possession of a 3rdperson in good faith. 74. The following are the characteristics of a voidable contract, except: a) Effective until set aside. b) May be assailed/attacked only in an action for that purpose. c) Can be confirmed or ratified. d) Can be assailed only by either party.

75. The following are void contracts, except: a) Pactum commissorium b) Pactum de non alienando c) Pactum leonina d) Pacto de retro 76. The borrower in a contract of loan or mutuum must pay interest to the lender. a) If there is an agreement in writing to the effect. b) As a matter of course. c) If the amount borrowed is very large. d) If the lender so demands at the maturity date. 77. The liability of the school, its administrators and teachers, or the individual, entity or institution engaged in child care over the minor child or damage caused by the acts or omissions of the unemancipated minor while under their supervision, instruction or custody shall be: a) Joint and subsidiary b) Principal and solidary c) Principal and joint d) Subsidiary and solidary. 78. The creditor has the right to the fruits of the thing from the time: a) the thing is delivered. b) the obligation to deliver the things arises. c) the contract is perfected. d) the fruits are delivered. 79. If one of the parties to the contract is without juridical capacity, the contract is: a) voidable b) rescissible c) void d) unenforceable 80. When both parties to the contract are minors, the contract is: a) voidable b) rescissible c) void d) unenforceable 81. When the consent of one of the parties was vitiated, the contract is: a) voidable b) rescissible c) void d) unenforceable 82. An obligation which is based on equity and natural law is known as: a) pure b) quasi-contract c) civil d) natural 83. Consent was given by one in representation of another but without authority. The contract is: a) voidable b) rescissible c) void d) unenforceable 84. Michael Fermin, without the authority of Pascual Lacas, owner of a car, sold the same car in the name of Mr. Lacas to Atty. Buko. The contract between Atty. Buko and Mr. Lacas is --a) void because of the absence of consent from the owner, Mr. Lacas. b) valid because all of the essential requisites of a contract are present. c) unenforceable because Michael Fermin had no authority but he sold the car in the name of Mr. Lacas, the owner. d) rescissible because the contract caused lesion to Atty. Buko. 85. Which of the following contracts is void?

a) An oral sale of a parcel of land. b) A sale of land by an agent in a public instrument where his authority from the principal is oral. c) A donation of a wrist watch worth P 4,500.00. d) A relatively simulated contract. 86. Which of the following expresses a correct principle of law? Choose the best answer. a) Failure to disclose facts when there is a duty to reveal them, does not constitute fraud. b) Violence or intimidation does not render a contract annullable if employed not by a contracting party but by a third person. c) A threat to enforce ones claim through competent authority, if the claim is legal or just, does not vitiate consent. d) Absolute simulation of a contract always results in a void contract. 87. Aligada orally offered to sell his two-hectare rice land to Balane for P 10Million. The offer was orally accepted. By agreement, the land was to be delivered (through execution of a notarized Deed of Sale) and the price was to be paid exactly one-month from their oral agreement. Which statement is most accurate? a) If Aligada refuses to deliver the land on the agreed date despite payment by Balane, the latter may not successfully sue Aligada because the contract is oral. b) If Aligada refused to deliver the land, Balane may successfully sue for fulfillment of the obligation even if he has not tendered payment of the purchase price. c) The contract between the parties is rescissible. d) The contract between the parties is subject to ratification by the parties. 88. Which of the following statements is wrong? a) Creditors are protected in cases of contracts intended to defraud them. b) Contracts take effect only between the parties, their assign and heirs, except in case where the rights and obligations arising from the contract are not transmissible by their nature, or by stipulation or by provision of law. c) If a contract should contain some stipulation in favor of a third person, he may demand its fulfillment provided he communicated his acceptance to the obligor before its revocation. d) In contracts creating real rights, third persons who come into possession of the object of the contract are not bound thereby. 89. Which phrase most accurately completes the statement Any third person who induces another to violate his contract: a) shall be liable for damages only if he is a party to the same contract. b) shall be liable for damages to the other contracting party. c) shall not be liable for damages to the other contracting party. d) shall not be liable for damages if the parties are in pari delicto. 90. The requisites of succession are as follows, except: a) Death of decedent b) Transmissible estate c) Existence and capacity of successor, designated by decedent or law d) Payment of Taxes 91. The characteristics of succession are as follows, except: a) It is a legal contract. b) Only property, rights and obligations to the extent of the value of the inheritance are transmitted. c) The transmission takes place only at the time of death. d) The transmission takes place either by will or by operation of law. 92. The following rights are extinguished by death, except: a) Legal support b) Parental authority c) Right to inherit d) Agency 93. The attestation clause contains the following, except: a) the number of pages used; b) that the testator signed or caused another to sign the will and every page thereof in the presence of the instrumental witnesses; c) notary public;

d) the instrumental witnesses witnessed and signed the will and all the pages thereof in the presence of the testator and one another. 94. The following are the formalities required in the execution of holographic will,except: a) Entirely written; b) Dated; c) Signed by testator himself d) Notarized by a notary public. 95. The following are the grounds for disallowance of wills, except: a) The formalities required by law have not been complied with. b) The testator was insane or mentally incapable of making will. c) The will was executed through force or under duress, or influence of fear or threats. d) The will contains an attestation clause. 96. It is the omission in the testators will of one, some or all of the compulsory heirs in direct line, whether living at the time of execution of the will or born after the death of the testator. What principle is being referred to? a) reserva troncal b) preterition c) fideicommissary d) disposicion captatoria 97. Any disposition made upon the condition that the heir shall make some provision in his will in favor of the testator or of any other person shall be void. Here, both the condition and the disposition are void. What principle is being referred to? a) reserva troncal b) preterition c) fideicommissary d) disposicion captatoria 98. Which phrase most accurately completes the statement If at the time the contract of sale is perfected, the thing which is the object of the contract has been entirely lost: a) the buyer bears the risk of loss. b) the contract shall be without any effect. c) the seller bears the risk of loss. d) the buyer may withdraw from the contract. 99. A contract granting a privilege to a person, for which he has paid a consideration, which gives him the right to buy certain merchandise or specified property, from another person, at anytime within the agreed period, at a fixed price. What contract is being referred to? a) Option Contract b) Contract to Sell c) Contract of Sale d) Lease 100. Which of the following contracts of sale is void? a) Sale of EGMs car by KRP, EGMs agent, whose authority is not reduced into writing. b) Sale of EGMs piece of land by KRP, EGMs agent, whose authority is not reduced into writing. c) Sale of EGMs car by KRP, a person stranger to EGM, without EGMs consent or authority. d) Sale of EGMs piece of land by KRP, a person stranger to EGM, without EGMs consent or authority. - NOTHING FOLLOWS HAND IN YOUR ANSWER SHEET. THERE IS NO NEED TO RETURN THIS QUESTIONNAIRE TO HEAD WATCHER. 2012 BAR EXAMINATIONS CIVIL LAW
14 October 2012 10 A.M.-12 NN.

Set B ESSAY TYPE QUESTIONS INSTRUCTIONS

The following questionnaire consists of ten (10) questions (numbered I to X) contained in FIVE (5) pages. Begin your answer to each numbered question on a separate page; an answer to a sub-question/s under the same number may be written continuously on the same page and succeeding pages until completed. Answer the question directly and concisely. Do not repeat the question. Write legibly. HAND IN YOUR NOTEBOOK. THERE IS NO NEED TO RETURN THIS QUESTIONNAIRE TO THE HEAD WATCHER. GOOD LUCK!!! _____________________________________ MARTIN S. VILLARAMA, JR. Chairperson 2012 Bar Examinations Committee PLEASE CHECK THAT THIS SET CONTAINS SIX (6) PAGES (INCLUDING THIS PAGE). WARNING: NOT FOR SALE OR UNAUTHORIZED USE
CIVIL LAW

I a) Roberto was in Nikko Hotel when he bumped into a friend who was then on her way to a wedding reception being held in said hotel. Roberto alleged that he was then invited by his friend to join her at the wedding reception and carried the basket full of fruits which she was bringing to the affair. At the reception, the wedding coordinator of the hotel noticed him and asked him, allegedly in a loud voice, to leave as he was not in the guest list. He retorted that he had been invited to the affair by his friend, who however denied doing so. Deeply embarrassed by the incident, Roberto then sued the hotel for damages under Articles 19 and 21 of the Civil Code. Will Robertos action prosper? Explain. (5%) b) Ricky donated P 1 Million to the unborn child of his pregnant girlfriend, which she accepted. After six (6) months of pregnancy, the fetus was born and baptized as Angela. However, Angela died 20 hours after birth. Ricky sought to recover theP 1 Million. Is Ricky entitled to recover? Explain. (5%) II a) Liwayway Vinzons-Chato was then the Commissioner of Internal Revenue while Fortune Tobacco Corporation is an entity engaged in the manufacture of different brands of cigarettes, among which are "Champion," "Hope," and "More" cigarettes. Fortune filed a complaint against Vinzons-Chato to recover damages for the alleged violation of its constitutional rights arising from Vinzons-Chatos issuance of Revenue Memorandum Circular No. 37-934 (which re-classified Fortune cigarettes as locally manufactured with foreign brands and thereby imposed higher taxes), which the Supreme Court later declared invalid. Vinzons-Chato filed a Motion to Dismiss arguing that she cannot be held liable for damages for acts she performed while in the discharge of her duties as BIR Commissioner. Is she correct? Explain. (5%) b) The petitioner filed a petition for declaration of nullity of marriage based allegedly on the psychological incapacity of the respondent, but the psychologist was not able to personally examine the respondent and the psychological report was based only on the narration of petitioner. Should the annulment be granted? Explain. (5%) III a) Maria, wife of Pedro, withdrew P 5 Million from their conjugal funds. With this money, she constructed a building on a lot which she inherited from her father. Is the building conjugal or paraphernal? Reasons. (5%) b) Cipriano and Lady Miros married each other. Lady Miros then left for the US and there, she obtained American citizenship. Cipriano later learned all about this including the fact that Lady Miros has divorced him in America and that she had remarried there. He then filed a petition for authority to remarry, invoking Par. 2, Art. 26 of the Family Code. Is Cipriano capacitated to re-marry by virtue of the divorce decree obtained by his Filipino spouse who was later naturalized as an American citizen? Explain. (5%) IV

a) After they got married, Nikki discovered that Christian was having an affair with another woman. But Nikki decided to give it a try and lived with him for two (2) years. After two (2) years, Nikki filed an action for legal separation on the ground of Christians sexual infidelity. Will the action prosper? Explain. (5%) b) Honorato filed a petition to adopt his minor illegitimate child Stephanie, alleging that Stephanies mother is Gemma Astorga Garcia; that Stephanie has been using her mothers middle name and surname ; and that he is now a widower and qualified to be her adopting parent. He prayed that Stephanies middle name be changed from "Astorga" to "Garcia," which is her mothers surname and that her surname "Garcia" be changed to "Catindig," which is his surname. This the trial court denied. Was the trial court correct in denying Hororatos request for Stephanies use of her mothers surname as her middle name? Explain. (5%) V a) Spouses Primo and Monina Lim, childless, were entrusted with the custody of two (2) minor children, the parents of whom were unknown. Eager of having children of their own, the spouses made it appear that they were the childrens parents by naming them Michelle P. Lim and Michael Jude Lim. Subsequently, Monina married Angel Olario after Primos death. She decided to adopt the children by availing the amnesty given under R.A. 8552 to those individuals who simulated the birth of a child. She filed separate petitions for the adoption of Michelle, then 25 years old and Michael, 18. Both Michelle and Michael gave consent to the adoption. The trial court dismissed the petition and ruled that Monina should have filed the petition jointly with her new husband. Monina, in a Motion for Reconsideration argues that mere consent of her husband would suffice and that joint adoption is not needed, for the adoptees are already emancipated. Is the trial court correct in dismissing the petitions for adoption? Explain. (5%) b) Jambrich, an Austrian, fell in-love and lived together with Descallar and bought their houses and lots at Agro-Macro Subdivision. In the Contracts to Sell, Jambrich and Descallar were referred to as the buyers. When the Deed of Absolute Sale was presented for registration before the Register of Deeds, it was refused because Jambrich was an alien and could not acquire alienable lands of the public domain. After Jambrich and Descallar separated, Jambrich purchased an engine and some accessories for his boat from Borromeo. To pay for his debt, he sold his rights and interests in the Agro-Macro properties to Borromeo. Borromeo discovered that titles to the three (3) lots have been transfereed in the name of Descallar. Who is the rightful owner of the properties? Explain. (5%) VI a) Siga-an granted a loan to Villanueva in the amount of P 540, 000.00. Such agreement was not reduced to writing. Siga-an demanded interest which was paid by Villanueva in cash and checks. The total amount Villanueva paid accumulated to P 1, 200, 000.00. Upon advice of her lawyer, Villanueva demanded for the return of the excess amount of P 660, 000.00 which was ignored by Siga-an. 1) Is the payment of interest valid? Explain. (3%) 2) Is solution indebiti applicable? Explain. (2%) b) Eulalia was engaged in the business of buying and selling large cattle. In order to secure the financial capital, she advanced for her employees (biyaheros). She required them to surrender TCT of their properties and to execute the corresponding Deeds of Sale in her favor. Domeng Bandong was not required to post any security but when Eulalia discovered that he incurred shortage in cattle procurement operation, he was required to execute a Deed of Sale over a parcel of land in favor of Eulalia. She sold the property to her grandneice Jocelyn who thereafter instituted an action for ejectment against the Spouses Bandong. To assert their right, Spouses Bandong filed an action for annulment of sale against Eulalia and Jocelyn alleging that there was no sale intended but only equitable mortgage for the purpose of securing the shortage incurred by Domeng in the amount of P 70, 000.00 while employed as "biyahero" by Eulalia. Was the Deed of Sale between Domeng and Eulalia a contract of sale or an equitable mortgage? Explain. (5%) VII a) Natividads holographic will, which had only one (1) substantial pr ovision, as first written, named Rosa as her sole heir. However, when Gregorio presented it for probate, it already contained an alteration, naming Gregorio, instead of Rosa, as sole heir, but without authentication by Natividads

signature. Rosa opposes the probate alleging such lack of proper authentication. She claims that the unaltered form of the will should be given effect. Whose claim should be granted? Explain. (5%) b) John Sagun and Maria Carla Camua, British citizens at birth, acquired Philippine citizenship by naturalization after their marriage. During their marriage, the couple acquired substantial landholdings in London and in Makati. Maria begot three (3) children, Jorge, Luisito, and Joshur. In one of their trips to London, the couple executed a joint will appointing each other as their heirs and providing that upon the death of the survivor between them, the entire estate would go to Jorge and Luisito only but the two (2) could not dispose of nor divide the London estate as long as they live. John and Maria died tragically in the London subway terrorist attack in 2005. Jorge and Luisito filed a petition for probate of their parents will before a Makati Regional Trial Court. Joshur vehemently objected because he was preterited. 1) Should the will be admitted to probate? Explain. (2%) 2) Are the testamentary dispositions valid? Explain. (2%) 3) Is the testamentary prohibition against the division of the London estate valid? Explain. (1%) VIII a) Ricky and Arlene are married. They begot Franco during their marriage. Franco had an illicit relationship with Audrey and out of which, they begot Arnel. Frnaco predeceased Ricky, Arlene and Arnel. Before Ricky died, he executed a will which when submitted to probate was opposed by Arnel on the ground that he should be given the share of his father, Franco. Is the opposition of Arnel correct? Why? (5%) b) How can RJP distribute his estate by will, if his heirs are JCP, his wife; HBR and RVC, his parents; and an illegitimate child, SGO? IX a) Does the right to request for the issuance of a writ of possession over a foreclosed real property prescribe in five (5) years? (5%) b) A petition for declaration of nullity of a void marriage can only be filed by either the husband or the wife? Do you agree? Explain your answer. (5%) X a) A contract to sell is the same as a conditional contract of sale. Do you agree? Explain your answer. (5%) b) A partner cannot demand the return of his share (contribution) during the existence of a partnership. Do you agree? Explain your answer. (5%) - NOTHING FOLLOWS HAND IN YOUR ANSWER SHEET. THERE IS NO NEED TO RETURN THIS QUESTIONNAIRE TO HEAD WATCHER.

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WEDNESDAY, OCTOBER 17, 2012

Final Exam
I. Write the X mark ( X ) opposite the correct answer (3%each) 1. By guaranty a person, called a guarantor, binds himself to the creditor to fulfil the obligation of the principal debtor in case the latter ( ) refuse to pay ( ) fail to pay ( ) be insolvent ( ) abscond 2. One of the following characteristics does not pertain to the contract of guaranty -

( ( ( (

) accessory ) primary ) unilateral ) gratuitous

3. As a general rule, a married woman who guarantees an obligation without her husbands consent, may bind ( ) the capital property ( ) absolute community of property ( ) the conjugal partnership ( ) the paraphernal property 4. ( ( ( ( The contract of guaranty exists for the benefit of the ) sub-guarantor ) creditor ) principal debtor ) co-guarantor

5. Maria obtained a loan from BDO and assigned her leasehold rights over a stall in the public market. The deed of assignment provides that in case of default in the payment of the loan, the bank, as Marias attorney-in-fact, shall have the right to sell Marias right over the market stall, and apply the proceeds to the payment of the loan. Is this pactum comissorium? ( ) Yes, because the bank has authority to sell the leasehold right in case of non-payment of the loan. ( ) Yes, because there is automatic transmission of the leasehold right from debtor to creditor. ( ) No, because there is no automatic transmission of ownership over the assigned property. ( ) No, because the banks authority to sell is not as owner but as attorney-in-fact of the debtor. 6) Ambrosio died, leaving his three daughters, Belen, Rosario and Sylvia, a hacienda which was mortgaged to the PNB. For having defaulted on their obligation, the bank foreclosed the mortgage and acquired the property at a public auction sale conducted on March 15, 2010. The certificate of sale was registered on April 15, 2010. Up to when may the foreclosed property be redeemed? ( ) April 15, 2011 ( ) July 15, 2010 ( ) March 15, 2011 ( ) June 15, 2010 7) Under the facts above (6), Sylvia redeemed the hacienda from the bank within three months from foreclosure. Thereafter, she took possession of the hacienda and refused to share its fruits with her sisters, contending that it was now owned exclusively by her, having redeemed it from the bank with her own money. Is she correct? ( ) Yes, because redemption of foreclosed property is one of the modes of terminating co-ownership. ( ) Yes, because at the time of redemption, the co-ownership no longer existed. ( ) No, because her right is limited to reimbursement from the other heirs because she insured necessary expenses in the preservation of the property. ( ) None of the above 8) The following contact/s can secure future obligations, except: ( ) Real estate mortgage ( ) Chattel mortgage ( ) Pledge ( ) Guaranty 9) Affidavit of Good Faith is a requirement in this contract: ( ) Deposit ( ) Chattel mortgage

( (

) Antichresis ) Real estate mortgage

10) This is the remedy of a debtor who, while possessing sufficient property to cover his debts, foresees the impossibility of meeting them as they respectively fall due. ( ) Voluntary Insolvency ( ) Involuntary insolvency ( ) Suspension of payments ( ) Preference of credits 11) Equity or redemption applies to: ( ) Judicial foreclosure ( ) Extrajudicial foreclosure ( ) Chattel mortgage ( ) Pledge 12) A contract of antichresis is: ( ) Consensual ( ) Real ( ) Formal ( ) All of the above 13) X, warehouseman, sent a text message to Y, to whom X had issued a warehouse receipt for Y's 500 sacks of corn, notifying him of the due date and time to settle the storage fees. The message stated also that if Y does not settle the warehouse charges within 10 days, he will advertise the goods for sale at a public auction. When Y ignored the demand, X sold 100 sacks of corn at a public auction. For Xs failure to comply with the statutory requirement of written notice to satisfy his lien, the sale of the 100 sacks of corn is: ( ) voidable ( ) rescissible. ( ) unenforceable ( ) void 14) The following contracts may secure future debts, except: ( ) Real estate mortgage ( ) Chattel mortgage ( ) Pledge ( ) Antichresis 15) T delivers two refrigerators to the warehouse of W who then issues a negotiable receipt undertaking the delivery of the refrigerators to "T or bearer." T entrusted the receipt to B for safekeeping only. B negotiated it, however, to F who bought it in good faith and for value. Who is entitled to the delivery of the refrigerators? ( ) T, since he is the real owner of the refrigerators ( ) F, since he is a purchaser in good faith and for value. ( ) B, since T entrusted the receipt to him. ( ) W, since he has as a warehouseman a lien on the goods. 16) X, creditor of Y, obtained a judgment in his favor in connection with Y's unpaid loan to him. The court's sheriff then levied on the goods that Y stored in T's warehouse, for which the latter issued a warehouse receipt. A month before the levy, however, Z bought the warehouse receipt for value. Who has a better right over the goods? ( ) T, being the warehouseman with a lien on the goods ( ) Z, being a purchaser for value of the warehouse receipt ( ) X, being Ys judgment creditor

) Y, being the owner of the goods

17) G, a grocery goods supplier, sold 100 sacks of rice to H who promised to pay once he has sold all the rice. H meantime delivered the goods to W, a warehouseman, who issued a warehouse receipt. Without the knowledge of G and W, H negotiated the receipt to P who acquired it in good faith and for value. P then claimed the goods from W, who released them. After the rice was loaded on a ship bound for Manila, G invokes his right to stop the goods in transit due to his unpaid lien. Who has a better right to the rice? ( ) P, since he has superior rights as a purchaser for value and in good faith. ( ) P, regardless of whether or not he is a purchaser for value and in good faith. ( ) G, since as an unpaid seller, he has the right of stoppage in transitu. ( ) W, since it appears that the warehouse charges have not been paid. 18) The period to redeem real property which was extrajudicially foreclosed is: ( ) 3 months ( ) 6 year ( ) 1 year ( ) 10 years 19) An unnotarized Chattel Mortgage is: ( ) Void ( ) Voidable ( ) Unenforceable ( ) Valid between the parties but void as to third persons 20) X borrowed money from Y to finance the construction of a building, mortgaging his land and the building to be constructed thereon to secure the loan. After the building was erected, X failed to pay the labourers who worked on the building, and some suppliers who furnished materials thereon. Upon foreclosure of the mortgage, who would have a preferential right to the proceeds of the sale, assuming that realty taxes thereon have been paid? ( ) As to the land, the mortgagee alone; as to the building, the labourers and suppliers share pro-rata; ( ) mortgagee, suppliers and labourers share pro rata in the proceeds from sale of land and building ( ) As to the land, mortgagee alone; as to the building, the mortgagee, labourers and suppliers share pro-rata ( ) As to the land and building, pro rata sharing among mortgagee, suppliers and laborers

II. On the space provided, write TRUE if the statement is true, and FALSE if otherwise. (2% each) ________ 1) A mortgaged property may be alienated. ________ 2) An unregistered real estate mortgage is binding between the parties. ________ 3) A pledge is indivisible. ________ 4) Deficiency can be recovered in a foreclosure of pledge. ________ 5) The contract of pledge may be created by operation of law. ________ 6) In antichresis, the creditor acquires the immovable if the debt is not paid. ________ 7) Chattel mortgage is a real contract. ________ 8) A house of strong materials may be the subject of chattel mortgage if the parties agree.

________ 9) The purpose of suspension of payment is to discharge the debtor from payment of certain debts. ________ 10) Voluntary insolvency proceeding is initiated by the debtor himself.

III. USE THE TEST BOOKLET. (5% each) 1) Explain the Dragnet Clause 2) Draft an affidavit of good faith 3) Grounds for setting aside a foreclosure sale 4) Enumerate at least 5 properties that are exempt from execution RETURN QUESTIONNAIRE WITH TEST BOOKLET

2012 Bar Exam in Labor Law

2012 BAR EXAMINATIONS LABOR LAW
7 October 2012 2:00 P.M. - 3:30 P. M.

Set A MULTIPLE CHOICE QUESTIONS (MCQs) INSTRUCTIONS The following questionnaire consists of seventy-five (75) MCQs numbered 1 up to 75 contained in TWENTY ONE (21) pages. Answer each question on the MCQ. Answer Sheet by shading completely the appropriate circle corresponding to the letter you have chosen. (Read the Marking Instructions on the Answer Sheet) Avoid erasures on the Answer Sheet. If you need to make corrections, erase completely the answer you want to change. Do not explain your answers in the MCQ portion of the exam. You will not earn any credit for that. Keep the Answer Sheet clean. Do not make unnecessary marks on it. Do not fold, roll, scratch, crumple or tear it. You may write on the questionnaire and use it as scratch paper but make sure to transfer your answer to the Answer Sheet. Provide ample time to transfer for the answers if you choose to do this. Answer first the MCQs completely before going to the essay-type questions. HAND IN YOUR ANSWER SHEET. THERE IS NO NEED TO RETURN THIS QUESTIONNAIRE TO THE HEAD WATCHER. GOODLUCK!!! _____________________________________ MARTIN S. VILLARAMA, JR. Chairperson 2012 Bar Examinations Committee PLEASE CHECK THAT THIS SET CONTAINS TWENTY TWO (22) PAGES (INCLUDING THIS PAGE). WARNING: NOT FOR SALE OR UNAUTHORIZED USE
LABOR LAW

1. The workers worked as cargadores at the warehouse and ricemills of farm A for several years. As cargadores, they loaded, unloaded and pilled sacks of rice from the warehouse to the cargo trucks for delivery to different places. They were paid by Farm A on a piece-rate basis. Are the workers considered regular employees? a. Yes, because Farm A paid wages directly to these workers without the intervention of any third party independent contractor; b. Yes, their work is directly related, necessary and vital to the operations of the farm;

c. No, because Farm A did not have the power to control the workers with respect to the means and methods by which the work is to be accomplished; d. A and B. 2. The following are excluded from the coverage of Book III of the Labor Code of the Philippines (Conditions of employment) except: a. Field personnel; b. Supervisors; c. Managers; d. Employees of government-owned and controlled corporations. 3. Work may be performed beyond eight (8) hours a day provided that: a. Employee is paid for overtime work an additional compensation wquivalent to his regular wage plus at least 25% thereof; b. Employee is paid for overtime work an additional compensation equivalent to his regular wage plus at least 30% thereof; c. Employee is paid for overtime work an additional compensation equivalent to his regular wage plus at least 20% thereof; d. None of the above. 4. May the employer and employee stipulate that the latters regular or basic salary already includes the overtime pay, such that when the employee actually works overtime he cannot claim overtime pay? a. Yes, provided there is a clear written agreement knowingly and freely entered into by the employees; b. Yes, provided the mathematical result shows that the agreed legal wage rate and the overtime pay, computed separately, are equal to or higher than the separate amounts legally due; c. No, the employer and employee cannot stipulate includes the overtime pay; d. A and B. 5. The following are instances where an employer can require an employee to work overtime, except: a. In case of actual or impending emergencies caused by serious accident, fire, flood, typhoon, earthquake, epidemic or other disaster or calamity to prevent loss of life and property, or imminent danger to public safety; b. When the country is at war or when other national or local emergency has been declared by the national assembly or the chief executive; c. When there is urgent work to be performed on machines, installations, or equipment or some other cause of similar nature; d. Where the completion or contribution of the work started before the eight hour is necessary to prevent serious obstruction or prejudice to the business or operations of the employer. 6. Z owns and operates a carinderia. His regular employees are his wife, his two (2) children, the family maid, a cook, two (2) waiters, a dishwasher and a janitor. The family driver occasionally works for him during store hours to make deliveries. On April 09, the dishwasher did not report for work. The employer did not give his pay for that day. Is the employer correct? a. No, because employees have a right to receive their regular daily wage during regular holidays; b. Yes, because April 09 is not regular holidays; c. Yes, because of the principle of "a fair days wage for a fair days work"; d. Yes, because he employs less than ten (10) employees.

7. For misconduct or improper behavior to be just cause for dismissal, the following guidelines must be met, except: a. It must be serious; b. It must relate to the performance of the employees duties; c. It should not be used as a subterfuge for causes which are improper, illegal or unjustified; d. It must show that the employee has become unfit to continue working for the employer. 8. The Company lawyer sent a memo to the employee informing him of the specific charges against him and giving him an opportunity to explain his side. In a subsequent letter, the employee was informed that, on the basis of the results of the investigation conducted, his written explanation, the written explanation of other employees as well as the audit report, the management has decided to terminate his employment. The employee contended that his termination was illegal for lack of procedural due process. Is the employees contention correct? a. No, the employees written explanation and written explanation of the other employees were sufficient basis for the employer to terminate his employment; b. Yes, because the employer did not abide by the two-notice rule; c. Yes, because he was not properly afforded the chance to explain his side in a conference; d. No, because the written notice of the cause of dismissal afforded him ample opportunity to be heard and defend himself, and the written notice of the decision to terminate him which states the reasons therefor, complies with the two-notice rule. 9. The Supreme Court categorically declared that separation pay shall be allowed as a measure of social justice only in those instances where the employee is validly dismissed for cause other than: a. Serious Misconduct; b. Gross and habitual neglect of duties; c. Willful disobedience to lawful orders; d. Fraud or willful breach of trust. 10. K is a legitimate contractor hired by G for six (6) months. On the third month, G remitted to K the salaries and wages of the employees. However, K absconded with the money leaving the employees unpaid. The disgruntled employees demanded from G the payment of their salaries. Is G liable? a. No, because G has already remitted the employees salaries to K, validly excusing G from liablity; b. Yes, because he is jointly and solidarily liable for whatever monetary claims the employees may have against K; c. Yes, because of the principle of "a fair days wage for a fair days work"; d. B and C. 11. Corporation X is owned by Ls family. L is the President. M, Ls wife, occasionally gives loans to employees of Corporation X. It was customary that loan payment were paid to M by directly deducting from the employees monthly salary. Is this practice of directly deducting payments of debts from the employees wages allowed? a. Yes, because where the employee is indebted to the employer, it is sanctioned by the law on compensation under Article 1706 of the Civil Code; b. Yes, because it has already become customary such that no express authorization is required; c. No, because an employees payment of obligation to a third person is deductible from the employees wages if the deduction is authorized in writing;

d. No, because Article 116 of the Labor Code absolutely prohibits the withholding of wages and kickbacks. Article 116 provides for no exception. 12. Union X staged a strike in front of Company B because of A CBA deadlock. During the strike, Company B hired replacement workers. Upon resuming their employment, the strikers found that Company B hired replacement workers in their place. Is Company B obliged to reinstate the returning workers? a. No, because the strike caused work stoppage; b. No, because it is a valid exercise of management prerogative; c. Yes, because workers who go on strike do not lose their employment status; d. Yes, because workers are entitled to such retention every time during a valid strike. 13. Which of the following is not a valid reason for a strike? a. There is a bargaining deadlock; b. There is a prevailing intra-union dispute; c. The company engaged in unfair labor practice; d. Theirs is a flagrant violation of CBAs economic provisions. 14. Iya, 15 years old, signed up to model a clothing brand. She worked from 9am to 4pm on weekdays and 1pm to 6pm on Saturdays for two (2) weeks. She was issued a child working permit under RA 9231. Which of the following statements is the most accurate? a. Working permit for Iyas employment is not required because the job is not hazardous; b. Her work period exceeds the required working hours for children aged 15 years old; c. To require a 15-year old to work without obtaining the requisite working permit is a form of child labor; d. Iya, who was engaged in a work that is not child labor, is a working child. 15. Under employees compensation, the so-called "Theory of Increased Risks" is relevant when: a. There is a need to categorize a disability as permanent and total; b. It is not clear as to how an injury was sustained; c. The ailment or sickness is not classified as an occupational disease; d. There is a prima facie finding that the employee had willful intention to hurt himself. 16. Which of the frollowing injuries/death is not compensable? a. Injuries sustained by a technician while at a field trip initiated by the Union and sponsored by the Company; b. Injuries received by a jani tor at a Union election meeting; c. Death of a bank teller because of a bank robbery; d. Death of a professor who was hit by a van on his way home from work. 17. The provisions of the Labor Code on the Working Conditions and Rest Periods of employees are inapplicable to the following employees, except : a. A supervisor in a fast food chain; b. A family driver; c. A laborer without any fixed salary, but receving a compensation depending upon the result of his work; d. A contractual employee. 18. Bugay, an employee with only six (6) months of service, was dismissed due to redundancy. He is, under Art. 283 of the Labor Code, entitled to a separation pay of: a. One (1) month pay;

b. One (1) year pay, Art. 283 of the Labor Code being explicit that "a fraction of at least six (6) months shall be considered one ( 1) whole year"; c. Six (6) months pay; d. One (1) year and six (6) months pay, as Art. 4 of the Labor Code mandates that "(a)ll doubts in the implementation and interpretation of this Code xxx shall be resolved in favor of labor". 19. The power to suspend or cancel a license to recruit employees is vested on: a. The Secretary of Labor and Employment; b. The POEAAdministrator; c. A and B 'concurrently; d. Neither of them. 20. The State shall allow the deployment of overseas Filipino workers only in countries where the rights of Filipino migrant workers are protected. Which of the following is not a guarantee, on the part of the receiving country, for the protection of the rights of OFW's? a. It has existing labor and social laws protecting the rights of migrant workers; b. It promotes and facilitates re-integration of migrants into the national mainstream; c. It is a signatory to and/or ratifier of multilateral conventions, declarations or resolutions relating to the protection of migrant workers; d. It has concluded a bilateral agreement or arrangement with the government on the protection of the rights of overseas Filipino workers. 21. Which is not a procedural requirement for the correction of wage distortion in an unorganized establishment? a. Both employer and employee will attempt to correct the distortion; b. Settlement of the dispute through National Conciliation and Mediation Board (NCMB); c. Settlement of the dispute through voluntary arbitration in case of failure to resolve dispute through CBA dispute mechanism; d. A and B. 22. In what situation is an employer permitted to employ a minor? a. 16-year old child actor as a cast member in soap opera working 8 hours a day, 6 days a week; b. A 17-year old in deep sea-fishing; c. A 17 -year old construction worker; d. A 17-year old assistant cook in a family restaurant. 23. The most important factor in determining the existence of an employer-employee relationship is the: a. Power to control the method by which employees are hired and selected; b. Power to control the manner by which employees are transferred from one job site to another; c. Power to control the results achieved by giving guidelines to the employees; d. Power to control the results to be achieved and the employee's method of achieving the task. 24. A neighbor's gardener comes to you and asks for help because his employer withheld his salary for two (2) months amounting to P4,000.00. Where will you advise him to file his complaint? a. Labor Arbiter; b. DOLE Regional Director; c. Conciliator/Mediator; d. MTC Judge.

25.

What is the nature of the liabilities of the local recruitment agency and its foreign principal? a. The local agency is jointly liable with the foreign principal; severance of relations between the local agent and the foreign principal dissolves the liability of the local agent recruiter; b. Local agency is solidarily liable with the foreign principal; severance of relations between the local agent and the foreign principal dissolves the liability of the foreign principal. only; c. Local agency is solidarily liable with the foreign principal; severance of relations between the local agent and foreign principal does not affect the liability of the foreign principal; d. Local agency is jointly liable with the foreign principal; severance of the relations between the local agent and the foreign principal does not affect the liability of the local recruiter. 26. Which phrase is the most accurate to complete the statement - A private employment agency is any person or entity engaged in the recruitment and placement of workers: a. for a fee, which is charged directly from the workers. b. for a fee, which is charged directly from employers. c. for a fee, which is charged directly or indirectly from workers, employers or both. d. for a fee, which is charged from workers or employers, which covers both local and overseas employment. 27. Who has jurisdiction over a money claim instituted by an overseas Filipino worker? a. Labor Arbiter; b. National Labor Relations Commission; c. Labor Arbiter concurrently with the regular courts.; d. National Labor Relations Commission concurrently with the regular courts. 28. Which of the following is not a valid wage deduction? a. Where the worker was insured with his consent by the employer, and the deduction is allowed to recompense the employer for the amount paid by him as the premium on the insurance; b. When the wage is subject of execution or attachment, but only for debts incurred for food, shelter, clothing and medical attendance; c. Payment for lost or damaged equipment provided the deduction does not exceed 25/o of the employee's salary for a week; d. Union dues. 29. Is the contractor a necessary party in a case where labor contracting is the main issue and labor-only contracting is found to exist? a. Yes, the contractor is necessary in the full determination of the case as he is the purported employer of the worker; b. Yes, no full remedy can be granted and executed without impleading the purported contractor; c. No, the contractor becomes a mere agent of the employer-principal in labor contracting; d. No, the contractor has no standing in a labor contracting case. 30. Who among the following is not entitled to 13th month pay? a. Stephanie, a probationary employee of a cooperative bank who rendered six (6) months of service during the calendar year before filing her resignation; b. Rafael, the secretary of a Senator;

c. Selina, a cook employed by and who lives with an old maid and who also tends the sari-sari store of the latter; d. Roger, a house gardener who is required to report to work only thrice a week. 31. Which type of employee is entitled to a service incentive leave? a. managerial employees; b. field personnel; c. government workers; d. part-time workers. 32. A wage order may be reviewed on appeal by the National Wages and Productivity Commission under these grounds, except: a. grave abuse of discretion; b. non-conformity with prescribed procedure; c. questions of law; d. gross under or over-valuation. 33. The following may file a Petition for Certification Election, except: a. The employer; b. The legitimate labor organization; c. The Federation on behalf of the chapter; d. The Workers' Association. 34. The following are grounds to deny the Petition for Certification Election, except: a. The petitioning union is illegitimate or improperly registered; b. Non-appearance for two consecutive schedules before the Med-Arbiter by petitioning union; c. The inclusion of members outside the bargaining unit; d. Filed within an existing election bar. 35. In response to Company X's unfair labor practices, a union officer instructed its members to stop working and walk out of the company premises. After three (3) hours, they voluntarily returned to work. Was there a strike and was it a valid activity? a. Yes, it was a strike; yes, it was a valid activity; b. Yes, it was a strike; no, it was not a valid activity; c. No, it was not a strike; yes, it was a valid activity; d. No, it was not a strike; no, it was not a valid activity. 36. Which of the following is not considered an employer by the terms of the Social Security Act? a. A self-employed person; b. The government and any of its political subdivisions, branches or instrumentalities, including corporations owned or controlled by the government; c. A natural person, domestic or foreign, who carries on in the Philippines, any trade, business, industry, undertaking or activity of any kind and uses the services of another person who is under his orders as regards the employment; d. A foreign corporation. 37. Jennifer, a receptionist at Company X, is covered by the SSS. She was pregnant with her fourth child when she slipped in the bathroom of her home and had a miscarriage. Meanwhile, Company X neglected to remit the required contributions to the SSS. Jennifer claims maternity leave benefits and sickness benefits. Which of these two may she claim? a. None of them;

b. Either one of them; c. Only maternity leave benefits; d. Only sickness benefits. 38. H files for a seven-day paternity leave for the purpose of lending support to his wife, W, who suffered a miscarriage through intentional abortion. W also filed for maternity leave for five weeks. H and W are legally married but the latter is with her parents, which is a few blocks away from H's house. Which of the following statements is the most accurate? a. Paternity leave shall be denied because it does not cover aborted babies; b. Paternity leave shall be denied because W is with her parents; c. Maternity leave shall be denied because it does not cover aborted babies; d. Maternity leave shall be denied because grant of paternity leave bars claim for maternity leave. 39. Which of the following is not a privilege of a person with disability under the Magna Carta for disabled persons? a. At least 20%_ discount on purchase of medicines in all drugstores; b. Free transportation in public railways; c. Educational assistance in public and private schools through scholarship grants; d. A and C. 40. Which of the following is not a regular holiday? a. New Year's Eve; b. Eidil Fitr; c. Father's Day; d. lndepenaence Day. 41. Which is a characteristic of a labor-only contractor? a. Carries an independent business different from the employer's; b. The principal's liability extends to all rights, duties and liabilities under labor standards laws including the right to self-organization; c. No employer-employee relationship; d. Has sufficient substantial capital or investment in machinery, tools or equipment directly or intended to be related to the job contracted. 42. What is not an element of legitimate contracting? a. The contract calls for the performance of a specific job, work or service; b. It is stipulated that the performance of a specific job, work or service must be within a definite predetermined period; c. The performance of specific job, work or service has to be completed either within or outside the premises of the principal; d. The principal has control over the performance of a specific job, work or service. 43. Which is a characteristic of the learner? a. A person is hired as a trainee in an industrial occupation; b. Hired in a highly technical industry; c. Three (3) months practical on-the-job training with theoretical instruction; d. At least 14 years old. 44. What is not a prerequisite for a valid apprenticeship agreement? a. Qualifications of an apprentice are met; b. A duly executed and signed apprenticeship agreement; c. The apprenticeship program is approved by the Secretary of Labor;

d. Included in the list of apprenticeable occupation of TESDA. 45. Which is not a constitutional right of the worker? a. The right to engage in peaceful concerted activities; b. The right to enjoy security of tenure; c. The right to return on investment; d. The right to receive a living wage. 46. Employee-employer relationship exists under the following, except : a. Jean, a guest relations officer in a nightclub and Joe, the nightclub owner; b. Atty. Sin' Cruz, who works part-time as the resident in house lawyer of X Corporation; c. Paul, who works as registered agent on commission basis in an insurance company; d. Jack and Jill, who work in X Company, an unregistered Association. 47. With respect to legitimate independent contracting, an employer or one who engages the services of a bona fide independent contractor is a. An indirect employer, by operation of law, of his contractor's employees; he becomes solidarily liable with the contractor not only for unpaid wages but also for all the rightful! claims of the employees under the Labor Code; b. Treated as direct employer of his contractor's employees in all instances; he becomes subsidiarily liable with the contractor only in the event the latter fails to pay the employees' wages and for violation of labor standard laws; c. An indirect employer, by operation of law, of his contractor's employees; he becomes solidarily liable with the contractor only in the event the latter fails to pay the employees' wages and for violation of labor standard laws; d. Treated as direct employer of his contractor's employees in all instances; the principal becomes solidarily liable with the contractor not only for unpaid wages but also for all the rightful claims of the employees under the Labor Code; 48. Kevin, an employee of House of Sports, filed a complaint with the DOLE requesting the investigation and inspection of the said establishment for labor law violations such as underpayment of wages, non-payment of 13th month pay, non-payment of rest day pay, overtime pay, holiday pay, and service incentive leave pay. House of Sports alleges that DOLE has no jurisdiction over the employees' claims where the aggregate amount of the claims of each employee exceeds P5,000.00, whether or not accompanied with a claim for reinstatement. Is the argument of House of Sports tenable? a. Yes, Article 1 ~9 of the Labor Code shall apply, and thus, the Labor Arbiter has jurisdiction; b. No, Article 128 (b) of the Labor Code shall apply, and thus, the DOLE Regional Director has jurisdiction; c. Yes, if the claim exceeds P5,000.00, the DOLE Secretary loses jurisdiction; d. No, a voluntarily arbitrator has jurisdiction because the matter involved is a grievable issue. 49. Which of the following is not compensable as hours worked? a. Travel away from home; b. Travel from home to work; c. Working while on call; d. Travel that is all in a day's work. 50. It is defined as any union or association of employees which exists in whole or in part for the purpose of collective bargaining with employers concerning terms and conditions of employment. a. Bargaining representative;

b. Labor organization; c. Legitimate labor organization; d. Federation. 51. This process refers to the submission of the dispute to an impartial person for determination on the basis of the evidence and arguments of the parties. The award is enforceable to the disputants. a. Arbitration; b. Mediation; c. Conciliation; d. Reconciliation. 52. The Regional Director or his representative may be divested of his enforcement and visitorial powers under the exception clause of Article 128 of the Labor Code and, resultantly, jurisdiction may be vested on the labor arbiter when three (3) elements are present. Which of the following is not one of the three (3) elements? a. Employer contests the findings of the labor regulations officers and raises issues thereon; b. In order to resolve any issues raised, there is a need to examine evidentiary matters; c. The issues raised should have been verifiable during the inspection; d. The evidentiary matters are not verifiable in the normal course of inspection . 53. In what instances do labor arbiters have jurisdiction over wage distortion cases? a. When jurisdiction is invoked by the employer and employees in organized establishments; b. When the case is unresolved by Grievance Committee; c. After the panel of voluntarily arbitrators has made a decision and the same is contested by either party; d. In unorganized establishments when the same is not voluntarily resolved by the parties before the NCMM. 54. Is a termination dispute a grievable issue? a. Yes, if the dismissal arose out of the interpretation or Implementation of the CBA; b. No, once there's actual termination, the issue is cognizable by a Labor Arbiter; c. Yes, it is in the interest of the parties that the dispute be resolved on the establishment level; d. No, a voluntary arbitrator must take cognizance once termination is made effective. 55. Peter worked for a Norwegian cargo vessel. He worked as a deckhand, whose primary duty was to assist in the unloading and loading of cargo and sometimes, assist in cleaning the ship. He signed a five-year contract starting in 2009. In 2011, Peter's employers began treating him differently. He was often maltreated and his salary was not released on time. These were frequently protested to by Peter. Apparently exasperated by his frequent protestations, Peter's employer, a once top official in China, suddenly told him that his services would be terminated as soon as the vessel arrived at the next port, in Indonesia. Peter had enough money to go back home, and immediately upon arriving, he filed a money claim with the NLRC against his former employer's local agent. Will Peter's case prosper? a. Yes, he is entitled to full reimbursement of his placement fee, with' interest at 12/o per annum, plus salary for the unexpired portion of his employment contract or for three (3) months for every year of the unexpired portion, whichever is higher; b. Yes, he is entitled to full reimbursement of his placement fee, with interest at 12% per annum, plus his salary for the unexpired portion of his employment contract or for three (3) months for every year of the unexpired portion, whichever is less;

c. Yes, he is entitled to his salaries for the unexpired portion of his employment contract, plus full reimbursement of his placement fee with interest at 12/o per annum; d. Yes, he is entitled to his salaries for three (3) months for every year of the unexpired portion of his employment contract, plus full reimbursement of his placement fee with interest at 12/o per annum. 56. The following are exempt from the rules on minimum wages, except: a. Household or domestic helpers; . b. Homeworkers engaged in needle work; c. Workers' in duly registered establishment in the cottage industry; d. Workers in the duly registered cooperative. 57. Which of the following is a right and/or condition of membership in a labor organization? a. No arbitrary or excessive initiation fees shall be required of the members of a legitimate labor organization nor shall arbitrary, excessive or oppressive fine and forfeiture be imposed; b. The members shall be entitled to full and detailed reports from their officers and representatives of all financial transactions as provided for in the constitution and bylaws of the organization; c. No labor organization shall knowingly admit as members or continue in membership any individual who belongs to a subversive organization or who is engaged directly or indirectly in any subversive activity; d. All of the above. 58. Which phrase most accurately completes the statement - Members of cooperatives: a. can invoke the right to collective bargaining because it is a fundamental right under the Constitution. b. can invoke the right to collective bargaining because they are permitted by law. c. cannot invoke the right to collective bargaining because each member is considered an owner. d. cannot invoke the right to collective bargaining because they are expressly prohibited by law. 59. Which of the following is not true in unfair labor practices committed by an employer? a. Unfair labor practices cannot be committed unless the union has been formed and registered; b. The commission of unfair labor practice requires an employer-employee relationship; c. The offense of unfair labor practice prescribes in one ( 1) year; d. The list of unfair labor practices is exclusive. 60. Which of the following is correct with respect to the extent of the application of security of tenure? a. It applies to managerial and to all rank-and-file employees i f not yet regular, but not to management trainees; b. It applies to managerial and to all rank-and-file employees including those under probation; c. It applies to seasonal and project employees, if they are hired repeatedly; d. It applies to all kinds of employees except those employed on a part-time basis. 61. Which of the following is not a procedural due process requirement in the termination of an employee for just cause? a. A written notice to the employee specifying the grounds for his termination; b. A written notice to the DOLE at least thirty (30) days before the effectivity of termination;

c. A written notice to the employee stating that upon consideration of the circumstances, grounds have been established to justify his termination; d. An opportunity for the employee to present his evidence. 62. Under current jurisprudence, when the dismissal is for a just or authorized cause but due process is not observed, the dismissal is said to be: a. Void for denial of due process; hence, the employee should be reinstated; b. Void for lack. of due process, the employee should be paid full backwages; c. Valid, for the dismissal is with just/authorized cause, but the employer shall be liable for nominal damages; d. Valid, even if due process is not observed, hence reinstatement should not be ordered. 63. What is the quantum of evidence required in labor cases? a. The degree of proof which produces the conclusion that the employee is guilty of the offense charged in an unprejudiced mind; b. Such amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion; c. That degree of proof which is greater in weight than the opposing party's evidence; d. Such evidence which must be highly and substantially more probable to be true than not which convinces the trier of facts of its factuality. 64. Which of the following statements is the most accurate? a. Domestic helpers with monthly income of at least P3,000.00 are compulsory members of the SSS Law; b. House helpers with monthly income of at least P2,000.00 are compulsory members of the SSS Law; c. Domestic helpers, 55 years of age and who worked for at least five (5) years, are covered by the Retirement Pay Law under optional retirement, in the absence of a CBA; d. Domestic helpers in the personal service of another are not entitled to 13th month pay. 65. The decision of the Labor Arbiter in a labor dispute case is: a. immediately executory; b. requires a writ of execution; c. is immediately executory insofar as the reinstatement of the employee is concerned; d. is stayed by the appeal of the employer and posting of appeal bond. 66. Which of the following is cognizable by the Bureau of Labor Relations Med-Arbiters? a. Unfair labor practice for violation of the CBA filed by the Workers Union of Company X against Company X; b. Claim for back wages filed by overseas contract worker Xena against her Saudi Arabian employer; c. Contest for the position of MG Union President brought by Ka Joe, the losing candidate in the recent union elections; d. G contesting his removal as Chief Executive Officer of Company Z. 67. J refused to comply with his deployment assignment with K, a manning agency. K filed a complaint against him for breach of contract before the Philippine Overseas Employment Administration (POEA). The POEA penalized J with one (1) year suspension from overseas deployment. On appeal, the suspension was reduced to six (6) months by the Secretary of Labor. Is the remedy of appeal still available to J and where should he file his appeal? a. Yes, he can file an appeal before the Court of Appeals via a Petition for Certiorari under rule 65;

b. Yes, he can file an appeal before the Supreme Court via a Petition for Certiorari under Rule 65; c. Yes, he can file an appeal before the Office of the President since this is an administrative case; d. Yes, he can file an appeal before the National Labor Relations Commission because there is an employer-employee relationship. 68. R was employed as an instructor of Cruz College located in Santiago City, lsabela. Pursuant to a stipulation in R's employment contract that the college has the prerogative to assign R in any of its branches or tie-up schools as the necessity demands, the college proposed to transfer him to llagan, a nearby town. R filed a complaint alleging constructive dismissal since his re-assignment will entail an indirect reduction of his salary or diminution of pay considering that additional allowance will not be given to cover for board and lodging expenses. R, however, failed to prove that allowances were given in similar instances in the past. Is R's contention that he will suffer constructive dismissal in view of the alleged diminution of benefit correct? a. Yes, such transfer should require an automatic additional allowance; the nongranting of said allowance amounts to a diminution of benefit; b. No, R failed to present evidence that the college committed to provide the additional allowance or that they were consistently granting such benefit as to have ripened into a practice which cannot be peremptorily withdrawn. Hence, there is no violation of the rule against diminution of pay; c. No, R's re-assignment did not amount to constructive dismissal because the college has the right to transfer R based on contractual stipulation; d. B and C. 69. At what particular point does a labor organization acquire a legal personality? a. On the date the agreement to organize the un1on is signed by the majority of all its members; b. On the date the application for registration is duly filed with the Department of Labor.; c. On the date appearing on the Certificate of Registration; d. On the date. the Certificate of Registration is actually issued. 70. How many years of service is the underground mine employee required to have rendered in order to be entitled to retirement benefits? a. 5; b. 10; c. 15; d. 20. 71. What is the prescriptive period of all criminal offenses penalized under the Labor Code and the Rules Implementing the Labor Code? a. 3 years; b. 4 years; c. 5 years; d. 10 years. 72. What is the nature of employment of househelpers? a. Seasonal; b. Fixed-term; c. Regular; d. Probationary. 73. The appeal to the NLRC may be entertained only on any of the following grounds, except:

a. If there is prima facie evidence of abuse of discretion on the part of the Labor Arbiter; b. If the decision, order or award was secured through fraud or coercion, including graft and corruption; c. If made purely on questions of fact and law; d. If serious errors in the findings of facts are raised which would cause grave or irreparable damage or injury to the appellant 74. The following are unfair labor practices of employers, except: a. Interrogating its employees in connection with their membership in the union or their union activities which hampers their exercise of free choice; b. The grant of profit-sharing benefits to managers, supervisors and all rank-and-file employees not covered by the CBA; c. The cessation of a company's operations shortly after the organization of a labor union and the resumption of business barely a month after; d. Withdrawal by the employer of holiday pay benefits stipulated under a supplementary agreement with the union. 75. According to Article 78 of the Labor Code., a handicapped worker is one whose earning capacity is impaired by the following, except : a. Age; b. Physical Deficiency; c. Mental Deficiency; d. Psychological Deficiency. - NOTHING FOLLOWS HAND IN YOUR ANSWER SHEET. THERE IS NO NEED TO RETURN THIS QUESTIONNAIRE TO HEAD WATCHER. 2012 BAR EXAMINATIONS LABOR LAW
7 October 2012 3:30 P.M. - 5 P.M.

Set B ESSAY TYPE QUESTIONS INSTRUCTIONS The following questionnaire consists of ten (1 0) questions (numbered I to X) contained in SIX (6) pages. Begin your answer to each numbered question on a separate page; an answer to a sub-question/s under the same number n1ay be written continuously on the san1e page and succeeding pages until completed. Answer the question directly and concisely. Do not repeat the question. Write legibly. HAND IN YOUR NOTEBOOK. THERE IS NO NEED TO RETURN THIS QUESTIONNAIRE TO THE HEAD WATCHER. GOODLUCK!!! _____________________________________ MARTIN S. VILLARAMA, JR. Chairperson 2012 Bar Examinations Committee PLEASE CHECK THAT THIS SET CONTAINS SEVEN (7) PAGES (INCLUDING THIS PAGE). WARNING: NOT FOR SALE OR UNAUTHORIZED USE I. a. Distinguish Labor-Only contracting and Job-Only contracting. (5%) b. A deadlock in the negotiations for the collective bargaining agreement between College X and the Union prompted the latter, after duly notifying the DOLE, to declare a strike on November 5. The strike totally paralyzed the operations of the school. The Labor Secretary immediately assumed jurisdiction over the dispute and issued on the same day (November 5) a return to work

order. Upon receipt of the order, the striking union officers and members, on November 1, filed a Motion for Reconsideration thereof questioning the Labor Secretary's assumption of jurisdiction, and continued with the strike during the pendency of their motion. On November 30, the Labor Secretary denied the reconsideration of his return to work order and further noting the strikers' failure to immediately return to work, terminated their employment. In assailing the Labor Secretary's decision, the Union contends that: 1. The Labor Secretary erroneously assumed jurisdiction over the dispute since College X could not be considered an industry indispensable to national interest; 2. The strikers were under no obligation to immediately comply with the November 5 return to work order because of their then pending Motion for Reconsideration of such order; and 3. The strike being legal, the employment of the striking Union officers and members cannot be terminated. Rule on these contentions. Explain. (5%) II. In the Collective Bargaining Agreement (CBA) between Dana Films and its rank-and-file Union (which is directly affiliated with MMFF, a national federation), a provision on the maintenance of membership expressly provides that the Union can demand the dismissal of any member employee who commits acts of disloyalty to the Union as provided for in its Constitution and By-Laws. The same provision contains an undertaking by the Union (MMFF) to hold Dana Films free from any and all claims of any employee dismissed. During the term of the CBA, MMFF discovered that certain employee-members were initiating a move to disaffiliate from MMFF and join a rival federation, FAMAS. Forthwith, MMFF sought the dismissal of its employee-members initiating the disaffiliation movement from MMFF to FAMAS. Dana Films, relying on the provision of the aforementioned CBA, complied with MMFF's request and dismissed the employees identified by MMFF as disloyal to it. a. Will an action for illegal dismissal against Dana Films and MMFF prosper or not? Why? (5%)) b. What are the liabilities of Dana Films and MMFF to the dismissed employees, i f any? (5%) III. a. On August 01, 2008, Y, a corporation engaged in the manufacture of textile garments, entered into a collective bargaining agreement with Union X in representation of the rank and-file employees of the corporation. The CBA was effective up to June 20, 2011. The contract had an automatic renewal clause which would allow the agreement after its expiry date to still apply until both parties would have been able to execute a new agreement. On May 10, 2011, Union X submitted to Y's management their proposals for the negotiation of a new CBA. The next day, Y suspended negotiations with Union X since Y had entered into a merger with z, a corporation also engaged in the manufacture of textile garments. Z assumed all the assets and liabilities of Y. Union X filed a complaint with the Regional Trial Court for specific performance and damages with a prayer for preliminary injunction against Y and Z and Z filed a Motion to Dismiss based on lack of jurisdiction. Rule on the Motion to Dismiss. (5%) b. X was one of more than one hundred (100) employees who were terminated from employment due to the closure of Construction Corporation A. The Cruz family owned Construction Company A. Upon the closure of Construction Company A, the Cruzes established Construction Company B. Both corporations had the same president, the same board of directors, the same corporate officers, and all the same subscribers. From the General Information Sheet filed by both companies, it also showed that they shared the same address and/or premises. . Both companies also hired the same accountant who prepared the books for both companies. X and his co-employees amended their Complaint with the Labor Arbiter to hold Construction Corporation 8 joint and severally liable with Construction Company A for illegal dismissal, backwages and separation pay. Construction Company 8 interposed a Motion to Dismiss contending that they are juridical entities with distinct and separate personalities from Construction Corporation A and therefore, they cannot be held jointly and severally liable for the money claims

of workers who are not their employees. Rule on the Motion to Dismiss. Should it be granted or denied? Why? (5%) IV. a. Juicy Bar and Night Club allowed by tolerance fifty (50) Guest Relations Officers (GROs) to work without compensation in its establishment under the direct supervision of its Manager from 8:00 P.M. To 4:00 A.M. everyday, including Sundays and holidays. The GROs, however, were free to ply their trade elsewhere at anytime, but once they enter the premises of the night club, they Were required to stay up to closing time. The GROs earned their keep exclusively from commissions for food and drinks, and tips from generous customers. In time, the GROs formed the Solar Ugnayan ng mga Kababaihang lnaapi (SUKI), a labor union duly registered with DOLE. Subsequently, SUKI filed a petition for Certification Election in order to be recognized as the exclusive bargaining agent of its members. Juicy Bar and Night Club opposed the petition for Certification Election on the singular ground of absence of employer-employee relationship between the GROs on one hand and the night club on the other hand. May the GROs form SUKI as a labor organization for purposes of collective bargaining? Explain briefly. (5%) b. A spinster school teacher took pity on one of her pupils, a robust and precocious 12-year old boy whose poor family could barely afford the cost of his schooling. She lives alone at her house near the School after her housemaid had left. In the afternoon, she lets the boy do various chores as cleaning, fetching water and all kinds of errands after school hours. She gives him rice and P100.00 before the boy goes home at 7:00 every night. The school principal learned about it and charged her with violating the law which prohibits the employment of children below 15 years of age. In her defense, the teacher stated that the work performed by her pupil is not hazardous. Is her defense tenable? Why? (5%) V. The weekly work schedule of a driver is as follows: Monday, Wednesday, Friday - drive the family car to bring and fetch the children to and from school. Tuesday, Thursday, Saturday - drive the family van to fetch merchandise from suppliers and deliver the same to a boutique in a mall owned by the family. a. Is the driver a house helper? (5%) b. The same driver claims that for work performed on Tuesday, Thursday and Saturday, he should be paid the minimum daily wage of a driver of a commercial establishment. Is the claim of the driver valid? (5%) VI. a. For humanitarian reasons, a bank hired several handicapped workers to count and sort out currencies. The handicapped workers knew that the contract was only for a period of six-months and the same period was provided in their employment contracts. After six months, the bank terminated their employment on the ground that their contract has expired. This prompted the workers to file with the Labor Arbiter a complaint for illegal dismissal. Will their action prosper? Why or why not? (5%) b. Mam-manu Aviation Company (Mam-manu) is a new airline company recruiting flight attendants for its domestic flights. It requires that the applicant be single, not more than 24 years old, attractive, and familiar with three (3) dialects, viz: llonggo, Cebuano and Kapampangan. lngga, 23 years old, was accepted as she possesses all the qualifications. After passing the probationary period, lngga disclosed that she got married when she was 18 years old but the marriage was already in the process of being annulled on the ground that her husband was afflicted with a sexually transmissible disease at the time of the celebration of their marriage. As a result of this revelation, lngga was not hired as a regular flight attendant. Consequently, she filed a complaint against Mam-manu alleging that the pre-employment qualifications violate relevant provisions of the Labor Code and are against public policy. Is the contention of lngga tenable? Why? (5%) VII. a. Inggu, an electronics technician, worked within the premises of Pit Stop, an auto accessory shop. He filed a Complaint for illegal dismissal, overtime pay and other benefits against Pit Stop. Pit Stop refused to pay his claims on the ground that lnggu was not its employee but was an

independent contractor . . It was common practice for shops like Pit Stop to collect the service fees from customers and pay the same to the independent contractors at the end of each week. The auto shop explained that lnggu was like a partner who worked within its premises, using parts provided by the shop, but otherwise lnggu was free to render service in the other auto shops. On the other hand, lnggu insisted that he still was entitled to the benefits because he was loyal to Pit Stop, it being a fact that he did not perform work for anyone else. Is lnggu correct? Explain briefly. (5%) b. The modes of determining an exclusive bargaining agreement are: 1. voluntary recognition 2. certification election 3. consent election Explain briefly how they differ from one another. (5%) VIII. ABC Tomato Corporation, owned and managed by three (3) elderly brothers and two (2) sisters, has been in business for 40 years. Due to serious business losses and financial reverses during the last five (5) years, they decided to close the business. a. As counsel for the corporation, what steps will you take prior to its closure? (3%) b. Are the employees entitled to separation pay? (2%) If the reason for the closure is due to old age of the brothers and sisters: c. Is the closure allowed by law? (2%) d. Are the employees entitled to separation benefits? (3%) IX. Dennis was a taxi driver who was being paid on the "boundary" system basis. He worked tirelessly for Cabrera Transport Inc. for fourteen (14) years until he was eligible for retirement. He was entitled to retirement benefits. During the entire duration of his service, Dennis was not given his 13th month pay or his service incentive leave pay. a. Is Dennis entitled to 13th month pay and service leave incentive pay? Explain. (5%) b. Since he was not given his 13th month pay and service incentive leave pay, should Dennis be paid upon retirement, in addition to the salary equivalent to fifteen (15) days for every year of service, the additional 2.5 days representing one-twelfth (1/12) of the 13th month pay as well as the five (5) days representing the service incentive leave for a total of 22.5 days? Explain. (5%) X. a. XYZ Manpower Services (XYZ) was sued by its employees together with its client, ABC Polyester Manufacturing Company (ABC). ABC is one of the many clients of XYZ. During the proceedings before the Labor Arbiter, XYZ was able to prove that it had substantial capital of Three Million Pesos. The Labor Arbiter ruled in favor of the employees because it deemed XYZ as a labor only contractor. XYZ was not able to prove that it had invested in tools, equipment, etc. Is the Labor Arbiter's ruling valid? Explain. (5%) b. Does the performance by a contractual employee, supplied by a legitimate contractor, of activities directly related to the main business of the principal make him a regular employee of the principal? Explain. (5%) - NOTHING FOLLOWS HAND IN YOUR ANSWER SHEET. THERE IS NO NEED TO RETURN THIS QUESTIONNAIRE TO HEAD WATCHER. The Lawphil Project - Arellano Law Foundation
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2012 Bar Exam in Political Law

2012 BAR EXAMINATIONS POLITICAL AND INTERNATIONAL LAW

7 October 2012 8:00 A.M. - 10 A.M.

Set A MULTIPLE CHOICE QUESTIONS (MCQs) INSTRUCTIONS The following questionnaire consists of one hundred (100) MCQs numbered 1 up to 100 contained in TWENTY TWO (22) pages. Answer each question on the MCQ Answer Sheet by shading completely the appropriate circle corresponding to the letter you have chosen. (Read the Marking Instructions on the Answer Sheet) Avoid erasures on the Answer Sheet. If you need to make corrections, erase completely the answer you want to change. Do not explain your answers in the MCQ portion of the exam. You will not earn any credit for that. Keep the Answer Sheet clean. Do not make unnecessary marks on it. Do not fold, roll, scratch, crumple or tear it. You may write on the questionnaire and use it as scratch paper but make sure to transfer your answer to the Answer Sheet. Provide ample time to transfer the answers if you choose to do this. Answer first the MCQs completely before going to the essay-type questions. HAND IN YOUR ANSWER SHEET. THERE IS NO NEED TO RETURN THIS QUESTIONNAIRE TO THE HEAD WATCHER. GOODLUCK!!! _____________________________________ MARTIN S. VILLARAMA, JR. Chairperson 2012 Bar Examinations Committee PLEASE CHECK THAT THIS SET CONTAINS TWENTY THREE (23) PAGES (INCLUDING THIS PAGE). WARNING: NOT FOR SALE OR UNAUTHORIZED USE
POLITICAL AND INTERNATIONAL LAW

1.

Constitution is defined by Cooley as: a. a body of statutory, administrative and political provisions by which the three branches of government are defined; b. a body of rules and maxims in accordance with which the powers of sovereignty are habitually exercised; c. a body of rules and edicts emanating from the rulings of courts and written guidelines of the executive and the legislature by which government is governed; d. a body of interpretations and rules by which the three branches of government are judged for purposes of sovereign compliance with good corporate governance. 2. The three essential parts of a Constitution are: a. the bill of rights, governmental organization and functions, and method of amendment; b. the preamble, the bill of rights, and provisions on checks and balances; c. the national territory, the declaration of principles and state policies, and the transitory provisions; d. the executive department, the legislative department and the judiciary. 3. The constitutional provision on initiative and referendum is not self-executory. This is so because it requires: a. an implementing resolution from the COMELEC; b. an implementing resolution from the Supreme Court; c. an implementing legislation; d. an implementing resolution from the party-list representative of the House of Representatives.

4. In an amendment to the constitution by "initiative and referendum", the "initiative" phase is meant that the people propose the amendments. There is a valid proposal when a proposition has received the approval of: a. at least 3% of the persons of majority age of each district, and 12% of the registered voters of the region from proposal emanates; b. at least 3% of the registered voters of each province and 12% of the total number of registered voters nationwide; c. at least 3% of the registered voters of each district and 12% of the total number of registered voters nationwide; d. more than 3% of the 3% of the registered voters of each district but less than 12% of the total number of registered voters nationwide. 5. The Constitution declares that the Philippines is a republican state. Republicanism means: a. the form of government must be presidential; b. the representatives of the government are elected by the people; c. sovereignty resides in the elected representatives of the government; d. the form of government cannot be changed by the people. 6. A chief characteristic of the presidential form of government is: a. concentration of power in the judiciary thru the power of expanded judicial review; b. supremacy of the presidency compared to the totality of powers of the legislative; c. regular periodic election of the President for a fixed term; d. unlimited term for the President for as long as elected by the people in free and honest elections. 7. Which of the following best exemplifies how the system of checks and balances is carried out: a. the legislature passes a law that prohibits the president from commuting a judiciary imposed sentence, as a check of the president; b. the President pardons a convict as a way to set aside or modify a judgment of the judiciary; c. the judiciary overturns a pardon granted by the President as a check on executions; d. the President pardons an accused after arraignment in the interest of justice. 8. Which phrase best completes the statement The starting point of the principle of separation of powers is the assumption of the division of the functions of government into three distinct classes: a. the bill of rights, state policies, and social justice and human rights; b. the accountability of public officers, the constitutional commissions, and the national economy and patrimony; c. the self-executing provisions, the non-self-executing provisions, and the self-evident social justice provisions; d. the executive, the legislative, and the judicial. 9. The Constitution provides that the "separation of church and state shall be inviolable." This is implemented most by the constitutional principles embodied in: a. the free exercise clause; b. the non-establishment clause; c. the freedom of religious belief clause; d. the freedom of religion clause. 10. Which one of the following is a non-self-executing provision of the Constitution: a. no law shall be passed abridging the freedom of speech; b. no law shall be made respecting an establishment of religion;

c. no person shall be held to answer for a criminal offense without due process of law; d. the state shall encourage and support researches and studies on the arts and culture. 11. Basic Philippine law, in respect of the modes of acquiring citizenship, follows the rule(s) of: a. jus soli and jus sanguinis; b. naturalization and provides for jus soli; c. jus sanguinis and provides for naturalization; d. none of the above. 12. Dual allegiance by citizen is: a. inimical to the national interest and is therefore proscribed by law; b. inimical to the national interest and is therefore prescribed by law; c. inimical to the national interest and therefore shall be dealt with by law; d. inimical to the national interest and is therefore outside of coverage of law. 13. Margarita was born in 1986 to a Filipino mother and Swedish father. She has been living and continues to live in the US for the last 20 years and has also been naturalized as a US citizen. She recently reacquired Philippine citizenship under RA 9225, the Citizenship Retention and Reacquisition Act of 2003. Can Margarita vote in the next national elections? a. Yes. Dual citizens who are not residents may register under the Overseas Absentee Voting Law. b. Yes. Margarita is a Filipino citizen and thus may enjoy the right to suffrage like everyone else without registering as an overseas absentee voter. c. No. Margarita fails the residency requirement under Section 1, Article V of the Constitution for Filipinos. d. No. Dual citizens upon renunciation of their Filipino citizenship and acquisition of foreign citizenship, have practically and legally abandoned their domicile and severed their legal ties to their homeland as a consequence. 14. Identify which one is an invalid exercise of the legislative power: a. legislation by local government on purely local matters; b. law granting an administrative agency the power to define policy and fix standards on price control; c. law authorizing the President, in times of war or other national emergency, for a limited period, subject to prescribed restrictions, to exercise powers necessary and proper to carry out a declared national policy; d. law authorizing the President to fix, within specific limits, tariff rates, import and export quotas, and other duties, within the framework of the national development program of the government. 15. Which one of the following theories does not support the valid delegation of authority by the Congress to an administrative agency: a. an administrative agency may "fill up the details" of a statute; b. the legislature may leave to another body the ascertainment of facts necessary to bring the law into actual operation; c. an administrative agency has equal expertise with the legislature in crafting and implementing laws; d. contingent legislation. 16. The rule in Article V1, Section 5 (3) of the Constitution that "Each legislative district shall comprise, as far as practicable, contiguous, compact and adjacent territory" is a prohibition against: a. re-apportionment; b. commandeering of votes;

c. gerrymandering; d. re-districting. 17. Article V1, Section 5(3) of the Constitution requires that for a city to be entitled to have at least one representative, its population shall be at least: a. 250,000; b. 150,000; c. 100,000; d. 175,000. 18. A Senator or Member of the House of Representatives shall be privileged from arrest while Congress is in session for all offenses punishable by imprisonment of not more than: a. life imprisonment; b. reclusion perpetua; c. six years imprisonment; d. four years imprisonment. 19. No Senator or member of the House of Representatives may personally appear as counsel before: a. any regional court; b. any court of justice; c. any inferior court; d. any appellate court. 20. Which of the following can be changed by an ordinary law enacted by Congress? a. Commencement of the term of office of Senators; b. Date of regular election for President and Vice Presidential; c. Authority to transfer appropriation; d. Regular election of the members of Congress. 21. Congress shall have the sole power to declare the existence of a state of war by vote of: a. three-fourths of both Houses in joint session assembled, voting jointly; b. two-thirds of both Houses in joint session assembled, voting jointly; c. two-thirds of both Houses in separate session assembled, voting jointly; d. two-thirds of both Houses in joint session, voting separately. 22. If by the end of any fiscal year, the Congress shall have failed to pass the general appropriations bill for the ensuring fiscal year, the general appropriations law for the preceding fiscal year shall be deemed: a. referred; b. unacted; c. refilled; d. re-enacted. 23. Provisions unrelated to an appropriation bill are considered prohibited. These are called: a. interlopers; b. riders; c. outriggers; d. add-ons. 24. The requirement that "Every bill shall embrace only one subject which shall be expressed in the title thereof" prevents: a. rollercoaster legislation; b. log-rolling legislation;

c. rolling fields legislation; d. loggerhead legislation. 25. The power of the President to veto any particular part in an appropriation revenue, or tariff bill, is called the: a. specific veto; b. revenue veto; c. item veto; d. monetary veto. 26. A tax is progressive when: a. the rate fluctuates as the tax base decreases; b. the rate increases as the tax base remains the same; c. the rate increases as the tax base increases; d. the rate decreases as the tax base increases. 27. When the Supreme Court sits en banc, cases are decided by the concurrence of a majority of the members who: a. actually sent in memos on matters for deliberation and called in their votes thereon; b. actually participated in the oral arguments and voted thereon; c. actually took part in the deliberations on the issues in the case and voted thereon; d. actually took part in the voting thereon and took notes on the actual deliberations. 28. When the Supreme Court sits in division, cases can be decided by as few as a minimum of: a. three votes; b. four votes; c. five votes; d. six votes. 29. A person who has a personal and substantial interest in the case, such that he has sustained, or will sustain, direct injury as a result of its enforcement is considered to have: a. understanding to challenge the governmental act; b. standing to challenge the governmental act; c. opportunity to challenge the governmental act; d. familiarity to challenge the governmental act. 30. Congressman Sugar Oll authored a bill called House Bill No, 0056 which legalizes jueteng. When the Bill became law (RA 10156), Fr. Nosu Gal, a priest, filed a petition seeking for the nullification of RA 10156 on the ground that it is unconstitutional as it violates Section 13, Article II, of the 1987 Constitution which states that "The state recognizes the vital role of the youth in nationbuilding and shall promote and protect their physical, moral, spiritual, intellectual, and social wellbeing". Fr. Gal filed the petition as a concerned citizen and as taxpayer. Does Fr. Gal have locus standi? a. No, because Fr. Gal has no personal and substantial interest that will be prejudiced by the implementation of the law; b. No, the law concerns neither citizens nor expenditure of public funds; c. Yes, because the issue is of transcendental importance; d. Yes, because as priest, Fr. Gal has special interest in the well-being of the youth. 31. Where there is "the impossibility of a courts undertaking independent resolution without expressing lack of the respect due coordinate branches of government; or an unusual need for unquestioning adherence to a political decision already made; or the potentially of embarrassment from multifarious pronouncement by various departments on a question," describes what kind of political question:

a. adherence kind; b. prudential kind; c. respectful kind; d. deference kind. 32. The "operative fact" doctrine of constitutional law is applied when a law is declared: a. operative; b. factual; c. constitutional; d. unconstitutional. 33. The totality of governmental power is contained in three great powers: a. police power, power of sequestration, power of foreign policy; b. power of immigration, municipal power, legislative power; c. executive power, legislative power, judicial power; d. police power, power of eminent domain, power of taxation. 34. The most essential, insistent and the least limitable of (government) powers, extending as it does to all the great public needs, is: a. emergency power; b. police power; c. legislative power; d. power to declare martial law. 35. 35. In the hierarchy of civil liberties, which right occupies the highest preferred position: a. right to academic freedom; b. right to a balanced and healthful ecology; c. right to freedom of expression and of assembly; d. right to equal health. 36. In which of the following would there be no double jeopardy even if a subsequent case is filed? a. Pot is accused before the RTC of qualified theft. After innumerable postponements against Pots wishes, he moves for dismissal for denial of the right to a speedy trial. Prosecutor objected. Dismissal granted; b. Pot is accused before the RTC of qualified theft. After innumerable postponements against Pots wishes, the prosecutor moves for dismissal with the consent of Pot. Granted; c. Pot is accused before the RTC of qualified theft. After innumerable postponements against Pots wishes, he moves for dismissal for denial of the right to a speedy trial. Prosecutor posts no objections. Dismissal granted; d. Pot is accused before the RTC of qualified theft. After innumerable postponements against Pots wishes, the prosecutor moves for dismissal over the objections of Pot. Granted. 37. Under Article III, Section 2 of the Bill of Rights, which provides for the exclusion of evidence that violate the right to privacy of communication and correspondence, to come under the exclusionary rule, the evidence must be obtained by: a. private individuals acting on their own; b. government agents; c. private individuals acting on orders of superiors; d. former high government officials. 38. The complementing regime that best characterizes the guarantees of freedom of speech and of the press are:

39. Rights:

a. prior punishment and moderate punishment; b. prior censorship and subsequent remedies; c. no prior restraint and subsequent punishment; d. no prior restraint and no subsequent punishment. The free exercise and non-establishment clauses pertain to which right under the Bill of

a. liberty of movement; b. liberty of abode; c. religion; d. life and liberty. 40. The Gangnam Styles Witnesses (whose tenets are derogatory to the Catholic Church), applied for a permit to use the public plaza and kiosk to hold their religious meeting on the occasion of their founding anniversary. Mayor Lebron allowed them to use the northwestern part of the plaza but not the kiosk (which is a few meters away from the Catholic church). Members of the Gangnam Style Witnesses claim that the act of Mayor Lebron is a violation of their freedom of assembly and religion. Is this correct? a. No, because this is valid exercise of police power; b. Yes, because the plaza being of public use can be used by anybody regardless of religious belief; c. No, because historical experience shows that peace and order may be disturbed whenever two opposing religious groups or beliefs expound their dogmas; d. Yes, because there is no clear and present danger in holding a religious meeting by another religious group near a catholic church. 41. Which one is NOT a recognized limitation to the right to information on matters of public concern: a. national security matters; b. trade secrets and banking transactions; c. criminal matters or classified law enforcement matters; d. government research data used as a basis for policy development. 42. Which one of the following circumstances is NOT an element of taking under eminent domain: a. entering upon public property for a momentary period; b. under color of legal authority; c. devoting it to public use; d. as substantially to cust the owner of all beneficial ownership. 43. Market value for purposes of determining just compensation in eminent domain has been described as the fair value of property: a. between one who desires to purchase and one does not desire to sell; b. between one who desires to purchase and one who wants to delay selling; c. between one who desires to purchase and one who desires to sell; d. between one who desires to purchase on terms and one who desires to sell after a period of time. 44. Under Article III, Section 12 of the Constitution, any person under investigation for the commission of an offense shall have the right to be informed of his right to remain silent, etc. The investigation referred to is called: a. preliminary investigation; b. summary investigation; c. criminal investigation;

d. custodial investigation. 45. All persons charged shall, before conviction, be bailable by sufficient sureties, except those charged with: a. offenses punishable by death when evidence of guilt is strong; b. offenses punishable by life imprisonment when evidence of guilt is strong; c. offenses punishable by death when evidence of guilt is weak; d. offenses punishable by reclusion perpetua when evidence of guilt is strong. 46. Criminal trial may proceed, notwithstanding the absence of the accused provided that he has been duly notified, and his failure to appear is unjustifiable, after: a. preliminary investigation; b. arraignment; c. sentencing; d. prosecution has rested its case. 47. The requisites of a valid trial in absentia exclude: a. Wherein his/her failure to appear is unjustifiable; b. Wherein he/she allows himself/herself to be identified by the witness in his/her absence, without further unqualified admitting that every time a witness mentions a name by which he/she is known, it shall be understood to refer to him/her; c. Wherein he/she has been duly notified of the trial; d. Wherein the accused has already been arraigned. 48. The privilege of the writ of habeas corpus shall not be suspended except in cases of: a. imminent danger of invasion or rebellion when the public safety requires it; b. grave danger of invasion or rebellion when the public safety requires it; c. clear and present danger of invasion or rebellion when the public safety requires it; d. invasion or rebellion when the public safety requires it. 49. The right of the accused against self-incrimination will be violated if: a. he is charged with violation of the Anti-Money Laundering Act and he was required to produce his bank passbook; b. he is a public officer charged with amassing ill-gotten wealth and his statement of assets and liabilities will be presented as evidence; c. his gun was subjected to a ballistics test; d. a sample of his blood was taken if his blood type matches the blood type found at the scene of the crime. 50. The death penalty shall not be imposed: a. unless for compelling reasons involving death penalty crimes and the executive hereafter provides for it; b. unless for compelling reasons involving heinous crimes and a constitutional amendment provides for it; c. unless for compelling reasons involving heinous crimes and Congress hereafter provides for it; d. unless for compelling reasons involving heinous crimes and the Supreme Court hereafter upholds it. 51. An ex post facto law has been defined as one: a. which aggravates a crime or makes it lesser than when it was committed; b. which mitigates a crime or makes it lesser than when it was committed; c. which aggravates a crime or makes it greater than when it was committed; d. which aggravates a crime or makes it non-criminal after it was committed.

52.

A bill of attainder is: a. an executive act which inflicts punishment without tender; b. a judicial act which inflicts punishment without tender; c. a legislative act which inflicts punishment without trial; d. a legislative act which pardons punishment after tender. 53. Which one of the following is NOT an independent Constitutional Commission under Article IX, Section 1 of the Constitution: a. Commission on Elections; b. Commission on Human Rights; c. Civil Service Commission; d. Commission on Audit. 54. The independent Constitutional Commissions enjoy: a. decisional autonomy; b. organizational autonomy; c. fiscal autonomy; d. quasi-judicial autonomy. 55. The Civil Service shall be administered by the Civil Service Commission composed of a: a. Chairman and a Commissioner; b. Chairman and two (2) Commissioners; c. Chairman and three (3) Commissioners; d. Chairman and four (4) Commissioners. 56. In Oposa vs. Factoran, Jr., G.R. No. 101083, July 30, 1993, the Supreme Court held that the personality of the petitioners to sue is based on the concept of: a. ecological responsibility; b. environmental accountability; c. intergenerational responsibility; d. interdisciplinary responsibility. 57. In a unitary system of government, such as the government under the Philippine Constitutor, local government can only be: a. an imperuim in imperio; b. an infa-sovereign subdivision; c. a sovereign nation; d. a sovereign entity. 58. Which one is NOT among the Constitutionally mandated grounds for impeachment of impeachable officials: a. culpable violation of the Constitution; b. treason, bribery, graft and corruption and other high crimes; c. betrayal of public trust; d. culpable violation of the duty to be at all times accountable to the people. 59. Which is NOT an impeachable public officer: a. a justice of the Supreme Court; b. a commissioner of the Comelec; c. the administrator of the Supreme Court; d. the Ombudsman. 60. Which has the exclusive power to initiate all cases of impeachment:

a. the Senate; b. the House of Representatives; c. the Senate President; d. the Speaker of the House of Representatives. 61. At least one-third of all the members of the House of Representatives may file articles of impeachment by: a. verified bill and resolution; b. verified complaint and resolution; c. verified notice and resolution; d. verified complaint and notice. 62. The President cannot grant pardon in cases of impeachment. He may however exercise such power when: a. A person convicted in an impeachment proceeding is subject to prosecution, trial and punishment in an ordinary criminal action; b. A person convicted in an impeachment proceeding is granted an absolute pardon; c. A person convicted in an impeachment proceeding files his appeal before the Supreme Court; d. None of the above. 63. A public officer impeached and removed from office shall: a. nevertheless be immure from prosecution, trial and punishment according to law; b. nevertheless be liable and subject to prosecution, trial and punishment under the Anti-Graft and Corrupt Practices Act; c. nevertheless be liable and subject to prosecution, trial and punishment according to law; d. nevertheless be liable and subject to prosecution, trial and punishment only for criminal acts under the law. 64. The Ombudsman and his deputies are appointed by the President from a list prepared by: a. the Integrated Bar of the Philippines; b. the Commission on Appointments; c. the Judicial and Bar Council; d. the Supreme Court. 65. SALN means: a. Summary of assets, liabilities and net worth; b. Statement of assets in banks, liabilities and net worth; c. Statement of assets, liabilities and net worth; d. Statement of personal assets, liabilities and net worth. 66. The independent economic planning agency of the Government as provided for by the Constitution is the: a. National Privatization Office; b. National Productivity Commission; c. National Economic Development Authority; d. National Economic Council. 67. The Independent Central Monetary Authority of the Government is the: a. Bankers Association of the Philippines; b. Philippine Mission of the International Monetary Fund; c. Central Bank of the Philippines;

d. World Bank, Philippine Affiliate. 68. The President may contract or guarantee foreign loans on behalf of the Republic of the Philippines only upon prior concurrence of the: a. House of Representatives; b. Senate; c. Central Bank; d. Monetary Board. 69. Bona fide associations of citizens which demonstrate capacity of promote the public interest and with identifiable leadership, membership, and structure are: a. independent party-list organizations; b. independent sectoral organizations; c. independent indigenous organizations; d. independent peoples organizations. 70. The principal function of the Commission on Human Rights is: a. issue writs of injunction/ restraining orders; b. investigatory; c. quasi-judicial; d. rule-making. 71. Optional religious instruction in public elementary and high schools is allowed provided it be: a. without additional overtime cost to Government; b. without additional cost to Government; c. without additional cost for religious books to Government; d. without additional power consumption costs to Government. 72. Academic freedom shall be enjoyed: a. in all public institutions; b. in all elementary and high schools; c. in all schools; d. in all institutions of higher learning. 73. Under Article 38(1) of the Statute of the International Court of Justice, which one of the following is NOT considered a source of international law: a. international conventions; b. international custom; c. international humanitarian law; d. general principles of law. 74. In international law, it is a norm which States cannot derogate or deviate from their agreements: a. terra nullius; b. opinio juris; c. jus cogens; d. jus cogentus. 75. In international law, the status of an entity as a State is accepted by other States through this act. It is the "act by which another State acknowledges that the political entity recognized possesses the attributes of statehood." a. accession; b. recognition;

c. acknowledgment; d. attribution. 76. An act or process by which a State, in compliance with a formal demand or request, surrenders to another State an alleged offender or fugitive criminal who has sought refuge in the territory of the first State, in order to stand trial or complete his prison term: a. extramediation; b. exterrertioriality; c. extradition; d. extraterritoriality. 77. This doctrine considers the general or customary norms of international law as a part of municipal law and are to be enforced as such, without regard as to whether they are enacted as statutory or legislative rules or not: a. accession; b. incorporation; c. accretion; d. adoption. 78. Under the United Nations Conference of the Law of the Sea (UNCLOS), the extent of the contiguous zone is: a. 3 nautical miles from the lowest water mark; b. 12 miles from the outer limits; c. 12 miles from the lowest water mark; d. 200 miles from the outer limits. 79. It is a line from which the breadth of the territorial sea and other maritime zones is measured: a. contiguous line; b. economic line; c. baseline; d. archipelagic line. 80. It is a maritime zone adjacent to the territorial seas where the coastal state may exercise certain protective jurisdiction: a. baseline zone; b. contiguous zone; c. transit zone; d. appurtenant zone. 81. Butchoy installed a jumper cable. He was prosecuted under a Makati ordinance penalizing such act. He moved for its dismissal on the ground that the jumper cable was within the territorial jurisdiction of Mandaluyong and not Makati. The case was dismissed. The City of Mandaluyong thereafter filed a case against him for theft under the Revised Penal Code (RCP). Is there double jeopardy? a. No. The first jeopardy was terminated with his express consent; b. Yes. This is double jeopardy of the second kind prosecution for the same act under an ordinance and a law; c. Yes. He is prosecuted for the same offense which has already been dismissed by the City of Makati; d. No. The second kind of double jeopardy under Section 21, Article III only contemplates conviction or acquittal which could terminate a first jeopardy. 82. One of the cardinal primary due process rights in administrative proceedings is that evidence must be "substantial." "Substantial evidence" is:

a. less than a mere scintilla; b. less than preponderant scintilla; c. more than a glint of scintilla; d. more than a mere scintilla. 83. A statutory provision requiring the President or an administrative agency to present the proposed implementing rules and regulations of a law to Congress which by itself or through a committee formed by it, retains a "right" or "power" to approve or disapprove such regulations before they may take effect, is a: a. legislative encroachment; b. legislative veto; c. legislative oversight; d. legislative scrutiny. 84. Which one of the enumeration below does not come under the Administrative Code definition of a "rule": a. agency statement of general applicability that implements or interprets a law; b. fixes and describes the procedures in or practice requirements of, an agency; c. includes memoranda and statements concerning internal administration; d. an agency process for the formulation of a final order. 85. Under the Administrative Code, "adjudication" means: a. whole or any part of any agency permit, certificate, or other form of permission, or regulation of the exercise of a right or privilege; b. an agency process for the formulation of a final order; c. agency process for the formulation, amendment, or repeal of a rule; d. agency process involving the grant, renewal, denial, revocation or conditioning of a license. 86. The requirement of the Administrative Code on "public participation" is that, if not otherwise required by law, an agency shall: a. in all cases, publish or circulate notices of proposed rules and afford interested parties the opportunity to submit their views prior to the adoption of any rule; b. in all clear and proper cases, publish or circulate notices of proposed rules and afford interested parties the opportunity to submit their views prior to the adoption of any rule; c. as far as practicable, publish or circulate notices of proposed rules and afford the party-list parties the opportunity to submit their views prior to the adoption of any rule; d. as far as practicable, publish or circulate notices of proposed rules and afford interested parties the opportunity to submit their views prior to the adoption of any rule. 87. Under the Administrative Code, in the fixing of rates, no rules or final order shall be valid unless: a. the proposed rates shall have been submitted to the U.P. Law Center for publication at least two weeks before the first hearing thereon; b. the proposed rates shall have been published in the Official Gazette at least two weeks before the final hearing thereon; c. the proposed rates shall have been published in a newspaper of general circulation at least two weeks before the first hearing thereon; d. the proposed rates shall have been published in a newspaper of general circulation at least two weeks before the final hearing thereon. 88. In the judicial review of decisions of administrative agencies, the Administrative Code requires that the review shall be made:

a. on the basis of the pleadings taken as a whole; b. on the basis of the record taken as a whole; c. on the basis of the evidence taken as a whole; d. on the basis of the memoranda taken as a whole. 89. In the judicial review of decisions of administrative agencies, the Administrative Code requires that, except when specifically provided otherwise by law: a. the findings of law of agency when supported by substantial evidence, shall be final; b. the findings of fact of the agency when supported by preponderant evidence, shall be final; c. the findings of fact of the agency when supported by substantial evidence, shall be final; d. the findings of law of the agency when supported by credible evidence, shall be final. 90. The right of the accused to be informed is violated if: a. he was accused of killing his wife by strangulation but it was proven that his wife died of poisoning; b. it was proven that he killed somebody on a date different from the one alleged in the information; c. he was charged with parricide but was convicted of murder, because it turned out that he and the victim were not married; d. the accused was charged with commission of acts of lasciviousness and was convicted of unjust vexation. 91. A criminal statute that "fails to give a person of ordinary intelligence fair notice that his contemplated conduct is forbidden by statute" is: a. void for fair notice; b. void for arbitrariness; c. void for vagueness; d. void conclusively. 92. "Chilling effect" is a concept used in the area of constitutional litigation affecting: a. protected speech; b. protected executive privilege; c. protected legislative discretion; d. protected judicial discretion. 93. In the law of libel and protected speech, a person who, by his accomplishments, fame, or mode of living, or by adopting a profession or calling which gives the public a legitimate interest in his doings, his affairs, and his character, has become a: a. public figure; b. celebrity; c. public official; d. de facto public officer. 94. Which one of the following is not a proper test in cases of challenges to governmental acts that may violate protected speech: a. clear and present danger; b. balancing of interests; c. reasonable relation; d. dangerous tendency. 95. Commercial speech is entitled to: a. more protection compared to other constitutionally guaranteed expression;

b. equal protection compared to other constitutionally guaranteed expression; c. lesser protection compared to other constitutionally guaranteed expression; d. none of the above. 96. No liability can attach to a false, defamatory statement if it relates to official conduct, unless the public official concerned proves that the statement was with knowledge that it was false or with reckless disregard of whether it was false or not. This is known as what rule? a. libel malice rule; b. actual malice rule; c. malice in fact rule; d. legal malice rule. 97. It is form of entrapment. The method is for an officer to pose as a buyer. He, however, neither instigates nor induces the accused to commit a crime because in these cases, the "seller" has already decided to commit a crime. The offense happens right before the eyes of the officer. Under these circumstances: a. there is a need for an administrative but not a judicial warrant for seizure of goods and arrest of the offender; b. there is need for a warrant for the seizure of the goods and for the arrest of the offender; c. there is no need for a warrant either for the seizure of the goods or for the arrest of the offender; d. the offender can be arrested but there is a need for a separate warrant for the seizure of the goods. 98. Where a police officer observes unusual conduct which leads him reasonably to conclude in light of his experience that criminal activity may be afoot and that the persons with whom he is dealing may be armed and dangerous and he identifies himself and makes reasonable inquiries, but nothing serves to dispel his reasonable fear for his own or others safety, he is entitled to conduct a carefully limited search of the outer clothing of such persons for weapons. Such search is constitutionally permissible and is known as a: a. stop and search; b. stop and frisk; c. stop and interrogate; d. stop and detain. 99. Accused was charged with slight illegal detention. On the day set for the trial, the trial court proceeded as follows:
"Court: to the accused: Q: "Do you have an attorney or are you going to plead guilty?" A: "I have no lawyer and i will plead guilty."

Accused was then arraigned, pleaded guilty, was found guilty and sentenced. On appeal, the Supreme Court reversed. The accused was deprived of his: a. right to cross-examination; b. right to be presumed innocent; c. right to counsel; d. right to production of evidence. 100. The constitutional right of an accused "to meet the witnesses face to face" is primarily for the purpose of affording the accused an opportunity to: a. identify the witness; b. cross-examine the witness; c. be informed of the witness; d. be heard.

- NOTHING FOLLOWS HAND IN YOUR ANSWER SHEET. THERE IS NO NEED TO RETURN THIS QUESTIONNAIRE TO HEAD WATCHER. 2012 BAR EXAMINATIONS POLITICAL AND INTERNATIONAL LAW
7 October 2012 10 A.M.-12 NN.

Set B ESSAY TYPE QUESTIONS INSTRUCTIONS The following questionnaire consists of ten (10) questions (numbered I to X) contained in FIVE (5) pages. Begin your answer to each numbered question on a separate page; an answer to a sub-question/s under the same number may be written continuously on the same page and succeeding pages until completed. Answer the question directly and concisely. Do Not repeat the question. Write legibly. HAND IN YOUR NOTEBOOK. THERE IS NO NEED TO RETURN THIS QUESTIONNAIRE TO THE HEAD WATCHER. GOOD LUCK!!! _____________________________________ MARTIN S. VILLARAMA, JR. Chairperson 2012 Bar Examinations Committee PLEASE CHECK THAT THIS SET CONTAINS SIX (6) PAGES (INCLUDING THIS PAGE). WARNING: NOT FOR SALE OR UNAUTHORIZED USE
POLITICAL AND INTERNATIONAL LAW

I. Mr. Violet was convicted by the RTC of Estafa. On appeal, he filed with the Court of Appeals a Motion to Fix Bail for Provisional Liberty Pending Appeal. The Court of Appeals granted the motion and set a bail amount in the sum of Five (5) Million Pesos, subject to the conditions that he secure "a certification/guaranty from the Mayor of the place of his residence that he is a resident of the area and that he will remain to be a resident therein until final judgment is rendered or in case he transfers residence, it must be with prior notice to the court". Further, he was ordered to surrender his passport to the Division Clerk of Court for safekeeping until the court orders its return. a. Mr. Violet challenges the conditions imposed by the Court of Appeals as violative of his liberty of abode and right to travel. Decide with reasons. (5%) b. Are "liberty of abode" and "the right to travel" absolute rights? Explain. What are the respective exception/s to each right if any? (5%) II. A verified impeachment complaint was filed by two hundred (200) Members of the House of Representatives against Madam Chief Justice Blue. The complaint was immediately transmitted to the Senate for trial. a. Madam Chief Justice Blue challenges such immediate transmittal to the Senate because the verified complaint 1) not included in the order of business of the House, 2) was not referred to the House Committee on Justice for hearing and consideration for sufficiency in form and substance, and 3) was not submitted to the House Plenary for consideration as enumerated in Paragraph (2), Section 3, Article XI of the 1987 Constitution. Decide with reasons. (5%) b. What is the purpose of Impeachment? Does conviction prevent further prosecution and punishment? Explain. (3%) c. Enumerate the grounds for impeachment. Is graft and corruption a ground for impeachment? (2%) III. Mr. Brown, a cigarette vendor, was invited by PO1 White to a nearby police station. Upon arriving at the police station, Brown was asked to stand side-by-side with five (5) other cigarette vendors in a

police line-up. PO1 White informed them that they were looking for a certain cigarette vendor who snatched the purse of a passer-by and the line-up was to allow the victim to point at the vendor who snatched her purse. No questions were to be asked from the vendors. a. Brown, afraid of a "set up" against him, demanded that he be allowed to secure his lawyer and for him to be present during the police line-up. Is Brown entitled to counsel? Explain (5%) b. Would the answer in (a.) be the same if Brown was specifically invited by White because an eyewitness to the crime identified him as the perpetrator? Explain. (3%) c. Briefly enumerate the so-called "Miranda Rights". (2%) IV. Mr. Yellow and Mr. Orange were the leading candidates in the vice-presidential elections. After elections, Yellow emerged as the winner by a slim margin of 100,000 votes. Undaunted, Orange filed a protest with the Presidential Electoral Tribunal (PET). After due consideration of the facts and the issues, the PET ruled that Orange was the real winner of the elections and ordered his immediate proclamation. a. Aggrieved, Yellow filed with the Supreme Court a Petition for Certiorari challenging the decision of the PET alleging grave abuse of discretion. Does the Supreme Court have jurisdiction? Explain. (3%) b. Would the answer in (a.) be the same if Yellow and Orange were contending for a senatorial slot and it was the Senate Electoral Tribunal (SET) who issued the challenged ruling? (3%) c. What is the composition of the PET? (2%) d. What is judicial power? Explain Briefly. (2%) V. Judge Red is the Executive Judge of Green City. Red is known to have corrupt tendencies and has a reputation widely known among practicing lawyers for accepting bribes. Ombudsman Grey, wishing to "clean up" the government from errant public officials, initiated an investigation on the alleged irregularities in the performance of duties of Judge Red. a. Judge Red refused to recognize the authority of the Office of the Ombudsman over him because according to him, any administrative action against him or any court official or employee falls under the exclusive jurisdiction of the Supreme Court. Decide with reasons. (5%) b. Does the Ombudsman have authority to conduct investigation over crimes or offenses committed by public officials that are NOT in connection or related at all to the officials discharge of his duties and functions? Explain. (3%) c. Who are required by the Constitution to submit a declaration under oath of his assets, liabilities, and net worth? (2%) VI. President Black of the Republic of Pasensya (RP) had a telephone conversation with President Blue of the Peoples Republic of Conquerors (PRC). In that conversation, both leaders agreed that they will both pull-out all their vessels, civilian or otherwise, sea crafts and other ships from the hotly disputed Kalmado Shoal area within eight (8) days in order to de-escalate the situation. After eight days, all RP ships and vessels have left the area. However, several military and civilian ships carrying the PRC flag remained in the area and began construction of a dock that could provide fuel and other supplies to vessels passing by. a. Assuming that President Black and President Blue both had full capacity to represent their states and negotiate with each other under their respective systems of government, and further assuming that both leaders acknowledge the existence of the conversation, is the verbal agreement via telephone binding under international law? Explain. (5%) b. Assuming the answer to (a.) is in affirmative, does that agreement constitute a Treaty under the 1969 Vienna Convention on the Law on Treaties? (2%) c. What are the sources of International Law? (2%) d. What is opinio juris in International Law? (1%) VII.

Mayor Pink is eyeing re-election in the next mayoralty race. It was common knowledge in the town that Mayor Pink will run for re-election in the coming elections. The deadline for filing of Certificate of Candidacy (CoC) is on March 23 and the campaign period commences the following day. One month before the deadline, Pink has yet to file her CoC, but she has been going around town giving away sacks of rice with the words "Mahal Tayo ni Mayor Pink" printed on them, holding public gatherings and speaking about how good the town is doing, giving away pink t-shirts with "Kay Mayor Pink Ako" printed on them. a. Mr. Green is the political opponent of Mayor Pink. In April, noticing that Mayor Pink had gained advantage over him because of her activities before the campaign period, he filed a petition to disqualify Mayor Pink for engaging in an election campaign outside the designated period. a.1. Which is the correct body to rule on the matter? Comelec en banc, or Comelec division? Answer with reasons. (2%) a.2. Rule on the petition. (5%) b. Distinguish briefly between Quo Warranto in elective office and Quo Warranto in appointive office. (3%) VIII. a. What is the doctrine of "overbreath"? In what context can it be correctly applied? Not correctly applied? Explain (5%) b. What is the doctrine of "void for vagueness"? In what context can it be correctly applied? Not correctly applied? Explain (5%) IX. In a protest rally' along Padre Faura Street, Manila, Pedrong Pula took up the stage and began shouting "kayong mga kurakot kayo! Magsi-resign na kayo! Kung hindi, manggugulo kami dito!" ("you corrupt officials, you better resign now, or else we will cause trouble here!") simultaneously, he brought out a rock the size of a fist and pretended to hurl it at the flagpole area of a government building. He did not actually throw the rock. a. Police officers who were monitoring the situation immediately approached Pedrong Pula and arrested him. He was prosecuted for seditious speech and was convicted. On appeal, Pedrong Pula argued he was merely exercising his freedom of speech and freedom of expression guaranteed by the Bill of Rights. Decide with reasons. (5%) b. What is "commercial speech"? Is it entitled to constitutional protection? What must be shown in order for government to curtail "commercial speech"? Explain. (3%) c. What are the two (2) basic prohibitions of the freedom of speech and of the press clause? Explain. (2%) X. a. What do you understand by the term "heirarchy of civil liberties"? Explain. (5%) b. Distinguish fully between the "free exercise of religion clause" and the "non-establishment of religion clause". (3%) c. When can evidence "in plain view" be seized without need of a search warrant? Explain. (2%) - NOTHING FOLLOWS HAND IN YOUR ANSWER SHEET. THERE IS NO NEED TO RETURN THIS QUESTIONNAIRE TO THE HEAD WATCHER