2015 TAXATION LAW SUMMER REVIEWER ERRATUM

1. Definition of Deposit Subtitute, p. 55

Deposit substitutes are defined as an alternative form of obtaining funds from the
public (meaning borrowing from 20 or more lenders at any one time) other than deposits.
Clarification:
Thus, from the point of view of the financial market, the phrase at any one time for
purposes of determining the 20 or more lenders would mean every transaction
executed in the primary or secondary market in connection with the purchase or sale of
securities. (BDO v. Republic, G.R. No. 198756, January 13, 2015)
2. Forgiveness of Indebtedness, p. 70
A GIFT if effect of entire
transaction is a reduction of
purchase
price
of
property
acquired in prior year)

Not
Taxable

A CAPITAL TRANSACTION if the

forgiveness of a stockholder is
equivalent to dividend distribution

Taxable

A TAXABLE INCOME in exchange

of a service performed

Taxable

Clarification:
Under the first scenario, the reduction of purchase price is not taxable under income
tax, but it may be considered taxable under donor's tax.
3. Exclusions from Gross Income, pp. 72-75
a.
b.
c.
d.
e.
f.
g.
h.

Proceeds of Life Insurance policies

Amount received by insures as return of premium
Amounts received under life insurance, endowment or annuity contract
Value of Property Acquired by Gifts, Bequests, Devise or Descent
Amount received through accident or health insurance
Income exempt under treaty
Retirement benefits, pensions, gratuities,
Winnings, prizes, awards

2015 TAXATION LAW SUMMER REVIEWER ERRATUM

Addition:
Section 32 (7) of NIRC, as amended by RA 10653 (An Act Adjusting the 13th Month Pay
and Other Benefits Ceiling Excluded from the Computation of Gross Income for
Purposes of Income Taxation, Amending for the Purpose Section 32(B), Chapter VI of
the National Internal Revenue Code of 1997, as amended.)

Excluded from gross income are the 13 th month pay and other benefits the total of
which does not exceed P82,000.
If the benefits exceed P82,000, only the excess will be taxable.
This rule is not applicable to self-employed individuals and income generated from
business

See also: Taxation on Compensation Income; Exclusions; 13th month pay and other
benefits, pp. 96-97
4. Exempt Corporations, p. 95
(a) Proprietary Educational Institutions and Hospital
Correction:
(a) Proprietary Educational Institutions and Hospitals which are Non-Profit (Sec. 27
(B), NIRC)

5. Optional Standard Deduction, p. 106

An amount not exceeding forty percent (40%) of gross income
Note:
For corporations, the basis of 40% is GROSS INCOME. For individuals, the basis is
GROSS RECEIPTS OR SALES. (Section 34 (L), NIRC)
See also: Discussion on Optional Standard Deduction on page 92.
6. VAT Exemptions: Sale of two or more residential lots, p. 160
If two or more adjacent residential lots are sold or disposed in favor of one buyer, for the
purpose of utilizing the lots as one residential lot, the sale shall be exempt from VAT only
if the aggregate value of the lots do not exceed 1.9195M (as amended by RR No. 162011 and RR No. 13-2012)
Note:
The sale, transfer or disposal of the two or more adjacent lots must be made within a
12-month period. (RR 13-2012)

2015 TAXATION LAW SUMMER REVIEWER ERRATUM

7. Summary of Tax Remedies for Taxpayers and the Government, p. 174
A. Remedies of Taxpayers
Before Payment of Taxes
Correction:
A. Remedies of Taxpayer
Before Payment of Taxes Due to an Assessment
8. Special Education Fund, p. 252
2. Special levies:

Special Education Fund (SEF) 1% additional real estate tax to finance the SEF
(Sec. 235, LGC) - within MM area only

Correction:
SEF may be levied not only by municipalities within Metro Manila Area but also by
provinces or cities. (Sec. 235, LGC)

2015 CIVIL LAW SUMMER REVIEWER ERRATUM

1. VOID MARRIAGES (p. 31)
d. VOID FOR REASON OF PUBLIC POLICY UNDER ART. 38
xxx
iii. Between parents-in-law and children-in-law
xxx
Addendum:
iii. Between parents-in-law and children-in-law (DEATH DOES NOT TERMINATE
AFFINITY WHETHER WITH CHILDREN OR NOT)
2. ANNULLABLE MARRIAGES (p. 34)
Circumstances constituting fraud: (Art. 46
Requisites of Annulment due to Impotence:
a. Impotence exists at the time of the celebration of marriage
b. Permanent
c. Incurable
d. Unknown to the other spouse
e. The other spouse must not also be impotent
Correction:
Requisites of Annulment due to Impotence:
a. Impotence exists at the time of the celebration of marriage
b. Permanent
c. APPEARS INCURABLE AND CONTINUOUS
3. TITLE OF TABLE (p. 36)
EFFECTS OF VOIDABLE BIGAMOUS MARRIAGE, DECLARATION OF NULLITY AND
ANNULMENT
Correction:
EFFECTS OF VOID BIGAMOUS MARRIAGE, DECLARATION OF NULLITY, AND
ANNULMENT
4. TITLE OF TABLE, second column (p. 36)
VOIDABLE BIGAMOUS MARRIAGE (ART. 41)
Correction:
VOID BIGAMOUS MARRIAGE (ART. 41)
5. RULES WHEN LANDOWNER (LO) BUILDER/PLANTER/SOWER (BPS) MAKES
CONSTRUCTIONS/PLANTINGS WITH MATERIALS OF ANOTHER (OM) (p. 84)
Addendum:
Note: This chart is from Atty. Francis H. Ampil

2015 CIVIL LAW SUMMER REVIEWER ERRATUM

6. RULES WHEN BPS BUILDS, PLANTS, SOWS ON THE LAND OF ANOTHER (LO) (p. 85)
Addendum:
Note: This chart is from Atty. Francis H. Ampil

7. RULES WHEN THREE (3) PARTIES ARE INVOLVED (p. 87)

Addendum:
Note: This chart is from Atty. Francis H. Ampil

8. C. AGAINST WHOM PRESCRIPTION MAY RUN (p. 138)

1. Minors and incapacitated person who have guardians
Addendum:
PARAS: CAN STILL RUN, BUT SUCH PEOPLE CAN BRING AN ACTION AFTER
DISABILITY HAS CEASED.
9. C. AGAINST WHOM PRESCRIPTION MAY RUN (p. 138)
1.
2.
3.
4.
5.
6.
7.
8.
9.

Minors and incapacitated person who have guardians

Absentees who have administrators
Persons living abroad who have administrators
Juridical persons EXCEPT the state with regard to property not patrimonial in character
Between husband and wife
Between parents and children (during minority/insanity)
Between guardian and ward (during guardianship)
Between co-heirs/co-owners
Between owner of property and person in possession of property in concept of holder

Correction and addendum:

9. Between husband and wife (ONLY IF SPECIFICALLY PROVIDED FOR BY LAW)
10. Between parents and children (during minority/insanity) PRESCRIPTION MAY RUN
11. Between guardian and ward (during guardianship) PRESCRIPTION MAY RUN
12. Between co-heirs/co-owners THERE MUST BE DEFINITE REPUDIATION FIRST
13. Between owner of property and person in possession of property in concept of OWNER
10. CONDITIONAL OBLIGATIONS (p. 145)
The performance in conditional obligations depends upon a future AND uncertain event or
upon a past event unknown to parties.

2015 CIVIL LAW SUMMER REVIEWER ERRATUM

Addendum:
THE AND MUST BE REALLY CONSTRUED AS OR.
8. PRINCIPLES APPLICABLE FOR A VALID PAYMENT OR PERFORMANCE 1.
PRINCIPLE OF IDENTITY b. WITH RESPECT TO PARTIES - i. PAYOR (p. 157)

3rd person interested in the fulfillment of the obligation creditor must accept the
payment and debtor need not give his There is full subrogation in this case, even if the
debtor does not consent to the payment.

Correction:

3rd person interested in the fulfillment of the obligation creditor must accept the
payment and debtor need not give his CONSENT. There is full subrogation in this case,
even if the debtor does not consent to the payment.
Addendum:
THE DELETION IS CORRECT.
RULE:
1) W/O DEBTORS CONSENT Only the cost which the third person paid to
creditor will be the extent of third persons right to collect.
2) W/ CONSENT third person gets all rights including right against securities,
collateral guarantees, etc.

11. SPECIAL RULES/FORMS OF PAYMENT 1. APPLICATION OF PAYMENTS

REQUISITES (OTDI)
a. There must be only one debtor and only one creditor;
b. Two or more debts of the same kind; and
c. All debts must be due.
Exception: There may be application of payment even if all debts are not yet due if:

Parties so stipulate
When application of payment is made by the party for whose benefit the term has been
constituted
Amount paid by the debtor is insufficient to cover the total amount of all debts.

Correction:
REQUISITES (OTDI)

2015 CIVIL LAW SUMMER REVIEWER ERRATUM

a. There must be only one debtor and only one creditor;
b. Two or more debts of the same kind; and
c. All debts must be due.
Exception: There may be application of payment even if all debts are not yet due if:

Parties so stipulate
When application of payment is made by the party for whose benefit the term has been
constituted

d. AMOUNT PAID BY THE DEBTOR IS INSUFFICIENT TO COVER THE TOTAL

AMOUNT OF ALL DEBTS.
12. REQUISITES OF IMPLIED CONDONATION (p. 165)
REQUISITES OF IMPLIED CONDONATION
1. Voluntary delivery of evidence of indebtedness when evidence of indebtedness is
found in the possession of the debtor there is a rebuttable presumption of voluntary
delivery, which if not rebutted, will extinguish the obligation.
2. If there if actual proof, or the presumption above is not rebutted, that the evidence of
indebtedness was returned by the creditor to the debtor, the obligation is extinguished.
a. If in hands of joint debtor only his share is condoned.
b. If in hands of solidary debtor - whole debt is condoned.
c. Tacit voluntary destruction of instrument by creditor; made to prescribe w/o
demanding.
Correction:
EXAMPLES OF IMPLIED REMISSION
1. Voluntary delivery of evidence of indebtedness when evidence of indebtedness is
found in the possession of the debtor there is a rebuttable presumption of voluntary
delivery, WHICH IF NOT REBUTTED, WILL CREATE THE PRESUMPTION OF
WAIVER CONDONATION (REMISSION) WHICH IN EFFECT EXTINGUISHES THE
DEBT.
2. If there if actual proof, or the presumption above is not rebutted, that the evidence of
indebtedness was returned by the creditor to the debtor, THERE IS A PRESUMPTION
OF WAIVER.
a. If in hands of joint debtor only his share is condoned.
b. If in hands of solidary debtor - whole debt is condoned.
c. Tacit voluntary destruction of instrument by creditor; made to prescribe w/o
demanding.

2015 ETHICS SUMMER REVIEWER ERRATUM

LEGAL AND JUDICIAL ETHICS LAW REVIEWER CORRECTIONS
1. PRACTICE OF LAW, CONCEPT (p.2)
b. Profession, not Business
It is a profession, not business, it is an essential part in the administration of justice, a
profession in pursuit of which pecuniary reward is considered as merely incidental. It is not a
moneymaking venture. (Rule 2.03, Code of Professional Responsibility).
Law is a profession and not a trade. Section 25 of Rule 127 provides that e. Sect to solicitation
or profitymaking veon orpose of gain, either personally of thru paid agents of brokers,
constitutes malpractice. (Director of Religious Affairs v. Bayot, 74 Phil. 740).
Correction:
b. Profession, not Business
It is a profession, not business; it is an essential part in the administration of justice, a
profession in pursuit of which pecuniary reward is considered as merely incidental. It is not a
moneymaking venture. (Rule 2.03, Code of Professional Responsibility).1
Law is a profession and not a trade. Section 25 of Rule 127 provides that THE PRACTICE OF
SOLICITING CASES AT LAW FOR PURPOSE OF GAIN, EITHER PERSONALLY OR THRU
PAID AGENTS OF BROKERS, CONSTITUTES MALPRACTICE. (Director of Religious Affairs
v. Bayot, 74 Phil. 740).
2. DUTY TO THE COURTS (p.28)
Lawyer Should Come to Court Adequately Prepared
Rule 12.01 - A lawyer shall not appear for trial unless he has adequately prepared himself
on the law and the facts of his case, the evidence he will adduce and the order of its
profference. He should also be ready with the original documents for comparison with
the copies.
Correction:
Lawyer Should Come to Court Adequately Prepared
Rule 12.01 - A lawyer shall not appear for trial unless he has adequately prepared himself
on the law and the facts of his case, the evidence he will adduce and the order of its
PREFERENCE. He should also be ready with the original documents for comparison with
the copies.

1 Note: Rule 2.03 - A lawyer shall not do or permit to be done any act designed
primarily to solicit legal business.