Political Law

I.

A priority thrust of the Administration is the change of the form of government from unitary to
federal. The change can be effected only through constitutional amendment or revision.

a. What are the methods of amending the Constitution? Explain briefly each method. (3%)

b. Cite at least three provisions of the Constitution that need to be amended or revised to effect the
change from unitary to federal, and explain briefly why. (3%)

II.

A.Under the doctrine of immunity from suit, the State cannot be sued without its consent. How may
the consent be given by the State? Explain your answer. (3%)

B. The doctrine of immunity from suit in favor of the State extends to public officials in the
performance of their official duties. May such officials be sued nonetheless to prevent or undo their
oppressive or illegal acts, or to compel them to act? Explain your answer. (3%)

C. Do government-owned or -controlled corporations also enjoy the immunity of the State from suit?
Explain your answer. (3%)

III.

State A and State B, two sovereign states, enter into a 10-year mutual defense treaty. State A finds
that more progressive State B did not go to the aid of State A when it was threatened by its strong
neighbor State C. State B reasoned that it had to be prudent and deliberate in reacting to State C
because of their existing trade treaties.

a. May State A unilaterally withdraw from its mutual defense treaty with State B? Explain your
answer. (2.5%)

b. What is the difference between the principles of pacta sunt servanda and rebus sic stantibus in
international law? (2.5%)

c. Are the principles of pacta sunt servanda and rebus sic stantibus relevant in the treaty relations
between State A and State B? What about in the treaty relations between State B and State C? Explain
your answer. (2.5%)
IV.

a. What is the pardoning power of the President under Art. VIII, Sec. 19 of the Constitution? Is the
exercise of the power absolute? (4%)

b. Distinguish pardon from amnesty. (4%)

V.

a. What is the right of legation, and how is it undertaken between states? Explain your answer. (2%)

b. Under this right, may a country like Malaysia insist that the Philippines establishes a consulate in
Sabah to look after the welfare of the Filipino migrants in the area? Explain your answer. (2%)

VI.

A. The President appoints the Vice President as his Administration’s Housing Czar, a position that
requires the appointee to sit in the Cabinet. Although the appointment of the members of the
Cabinet requires confirmation by the Commission on Appointment (CA), the Office of the
President does not submit the appointment to the CA. May the Vice President validly sit in the
Cabinet? (2.5%)
B. The Executive Department has accumulated substantial savings from its appropriations.
Needing P3,000,000 for the conduct of a plebiscite for the creation of a new city but has no
funds appropriated soon by the Congress for the purpose, the COMELEC requests the
President to transfer funds from the savings of the Executive Department in order to avoid a
delay in the holding of the plebiscite.

May the President validly exercise his power under the 1987 Constitution to transfer funds from the
savings of the Executive Department, and make a cross-border transfer of P3,000,000 to the COMELEC
by way of augmentation? Is your answer the same if the transfer is treated as aid to the COMELEC?
Explain your answer. (4%)

VII.

Give the limitations on the power of the Congress to enact the General Appropriations Act. Explain
your answer. (5%)

VIII.

A bank acquired a large tract of land as the highest bidder in the foreclosure sale of the mortgaged
assets of its borrower. It appears that the land has been originally registered under the Torrens
system in 1922 pursuant to the provisions of the Philippine Bill of 1902, the organic act of the
Philippine Islands as a colony of the USA. Sec. 21 of the Philippine Bill of 1902 provided that “all
valuable mineral deposits in public lands in the Philippine Islands, both surveyed and unsurveyed, are
hereby declared to be free and open too exploration, occupation, and purchase, and the land in which
they are found to occupation and purchase, by citizens of the United States, or of said Islands.” Sec. 27
of the law declared that a holder of the mineral claim so located was entitled to all the minerals that
lie within his claim but he could not mine outside the boundary lines of his claim.

The 1935 Constitution expressly prohibited the alienation of natural resources except agricultural
lands. Sec. 2, Art. XII of the 1987 Constitution contains a similar prohibition, and proclaims that all
lands of public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces of
potential energy, fisheries, forests, or timber, wildilfe, flora, and fauna, and other natural resources
are owned by the State. This provision enunciates the Regalian Doctrine.

May the Government, on the basis of the Regalian Doctrine enunciated in the constitutional
provisions, deny the bank its right as the owner of the mineral resources underneath the surface of its
property as recognized under the Philippine Bill of 1902? Explain your answer. (5%)

IX.

A.

Ambassador Robert of State Alpha committed a very serious crime while he headed his foreign
mission in the Philippines. Is he subject to arrest by Philippine authorities? Explain your answer. (3%)

B.

Extradition is the process pursuant to a treaty between two State parties for the surrender by the
requested State to the custody of the requesting State of a fugitive criminal residing in the former.
However, extradition depends on the application of two principles – the principle of specialty and the
dual criminality principle. Explain these principles. (4%)

C.

The President signs an agreement with his counterpart in another country involving reciprocity in the
treatment of each other country’s nationals residing in the other’s territory. However, he does not
submit the agreement to the Senate for concurrence.

Sec. 21, Art. VII of the Constitution provides that no treaty or international agreement shall be valid
and effective without such concurrence.

Is the agreement signed by the President effective despite the lack of Senate concurrence? Explain
your answer. (4%)
X.

A Under the enrolled bill doctrine, the signing of a bill by both the Speaker of the House of
Representatives and the President of the Senate and the certification by the secretaries of both
Houses of Congress that the bill was passed on a certain date are conclusive on the bill’s due
enactment. Assuming there is a conflict between the enrolled bill and the legislative journal, to the
effect that the enrolled bill signed by the Senate President and eventually approved by the President
turned out to be different from what the Senate actually passed as reflected in the legislative journal.

a. May the Senate President disregard the enrolled bill doctrine and consider his signature as invalid
and of no effect? (2.5%)

b. May the President thereafter withdraw his signature? Explain your answer. (2.5%)

B. Sec. 26(2), Art. VI of the Constitution provide that no bill passed by either House of Congress shall
become a law unless it has passed three readings on separate days and printed copies of it in its final
form have been distributed to the Members of the House three days before its passage.

Is there an exception to the provision? Explain your answer. (3%)

XI.

Sec. 17, Art. VI of the Constitution establishes an Electoral Tribunal for each of the Houses of
Congress, and makes each Electoral Tribunal “the sole judge of all contests relating to the election,
returns, and qualifications of their respective Members.” On the other hand, Sec. 2(1).C Art. IX of the
Constitution grants to the COMELEC the power to enforce and administer all laws and regulations
“relative to the conduct of an election, plebiscite, initiative, referendum, and recall.”

Considering that there is no concurrence of jurisdiction between the Electoral Tribunals and the
COMELEC, state when the jurisdiction of the Electoral Tribunals begins, and the COMELEC’s
jurisdiction ends. Explain your answer. (4%)

XII.

The Congress establishes by law Philippine Funds, Inc., a private corporation, to receive foreign
donations coming from abroad during national and local calamities and disasters, and to enable the
unhampered and speedy disbursements of the donations through the mere action of its Board of
Directors. Thereby, delays in the release of the donated funds occasioned by the stringent rules of
procurement would be avoided. Also, the releases would not come under the jurisdiction of the
Commission on Audit (COA).

a. Is the law establishing Philippine Funds, Inc., constitutional? Explain your answer. (3%)
b. Can the Congress pass the law that would exempt foreign grants from the jurisdiction of the COA.
Explain your answer. (3%)

XIII.

Command responsibility pertains to the responsibility of commanders for crimes committed by

subordinate members of the armed forces or other persons subject to their control in international
wars or domestic conflicts. The doctrine has now found application in civil actions for human rights
abuses, and in proceedings seeking the privilege of the writ of amparo.

a. What are the elements to be established in order to hold the superior or commander liable under
the doctrine of command responsibility? (4%)

b. May the doctrine of command responsibility apply to the President for the abuses of the armed
forces (AFP and PNP) given his unique role as the commander-in-chief of all the armed forces? Explain
your answer. (4%)

XIV.

To fulfill a campaign promise to the poor folk in a far-flung area in Mindanao, the President requested
his friend, Pastor Roy, to devote his ministry to them. The President would pay Pastor Roy a monthly
stipend of P50,000 from his discretionary fund, and would also erect a modest house of worship in the
locality in an area of the latter’s choice.

Does the President thereby violate any provisions of the Constitution? Explain your answer. (3%)

XV.

a. According the Sec. 3, Art. VIII of the Constitution, the Judiciary shall enjoy fiscal autonomy. What
does the term “fiscal autonomy” signify? Explain your answer. (3%)

b. May a complaint for disbarment against the Ombudsman prosper during her incumbency? Explain
your answer. (3%)

c. Sec. 3, Art. XI of the Constitution states that “[n]o impeachment proceedings shall be initiated
against the same official more than once within a period of one year.” What constitutes initiation of
impeachment proceedings under the provision? (3%)
Labor Law

a. What are the accepted tests to determine the existence of an employer-employee relationship?
(5%)

b. Applying the tests to determine the existence of employer-employee relationship, is a jeepney

driver operating under the boundary system an employee of the jeepney operator or a mere lessee of
the jeepney? Explain your answer. (3%)

II

Procopio was dismissed from employment for stealing his co-employee Raul’s watch. Procopio filed a
complaint for illegal dismissal. The Labor Arbiter ruled in Procopio’s favor on the ground that Raul’s
testimony was doubtful, and, therefore, the doubt should be resolved in favor of Procopio. On appeal,
the NLRC reversed the ruling because Article 4 of the Labor Code – which states that all doubts in the
interpretation and implementation of the provisions of the Labor Code, including the implementing
rules and regulations, shall be resolved in favor of labor – applied only when the doubt involved the
“implementation and interpretation” of the Labor Code; hence, the doubt, which involved the
application of the rules on evidence, not the Labor Code, could not necessarily be resolved in favor of
Procopio. Was the reversal correct? Explain your answer. (3%)

III

a. Andrew Manning Agency (AMA) recruited Feliciano for employment by Invictus Shipping, its foreign
principal. Meantime, AMA and Invictus Shipping terminated their agency agreement. Upon his
repatriation following his premature termination, Feliciano claimed from AMA and Invictus Shipping
the payment of his salaries and benefits for the unserved portion of the contract. AMA denied liability
on the ground that it no longer had an agency agreement with Invictus Shipping. Is AMA correct?
Explain your answer. (3%)

b. As a rule, direct hiring of migrant workers is not allowed. What are the exceptions? Explain your
answer. (2.5%)

c. Phil, a resident alien, sought employment in the Philippines. The employer, noticing that Phil was a
foreigner, demanded that he first secures an employment permit from the DOLE. Is the employer
correct? Explain your answer. (2.5%)

IV.

The Regional Tripartite Wages and Productivity Board (RTWPB) for Region 3 issued a wage order on
November 2, 2017, fixing the minimum wages for all industries throughout Region 3.

a. Is the wage order subject to the approval of the National Wages and Productivity Commission
before it takes effect? (2%)
b. The law mandates that no petition for wage increase shall be entertained within a period of 12
months from the effectivity of the wage order. Under what circumstances may the Kilusang Walang
Takot, a federation of labor organizations that publicly and openly assails the wage order as blatantly
unjust, initiate the review of the wage increases under the wage order without waiting for the end of
the 12-month period? Explain your answer. (3%)

V.

a. Percival was a mechanic of Pacific Airlines. He enjoyed a meal break of one hour. However, during
meal breaks, he was required to be on standby for emergency work. During emergencies, he was
made to forego his meals or to hurry up eating. He demanded payment of overtime for work done
during his meal periods. Is Percival correct? Explain your answer. (3%)

b. Distinguish a learner from an apprentice. (4%)

c. Are there differences between a househelper and a homeworker? Explain your answer. (4%)

VI.

a. One of Pacific Airline’s policies was to hire only single applicants as flight attendants, and
considered as automatically resigned the flight attendants at the moment they got married. Is the
policy valid? Explain your answer. (2.5%)

b. Tarcisio was employed as operations manager and received a monthly salary of P25,000 through his
payroll account with DB Bank. He obtained a loan from Roberto to purchase a car. Tarcisio failed to
pay Roberto when the loan fell due. Roberto sued to collect, and moved to garnish Tarcisio’s payroll
account. The latter vigorously objected and argued that salaries were exempt from garnishment. Is
Tarcisio correct? Explain your answer. (3%)

VII.

Dr. Crisostomo entered into a retainer agreement with AB Hotel and Resort whereby he would
provide medical services to the guests and employees of AB Hotel and Resort, which, in turn, would
provide the clinic premises and medical supplies. He received a monthly retainer fee of P60,000, plus
70% share in the service charges from AB Hotel and Resort’s guests availing themselves of the clinic’s
services. The clinic employed nurses and allied staff, whose salaries, SSS contributions, and other
benefits he undertook to pay. AB Hotel and Resort issued directives giving instructions to him on the
replenishment of emergency kits and forbidding the clinic staff from receiving cash payments from the
guests. In time, the nurses and the clinic staff claimed entitlement to rights as regular employees of
AB Hotel and Resort, but the latter refused on the ground that Dr. Crisostomo, who was their
employer, was an independent contractor. Rule with reasons. (4%)
VIII.

Marciano was hired as Chief Engineer on board the vessel M/V Australia. His contract of employment
was for nine months. After nine months, he was re-hired. He was hired for a third time after another
nine months. He now claims entitlement to the benefits of a regular employee based on his having
performed tasks usually necessary and desirable to the employer’s business for a continuous period of
more than one year. is Marciano’s claim tenable? Explain your answer. (3%)

IX.

Section 255 of the Labor Code recognizes three categories of employees, namely: managerial,
supervisory, and rank-and-file.

a. Give the characteristics of each category of employees, and state whether the employees in each
category may organize and form unions. Explain your answer. (5%)

b. May confidential employees who assist managerial employees and who act in a confidential
capacity or have access to confidential matters being handled by persons exercising managerial
functions in the field of labor relations form, or assist, or join labor unions? Explain your answer.
(2.5%)

X.

a. The labor sector has been loudly agitating for the end of labor-only contracting, as distinguished
from job contracting. Explain these two kinds of labor contracting, and give the effect of a finding that
one is a labor-only contractor. Explain your answers. (4%)

b. What are the grounds for validly terminating the services of an employee based on a just cause?
(5%)

c. Give the procedure to be observed for validly terminating the services of an employee based on a
just cause. (4%)

XI.

a. The modes of determining the exclusive bargaining agent of the employees in a business are: (a)
voluntary recognition; (b) certification election; and (c) consent election. Explain how they differ from
one another. (4%)

b. Marcel was the Vice President for Finance and Administration and a member of the Board of
Directors of Mercedes Corporation. He brought a complaint for illegal suspension and illegal dismissal
against Mercedes Corporation, which moved to dismiss the complaint on the ground that the
complaint pertained to the jurisdiction of the RTC due to the controversy being intracorporate based
on his positions in the corporation. Marcel countered that he had only been removed as Vice
President for Finance and Administration, not as a member of the Board of Directors. he also argued
that his position was not listed as among the corporate offices in Mercedes Corporation’s by-laws. Is
the argument of Marcel correct? Explain your answer. (2.5%)

c. State the jurisdiction of the Voluntary Arbitrator, or Panel of Voluntary Arbitrators in labor
disputes? (4%)

XII.

A.

Juanito initiated a case for illegal dismissal against Mandarin Company. The Labor Arbiter decided in
his favor, and ordered his immediate reinstatement with full backwages and without loss of seniority
and other benefits. Mandarin Company did not like to allow him back in its premises to prevent him
from influencing his co-workers to move against the interest of the company; hence, it directed his
payroll reinstatement and paid his full backwages and other benefits even as it appealed to the NLRC.

A few months later, the NLRC reversed the ruling of the Labor Arbiter and declared that Juanito’s
dismissal was valid. The reversal ultimately became final.

May Mandarin Company recover the backwages and other benefits paid to Juanito pursuant to the
decision of the Labor Arbiter in view of the reversal by the NLRC? Rule with reasons. (2.5%)

B.

Gene is a married regular employee of Matibay Corporation. The employees and Matibay Corporation
had an existing CBA that provided for funeral and bereavement aid of P15,000 in case of the death of
a legal dependent of a regular employee. His widowed other, who had been living with him and his
family for many years, died; hence, he claimed the funeral aid. Matibay Corporation denied the claim
on the basis that she had not been his legal dependent as the term legal dependent was defined by
the Social Security Law.

a. Who may be the legal dependents of Gene under the Social Security Law? (2.5%)

b. Is Gene entitled to the funeral aid for the death of his widowed mother? Explain your answer. (2%)

C.

Rosa was granted vacation leave by her employer to spend three weeks in Africa with her family. Prior
to her departure, the General manager of the company requested her to visit the plant of a client of
the company in Zimbabwe in order to derive the best manufacturing practices useful to the company.
She accepted the request because the errand would be important to the company and Zimbabwe was
anyway in her itinerary. It appears that she contracted a serious disease during the trip. Upon her
return, she filed a claim for compensation, insisting that she had contracted the disease while serving
the interest of her employer.
Under the Labor Code, the sickness or death of an employee, to be compensable, must have resulted
from an illness either definitely accepted as an occupational disease by the Employees’ Compensation
Commission, or caused by employment subject to proof that the risk of contracting the same is
increased by working conditions.

Is the serious disease Rosa contracted during her trip to Africa compensable? Explain your answer.
(2.5%)

XIII.

A.

Given that the liability for an illegal strike is individual, not collective, state when the participating
union officers and members may be terminated from employment because of the illegal strike.
Explain your answer. (4%)

B.

A sympathetic strike is stoppage of work to make common cause with other strikers in another
establishment or business. Is the sympathetic strike valid? Explain your answer. (1%)

C.

Due to business recession, Ballistic Company retrenched a part of its workforce. Opposing the
retrenchment, some of the affected employees staged a strike. Eventually, the retrenchment was
found to be justified, and the strike was declared illegal; hence, the leaders of the strike, including the
retrenched employees, were declared to have lost their employment status.

Are the striking retrenched employees still entitled to separation pay under Sec. 298 of the Labor
Code despite the illegality of their strike? Explain your answer. (2%)

XIV.

Pursuant to his power under Sec. 278(g) of the Labor Code, the Secretaryy of Labor assumed
jurisdiction over the three-day old strike in Armor Steel Plates, Inc., one of the country’s bigger
manufacturers of steel plates, and ordered all the striking employees to return to work. The striking
employees ignored the order to return to work.

a. What conditions may justify the Secretary of Labor to assume jurisdiction? (2.5%)

b. What are the consequences of the assumption of jurisdiction by the Secretary of Labor, and of the
disobedience to the return to work? Explain your answer. (2.5%)
Civil Law

I.

State whether the following marital unions are valid, void, or voidable, and give the corresponding
justifications for your answer:

a. Ador and Becky’s marriage wherein Ador was afflicted with AIDS prior to the marriage. (2%)

b. Carlos’ marriage to Dina which took place after Dina had poisoned her previous husband Edu in
order to free herself from any impediment in order to live with Carlos. (2%)

c. Eli and Fely’s marriage solemnized seven years after the disappearance of Chona, Eli’s previous
spouse, after the plane she had boarded crashed in the West Philippine Sea. (2%)

d. David who married Lina immediately the day after obtaining a judicial decree annulling his prior
marriage to Elisa. (2%)

e. Marriage of Zoren and Carmina who did not secure a marriage license prior to their wedding, but
lived together as husband and wife for 10 years without any legal impediment to marry. (2%)

II.

In 1960, Rigor and Mike occupied two separate but adjacent tracts of land in Mindoro. Rigor’s tract
was classified as timber land while Mike’s was classified as agricultural land. Each of them fenced and
cultivated his own tract continuously for 30 years. In 1991, the Government declared the land
occupied by Mike as alienable and disposable, and the one cultivated by Rigor as no longer intended
for public use or public service.

Rigor and Mike now come to you today for legal advice in asserting their right of ownership of their
respective lands based on their long possession and occupation since 1960.

a. What are the legal consequences of the 1991 declarations of the Government respecting the lands?
Explain your answer. (2%)

b. Given that, according to Section 48(b) of Commonwealth Act No. 141, in relation to Section 14(1) of
Presidential Decree No. 1529, the open, continuous, exclusive, and notorious possession and
occupation of alienable and disposable lands of the public domain as basis for judicial confirmation of
imperfect title must be from June 12, 1945, or earlier, may Mike nevertheless validly base his
assertion of the right of ownership on prescription under the Civil Code? Explain your answer. (4%)

c. Does Rigor have legal basis for his application for judicial confirmation of imperfect title based on
prescription as defined by the Civil Code given that, like Mike, his open, continuous, exclusive, and
notorious possession and occupation was not since June 12, 1945, or earlier, and his tract of land was
timber land until the declaration in 1991? Explain your answer. (4%)

III.
Josef owns a piece of land in Pampanga. The National Housing Authority (NHA) sought to expropriate
the property for its socialized housing project. The trial court fixed the just compensation for the
property at P50 million. The NHA immediately deposited the same at the authorized depository bank
and filed a motion for the issuance of a writ of possession with the trial court. Unfortunately, there
was delay in the resolution of the motion. Meanwhile, the amount deposited earned interest.

When Josef sought the release of the amount deposited, NHA argued that Josef should only be
entitled to P50 million.

Who owns the interest earned? (3%)

IV.

a. Distinguish antichresis from usufruct. (3%)

b. Distinguish commodatum from mutuum. (3%)

V.

Jacob has owned a farm land in Ramos, Tarlac. In 2012, Liz surreptitiously entered and cultivated the
property. In 2014, Jacob discovered Liz’s presence in and cultivation of the property. Due to his being
busy attending to his business in Cebu, he tolerated Liz’s cultivation of the property. Subsequently, in
December 2016, Jacob wanted to regain possession of the property; hence, he sent a letter to Liz
demanding that she vacate the property. Liz did not vacate despite the demand.

Jacob comes to enlist your legal assistance to bring an action against Liz to recover the possession of
the property.

What remedies are available to Jacob to recover possession of his property under the circumstances?
Explain your answer. (4%)

VI.

Tyler owns a lot that is enclosed by the lots of Riley to the North and East, of Dylan to the South, and
of Reece to the West. The current route to the public highway is a kilometer’s walk through the
northern lot of Riley, but the route is a rough road that gets muddy during the rainy season, and is
inconvenient because it is only 2.5 meters wide. Tyler’s nearest access to the public highway would be
through the southern lot of Dylan.

May Dylan be legally required to afford to Tyler a right of way through his property? Explain your
answer. (4%)

VII.

Alice agreed to sell a parcel of land with an area of 500 square meters registered in her name and
covered by TCT No. 12345 in favor of Bernadette for the amount of P900,000. Their agreement dated
October 15, 2015, reads as follows:
I, Bernadette, agree to buy the lot owned by Alice covered by TCT No. 12345 for the ammount of
P900,000 subject to the following schedule of payment:

Upon signing of agreement – P100,000

November 15, 2015 – P200,000

December 15, 2015 – P200,000

January 15, 2016 – P200,000

February 15, 2016 – P200,000

Title to the property shall be transferred upon full payment of P900,000 on or before February 15,
2016.

After making the initial payment of P100,000 on october 15, 2015, and the second installment of
P200,000 on November 15, 2015, Bernadette defaulted despite repeated demands from Alice.

In December 2016, Bernadette offered to pay her balance but Alice refused and told her that the land
was no longer for sale. Due to the refusal, Bernadette caused the annotation of her adverse clalm
upon TCT No. 12345 on December 19, 2016. Later on, Bernadette discovered that Alice had sold the
property to Chona on February 5, 2016, and that TCT No. 12345 had been cancelled and another one
issued (TCT No. 67891) in favor of Chona as the new owner.

Bernadette sued Alice and Chona for specific performance, annulment of sale and cancellation of TCT
No. 67891. Bernadette insisted that she had entered into a contract of sale with Alice; and that
because Alice had engaged in double sale, TCT No. 67891 should be cancelled and another title be
issued in Bernadette’s favor.

a. Did Alice and Bernadette enter into a contract of sale of the lot covered by TCT No. 12345? Explain
your answer. (4%)

b. Did Alice engage in double sale of the property? Explain your answer. (4%)

VIII.

Pedro had worked for 15 years in Saudi Arabia when he finally decided to engage in farming in his
home province where his 10-hectare farmland valued at P2,000,000 was located. He had already
P3,000,000 savings from his long stint in Saudi Arabia.

Eagerly awaiting Pedro’s arrival at the NAIA were his aging parents Modesto and Jacinta, his common-
law spouse Veneranda, their three children, and Alex, his child by Carol, his departed legal wife. Sadly
for all of them, Pedro suffered a stroke because of his over-excitement just as the plane was about to
land, and died without seeing any of them.

The farmland and the savings were all the properties he left.

(a) State who are Pedro’s legal heirs, and the shares of each legal heir to the estate? Explain your
answer. (4%)

(b) Assuming that Pedro’s will is discovered soon after his funeral. In the will, he disposed of half of
his estate in favor of Veneranda, and the other half in favor of his children and his parents in equal
shares. Assuming also that the will is admitted to probate by the proper court. Are the testamentary
dispositions valid and effective under the law on succession? Explain your answer. (4%)

IX.

Danny and Elsa were married in 2002. In 2012, Elsa left the conjugal home and her two minor children
with Danny to live with her paramour. In 2015. Danny sold without EIsa’s consent a parcel of land
registered in his name that he had purchased prior to the marriage. Danny used the proceeds of the
sale to pay for his children’s tuition fees.

Is the sale valid, void or voidable? Explain your answer. (3%)

X.

Briefly explain whether the following contracts are valid, rescissible, unenforceable, or void:

(a) A contract of sale between Lana and Andy wherein 16-year old Lana agreed to sell her grand piano
for 25,000.00. (2%)

(b) A contract of lease of the Philippine Sea entered by and between Mitoy and Elsa. (2%)

(c) A barter of toys executed by 12-year old Clarence and 10-year old Czar (2%)

(d)A sale entered by Barri and Garri, both minors, which their parents later ratified. (2%)

(e) Jenny’s sale of her car to Celestine in order to evade attachment by Jenny’s creditors. (2%)

XI.

Zeny and Nolan were best friends for a long time already. Zeny borrowed 310,000.00 from Nolan,
evidenced by a promissory note whereby Zeny promised to pay the loan “once his means permit.”
Two months later, they had a quarrel that broke their long-standing friendship.
Nolan seeks your advice on how to collect from Zeny despite the tenor of the promissory note. what
will your advice be? Explain your answer. (3%)

XII.

Krystal owns a parcel of land covered by TCT No. 12345 in Angeles City, Due to severe financial
constraints, Krystal was lorc based in the property to RBP Corporation, a foreign corporation based in
South Korea. Subsequently, RBP Corporation sold the property to Gloria, one of its most valued
clients.

Wanting her property back, Krystal, learning of the transfer of the property from RBP Corporation to
Gloria, sued both of them in the Regional Trial Court (RTC) for annulment of sale and for
reconveyance. She alleged that the sale by RBP Corporation to Gloria was void because RBP
Corporation was a foreign corporation prohibited by the Constitution from acquiring and owning
lands in the Philippines.

Will KrystaI’s suit for annulment of sale and reconveyance prosper? Explain your answer. (4%)

XIII.

TRUE or FALSE – Explain your answers.

(a) All rights are considered as property. (2%)

(b) A lessee cannot bring a case for quieting of title respecting the property that he leases. (2%)

(c) Only the city or municipal mayor can file a civil action to abate a public nuisance. (2%)

(d) Possession of a movable property is lost when the location of the said movable is unknown to the
owner. (2%)

(e) Continuous non-apparent easements can be acquired either through title or by prescription. (2%)

XIV.

Plutarco owned land that borders on a river. After several years the action of the water of the river
caused the deposit of soil, and increased the area of Plutarco’s property by 200 square meters.

a. If Plutarco wants to own the increase in area, what will be his legal basis for doing so? Explain your
answer. (2%)

b. On the other hand, if the river dries up, may Plutarco validly claim a right of ownership of the dried-
up river bed? Explain your answer. (2%)

XV.
Kevin signed a loan agreement with ABC Bank. To secure payment, Kevin requested his girlfriend
Rosella to execute a document entitled “Continuing Guaranty Agreement” whereby she expressly
agreed to be solidarily liable for the obligation of Kevin.

Can ABC Bank proceed directly against Rosella upon Kevin’s default even without proceeding against
Kevin first? Explain your answer. (3%)

XVI.

Jovencio operated a school bus to ferry his two sons and five of their schoolmates from their houses
to their school, and back. The parents of the five schoolmates paid for the service. One morning,
Porfirio, the driver, took a short cut on the way to school because he was running late, and drove
across an unmanned railway crossing. At the time, Porfirio was wearing earphones because he loved
to hear loud music while driving. As he crossed the railway tracks, a speeding PNR train loudly blared
its horn to warn Porfirio, but the latter did not hear the horn because of the loud music. The train
inevitably rammed into the school bus. The strong impact of the collision between the school bus and
the train resulted in the instant death of one of the classmates of Jovencio’s younger son.

The parents of the fatality sued Jovencio for damages based on culpa contractual alleging that
Jovencio was a common carrier; Porfirio for being negligent; and the PNR for damages based on culpa
aquiliana.

Jovencio denied being a common carrier. He insisted that he had exercised the diligence of a good
father of a family in supervising Porfirio, claiming that the latter had had no history of negligence or
recklessness before the fatal accident.

(a) Did his operation of the school bus service for a limited clientele render Jovencio a common
carrier? Explain your answer. (3%)

(b) In accordance with your answer to the preceding question, state the degree of diligence to be
observed by Jovencio, and the consequences thereof. Explain your answer. (3%)

(c) Assuming that the fatality was a minor of only 15 years of age who had no earning capacity at the
time of his death because he was still a student in high school, and the trial court is minded to award
indemnity, what may possibly be the legal and factual justifications for the award of loss of earning
capacity? Explain your answer. (4%)

I.

SMZ, Inc., is a VAT-registered enterprise engaged in the general construction business. HP

International contracts the services of SMZ, Inc. to construct HP International’s factory building
located in the Laguna Techno Park, a special economic zone. HP lnternational is registered with the
the Philippine Economic Zone Authority (PEZA) as an ecozone export enterprise, and, as such, enjoys
income tax holiday pursuant to the Special Economic Zone Act of 1995.

SMZ, Inc., files an application with the Bureau of lnternal Revenue (BIR) for the VAT zero-rating of its
sale of services to HP International. However, the BIR denies SMZ, lnc.’s application on the ground
that HP lnternational already enjoys income tax holiday.

Is the BIR correct in denying SMZ, lnc.’s application? Explain your answer. (6%)

II.

Wreck Corporation is a domestic corporation engaged in the business of importing, refining and
selling petroleum products. During the period from September 1, 2014 to December 31, 2014, Wreck
Corporation imported 225 million liters of Jet A-1 aviation fuel and paid the excise taxes thereon.
Seventy-five percent (75%) of the total volume of aviation fuel imported were actually sold to
international carriers of Philippine and foreign registries for their use or consumption outside of the
Philippines in the period from November 1, 2014, to December 31, 2014. Wreck Corporation did not
pass on to the international carriers the excise taxes it paid on the importation of petroleum products.

On June 25, 2015, Wreck Corporation filed an administrative claim for refund or issuance of tax credit
certificate amounting to the excise taxes it had paid on the importation of 225 million liters of Jet A-1
aviation fuel.

If you were the Commissioner of lnternal Revenue, will you grant Wreck Corporation’s administrative
claim for refund or issuance of tax credit certificate Explain your answer. (6%)

III.

Vanderful, Inc.’s income tax return for taxable year 2015 showed an overpayment due to excess
creditable witholding taxes in the amount of P750,000. The company opted to carry over the excess
income tax credits as tax credit against its quarterly income tax liabilities for the next succeeding
years. For taxable year 2016, the company’s income tax return showed an overpayment due to excess
creditable withholding taxes in the amount of P1,100,000, which included the carry-over from year
2015 in the amount of P750,000 because its operations resulted in a net loss hence, there was no
application for any tax liability. This time, the company opted and marked the box “To be refunded”
in respect of the total amount of P1,100,000.

Vanderful, lnc. now files in the BIR a claim for refund of unutilized overpayments of P1,100,000. Is the
claim meritorious? (4%)

IV.

On the basis of a warrant of seizure and detention issued by the Collector of Customs for the purpose
of enforcing the Tariff and Customs Code, assorted brands of liquor and cigarettes said to have been
illegally imported into the Philippines were seized from a store operating in a Freeport zone. The store
owner moved for the quasahal of the warrant on the ground that the collector of Customs had no
jurisdiction to enforce it within the Freeport zone.

Should the motion to quash be granted (3%)

V.

On March 30, 2016, XL Co. filed an administrative claim for refund of unutilized input VAT for taxable
year 2014, together with supporting documents. XL Co. claimed that its sale of generated power and
delivery of electric capacity was VAT zero-rated. Due to the inaction of the Commissioner of Internal
Revenue (CIR), XL Co. filed with the Court of Tax Appeals (CTA) the following judicial claims for refund.

 Period Covered – Date Filed

 1st Quarter of 2014 – March 31, 2016

 2nd Quarter of 2014 – June 30, 2016

 3rd and 4th quarter of 2014 – August 12, 2016

Is XL Co.’s claim for VAT refund timely filed? Explain your answer. (5%)

VI.

Heeding the pronouncement of the President that the worsening traffic condition in the metropolis
was a sign of economic progress, the Congress enacted Republic Act No. 10701, also known as An Act
Imposing a Transport Tax on the Purchase of Private Vehicles.

Under RA 10701, buyers of private vehicles are required to pay a transport tax equivalent to 5% of the
total purchase price per vehicle purchased. RA 10701 provides that the Land Transportation Office
(LTO) shall not accept for registration any new vehicles without proof of payment of the 5% transport
tax. RA 10701 further provide that existing owners of private vehicles shall be required to pay a tax
equivalent to 5% of the current fair market value of every vehicle registered with the LTO. However,
RA 10701 exempts owners of public utility vehicles and the Government from the coverage of the 5%
transport tax.

A group of private vehicle owners sue on the ground that the law is unconstitutional for contravening
the Equal Protection Clause of the Constitution.

Rule on the constitutionality and validity of RA 10701. (5%)

VII.

Calvin Dela Pisa was a Permits and Licensing Officer (rank-and-file) of Sta. Portia Realty Corporation
(SPRC). He invited the Regional Director of the Housing and Land Use Regulatory Board (HLURB) to
lunch at the Sulo Hotel in Quezon City to discuss the approval of SPRC’s application for a development
permit in connection with its subdivision development project in Pasig City. At breakfast the following
day, Calvin met a prospective client interested to enter into a joint venture with SPRC for the
construction of a residential condominium unit in Cainta, Rizal.

Calvin incurred expenses for the lunch and breakfast meetings he had with the Regional Director of
HLURB and the prospective client, respectively. The expenses were duly supported by official receipts
issued in his name. At month’s end, he requested the reimbursement of his expenses, and SPRC
granted his request.

a. Can SPRC claim an allowable deduction for the expenses incurred by Calvin? Explain your answer.
(2.5%)

b. Is the reimbursement received by Calvin from SPRC subject to tax? Explain your answer. (2.5%)

VIII.

On April 30, 2015, Daryl resigned as the production manager of 52nd Avenue, a television studio
owned by SSS Entertainment Corporation. 52nd Avenue issued to her a Certificate of Withholding Tax
on Compensation (BIR Form No. 2316), which showed that the tax withheld from her compensation
was equal to her income tax due for the period from January 2015 to April 30 2015.

A month after her resignation, Daryl put up her own studio and started producing short films. She was
able to earn a meager income from her short films but did not keep record of her production
expenses.

Is Daryl qualified for substituted filing for taxable year 2015? Explain your answer. (3%)

IX.

Upon his retirement, Alfredo transferred his savings derived from his salary as a marketing assistant
to a time deposit with AAB Bank. The bank regularly deducted 20% final withholding tax on the
interest income from the time deposit.

Alfredo contends that the 20% final tax on the interest income constituted double taxation because
his salary had been already subjected to withholding tax.

Is Alfredo’s contention correct? Explain your answer. (3%)

X.

On January 27, 2017, Ramon, the comptroller of Vantage Point, Inc., executed a document entitled
“Waiver of the Statute of Limitations” in connection with the BIR’s investigation of the tax liabilities of
the company for the year 2012. However, the Board of Directors of Vantage Point, Inc., did not adopt
a board resolution authorizing Ramon to execute the waiver.

On October 14, 2017, Vantage Point, Inc., received a preliminary assessment notice from the BIR
indicating its deficiency withholding taxes for the year 2012. Vantage Point, Inc., filed its protest. On
October 30, 2017, the BIR issued a formal letter of demand and final assessment notice. Vantage
Point, Inc., again filed a protest. The Commissioner of Internal Revenue denied the protests and
directed the collection of the assessed deficiency taxes.

Accordingly, Vantage Point, Inc., filed a petition for review in the CTA to seek the cancellation and
withdrawal of the assessment on the ground of prescription.

a. What constitutes a valid waiver of the statute of limitations for the assessment and collection of
taxes? Explain your answer. (3%)

b. Has the right of the Government to assess and collect deficiency taxes from Vantage Point, Inc. for
the year 2012 prescribed? Explain your answer. (3%)

XI.

The Board of Directors of Sumo Corporation, a company primarily engaged in the business of
marketing and distributing pest control products, approved the partial cessation of its commercial
operations, resulting in the separation of 32 regular employees. Only half of the affected employees
were notified of the board resolution.

Rule on the taxability of the separation pay and indemnity that will be received by the affected
employees as the result of their separation from service. Explain your answer. (3%)

XII.

On September 17, 2015, Data Realty, Inc., a real-estate corporation duly organized and existing under
Philippine law, sold to Jenny Vera a condominium unit at Freedom Residences in Malabon City with an
area of 32.31 square meters for a contract price of P4,213,000. The condominium unit had a zonal
value amounting to P2,877,000 and fair market value amounting to P550,000.

a. Is the transaction subject to value-added tax and documentary stamp tax? Explain your answer.
(3%)

b. Would your answer be the same if the property was sod by a bank in a foreclosure sale? Explain
your answer. (3%)

XIII.

BATAS Law is a general professional partnership operating in the City of Valenzuela. It regularly pays
value-added tax on its services. All its lawyers have individually paid the required professional tax for
the year 2017. However, as a condition for the renewal of its business permit for the year 2017, the
City Treasurer of Valenzuela assessed BATAS Law for the payment of percentage business tax on its
gross receipts for the year 2016 in accordance with the Revenue Tax Code of Valenzuela.

Is BATAS Law liable to pay the assessed percentage business tax? Explain your answer. (3%)

XIV.
Globesmart Services, Inc. received a final assessment notice with formal letter of demand from the
BIR for deficiency income tax, value-added tax and withholding tax for the taxable year 2016
amounting to P48 million. Globesmart Services, Inc., fied a protetst against the assessment, but the
Commissioner of Internal Revenue denied the protest. Hence, Globesmart Services, Inc. filed a
petition for review in the CTA with an urgent motion to suspend the collection of tax.

After hearing, the CTA Division issued a resolution granting the motion to suspend but required
Globesmart Services, Inc., to post a surety bond equivalent to the deficiency assessment within 15
days from notice of the resolution. Globesmart Services, Inc. moved for the partial reconsideration of
the resolution and for the reduction of the bond to an amount it could obtain. The CTA division issued
another resolution reducing the amount of the surety bond to P24 million. The latter amount was still
more than the net worth of Globesmart Services, Inc., as reported in its audited financial statements.

a. May the collection of taxes be suspended? Explain your answer. (3%)

b. Is the CTA Division justified in requiring Globesmart Services, Inc., to post a surety bond as a
condition for the suspension of the deficiency tax collection? Explain your answer. (3%)

XV.

Casimira died on June 19, 2017, after three weeks of confinement due to an unsuccessful liver
transplant. For her confinement, she had incurred substantial medical expenses that she financed
through personal loans secured by mortgages on her real properties. Her heirs are still in the process
of making an inventory of her assets that can be used to pay the estate taxes, if any, which are due on
December 19, 2017.

a. Are the medical expenses, personal loans and mortgages incurred by Casimira deductible from her
gross estate? Explain your answer. (5%)

b. May the heirs of Casimira file the estate tax return and pay the corresponding estate tax beyond
December 19, 2017, without incurring interest and surcharge? Explain your answer. (3%)

XVI.

The BIR assessed the Babuyan Water District (BWD) with deficiency income taxes amounting to P8.5
million, inclusive of interest and surcharge. The BWD disputed the assessment, and argued that it was
a wholly-owned government entity performing essential government functions. However, the BIR
denied the protest.

The BWD filed a petition for arbitration in the Office of the Secretary of Justice pursuant to Sections
66 to 71, Chapter 14, Book IV of the Administrative Code of 1987 to assail the denial of its protest, and
to seek the proper interpretation of Section 32(B)(7)(b) of the Tax Code that excluded from gross
income the income derived by the Government or its political subdivisions. The Secretary of Justice
rendered a decision declaring the BWD exempt from the payment of income tax.
The Commissioner of Internal Revenue appealed to the CTA on the sole ground that the Secretary of
Justice had no jurisdiction to review the assessment of the BIR.

Is the appeal meritorious? Explain your answer. (4%)

XVII.

San Juan University is a non-stock, non-profit educational institution. It owns a piece of land in
Caloocan City on which its three 2-storey school buildings stood. Two of the buildings are devoted to
classrooms, laboratories, a canteen, a bookstore, and administrative offices. The third building is
reserved as dormitory for student athletes who are granted scholarships for a given academic year.

In 2017, San Juan University earned income from tuition fees and from leasing a portion of its
premises to various concessionaires of food, books, and school supplies.

a. Can the City Treasurer of Caloocan City collect real property taxes on the land and building of San
Juan University? Explain your answer. (5%)

b. Is the income earned by San Juan University for the year 2017 subject to income tax? Explain your
answer. (5%)

XVIII.

a. Distinguish outright smuggling from technical smuggling. (3%)

b. Distinguish compromise from abatement of taxes. (3%)

XIX.

CMI School, Inc., a non-stock, non-profit corporation, donated its three parcels of idle land situated in
the Municipality of Cuyapo, Nueva Ecija to SLC University, another non-stock, non-profit corporation,
in recognition of the latter’s contribution to and participation in the spiritual and educational
development of the former.

a. Is CMI School, Inc., liable for the payment of donor’s tax? Explain your answer. (2.5%)

b. If SLC University later sells the three parcels of idle land to Puregold Supermarket, Inc., a stock
corporation, will SLC University be liable for capital gains tax? Explain your answer. (3%)

c. If SLC University donates the three parcels of idle land in favor of the Municipality of Cuyapo, Nueva
Ecija, will SLC University be liable for donor’s tax? Explain your answer. (2.5%)